Currently three major players - all among the top 30 largest U.S. public companies - dominate healthcare product distribution.  Other than consultants, distributors possess more customer information than any other stakeholder.  In fact, manufacturers and GPOs rely on them for information about their customers.

They have not, however, done a great job overall of creating value beyond price.  Over the past 10 years, there has been nominal share shift between them; each continues to serve about a third of the market. 

Distributor Issues:

• have the slimmest margins of all supply chain stakeholders
• have not effectively leveraged the power of their vast stores of information
  
  

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As providers increasingly shift to just-in-time strategies, distributors will have the opportunity to increase their influence by managing centralized warehouses for all medical products.  These data kings of the supply chain also have the means to develop other, more profitable businesses and to use their highly efficient distribution business as a loss leader.