News

It makes more than Amazon. Do you know Pa.'s biggest company?

Written by Joel Shannon/The York Daily Record | Jan 16, 2018 8:19 AM
Amerisource_Louisville-Distribution-Drug.jpg

A forklift operator works at an AmerisourceBergen facility. (Photo: Courtesy AmerisourceBergen)

(Undated) -- It takes in more money than Amazon. It employs 20,000 people. It's the largest company based in Pennsylvania.

And you've almost certainly never heard of it.

AmerisourceBergen is a pharmaceutical distributor based in Chesterbrook, near the King of Prussia Mall. 

n the 2016 fiscal year, it made $146 billion in revenue, coming in at 11th on the Fortune 500 list. Amazon is one place lower and earned over $10 billion less.

For context, Pennsylvania's state budget is only $32 billion.

What does the company do?

AmerisourceBergen is the second biggest distributor of pharmaceuticals in the nation, according to Fortune.

Wholesale distributors connect drug manufacturers -- the people who make the drugs -- with business such as pharmacies -- the people who get the drugs to patients.

But AmerisourceBergen CEO Steven Collis says he sees the business as a marketplace, rather than simply a middleman.

"Each day, tens of thousands of healthcare providers reach out to us as their primary source for the healthcare products they need to provide care to patients. We bring them convenience, reliability, security, selection. We make life easier for them," he wrote in a LinkedIn post

Lauren Moyer, the director of external communications for AmerisourceBergen, said the company also has a variety of operations that complement drug distribution. For example, in some cases, the business works to get drugs directly to patients; it also offers a number of support services, such as consulting for small pharmacies.

Why is it so big?

Fortune ranks businesses by revenue, and AmerisourceBergen certainly has a lot of that: $153 billion in the 2017 fiscal year, according to the Security and Exchange Commission.

The industry it's in is a big part of the reason.

Buying and selling drugs is expensive: The company also reported spending $147 billion on goods that year. 

And drug wholesalers have gotten bigger and bigger over the past several decades.

In the 1970s, there were about 200 such businesses. Thirty years later, three distributors accounted for almost 90 percent of the market, according to a 2005 study by The Kaiser Family Foundation.

The company got its current name from one such merger in 2001, when AmeriSource Health Corp. and Bergen Brunswig Corp. merged in a $2.1 billion deal, reported on by the Wall Street Journal. Since then, the company's stock has soared by more than 600 percent.

The company has been recognized as the No. 1 business two years in a row by Barron's 500, a list that "seeks to identify the companies that have done the best job of boosting sales and investing for growth."

Controversy

AmerisourceBergen has been named in multiple lawsuits against the pharmaceutical industry for its alleged role in the opioid crisis. 

Among those suits: A December 2017 lawsuit filed by York County that names 24 pharmaceutical industry defendants. 

"This case is about one thing: corporate greed," the lawsuit begins. "Defendants put their desire for profits above the health and well-being of the York County consumers at the cost of Plaintiff."

Moyer said in a statement that the company had halted or reported tens of thousands of suspicious orders and refuses service to customers "we deem as a diversion risk." 

"We are committed to collaborating with all stakeholders on ways to combat opioid abuse," the statement said.

This story comes to us through a partnership between WITF and The York Daily Record

Published in News

Tagged under , , , , , , , , ,

back to top

Give Now

Estate Planning

Support for WITF is provided by:

Become a WITF sponsor today »

Smart Talk

National Edward R. Murrow Awards

DuPont Columbia Awards

Support Local Journalism

Latest News from NPR

Support for WITF is provided by:

Become a WITF sponsor today »