How Cardinal Health Wins by Owning What It Delivers

Part of Distributor Playbooks — strategy teardowns of every company on the 2025 MDM Top Distributors lists.

Cardinal Health lands at #3 on Modern Distribution Management's 2025 Top Distributors list for Pharma & Healthcare, on $205.0 billion in 2024 revenue per MDM's count. That figure alone makes it one of the largest companies in North America, full stop, in any industry. The more interesting question is what Cardinal has been doing with the cash flow a business that size throws off, because the answer is a quiet bet that distribution alone is no longer enough.

From food wholesaler to pharmacy giant

Robert D. Walter started the company in 1971 as Cardinal Foods, a food distribution business in Ohio. The pivot came in 1979, when Walter acquired Bailey Drug Company and redirected the firm toward pharmaceutical wholesale. It went public in 1983 and took the Cardinal Health name in 1994, by which point it was already the third-largest drug wholesaler in the country.

The 1990s were a buying spree that built the modern company: Medicine Shoppe's pharmacy franchises in 1995, Pyxis Corporation's automated medication dispensing for $867 million in 1996, Owen Healthcare in 1997, Allegiance Healthcare for $2.7 billion in 1999, Bindley Western in 2001. Revenue went from $1.2 billion to $8.9 billion between 1991 and 1996 alone, according to Wikipedia's history of the company. A 2004 accounting restatement covering fiscal 2001 through 2004 and a 2009 spinoff of the clinical-products business into CareFusion were the hard chapters in that arc, along with a run of opioid-related settlements that culminated in a $6.4 billion payment as part of the $26 billion multistate settlement in 2021.

Jason Hollar took over as CEO on September 1, 2022, succeeding Mike Kaufmann. Under Hollar, the company has been unusually clear about where it wants to grow next, and it isn't in commodity pharmaceutical wholesale.

A margin problem the whole industry shares

Pharmaceutical distribution is a three-company game. Cardinal Health, McKesson, and Cencora move the overwhelming majority of drugs sold in the United States, and the margins on that core business are famously thin, because manufacturers and retail pharmacy customers both have leverage over the middle. Scale helps, but scale alone doesn't change the structure. What changes it is owning something your rivals don't have to fight over on price.

Cardinal has two answers to that problem, and they're worth separating because they work on different logic.

The moat that decay physics builds for you

The first is Nuclear & Precision Health Solutions, Cardinal's radiopharmaceutical business, which the company describes as the only national network offering both PET and SPECT products. It traces back to 1972, when Cardinal opened the first centralized nuclear pharmacy, and 1985, when it built the first nationwide nuclear pharmacy network. Today that network runs more than 130 radiopharmacies and over 30 PET manufacturing sites with cyclotrons, serving upward of 6,600 customers and dispensing more than 12 million patient-ready doses a year, with a 99.99% dispensing accuracy rate, per Cardinal Health's own account of the business.

That network is close to un-copyable, not because a competitor lacks the capital, but because radiopharmaceuticals decay on a clock measured in hours. You cannot warehouse them regionally and truck them out; you have to manufacture and compound close to the patient, on a schedule that matches a hospital's imaging or infusion appointment. Density built over fifty years is the product. In May 2026, Cardinal said it would expand production of the cancer isotope actinium-225 at its Indianapolis site in partnership with SHINE Technologies, part of a broader push to bring critical isotope supply chains back onshore, as Chain Drug Review reported.

Buying the demand side, not just the supply chain

The second answer is newer and more aggressive: buying the physician practices that write the orders. Across 2024, Cardinal closed a run of specialty-care acquisitions worth roughly $5 billion combined.

The GI Alliance deal, detailed by Healthcare Dive, came with sellers including physician owners and Apollo Global Management, and it gives Cardinal an option to buy the remaining stake within three years. Hollar's stated rationale was blunt: Cardinal would "take care of the business side of what they do," running back-office functions like revenue cycle management and physician recruiting so specialty doctors could focus on medicine, with plans to extend the GI Alliance platform model into other therapeutic areas.

That's the insight worth naming directly. McKesson and Cencora, Cardinal's two direct peers on every pharma distribution ranking, have largely stayed on the supply side of the line, expanding through specialty pharmacy and biopharma services but not through owning physician practices outright. Cardinal crossed that line in 2024, and did it fast, with four deals in under twelve months. It is choosing to own a stake in the prescribing decision itself, not just the truck that fills it. That is a genuinely different kind of bet than density or scale, and it carries a different kind of risk too: practice ownership means Cardinal now answers for clinical operations and physician relationships in a way a pure wholesaler never had to, in a healthcare system where control of physician networks draws its own regulatory scrutiny.

Whether that bet pays off will show up less in Cardinal's headline revenue, which was already the largest in the industry, and more in whether GI Alliance's playbook actually replicates cleanly into oncology, cardiology, or wherever it goes next.

This series looks at companies like Cardinal Health because the parts of distribution that never make headlines, the catalogs, the branch networks, the delivery windows measured in hours instead of days, are usually where the real competitive advantage was built all along.