2026 Health Care Outlook: Chip Davis, HDA

By Chester “Chip” Davis Jr., president and CEO of the Healthcare Distribution Alliance

As the national debate about health care access and affordability bubbles, one constant that stakeholders largely agree upon is the value and efficiency that pharmaceutical distributors deliver to their supply chain partners. The Healthcare Distribution Alliance’s (HDA’s) pharmaceutical distributor members connect 1,400 manufacturers with over 450,000 pharmacies, hospitals, clinics and other sites of care nationwide each day.

This year, the distribution industry, like so many sectors, finds itself on uneven ground, marked by shifting policies, global trade uncertainty and new specialty medicines changing the delivery of care. As policy makers explore reforms, we urge caution so the highly reliable and effective pharmaceutical supply chain that patients rely on is not unintentionally disrupted.

Distributors continue to lead, adapt and work with manufacturers and providers to support patient access to more than 10 million critical medicines and health care products each day. In 2026, HDA will continue to be an advocate and resource, helping to find solutions to keep America’s pharmaceutical distribution system reliable, efficient and secure, while ensuring our industry’s value proposition is well understood by key stakeholders.

The Infrastructure Behind Access

According to new data from the HDA Research Foundation, core distribution services save the U.S. health care system up to $78 billion annually, and distributors are able to accomplish this while operating on net margins averaging just 0.2% after taxes. Distribution centers combine sophisticated automation with skilled teams to manage more than 135 million orders each year with remarkable accuracy.

In fact, distributors are helping to make health care faster, smarter and more reliable, and they are doing it all right here in America. The sector supports nearly 60,000 skilled jobs and more than 340,000 additional jobs throughout their communities — generating $32.8 billion in labor income and $62.6 billion in GDP. Continued workforce investments, along with next-generation technology, will play a role in improving distribution, along with strengthening cybersecurity, enhancing logistics resilience and navigating new regulatory requirements.

Simultaneously, distributors are preparing for a more complex therapeutic landscape through cold-chain expansion, predictive analytics and enhanced track-and-trace systems. With the continued growth of specialty medicines and cell and gene therapies reshaping logistics, distributors are redefining transportation, storage and risk-management capabilities to support these breakthrough treatments. Meanwhile, AI and automation are improving forecasting, reducing shortages and enabling more support for health care providers. Technology and human expertise are working in tandem to ensure a more resilient and reliable supply chain.

Economic and Policy ­Headwinds

Economic and policy pressures are shaping the distribution industry following a flurry of unprecedented activity emanating from the White House last year. HDA has highlighted that tariffs on pharmaceutical products could raise patient costs and introduce new vulnerabilities across the supply chain. The administration’s decision to minimize tariffs on the sector reflects a recognition of the need to protect patient access and manage costs.

Additionally, scrutiny of business and payment models is intensifying with a significant focus on transparency. As part of this discussion, the administration’s exploration of supply chain payment and reimbursement policies, particularly the treatment of service fees, is one we will follow closely.

Direct-to-consumer (DTC) models also could reshape how patients purchase and receive medicines, while potentially lowering costs for uninsured and underinsured individuals. DTC programs are built to advance convenience and achieve savings, but should leverage the existing distribution network to maximize efficiency. More to come as TrumpRx is officially rolled out in 2026.

Supporting Community Care Through Innovation and Efficiency

Distributors remain key partners to independent pharmacies, which have become increasingly vulnerable to closure due to recent market dynamics. Often, pharmacists are the primary health care providers in many small and rural communities. Through inventory solutions, shortage mitigation and business support, distributors play a critical role in the daily operations of these providers. Pharmacists have long been among the most trusted and accessible health care providers, and their role is more important than ever as patients face difficulties obtaining essential medicines and treatments.

The implementation of the Drug Supply Chain Security Act (DSCSA) is a strong example of coordinated success in a highly regulated environment. Since the requirements for distributors, manufacturers and large dispensers went into effect last year, data exchanged among trading partners has been largely accurate and complete, with continued improvements in the quality and consistency of information flowing through the system.

This work will continue to evolve, and ongoing collaboration will be essential to preventing disruption and streamlining access to necessary medicines. HDA and the distributor community remain committed to working closely with the small dispenser community as they approach their November 27, 2026, milestone, which will mark the official end of DSCSA implementation. 

The Road Ahead

Distributors and policy makers share a common goal: strengthening health care for the patients who depend on it. Distributors do far more than move medicines. They help make care possible. As we enter 2026, our industry stands ready to support a stronger, more accessible and affordable health care system for all.

Chester “Chip” Davis Jr. is president and CEO of the Healthcare Distribution Alliance.