Cencora, Inc. (Cencora) is a global pharmaceutical sourcing and distribution services company.
The company helps both healthcare providers and pharmaceutical and biotech manufacturers improve patient access to products and enhance patient care. The company delivers innovative programs and services designed to increase the effectiveness and efficiency of the pharmaceutical supply chain in both human and animal health. More specifically, the company distributes a comprehensive offering of brand-n...
Cencora, Inc. (Cencora) is a global pharmaceutical sourcing and distribution services company.
The company helps both healthcare providers and pharmaceutical and biotech manufacturers improve patient access to products and enhance patient care. The company delivers innovative programs and services designed to increase the effectiveness and efficiency of the pharmaceutical supply chain in both human and animal health. More specifically, the company distributes a comprehensive offering of brand-name, specialty brand-name, and generic pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, and related services to a wide variety of healthcare providers located in the United States and select global markets, including acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and alternate site pharmacies, physician practices, medical and dialysis clinics, veterinarians, and other customers. Additionally, the company furnishes healthcare providers and pharmaceutical manufacturers with an assortment of related services, including data analytics, outcomes research, reimbursement and pharmaceutical consulting services (including regulatory affairs, development consulting and scientific affairs, pharmacovigilance, and quality management and compliance) niche premium logistics services, inventory management, pharmacy automation, pharmacy management, and packaging solutions.
The company serves its customers (healthcare providers and pharmaceutical and biotech manufacturers) through a geographically diverse network of distribution service centers and other operations in the United States and select global markets. In the company’s pharmaceutical distribution businesses, the company is typically the primary supplier of pharmaceutical and related products to the company’s healthcare provider customers. The company offer a broad range of services to the company’s customers designed to enhance the efficiency and effectiveness of their operations, which allow them to improve the delivery of healthcare to patients and to lower overall costs in the pharmaceutical supply chain.
Strategy
The company’s business strategy is focused on the global pharmaceutical supply chain where the company provides distribution and value-added services to healthcare providers (primarily pharmacies, health systems, medical and dialysis clinics, physicians, and veterinarians) and pharmaceutical manufacturers to improve channel efficiencies and support positive patient outcomes. The company’s strategy is one of driving executional excellence in the company’s core distribution solutions business in the U.S. and internationally, while also investing in higher-margin, high-growth adjacencies where the company provides solutions to pharmaceutical manufacturers to support the clinical development and commercialization of their therapies and support providers in driving efficiency and effectiveness of their operations. Implementing this disciplined and focused strategy in a seamless and unified way has allowed the company to significantly expand the company’s business. The company is well positioned to grow revenue and increase operating income through the execution of the following key elements of the company’s business strategy:
Optimize and Grow U.S. Healthcare Solutions Businesses. The company is well positioned in size and market breadth to continue to grow the company’s U.S. Healthcare Solutions businesses as the company invest to improve the company’s operating and capital efficiencies. The company’s U.S. human health distribution businesses, including specialty pharmaceuticals, anchor the company’s growth and position in the pharmaceutical supply chain as the company provides superior distribution services and deliver value-added solutions, which improve the efficiency and competitiveness of both healthcare providers and pharmaceutical manufacturers, thus allowing the pharmaceutical supply chain to better deliver healthcare to patients.
The company is a leader in distribution and services to community oncologists and have leading positions in other physician-administered products, such as those in ophthalmology. The company distribute plasma and other blood products, injectable pharmaceuticals, vaccines, and other specialty products. The company is well positioned to service and support biotechnology therapies, including biosimilars, and advanced technologies such as cell and gene therapies.
The company has introduced strategies to enhance its position in the generic marketplace, including the company’s generic product private label program based in Ireland. The company sources generics globally, offer a value-added generic formulary program to the company’s healthcare provider customers, and monitor the company’s customers' compliance with its generics program. The company also provides data and other valuable services to the company’s manufacturer customers.
The company offers value-added services and solutions to assist healthcare providers and pharmaceutical manufacturers to improve their efficiency and their patient outcomes. Services for manufacturers include assistance with new product launches, promotional and marketing services to accelerate product sales, product data reporting, market access and health economics consulting, patient support programs, and logistical support.
The company’s provider solutions include: its Good Neighbor Pharmacy program, which enables independent community pharmacies to compete more effectively through pharmaceutical benefit and merchandising programs; Elevate Provider Network, the company’s managed care network, which connects the company’s retail pharmacy customers to payor plans throughout the country and is one of the largest in the United States; generic product purchasing and private label services; hospital pharmacy consulting designed to improve operational efficiencies; and packaging solutions for institutional and retail healthcare providers. The company also offers services that optimize patient access and provide purchasing power to providers.
The company has one of the lowest operating cost structures among pharmaceutical distributors. The company’s robust distribution facility network includes a national distribution center in Columbus, OH, which offers pharmaceutical manufacturers a single shipping destination. The company continue to seek opportunities to achieve increased productivity and drive operating income gains as the company invests in and continues to implement warehouse automation technology, adopt ‘best practices’ in warehousing activities, and increase operating leverage by increasing volume per full-service distribution facility. The company continues to seek opportunities to expand the company’s offerings in the company’s human health distribution businesses.
The company’s animal health business sells pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and various other products to customers in both the companion animal and production animal markets. It also offers its customers a variety of value-added services, including its e-commerce platform, technology management systems, pharmacy fulfillment, inventory management system, equipment procurement consultation, special order fulfillment, and educational seminars, which closely integrate the animal health business with its customers' day-to-day operations and provide them with meaningful incentives to remain customers.
The company’s consulting service businesses help global pharmaceutical and biotechnology manufacturers commercialize their products. The company provides reimbursement services that assist pharmaceutical companies in supporting access to branded drugs. The company also provides outcomes research, contract field staffing, patient assistance and copay assistance programs, adherence programs, risk mitigation services, and other market access programs to pharmaceutical companies.
Optimize and Grow The company’s International Healthcare Solutions Businesses. The company is well positioned in size and market breadth to continue to grow the company’s International Healthcare Solutions businesses as the company invests to improve its operating and capital efficiencies. The International Healthcare Solutions reportable segment consists of businesses that focus on international pharmaceutical wholesale and related service operations and global commercialization services. The International Healthcare Solutions reportable segment distributes pharmaceuticals, other healthcare products, and related services to healthcare providers, including pharmacies, doctors, health centers and hospitals primarily in Europe. It is a leading global specialty transportation and logistics provider for the biopharmaceutical industry. It also is a provider of specialized services, including regulatory affairs, development consulting and scientific affairs, pharmacovigilance, and quality management and compliance, for the life sciences industry. The Canada business drives innovative partnerships with manufacturers, providers, and pharmacies to improve product access and efficiency throughout the healthcare supply chain.
Acquisitions and Investments. In order to grow the company’s core strategic offerings and to enter related markets, the company has acquired and invested in businesses and will continue to consider additional acquisitions and investments.
Segments
The company is organized geographically based upon the products and services the company provides to the company’s customers. The company’s operations are consisted of two reportable segments: U.S. Healthcare Solutions and International Healthcare Solutions.
U.S. Healthcare Solutions Segment
The U.S. Healthcare Solutions reportable segment distributes a comprehensive offering of brand-name, specialty brand-name and generic pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, and related services to a wide variety of healthcare providers, including acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and alternate site pharmacies, and other customers. The U.S. Healthcare Solutions reportable segment also provides pharmaceutical distribution (including plasma and other blood products, injectable pharmaceuticals, vaccines, and other specialty pharmaceutical products) and additional services to physicians who specialize in a variety of disease states, especially oncology, and to other healthcare providers, including hospitals and dialysis clinics. Additionally, the U.S. Healthcare Solutions reportable segment provides data analytics, outcomes research, and additional services for biotechnology and pharmaceutical manufacturers. The U.S. Healthcare Solutions reportable segment also provides pharmacy management, staffing and additional consulting services, and supply management software to a variety of retail and institutional healthcare providers. It also provides a full suite of integrated manufacturer services that ranges from clinical trial support to product post-approval and commercialization support. Additionally, it delivers packaging solutions to institutional and retail healthcare providers. Through its animal health business, the U.S. Healthcare Solutions reportable segment sells pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and various other products to customers in both the companion animal and production animal markets. It also offers demand-creating sales force services to manufacturers.
International Healthcare Solutions Segment
The International Healthcare Solutions reportable segment consists of businesses that focus on international pharmaceutical wholesale and related service operations and global commercialization services. The International Healthcare Solutions reportable segment distributes pharmaceuticals, other healthcare products, and related services to healthcare providers, including pharmacies, doctors, health centers and hospitals primarily in Europe. It is a leading global specialty transportation and logistics provider for the biopharmaceutical industry. It also is a provider of specialized services, including regulatory affairs, development consulting and scientific affairs, pharmacovigilance, and quality management and compliance, for the life sciences industry. In Canada, the business drives innovative partnerships with manufacturers, providers, and pharmacies to improve product access and efficiency throughout the healthcare supply chain.
Sales and Marketing
The majority of U.S. Healthcare Solutions' sales force is led nationally, with geographic focus and specialized by either healthcare provider type or size. Customer service representatives are centralized to respond to customer needs in a timely and effective manner. U.S. Healthcare Solutions also has support professionals focused on its various technologies and service offerings. U.S. Healthcare Solutions' sales teams also serve national account customers through close coordination with local distribution centers and ensure that the company’s customers are receiving service offerings that meet their needs. The company’s International Healthcare Solutions' businesses each have independent sales forces that specialize in their respective product and service offerings. In addition, the company has an enterprise-wide marketing team that coordinates branding and all other marketing activities across the company.
Customers
The company has a diverse customer base that includes institutional and retail healthcare providers, as well as pharmaceutical manufacturers. Institutional healthcare providers include acute care hospitals, health systems, mail order pharmacies, long-term care and other alternate care pharmacies, and providers of pharmacy services to such facilities, physicians, and physician group practices. Retail healthcare providers include national and regional retail drugstore chains, independent community pharmacies, pharmacy departments of supermarkets and mass merchandisers, and veterinarians. The company is typically the primary source of supply for the company’s healthcare provider customers. The company’s manufacturer customers include branded, generic, and biotechnology manufacturers of prescription pharmaceuticals, as well as over-the-counter product and health and beauty aid manufacturers. In addition, the company offers a broad range of value-added solutions designed to enhance the operating efficiencies and competitive positions of the company’s customers, thereby allowing them to improve the delivery of healthcare to patients and consumers.
The company’s two largest customers, Walgreens Boots Alliance, Inc. (‘WBA’) and Evernorth Health Services (formerly Express Scripts, Inc.), accounted for approximately 26% and approximately 13%, respectively, of revenue in fiscal 2024. The company’s top 10 customers, including governmental agencies and group purchasing organizations (‘GPO’), represented approximately 66% of revenue in fiscal 2024.
Competition
The company’s largest competitors are McKesson Corporation (‘McKesson’), Cardinal Health, Inc. (‘Cardinal’), and UPS Logistics, among others. The company’s U.S. human health distribution businesses compete with both McKesson and Cardinal, as well as national generic distributors and regional distributors within pharmaceutical distribution. Alliance Healthcare, MWI Animal Health, World Courier, and the company’s consulting businesses also face competition from a variety of entities.
Government Regulation
The company is subject to extensive oversight by United States, United Kingdom and European Union governmental entities and the company is subject to, and affected by, a variety of laws, regulations, and policies.
The company and its customers are subject to fraud and abuse laws, including the federal anti-kickback statute and the False Claims Act.
History
The company was founded in 1871. It was incorporated in 2001. The company was formerly known as AmerisourceBergen Corporation and changed its name to Cencora, Inc. in 2023.
