Cencora

Moat sources and durability assessment (weights in parentheses): Efficient scale (35% weight, 92/100): U.S. drug distribution is an oligopoly where the Big Three exceed 90% share. Replicating national cold‑chain logistics, DEA compliance, DSCSA serialization, returns, chargebacks, and financing is uneconomic for entrants.

We expect durability through the decade. Cost advantages (25% weight, 85/100): Scale drives purchasing power and network density; generics sourcing and high fixed‑cost leverage create a unit‑cost gap versus smaller rivals. Mix shifts to specialty further support gross profit dollars.

Switching costs (30% weight, 82/100): Deep system integration, daily delivery, credit terms, and inventory/automation ties make switching disruptive for pharmacies, health systems, and practices. Multi‑year contracts with Walgreens/Evernorth/Boots raise frictions.

Intangibles (7% weight, 70/100): Trusted compliance history, licenses, and know‑how matter in controlled substances and international markets; brand is secondary to service reliability. Network effects (3% weight, 40/100): Minimal classic network effects; scale economies dominate.

Weighted blend yields ~84. Moat erosion risks: potential disintermediation by payers/manufacturers in limited niches, PBM consolidation, and regulatory changes. Offsetting factors include renewed contracts, specialty services, and capital investment in distribution.