Three Wholesalers, and Nobody Else Above Ten PercentNarrow moat
Eli Lilly (LLY) — moat facet
McKesson, Cencora and Cardinal each take a significant share of revenue and carry the receivables unsecured — logistics, not power.
Lilly's 10-K names three customers and no others: in 2025, 2024 and 2023, McKesson, Cencora and Cardinal Health each accounted for a significant percentage of consolidated revenue, and no other customer accounted for more than 10 percent in any of those years1.
This is the standard structure of American pharmaceutical distribution rather than anything specific to Lilly, and it concentrates two different risks. The first is operational: essentially all of Lilly's American product reaches pharmacies through three companies, so a disruption at any one is a disruption to a large share of revenue. The second is financial — wholesale distributors account for a substantial portion of trade receivables, and collateral is generally not required.
What the concentration does not confer is much pricing power on either side. Wholesalers earn a fee for moving product; they do not choose which drug a patient receives, and they cannot substitute a competitor's molecule for Lilly's. The genuinely powerful counterparties are the benefit managers on the next page, who never appear in this disclosure.
Watch receivable balances against revenue growth. In a business growing this fast, with three unsecured counterparties carrying most of the exposure, receivables expanding faster than sales would be the first sign of strain in a channel that is otherwise the least interesting part of the story.
Three wholesalers, each a significant percentage of revenue, in each of the last three years — the standard structure of American pharmaceutical distribution and unchanged. It concentrates operational and receivable risk without conferring pricing power on either side, which is why it is the least interesting part of Lilly's customer picture.
Receivables are unsecured and concentrated in the same three names that move the product. A rising share would increase credit exposure to any one distributor; Lilly reports its allowance for doubtful accounts as not material.
Source: Eli Lilly Form 10-K, FY2025 (Note 2) ↗- ReportedMcKesson, Cencora and Cardinal Health each accounted for a significant percentage of consolidated revenue in 2023-2025, with no other customer above 10%; wholesale distributors account for a substantial portion of trade receivables without collateral.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 ↗