The Big 3 Distributors

The Big 3 drug wholesalers in the U.S.--AmerisourceBergen, McKesson and Cardinal Health--are enjoying a financial boost this year thanks to the growing use of generic drugs. That's a bus they hope to ride into 2011 and beyond, when they can expect drug distribution's next big business-shaker: healthcare reform.

Wholesalers rely on their ability to purchase large volumes of generics and other drugs at low prices and quickly get them where they're needed. "The average drug retailer gets a delivery a day; hospitals, sometimes two," says Tony Pera, senior VP for supply chain management at ASB, in an interview.  

That's one fast-paced business. To understand the Big 3, we looked at the following drivers and each company's tactics for business success:

  • Generics
  • Healthcare reform
  • Technology
  • Cash flow

Combined, the wholesalers handle more than 90 percent of the drugs in the U.S, says Peyton Howell, ASB's senior VP for business development. "We have a prime vendor system that encourages relationships with all manufacturers."

Among the Big 3, ASB boasted an 11 percent stock rise at the end of July, compared with three percent rises for McKesson and Cardinal Health, according to Reuters. On the Fortune 500 list, McKesson holds the 14th spot, Cardinal pulls in at 17th, and ASB garners the 24th spot.