Drug and Druggists' Sundries Wholesalers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 7,200 drug and druggists’ sundries wholesalers in the US distribute biological and medical products; botanical drugs and herbs; pharmaceutical products; and related goods. Prescription drugs account for over 80% of industry sales. Other product categories include cosmetics and beauty supplies; vitamins and nutritional supplements; non-prescription drugs; and personal care items.
Regulated Environment
The distribution, compounding, purchase, and storage of pharmaceuticals is highly regulated by the Drug Enforcement Administration (DEA), FDA, and US Department of Health and Human Services (HHS).
Reimbursement Rates and Coverage
The drug wholesale industry is affected by changes to medical reimbursement rates, which continue to fall as the healthcare industry looks for ways to cut costs.
Industry size & Structure
The average drug wholesaler operates out of a single location, employs 36 workers, and generates about $107 million annually.
- The drug and druggists' sundries wholesale industry consists of about 7,200 firms that employ about 260,000 workers and generate $770 billion annually.
- The industry is concentrated; the top 50 companies account for 86% of industry revenue.
- Large companies include McKesson, Amerisource Bergen, Cardinal Health, and JM Smith. Large firms may have international or pharmacy retail operations.
Industry Forecast
Drug and Druggists' Sundries Wholesalers Industry Growth
Recent Developments
Jan 9, 2025 - Proposed Tariffs may Squeeze Profit Margins and Reduce Product Availability
- President-elect Trump’s plan to impose a 25% tariff on goods from Canada and Mexico and a higher tariff on goods from China could affect the prices and availability of pharmaceutical drugs in the US, according to The Hill. Drug and druggists’ sundries wholesalers may be negatively impacted if higher prices can’t be passed on to customers or if availability of some products decreases. Canada, China, and Mexico are among the top five countries from which the US imports pharmaceutical goods, with China accounting for nearly a quarter of all such imports as of 2021. Arthur Wong, health care managing director at S&P Global Ratings, noted that tariffs on Chinese imports have the potential to impact the cost of generic drugs in particular because the US imports many such ingredients from China.
- Annual out-of-pocket costs for the Medicare Part D drug benefit will be capped at $2,000 in 2025, according to the Centers for Medicare & Medicaid Services (CMS). Many insurers are increasing premiums for their stand-alone drug plan offerings, however, according to health policy research firm KFF. Some major plan sponsors, including Aetna and UnitedHealthcare, are also reducing their stand-alone prescription drug plan offerings, and overall, there will be fewer prescription drug plans in 2025 than in 2024 – 524 plans nationwide, down from 709 in 2024.
- The Biden administration reached an agreement with drugmakers to lower prices on the 10 costliest prescription drugs under Medicare beginning in 2026. The agreement with drugmakers is projected to save older adults $1.5 billion in out-of-pocket costs when the new prices go into effect in 2026. The drugs are purchased through Medicare Part D, a prescription drug coverage program for Americans who are 65 and older. The 10 medications were used by 9 million patients with Medicare coverage in 2023 and accounted for $56.2 billion in total Medicare spending. The government estimates that, had the negotiated prices been in place that year, Medicare would have saved about $6 billion. Total annual spending on prescription drugs in the US exceeds $405 billion, and Part D alone accounts for more than $215 billion.
- Drug and druggist’s sundries wholesaler industry employment decreased slightly during the first nine months of 2024, according to the US Bureau of Labor Statistics (BLS). Drug and druggist’s sundries wholesalers slightly increased their prices during the first nine months of 2024, according to the BLS.
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