PLMA_1170x120_10-8-21

Pharmacy players rise in Fortune 500

Print Friendly, PDF & Email

Players in the retail pharmacy space accounted for three of the top 10 spots in the 2016 Fortune 500 list of the nation’s largest companies by revenue.

Coming in again at No. 1 overall on the annual list, released this week, was the world’s largest retailer, Walmart, with sales of $482.13 billion. The company is the fourth-biggest pharmacy retailer, tallying about $24 billion in pharmacy sales.

Fortune 500 logo_2016The largest U.S. pharmacy retailer, CVS Health, rose to No. 7 on the Fortune 500 from No. 10 last year, with revenue up 10% to $153.29 billion, Fortune magazine reported.

“Though the PBM eclipsed its retail drug store business size a few years ago, the company has still gone still full steam ahead with expanding its CVS Pharmacy business,” Fortune wrote. CVS’ retail pharmacy sales topped $72 billion in its most recently completed fiscal year, and its more than 9,600 stores now include the 1,600-plus pharmacies inside Target stores.

Just above CVS on the list was the biggest pharmaceutical distributor, McKesson, which finished at No. 5 with sales of $181.24 billion, a year-over-year gain of over 31%, according to Fortune. McKesson — whose business units include the retail pharmacy networks Health Mart (4,600-plus drug stores) and McKesson Canada (1,500-plus drug stores) — climbed from the No. 11 slot last year.

Citing the diminishing tailwind of generic drug price inflation and possible loss of Rite Aid as a customer, Fortune wrote about McKesson, “Management has been working on a series of maneuvers to lessen these blows, including acquiring strategic bolt-on companies to replace lost business and implementing a restructuring plan that’s expected to generate about $180 million in savings this fiscal year.”

AmerisourceBergen nearly cracked the top 10 on the Fortune 500 this year, rising to No. 12 from the No. 16 spot last year. The drug wholesaler’s revenue grew almost 14% to $135.96 billion.

The soon-to-be largest U.S. chain drug retailer, Walgreens Boots Alliance, jumped to No. 19 after finishing at No. 35 on the 2015 Fortune 500 list. Revenue totaled $103.44 billion, a gain of over 35%.

“Walgreens’ size gives it enormous clout with drugmakers, and the Boots products have been a big shot in the arm for its beauty business,” Fortune wrote. Of WBA’s pending $17.2 billion deal to buy Rite Aid, Fortune observed, “Its acquisition of smaller rival Rite Aid may force it to sell off more drug stores than it really wants to.” If OK’d by regulators, the purchase of Rite Aid would add roughly 4,600 stores to Walgreens’ store base of over 8,100 stores.

Rite Aid, meanwhile, climbed up the Fortune 500 list to No. 107 from No. 117 a year ago, as sales edged up nearly 4% to about $26.53 billion. The company’s acquisition of PBM EnvisionRx has since lifted total revenue to almost $31 billion.

Also moving up on the 2016 Fortune 500 in the pharmacy space was distributor Cardinal Health, which rose to No. 21 from No. 26 last year as revenue grew almost 13% to $102.53 billion.

Cardinal Health “has been shoring up its future earnings through a series of strategic acquisitions, development of its alternate care business, and promotion of its specialty drug assets,” Fortune wrote, also pointing to the company’s generic drug sourcing joint venture with CVS Health. “Cardinal Health will also be focused on its Red Oak venture over the next year. The 10-year split generics buying operation with CVS is a strong earnings booster.”


EMC_728x90

PHILLYGLASS_728x90_7-29-21

Comments are closed.