Inside the 2025 PSAO Market: How Wholesalers Shape Pharmacy–PBM Relationships

Pharmacy services administrative organizations (PSAOs), which operate between pharmacy benefit managers (PBMs) and smaller pharmacies, are among the most mysterious—and misunderstood—intermediaries in our complex U.S. drug channel.

Adding to the mystery: the largest PSAOs are owned by the three multi-billion dollar, public companies that also dominate pharmaceutical distribution—Cencora, Cardinal Health, and McKesson. These companies sit atop the Fortune 500 list and distribute more than 96% of prescription pharmaceuticals in the U.S.

Below, we draw on data from our forthcoming 2025-26 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors to profile the largest PSAOs and highlight crucial business trends affecting each company. We also examine how wholesalers are leveraging PSAOs as part of a broader vertical integration strategy that is building significant positions in businesses beyond drug distribution. 

So, buckle up and let’s take a trip through the tollbooth to visit yet another overlooked—but powerful—corner of the drug channel.

THROUGH THE PSAO TOLLBOOTH

PBMs play a crucial role in pharmacy economics: they handle the flow of payments from plan sponsors to network pharmacies. To receive third-party payment on behalf of a patient, a pharmacy must participate in one or more of the networks that PBMs organize. The reimbursement rate established by a PBM determines a pharmacy’s prescription revenue and, in turn, its gross profit margin from third-party insurance.

Large pharmacies interact and negotiate directly with PBMs and other third-party payers. However, nearly all smaller pharmacy owners participate in pharmacy services administrative organizations (PSAOs) to leverage their influence in contract negotiations with PBMs and other third-party payers.

The PSAO relationship is crucial for smaller pharmacies, which generate more than 90% of their total sales from prescription dispensing. A pharmacy typically must interact with a PBM through only one PSAO, although pharmacies can belong to multiple PSAOs.

The key services PSAOs provide include:

• Contracting with PBMs and other third-party payers

• Negotiating for preferred network access—or declining to participate in a PBM’s network

• Claims payment, central pay (financial intermediation between PBMs and pharmacies), reimbursement management, appeals, and related services

• Business and legislative support

Pharmacies typically pay $2,000 to $3,000 annually for bundled PSAO services.

WELCOME TO THE LAND OF INTERMEDIARIES

Pharmaceutical wholesalers now own and operate the largest PSAOs, making them critical intermediaries between PBMs and smaller pharmacies.

Here are the largest PSAOs:

• Health Mart Atlas is owned by McKesson. In 2022, McKesson launched Atlas Specialty, a PSAO focused on health system pharmacies, medically integrated dispensary practices, and specialty community pharmacies.

• Cardinal Health operates three PSAOs that serve different segments of its business. LeaderNET services Cardinal’s drug distribution customers and is the largest of its PSAOs.

• Elevate Provider Network is owned by Cencora. In 2021, Cencora launched the Accelerate Specialty Network, a PSAO focused on accredited health system specialty pharmacies, independent specialty pharmacies, and medically integrated dispensing practices.

• AlignRx was formed from the 2021 merger of Arete Pharmacy Network (owned by American Associated Pharmacies) with PPOk (owned by Unify Rx). Due to the merger, AlignRx now has three separate networks: AlignRx APN (the new name for the legacy Arete network); AlignRx RxSelect; and AlignRx TriNet. Earlier this year, the Wholesale Alliance, a group of regional wholesalers which had operated the Pharmacy First PSAO, became an owner of AlignRx.

Pharmacies can participate in a wholesaler’s PSAO programs without being part of a wholesaler’s franchise or marketing group. For example, we estimate that one-third of the pharmacies that participate in Cencora’s PSAO programs are not Good Neighbor pharmacies. Similarly, Health Mart Atlas has nearly 1,600 more locations than does the Health Mart franchise.

Some smaller PSAOs are owned not by a wholesaler but by the member pharmacies. Examples include EPIC Pharmacy Network and Sav-Mor. Following the AlignRx/Wholesale Alliance transaction, EPIC is now the largest PSAO without wholesaler ownership.

KINGDOMS OF CONTROL

So how do these organizations stack up in 2025? Here’s what DCI’s latest data show.

The table below presents DCI’s updated list of the largest PSAOs, which include participation from nearly 25,000 smaller pharmacies. This chart appears as Exhibit 27 in DCI’s forthcoming 2025-26 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. Note that the figures below include physician practices, health system pharmacies, and small retail chains in addition to independent community pharmacies.

[Click to Enlarge]

Trends worth noting:

• The PSAOs shown above lost a collective 425 locations since last year, likely due to the ongoing shakeout among retail pharmacies.

• McKesson’s Health Mart Atlas remains the largest PSAO, with more than 6,100 pharmacy locations. However, that figure represents a steep decline from its peak of 7,000 locations in 2019.

• Cardinal Health’s LeaderNet has grown its membership to nearly 5,900 locations, an increase of 25% since 2019. Meanwhile, MSInterNet, which services Medicine Shoppe International franchise members, has declined along with the collapse of that franchise.

• Cencora’s Elevate Provider Network has more than 5,100 members. This PSAO has shrunk slightly in recent years, but remains larger than it was in 2019.

• AlignRx’s membership has grown dramatically due to the addition of Pharmacy First members. However, the combined PSAO’s membership is lower than the pro forma total of the two organizations’ membership from 2024.

• EPIC Pharmacy Network was the big winner in 2025, adding 300 locations in the past year.

THE CASTLE OF VERTICAL INTEGRATION

The membership shifts are only part of the story. Via PSAOs, wholesalers negotiate with PBMs and other payers on behalf of their pharmacy customers. Their control of the PSAO market shows just how vertically integrated—and powerful—these intermediaries have become in shaping the future of U.S. pharmacy.

For Cencora, Cardinal Health, and McKesson, conventional pharmaceutical wholesaling remains their largest revenue source. But each company has expanded both upstream and downstream with businesses that:

• Market their own private-label generic drugs

• Operate retail pharmacy franchises

• Offer group purchasing services for physician practices

• Provide technology systems that run physician offices

• Deliver consulting and patient services for manufacturers

• Invest in management services organizations for physician practices in such clinical specialties as oncology, ophthalmology, and urology

Click here to see our updated representation of wholesalers’ vertical alignment within the drug channel. Together, the scope of these businesses reveal just how much influence wholesalers now exert across the entire healthcare ecosystem.

For smaller pharmacies, the road to PBMs runs through a phantom tollbooth controlled by wholesalers. The price of passage? Ever more influence ceded to the intermediaries who set the rules of the road.