Twenty-six manufacturers now hold most-favored-nation agreements, and the commitments attached to the pricing terms may matter more than the prices themselves.
News|Articles|October 2, 2026
Cardinal Health, McKesson Extend CVS Distribution Deals to 2032
Author(s)Stephen Appezzato
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Key Takeaways
- Cardinal Health extended its CVS distribution arrangement through June 30, 2032, maintained current service scope, and reaffirmed fiscal 2027 non-GAAP EPS guidance of $12.40–$12.60.
- McKesson’s extension in principle runs to June 2032 and covers CVS retail pharmacies, mail order and specialty pharmacies, plus distribution centers; a definitive agreement remains pending.
Cardinal Health and McKesson moved to extend CVS Health distribution deals through June 2032, retaining their largest customer pending final contracts.
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Cardinal Health and McKesson each announced that they are extending their pharmaceutical distribution agreements with CVS Health through June 2032.1,2 Cardinal Health entered into a binding letter of intent, while McKesson signed an agreement in principle. Both moves keep the distributors tied to their largest customer for roughly six more years.
"We value our long-standing partnership with CVS Health and look forward to continuing to bring our best-in-class capabilities together to serve their customers," said Jason Hollar, CEO of Cardinal Health, in an announcement.1
Cardinal Health paired the announcement with a reaffirmation of its fiscal 2027 earnings guidance, while McKesson framed its extension around a relationship spanning more than two decades.
"We are pleased to extend our long-standing, strategic relationship with CVS Health and continue supporting their important role in serving patients and communities across the country," said Brian Tyler, chair and CEO of McKesson, in a press release.2 "For more than 25 years, our teams have worked together to deliver reliable, high-quality services to patients, and we remain committed to building on that strong foundation through our differentiated capabilities and shared focus on improving health outcomes."
What Do the Two Agreements Cover?
Cardinal Health said its letter of intent extends its existing CVS Health agreement through June 30, 2032, and continues its current scope of distribution services.1 Alongside the renewal, the company reaffirmed fiscal 2027 non-GAAP EPS growth guidance of 13% to 15% ($12.40 to $12.60). It also reaffirmed long-term non-GAAP EPS growth guidance of 12% to 14%.
McKesson's agreement in principle covers pharmaceutical distribution to CVS Health's mail order and specialty pharmacies,
How Much of Each Distributor's Business Rides on CVS Health?
CVS Health was Cardinal Health's largest customer in fiscal year 2026, accounting for 28% of revenue. Cardinal Health's five largest customers combined represented 43%.4 The company lists the loss of any significant customer or group purchasing organization among its risk factors.
At McKesson, sales to CVS Health accounted for approximately 24% of total consolidated revenues in fiscal 2026.3 CVS Health also represented approximately 21% of McKesson's trade accounts receivable as of March 31, 2026.
The renewals follow a busy stretch for CVS Health's pharmacy business. In August, the company
What Comes Next for the Two Agreements?
Neither company disclosed financial terms. McKesson's extension remains an agreement in principle, with a definitive contract still to be signed. Cardinal Health described its letter of intent as binding and said it may provide further updates on its first-quarter earnings call on Nov. 5.1
With both agreements now set to run to mid-2032, CVS Health's pharmaceutical distribution is positioned to remain with the same two wholesalers through the end of the decade, pending definitive contracts.
References
1. Cardinal Health. "Cardinal Health Enters into Binding Letter of Intent to Extend Pharmaceutical Distribution Agreements with CVS Health." PR Newswire. Oct. 1, 2026.
2. McKesson Corporation. "McKesson Corporation Extends Pharmaceutical Distribution Agreement with CVS Health." Oct. 1, 2026.
3. McKesson Corporation. Form 10-K for the Fiscal Year Ended March 31, 2026. U.S. Securities and Exchange Commission. Accessed Oct. 2, 2026.
4. Cardinal Health. Form 10-K for the Fiscal Year Ended June 30, 2026. U.S. Securities and Exchange Commission. Accessed Oct. 2, 2026.
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