What are the biggest companies in the US?
Ask a large enough sample of Americans that question in the past and I bet you'd be able to assemble a full list of the Top 25 or 50 in the Fortune 500 fairly easily. Try the same experiment now and I'm not entirely sure some of them would ever come up. And that's very strange.
What are the first ones that came to mind when you read the opening sentence? Apple? Amazon? Walmart? GM? ExxonMobil? UPS? AT&T? Perusing the Fortune 500 list is an interesting exercise in assumptions vs. reality. Some are a lot lower than you'd think because the list ranks by revenue, not profit or market cap. So McDonald's doesn't crack the top 100. Google ("Alphabet") is 27th. UPS is 48th. Microsoft is 28th. Citibank is 30th. Citibank!
So what IS up at the top? My guesses were: banks, oil companies, and mega-retailers (Amazon, Costco, Walmart, etc). I wasn't way off, but the Top 25 had a few that were very odd to me:
2 Berkshire Hathaway
4 Exxon Mobil
6 UnitedHealth Group
7 CVS Health
8 General Motors
10 Ford Motor
13 General Electric
14 Verizon Communications
15 Cardinal Health
17 Walgreens Boots Alliance
20 Fannie Mae
21 J.P. Morgan Chase
22 Express Scripts Holdings
23 Home Depot
25 Wells Fargo
Guys, I might be projecting my own ignorance here so correct me if I'm wrong, but I'm convinced that we could poll Americans by the tens of thousands before anyone mentioned "Express Scripts Holdings" as one of the 25 biggest companies in America. Not far behind on the list of "Never heard of them" candidates (unless you work in the medical or insurance industries) would be AmerisourceBergen, Cardinal Health, and McKesson.
Express Scripts, for the record, fulfills prescriptions by mail for some big institutional clients like TriSource (the military's health plan) and Blue Cross.
Does anyone think it's a little weird that 1/3 of this list is companies delivering pills from manufacturers to customers? McKesson, Express Scripts, CVS, Walgreens, and AmerisourceBergen do nothing but. Walmart and Kroger both derive a large part of their revenue from pharmacy (see Target's recent alliance with CVS). Two more of the remaining companies (UnitedHealth and Cardinal Health) are big hospital-pharmacy conglomerates.
Compare that to the first Fortune 500 (in 1955) or even more recent examples from the late 20th Century. Now, I understand that the economy is bound to change, and should change, over time. Big steel companies from the 1955 list are no longer the economic titans they once were for reasons we all understand. The economy will change. But it's a little odd to see hard evidence that one of the things it has changed to is…mailing each other pills.
It's an additional layer of weirdness to think that all of the 1955 companies are, for lack of a more precise term, things people have heard of. Things people recognized as Big Business (the holding company Esmark, like Berkshire Hathaway today, being perhaps the exception). Perhaps people who work in the medical / pharma / insurance industry take this as a given, but it just does not strike me as common knowledge what a massive share of our economy is currently made up of companies that pass out prescription drugs.
The argument that America is over-prescribed is common, as is the recognition that medical care and drugs in particular are overpriced. There is compelling evidence to support all of that, and combined with an aging population and the availability of more drugs to treat more conditions than in the past we have created a kind of perfect storm of medical spending.
This is weird. As recently as 1990 or 2000 there were zero companies related to health care in the top 25. It shouldn't be a surprise that companies that barely existed 20 years ago might be economic giants today, but if forced to guess I'm assuming most people would identify internet giants like Google, Amazon, Facebook, and the like as the likely candidates.
It would be remarkably interesting to see some survey research on this – comparing what Americans think makes up the largest shares of our economy versus reality. We recognize as a country that health care is expensive and a lot of money is spent on it, but insurers and drug companies like Pfizer, Merck, etc tend to bear the brunt of that criticism. I think many people would genuinely be surprised to see that the middle men are the biggest economic entities, often in the form of companies that exist largely in anonymity.
I don't know what, if anything, this means. I do wonder, though, about the long term prospects for an economy in which so much economic activity involves mailing and handing people – especially a very large generation of older people at the moment – pills. Express Scripts Holdings seems likely to go the route of Republic Steel in the long run.