Cencora's Bet: Sell the Warehouses, Buy the Physicians

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

Cencora lands at #2 in Modern Distribution Management's 2025 Top Distributors ranking for Pharma & Healthcare, on roughly $255.7 billion in 2024 revenue per MDM's report. That number alone tells you it moves about a fifth of every drug dispensed in the United States. What it does not tell you is that the company spent the past eighteen months quietly reversing the logic that built it: instead of adding more distribution categories, it is selling one off and buying its way into owning physician practices.

The moat everyone already knows about

The base business is scale, and scale in drug distribution is almost boring to describe. Cencora, McKesson, and Cardinal Health move the overwhelming majority of pharmaceuticals sold in the U.S., and the economics reward density: more warehouses, more delivery routes, tighter margins absorbed by volume. Cencora's version includes World Courier, a specialty and cold-chain logistics arm it bought in 2012 that handles clinical trial materials and temperature-sensitive biologics across more than 50 countries — a genuinely hard-to-replicate network for a category (cell and gene therapy, biologics) that is growing faster than pills in a bottle ever will again.

That much is the standard playbook for a national pharma wholesaler. It is not the interesting part.

The unbundling

In January 2025, Cencora completed its acquisition of Retina Consultants of America, paying roughly $4.4 billion for an 85 percent stake in the largest management services organization in retina care, a specialty built around expensive, complex-to-administer treatments for macular degeneration. The company said the deal would let it "build on its leadership in specialty, expand its MSO solutions and drive differentiated value for stakeholders." Read plainly, that means Cencora now owns a piece of roughly 1,750 retina physicians and the 565-plus locations they practice out of. It is not distributing to those practices anymore. It is one of the practices.

Then, thirteen months later, it did the opposite move on a different limb of the business. In February 2026, Cencora announced it would merge MWI Animal Health with Covetrus, folding its veterinary distribution unit — valued at $3.5 billion — into a combined company it will not control. Cencora walks away with $1.25 billion in cash, $800 million in preferred equity, and a 34.3 percent non-controlling stake. CEO Bob Mauch framed it as freeing Cencora to focus on "key growth priorities," and Covetrus CEO Ben Wolin talked about pairing MWI's distribution muscle with his company's technology platform.

Put those two transactions side by side and the pattern is plain: Cencora is not trying to be the biggest distributor across every category anymore. It is trading breadth in commodity distribution categories, like animal health, for depth in specialty human healthcare, where owning the physician relationship and the drug supply chain around a single high-value therapy category is worth more than owning a warehouse network in a lower-margin adjacent business. That is the strategic tension worth naming plainly: a company that grew for two decades by adding distribution categories is now actively subtracting one, on the theory that vertical depth in specialty care beats horizontal breadth in general distribution. It is a bet that could look prescient in five years or could look like Cencora ceded a category to a competitor at exactly the wrong moment, if animal health turns out to be more valuable standalone than as a JV stake.

How the company got built to make that bet

Cencora's capacity to move that fast on portfolio surgery traces back to its own consolidation. The company was formed in 2001 when Bergen Brunswig merged with AmeriSource, combining two century-old drug wholesalers into what became AmerisourceBergen. Steven Collis took over as CEO in 2011 and, over 13 years, more than tripled revenue past $250 billion while building out the specialty and animal health arms through a string of deals: World Courier in 2012, MWI Veterinary for $2.5 billion in 2015, PharMEDium's compounding business the same year, H.D. Smith in 2018, and Alliance Healthcare from Walgreens for roughly $6.5 billion in 2021. In August 2023 the company renamed itself Cencora, and on October 1, 2024, Collis handed the CEO role to Robert Mauch, the company's COO and a 30-year pharma veteran who had founded Xcenda, a health economics consultancy Cencora acquired in 2007, before moving into operating roles. Collis stayed on as Executive Chair. It was Mauch, roughly a year into the job, who greenlit the Retina Consultants deal and the MWI-Covetrus merger back to back — a new CEO reshaping the portfolio faster than his predecessor did in over a decade of steady roll-up.

What it adds up to

The through-line is that Cencora no longer treats "distributor" as a fixed identity. It treats it as a starting position from which to move upstream into specialty care ownership where the drug is complex and the relationship is durable, while treating general distribution categories as things you can hold, or trade, depending on where the growth is. That is a harder story to tell in an annual report than "we deliver more pills to more pharmacies than anyone," but it is the one that actually explains the last two years of deal activity.

Every distributor on MDM's list runs on the same unglamorous machinery underneath the strategy: catalogs that have to be accurate, branches that have to be stocked, and data that has to move as fast as the product does. This series keeps looking at how the largest players wire that machinery together.