A medicine does not move from manufacturer to patient through a single route. The path can involve wholesalers, specialty distributors, retail pharmacies, hospitals, infusion centres, payers and, increasingly, direct or home-based fulfilment.
That channel structure matters commercially. In the US, Bristol Myers Squibb reported that McKesson, Cencora and Cardinal Health together accounted for 87% of its US gross revenue in 2025.
For pharmaceutical companies, distribution is therefore more than a logistics function. The channel determines reach, cost, inventory visibility, patient access and, ultimately, how efficiently a product can be commercialized.
The Route Changes with the Medicine
A high-volume oral medicine can move through a relatively conventional route:
Manufacturer → wholesaler → pharmacy → patient
Complex therapies require a very different model.
Specialty medicines may involve specialty pharmacies, restricted distribution networks, hospital procurement or direct-to-provider arrangements. Products requiring administration can move through hospitals, physician practices, ambulatory infusion centres or home-infusion providers.
The choice depends on the product’s characteristics:
- Routine medicines: Broad wholesaler and retail pharmacy networks
- Specialty medicines: Specialty pharmacies and focused distributors
- Hospital products: Institutional procurement and provider networks
- Infusion therapies: Infusion centres, hospitals or home-care channels
- Highly specialized therapies: Controlled or manufacturer-supported distribution
This means a pharmaceutical company cannot determine its distribution strategy from market size alone. It needs to understand how the target product is purchased, stored, dispensed and administered.
Distribution Concentration Can Shape Commercial Risk
Wholesalers provide scale, but dependence on a small number of major distributors can create concentration risk.
Gilead reported in 2025 that approximately 90% of its US gross product sales historically flowed through three major wholesalers and their specialty-distributor affiliates. The company also noted that inventory held by wholesalers and distributors can affect how closely channel stock reflects actual end-user demand.
For manufacturers, the questions go beyond identifying the largest distributor:
- What geographic coverage does each channel provide?
- How much negotiating leverage does the distributor hold?
- Where is inventory physically located?
- How accurately does channel inventory reflect patient demand?
- What happens if a distributor changes purchasing behaviour?
A distribution strategy therefore needs to balance reach against concentration and control.
Specialty Products Need More Than a Bigger Distribution Network
The distribution requirements become more demanding as therapies become more complex.
Temperature-sensitive biologics, specialty injectables and cell and gene therapies can require controlled storage, specialized handling, patient scheduling and coordination between manufacturers and treatment sites.
The infrastructure is evolving accordingly. McKesson’s FY2026 reporting describes expanded refrigerated capacity and a dedicated cell-and-gene-therapy distribution facility, alongside a digitally connected network serving more than 1 million providers and 50,000 pharmacies.
For pharmaceutical companies launching specialized therapies, the assessment should therefore consider:
- Product requirements: Temperature, handling, storage and administration
- Site requirements: Hospitals, pharmacies, clinics or infusion centres
- Patient requirements: Scheduling, support and delivery coordination
- Channel capability: Whether distributors can meet the product’s operational requirements
A channel that works for conventional pharmaceuticals may not be suitable for a complex biologic.
Care Is Moving, and Distribution Has to Follow
The site where a medicine is administered can also change its route to the patient.
CMS’s 2026 outpatient payment rule expanded the use of outpatient settings by removing 285 mostly musculoskeletal procedures from the inpatient-only list. It also introduced physician-fee-schedule-equivalent payment for certain drug-administration services in excepted off-campus hospital outpatient departments, with an estimated $290 million reduction in OPPS spending during 2026.
For pharmaceutical manufacturers, these changes matter because a shift from hospital-based care toward outpatient settings can alter who buys the product, where it is stored and how it reaches the patient.
A product may therefore require a different distribution strategy as its treatment setting evolves.
How Nexdigm Assesses Pharmaceutical Distribution
Nexdigm’s pharmaceutical distribution market study can evaluate the commercial route from manufacturer to patient through five dimensions:
- Channel Mapping
Map wholesalers, specialty distributors, pharmacies, hospitals, clinics and emerging channels to understand how products reach patients. - Buyer & Purchasing Analysis
Assess who makes purchasing decisions, how procurement works and how channel relationships influence product access. - Distribution Economics
Evaluate channel margins, logistics costs, inventory requirements and the economics of alternative fulfilment models. - Infrastructure & Coverage
Assess cold-chain capabilities, geographic reach, storage, delivery networks and the ability to handle specialized therapies. - Channel Prioritization
Compare distribution routes according to reach, cost, control, scalability and product requirements to identify the most suitable commercial model.
This enables pharmaceutical companies to determine which channels to use, where direct distribution makes sense and where specialized partners are required.
Nexdigm’s Pharmaceutical Distribution Market Assessment
A pharmaceutical company preparing to launch a specialty therapy across 4 markets evaluated wholesale, specialty-pharmacy, hospital and direct-to-provider channels. Nexdigm mapped channel coverage, purchasing behaviour, logistics requirements and economics, identifying a hybrid distribution model combining national wholesalers with specialized fulfilment partners.
The route from manufacturer to patient increasingly depends on the product, treatment setting, buyer and infrastructure required to deliver it. Nexdigm’s pharmaceutical distribution market study helps companies map these relationships, compare channel economics and identify the distribution model best suited to market entry and expansion.
To take the next step, simply visit our Request a Consultation page and share your requirements with us.
Harsh Mittal
+91-8422857704
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