Why This Matters to Distributors: CVS Health accounted for 28% of Cardinal Health’s fiscal 2026 revenue, making the contract one of the distributor’s most important customer relationships. Extending the agreement through 2032 gives Cardinal Health longer-term visibility into a significant share of the volume moving through its pharmaceutical network as it invests in new capacity, robotics, inventory technology, and transportation systems. For distributors, the agreement shows how securing a major national account for a longer period can provide greater certainty for decisions about inventory, labor, distribution-center capacity, and automation.
Cardinal Health has reached an agreement to extend its pharmaceutical distribution relationship with CVS Health through June 30, 2032, locking in its largest customer for another five years as the distributor invests in additional pharmaceutical distribution capacity and automation.
The Dublin, Ohio-based company said Oct. 1 that it entered a binding letter of intent with CVS Health that will continue the current scope of Cardinal Health’s distribution services. The company did not disclose financial terms or announce changes to the services covered by the agreement.
The extension is significant because of the size of the relationship. CVS Health accounted for 28% of Cardinal Health’s $254.2 billion in fiscal 2026 revenue, according to Cardinal Health’s annual report. CVS also represented 22% of the company’s gross trade receivables as of June 30.
Cardinal Health identified CVS as its largest customer in fiscal 2026. Its five largest customers combined accounted for 43% of annual revenue, illustrating the concentration of business among major healthcare customers.
The new agreement would extend an existing distribution arrangement that runs through June 30, 2027. Cardinal Health announced in August 2021 that it had extended agreements to distribute pharmaceuticals to CVS Health retail pharmacies and distribution centers through that date.
“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,” Cardinal Health CEO Jason Hollar said in announcing the latest extension.
Cardinal Health generated $254.2 billion in revenue in fiscal 2026, up 14% from the previous year. The company reported $2.6 billion in operating earnings for the year, while adjusted operating earnings increased 30% to $3.6 billion.
The CVS extension comes as Cardinal Health is putting additional capital into the infrastructure supporting its pharmaceutical distribution business.
The company plans to open a 230,000-square-foot pharmaceutical distribution center in Indianapolis in fall 2027. Cardinal Health said the facility will add capacity to its national network and use robotics, automated storage and retrieval, conveyors, and sorting technology to manage product movement from receiving through shipping.
Cardinal Health said when it announced the project that its pharmaceutical network handles more than 70,000 pharmaceutical and specialty deliveries a day across the U.S. The Indianapolis facility is also expected to provide real-time inventory visibility and automated order fulfillment.
The Indianapolis project is part of a broader effort to modernize the distributor’s network. Cardinal Health has said it is upgrading existing distribution centers and investing in a transportation management system intended to improve product movement and provide greater visibility into orders and delivery timing.
Cardinal Health also announced in August that it had reached a long-term renewal of its wholesale distribution agreement with Kroger, another major retail customer.
The CVS extension provides additional customer stability as those network investments move forward. Cardinal Health itself identifies customer concentration as a business risk, noting in its annual filing that a reduction in purchases, payment default, or failure to renew an agreement with CVS or another significant customer could adversely affect its results.
Cardinal Health distributes pharmaceuticals and specialty products and manufactures and distributes medical and laboratory products. Its operations also include home-health and direct-to-patient products and services, nuclear pharmacies and manufacturing facilities, and health care data and performance services.
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