Untapped Opportunity: Unlocking Growth in the Independent Pharmacy & Drug Wholesaler Channel

When you think of independent pharmacies, do you think of dusty mom-and-pop stores from your grandparents’ day?

If so, forget it! Today’s independent drugstores are thriving, modern healthcare hubs—offering personalized service, trusted pharmacist recommendations, and an enviable level of consumer influence. Independent pharmacies account for 35% of all retail pharmacies in the U.S., with 20,000 locations nationwide, and continue to play a critical role in consumer health decisions. Wholesale partners like McKesson, Cencora (formerly AmerisourceBergen), and Cardinal Health, among many others, are fueling their reach, making it easier than ever for brands to tap into this space. And they’re only one piece of the overall drug wholesaler sector. Yet, many OTC health and wellness brands still are overlooking the massive potential in this channel.

Megan Palmer, VP Drug Wholesale

Could this be the strategic opportunity your brand has been missing? Megan Palmer, MPG Vice President, Drug Wholesale, unpacks why independent pharmacies are gaining momentum, how brands can carve out their space, and what it takes to win in this channel.

Why should OTC brands prioritize this channel?

From my experience over the years, I can tell you that focusing on this segment can be a definite game-changer for certain brands. It offers a number of benefits that consumer brand suppliers may not realize, including:

Wider distribution

Drug wholesalers play a key role in this channel and they have extensive networks that allow OTC suppliers to access a broader range of independent pharmacies, hospitals, and other healthcare providers. This ensures your products are available in more places, setting the stage for increased sales opportunities.

Greater efficiency

Wholesalers take care of distribution logistics like warehousing, transportation, and inventory management. This means OTC suppliers can worry less about the heavy lifting of distribution and focus more on what they do best—producing great products and building strong marketing campaigns.

Market access

Wholesalers often have established relationships with various retail chains, like Walgreens, Walmart, and Costco, and buying groups like CPA and APCI. Tapping into these relationships can give OTC suppliers quicker, more dependable access to these crucial markets.

Cost savings

By consolidating shipments and using the wholesaler's infrastructure, OTC suppliers can often reduce their distribution costs. This can lead to better pricing strategies as well as improved profit margins.

Regulatory compliance

Distributing health-related products involves navigating a maze of complex regulations, and wholesalers are typically well-versed in these requirements. By partnering with them, OTC brands can better avoid the pitfalls and reduce legal risks, all while ensuring the distribution process runs smoothly.

Are there specific types of OTC brands that perform best here?

Absolutely. Independent Pharmacies are often owned by the pharmacist and typically have smaller front ends, so space plays a key factor. The categories that typically perform the best are Pain, First Aid, Digestive Health, Cough/Cold/Allergy, and Oral Care. The main reason a person chooses to shop at an Independent pharmacy is because they trust their pharmacist. At the same time, the pharmacist goes out of their way to make sure they are providing the best care – part of that is having OTC products on the shelf that are complementary to prescriptions they are filling.

Many brands assume it’s hard to scale in independent pharmacies. How do they get started?

If you’re a new supplier, scaling in this channel can be challenging without the right approach.

When developing your strategy, it’s important to consider that independent pharmacies often have fewer resources compared to large chain pharmacies. This includes limited shelf space, smaller budgets for stocking new products, and less sophisticated inventory management systems. At the same time, they rely on the manufacturer to market and create brand loyalty. They typically prefer stocking well-known brands that have established consumer trust. New or lesser-known OTC manufacturers might struggle to convince these pharmacies to carry their products. Independent pharmacies may not have the same marketing and promotional capabilities as larger chains, making it harder for OTC manufacturers to drive consumer awareness and demand for their products.

The key to scale is wholesale distribution. Instead of working with thousands of individual stores, brands partner with drug wholesalers like McKesson, Cencora, and Cardinal Health, which supply tens of thousands of independent pharmacies across the U.S. That’s how you get in the door.

But you need to show there’s demand. If pharmacists are asking for your product and consumers are looking for it, wholesalers will take notice. The brands that do best in this space don’t just “get listed” with wholesalers; they build demand from the ground up—starting with pharmacist engagement and smart retail support. Educating the pharmacist is one of the most important things we stress to manufacturers when we start working with them in this channel. You have to have a promotional budget set aside to lean in.

How do brands ensure their products actually sell in pharmacies once they’re on the shelf?

This is where a lot of brands make mistakes. Just because a wholesaler stocks your product doesn’t mean it will sell. Again, you need to activate pharmacist advocacy—because pharmacists are the real drivers in this channel. Brands that succeed invest in pharmacist education by:

• Providing samples so pharmacists can test the product themselves

• Offering quick, easy-to-understand clinical data that supports the product’s effectiveness

• Partnering with pharmacy buying groups to get bulk adoption

From the work we’ve done for both established and emerging brands in this space, we know this works. If pharmacists know and trust your product, they’ll recommend it over competitors—that’s how you drive long-term growth in this channel.

What’s the biggest mistake brands make in this channel?

First, not setting aside a promotional budget – inclusive of purchasing data from the wholesalers, as well as participating in wholesalers’ toolkits and trade shows.

Second, trying to activate your entire portfolio with the wholesaler without the rationale to back it up. Suppliers should identify the needs of independent pharmacy shoppers and understand the pharmacist's priorities. When crafting a sell in story, it's crucial to address the “why” and “how”– why should pharmacists carry your item or your portfolio and how can they positively impact their patients and shoppers in store.  The brands that treat independent pharmacies as a strategic growth channel, not an afterthought, are the ones that succeed.

If an OTC  brand wants to enter the independent pharmacy and drug wholesaler channel, what’s the right approach?

Entering the independent pharmacy and drug wholesaler space requires more than just distribution; it calls for a strategic, channel-specific approach that builds trust, drives demand at the shelf level, and aligns with how decisions are made locally and regionally. Unlike national retail chains, this channel is highly relationship-driven, fragmented, and influenced by a mix of wholesalers, buying groups, and pharmacists themselves — all of whom play a critical role in product access and recommendation.

Success here starts with understanding the nuances: who the gatekeepers are, what motivates them, and how to tailor your value proposition for both distribution and in-store execution. It’s about showing up in the right places, with the right message, and supporting sell-through as well as sell-in.

That’s where we come in. Our MPG team has deep experience in this space and specializes in helping brands navigate every stage of the journey — from market entry strategy and sell-in to trade marketing, pharmacist engagement, and data tracking to optimize performance. We’re happy to share our insights with MPG clients, to help you determine if this is the right place to drive incremental growth for your brand.

More and more brands are starting to recognize the value of this channel, and the ones that move now will lock in the best wholesaler partnerships, the strongest pharmacist relationships, and premium shelf space. Interested in learning more about the opportunities for your brand to grow in independent pharmacies? Reach out to Megan Palmer at megan.palmer@mpgllc.com for more insights and tailored strategies that can help you get in, stand out, and scale successfully in this channel.