During this period of volatility, the core business model of the Big Three public pharmaceutical distribution companies—Cardinal Health, Cencora, and McKesson—remains intact. Put simply: Buy low, sell high, collect early, and pay late.
But as I explain below, wholesalers continue to position themselves as essential intermediaries by expanding their role across the drug channel and strengthening their economic fundamentals.
Read on for 10 key pricing, pharmacy, provider, and manufacturer trends that are driving the U.S. drug wholesaling industry.
For even more, check out DCI's new 2026-27 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors, the seventeenth edition of our deep dive into wholesale distribution channels. Click here to download a free report overview (including key industry trends, the table of contents, and a list of exhibits)
INDUSTRY TRENDS FOR DRUG WHOLESALERS
Here are 10 significant trends that are shaping the drug wholesaling industry. Details and underlying data are available in DCI’s new industry report.
1) Overall U.S. drug distribution revenues continue to expand, but growth is slowing.
DCI projects that drug distribution revenues for the Big Three public companies—Cencora, Cardinal Health, and McKesson—will reach $933 billion in 2026. Through 2025, these companies experienced double-digit revenue growth. For 2026, DCI projects that growth will slow to mid-single-digit rates, reflecting reductions in the list prices of select brand-name medications, slower growth in GLP-1 agonist revenues, and growing adoption of lower-priced biosimilars. (See chart below.)
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2) The public companies retain strong financial positions.
The Big Three wholesalers continue to have conservative capital structures, limited leverage, high levels of liquidity, excess cash flow, and solid debt ratings. Over the past five years, their stock prices have outperformed broader market indices, although performance has been more volatile during the past year. The public companies’ valuations remain at a modest discount to the broader market.
3) Wholesalers’ revenues remain highly concentrated among a handful of large customers, while retail pharmacy economics remain under sustained pressure.
In 2026, five companies—CVS Health, Cigna, Walgreens, Walmart, and UnitedHealth Group—are projected to account for more than 40% of total U.S. drug distribution revenues. Three of these companies operate central fill mail and specialty pharmacies within vertically integrated organizations that also own an insurer and a pharmacy benefit manager (PBM). These multi-year relationships generally remain stable.
Meanwhile, restructuring among the major chains has accelerated. Rite Aid liquidated its business and sold its prescription assets to other chains. Since 2018, the two remaining national drugstore chains have collectively closed more than 3,000 locations, reflecting margin compression and weaker front-end economics. Wholesalers are investing more in stabilizing their smaller, more profitable pharmacy customers while facing contracting pressures from their largest customers.
Meanwhile, restructuring among the major chains has accelerated. Rite Aid liquidated its business and sold its prescription assets to other chains. Since 2018, the two remaining national drugstore chains have collectively closed more than 3,000 locations, reflecting margin compression and weaker front-end economics. Wholesalers are investing more in stabilizing their smaller, more profitable pharmacy customers while facing contracting pressures from their largest customers.
4) Drug pricing changes are challenging wholesalers’ economic models.
Changes in manufacturers’ pricing policies, emerging channels, and evolving PBM business models signal that the U.S. pharmaceutical system is evolving into a Net Pricing Drug Channel (NPDC)—a market environment in which net prices, not list prices, determine access, economics, and competitive strategy. Brand-name list-price increases have remained low in recent years, while manufacturers have sharply reduced the list prices of more than 30 currently marketed brand-name drugs, shrinking the gross-to-net pricing gap for these products. Wholesalers have responded with various tactics to mitigate the effects of lower brand-name drug list prices and slower list-price growth on their profits.
5) Alternative pricing and distribution pathways have had limited impact on the wholesaler channel.
Cash-pay pharmacies and manufacturers’ direct-to-patient solutions are bypassing certain aspects of the conventional channel to enable pricing closer to post-rebate net prices. At the same time, discount cards are encouraging patients to access pricing that excludes mark-ups, rebates, and other payments that would otherwise be earned or absorbed by channel participants. These channels seem likely to alter pricing benchmarks and payment flows, but they generally continue to rely on existing pharmacy dispensing and wholesale distribution infrastructure.
6) Ownership of physician management services organizations (MSOs) is transforming wholesalers’ role in the buy-and-bill market.
The largest wholesalers have spent over $20 billion to acquire complete or partial ownership stakes in physician MSOs in such specialties as gastroenterology, ophthalmology, oncology, and urology. Practices within these MSOs generate significant revenues from provider-administered drugs. MSO ownership is protecting wholesalers’ channel roles, enabling market share expansion, and creating new sources of revenue and profit for their distribution businesses. The ultimate strategic benefits of these transactions, however, remain uncertain. McKesson's recently announced investment in Option Care Health suggests buy-and-bill expansion via alternate sites and at-home infusion.
7) Biosimilars of provider-administered specialty drugs are now an important source of profits for wholesalers and specialty distributors.
Adoption of both provider- and patient-administered biosimilars has grown, although the benefits to wholesalers vary. Provider-administered biosimilars have emerged as an important source of profits for wholesalers and specialty distributors. Since the previous edition of our report, wholesalers have also begun investing in private-label biosimilars of these products. By contrast, biosimilars of patient-administered biologics such as Humira and Stelara have not benefited wholesalers in the same way. Instead, these lower-priced products reduce wholesalers’ revenues and alter channel economics.
8) The Inflation Reduction Act (IRA) will disrupt the buy-and-bill market, creating new risks for wholesalers’ MSO investments while pressuring other provider customers.
Beginning in 2028, negotiated prices under the IRA will take effect for selected single-source Medicare Part B drugs and biologics. We expect reimbursement for provider-administered drugs subject to Medicare negotiation to decline, both directly through lower Medicare reimbursement and indirectly through spillover into commercial reimbursement. For wholesalers, these changes could weaken the economics of an important customer segment while accelerating the shift in purchasing volume to larger hospital and health-system customers, including 340B covered entities.
9) The growth and scale of the 340B program have created the conditions for dramatic change in this influential economic channel.
The 340B Drug Pricing Program and the role of 340B contract pharmacies remain highly controversial. Net drug sales under the 340B program reached $100 billion and now exceed net drug sales under the Medicaid outpatient drug program. More than 40 manufacturers have altered their policies regarding 340B discounts for external pharmacies. These actions have prompted state legislation, accelerated hospital investments in specialty pharmacy operations, and created new challenges for pharmacy and PBM profits. Implementation of the IRA is also bringing new transparency to the 340B program. These developments could diminish wholesalers’ economic benefits from the program.
10) Cell and gene therapies are creating new channel opportunities for wholesalers.
Cell and gene therapies (CGTs) have begun to transform treatment for many serious and previously untreatable conditions. Wholesalers offer new services to address key logistical and commercial challenges associated with these therapies, although their roles and functions differ from those for conventional pharmaceutical products. Wholesalers’ MSO investments, combined with emerging community CAR-T activity, could allow wholesalers to benefit from higher CAR-T volumes in community oncology practices.
Our full report also considers other trends that will affect wholesalers, including most favored nation (MFN) pricing policies, importation, the Drug Supply Chain Security Act (DSCSA), and much more. For a super deep dive into how wholesalers make money and a look at the latest financial benchmarks, check out DCI’s 2026-27 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.
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