Moves over 4 billion prescription units a year to pharmacies and hospitals across all 50 states.
At a glance
- Depends onMidstream position: 5 outgoing, 7 incoming connections
- ScaleMarket cap is in the top 5% of all stocks globally
Moves over 4 billion prescription units a year to pharmacies and hospitals across all 50 states.
McKesson moves over 4 billion prescription units a year through 28 automated distribution centres, and every controlled substance in that flow requires an unbroken DEA chain-of-custody from manufacturer to pharmacy — which means retail chains like CVS and Walgreens and hospital systems like HCA have no legal option but to route orders through a federally licensed distributor with next-day delivery already built. Because DEA rules bar manual labour from filling in during volume spikes, the robotic picking capacity inside those 28 centres is the hard ceiling on how many prescriptions can move in any given week, so flu-season surges and new specialty-drug launches cause units to queue rather than flow. On top of that physical infrastructure sits OneStop, a platform with live software connections into hospital medical-record systems and manufacturer approval to process patient assistance programmes for expensive specialty drugs — a combination that took years of custom integration work to assemble and that manufacturers will only grant to distributors who have already built and validated each connection. A hospital that wanted to switch distributors anyway would face a 90-day federal process just to transfer its controlled-substance registrations, an 18-month Joint Commission requalification before a new specialty distributor could serve it, and the cost of rebuilding every OneStop software connection from scratch.
How does this company make money?
The company charges a fee for every prescription unit it delivers to a pharmacy. Drug manufacturers pay rebates based on how much volume the company moves, and those rebates are what make the thin per-unit margins add up to something meaningful. Hospitals and specialty pharmacies that use the OneStop platform pay a service fee for it. Independent pharmacies also pay a licensing fee to use the company's prescription management software.
What makes this company hard to replace?
A hospital system that wants to move to a different specialty drug distributor must go through an 18-month requalification process required by Joint Commission accreditation rules — there is no shortcut. The custom software connections between OneStop and each hospital's electronic medical record system cannot simply be copied over; a new distributor would have to build them from scratch. On top of that, transferring DEA registrations for controlled substances requires a 90-day federal approval process, meaning even the paperwork alone takes three months before a single controlled substance can legally move through a new distributor.
What limits this company?
The robotic picking systems inside the 28 distribution centres set a hard ceiling on how many units can move on any given day. When prescription volume spikes — during flu season or a major drug launch — DEA rules bar the company from simply adding manual workers to speed things up. Orders queue instead of flowing, and there is no quick fix because building and certifying a new automated distribution centre takes years.
What does this company depend on?
The company cannot operate without its DEA wholesale distribution licences across all 50 states — losing even one state licence creates a gap in the chain-of-custody records the federal government requires. It also depends on rebate agreements with pharmaceutical manufacturers that top up margins on each drug sold. The automated warehouse systems, supplied by vendors like Swisslog, keep the distribution centres running. Its temperature-controlled transportation fleet keeps biologics inside the required 2–8°C window. Finally, large credit facilities give it the cash to hold billions of dollars of pharmaceutical inventory before it is paid.
Who depends on this company?
CVS Health and Walgreens would run out of stock within 48 hours if deliveries stopped. Hospital systems like HCA Healthcare would face critical drug shortages within 24 hours, directly affecting patient care. Specialty oncology practices would lose access to chemotherapy drugs entirely, because those drugs require cold-chain handling that smaller distributors are not set up to provide.
How does this company scale?
Adding a new distribution centre and layering in route-optimisation software lets the company lower the cost of each prescription it fills — that part scales reasonably well. What does not scale is rural pharmacy delivery: the distances between customers in low-density areas mean daily delivery routes cost too much to run profitably, no matter how good the software gets.
What external forces can significantly affect this company?
Changes to Medicare Part D reimbursement rates hit directly, because they set the prices pharmacies receive for generic drugs and shape the fees distributors can charge. Opioid litigation has already produced multi-billion-dollar settlements across the wholesale distribution industry, and future legal costs remain unpredictable. The Drug Supply Chain Security Act requires the company to track and trace every individual drug unit through serialisation technology, forcing ongoing and expensive software upgrades to stay compliant.
Where is this company structurally vulnerable?
The entire real-time data pipeline runs through APIs provided by major electronic medical record systems like Epic and Cerner. If either of those vendors changed its policy and cut off direct third-party access, OneStop would have to revert to slow manual processes for prior authorisations. That would erase the speed advantage that keeps manufacturers restricting programme access to this company and keeps hospitals locked in — both would have a reason to look elsewhere at the same time.
Sign in to view price data.
Sign inScreen for dividend patterns
Find other stocks with similar dividend characteristics in the screener.
Structural observations derived from financial data, industry benchmarks, and supply chain position.
Companies that share the same coordination system — how they create, deliver, or capture value.
CompanyGraph