Major ClientsNarrow moat
Eli Lilly (LLY) — moat facet
Three wholesalers buy nearly everything and three benefit managers decide whether anyone can — and only the first group appears in the filing.
Lilly's customer disclosure is short and revealing. In each of 2023, 2024 and 2025, three American wholesale distributors — McKesson, Cencora and Cardinal Health — each accounted for a significant percentage of consolidated revenue, and no other customer exceeded 10%1. Those three also account for a substantial portion of trade receivables, generally without collateral.
But the wholesalers are logistics. They take title, warehouse the product and ship it, and they do not decide whether a patient can obtain it. That decision belongs to a different set of counterparties who never appear in the concentration table at all: pharmacy benefit managers and health plans, which Lilly's own filing notes have consolidated into fewer, larger entities with enhanced market power, and which control formulary placement by negotiating rebates in exchange for coverage. Unfavourable placement means prior authorisations, exclusions and higher out-of-pocket costs — a product that is approved, manufactured and prescribed, and still not dispensed.
This is why the gap between list price and realised price is so wide, and why Lilly's realised prices keep falling even as demand grows. The rebate is the price of admission.
The third development is Lilly's attempt to go around all of it. LillyDirect sells to patients directly, and the company states that sales through the platform represented a growing portion of its business in 2025. That is a manufacturer deliberately disintermediating the channel that has taken a share of its economics for decades — the most consequential change in these relationships in a generation.
The disclosed customer relationships are unchanged, and the undisclosed ones continue to tighten: benefit managers have consolidated further, formulary leverage is greater, and realised prices keep falling while volumes grow. LillyDirect is a real and promising answer, but it is small against the portfolio and carries retaliation risk. The direction of power in this channel has not yet reversed.
McKesson, Cencora and Cardinal Health move most U.S. product, while benefit managers and health plans, who appear in no concentration table, decide access. A wholesaler above a quarter of revenue would add operational risk without adding pricing power on either side.
Source: Eli Lilly Form 10-K, FY2025 (Note 2) ↗- ReportedThree US wholesalers each accounted for a significant percentage of revenue with no other customer above 10%; PBMs and health plans have consolidated and control formulary placement through rebates; LillyDirect sales were a growing portion of the business in 2025.Eli Lilly Form 10-K, FY2025 — in 2025, 2024 and 2023 three US wholesale distributors, McKesson Corporation, Cencora, Inc. and Cardinal Health, Inc., each accounted for a significant percentage of consolidated revenue, and no other customer accounted for more than 10 percent in any of these years; wholesale distributors account for a substantial portion of trade receivables with collateral generally not required; health plans, managed care organizations, pharmacy benefit managers, wholesalers and pharmacies have consolidated into fewer, larger entities, enhancing their market power, and maintain formularies specifying coverage and reimbursement, controlling costs by negotiating discounts or rebates in exchange for formulary inclusion and placement, with unfavorable placement leading to reduced usage through prior authorizations, exclusions or higher consumer out-of-pocket cost; LillyDirect is a direct-to-patient digital platform through which sales represented a growing portion of the business in 2025 — FY2025 (ended December 31, 2025) · publ. February 12, 2026 · source ↗