<PAGE>   1
                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                      
                                  FORM 10-K
(Mark One)
  [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934 (FEE REQUIRED)
                                      
                 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
                                      
                                      OR

  [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

        FOR THE TRANSITION PERIOD FROM ______________TO______________
                                      
                       COMMISSION FILE NUMBER: 0-11355
                                               -------

                       BINDLEY WESTERN INDUSTRIES, INC.
            (Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S>                                                                                     <C>

         INDIANA                                                                          84-0601662
(State or other jurisdiction of                                                         (I.R.S.Employer
 incorporation or organization)                                                         Identification No.)

10333 North Meridian Street, Suite 300, Indianapolis, Indiana                                46290
(Address of principal executive offices)                                                   (Zip Code)

Registrant's telephone number, including area code:         (317) 298-9900

                                    Securities registered pursuant to Section 12(b) of the Act:

Common Stock ($.01 par value)                                                           New York Stock Exchange
     (Title of class)                                                                (Name of exchange on which registered)
  
                                    Securities registered pursuant to section 12(g) of the Act:

                                            6-1/2% Convertible Subordinated Debentures
                                                     (Title of class)
</TABLE>

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.   Yes   x    No ____


Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [  ]
             
                                 $138,637,541

Aggregate market value of the voting stock held by nonaffiliates of the
registrant based on the last sale price for such stock at March 15, 1996
(assuming solely for the purposes of this calculation that all Directors and
Officers of the Registrant are "affiliates")

                                  11,345,847

      Number of shares of Common Stock outstanding as of March 15, 1996

                     DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents have been incorporated by reference into
this annual report on Form 10-K:

IDENTITY OF DOCUMENT                        PARTS ON FORM 10-K INTO WHICH
                                            DOCUMENT IS INCORPORATED

Proxy Statement to be filed for the         PART III
1996 Annual Meeting of Common               Page 1 of 237
Shareholders of Registrant                  Index to Exhibits at Pages 39














<PAGE>   2
                       BINDLEY WESTERN INDUSTRIES, INC.
                            Indianapolis, Indiana
                                      
             Annual Report to Securities and Exchange Commission
                              December 31, 1995
                                      
                                      
                                    Part I

Item 1.      BUSINESS.

General 

             Bindley Western Industries, Inc., an Indiana corporation, together
with its subsidiaries (the "Company"), is the country's sixth largest (in terms
of annual sales) wholesale distributor of pharmaceuticals and related health
care products. Its product lines include ethical pharmaceuticals (prescription 
drugs), dialysis supplies, health and beauty care products and home health 
care merchandise.  The Company's wholesale drug customer base includes chain 
drug companies which operate their own warehouses, individual drug stores, both
chain and independent, hospitals, clinics, HMOs, state and federal government
agencies and other health care providers.  The Company's drug wholesaling
operations service customers in approximately 35 states plus Puerto Rico from
its 10 distribution centers located in Austell, GA; Dallas, TX; Houston, TX;
Indianapolis, IN; Middletown, PA; Orange, CT; Orlando, FL; Portland, ME; San
Dimas, CA; and Shelby, NC.  By using the Company as a primary source of
pharmaceuticals, these customers can centralize purchasing functions, exercise
better inventory control, maintain better security and reduce handling costs.


             The Company has historically specialized in the distribution of 
ethical  pharmaceuticals to chain drug companies which maintain their own 
warehouses. Currently, the Company services 5 of the top 10 chain drug 
companies, based on sales and number of stores, in the United States.  The 
Company believes that its technological innovation and superior customer 
service has enabled it to better serve these customers.

             Since 1987, the Company has focused its marketing efforts on
direct store delivery customers.  The Company has increased sales to these
customers from $171 million in 1987 to $1,482 million in 1995.  To further this
growth, the Company purchased J.E. Goold in 1992 and Kendall Drug in 1994 to
strengthen the Company's position in the northeastern and southeastern United
States, respectively.

             In 1994, the Company created Priority Healthcare Corporation as a
wholly-owned subsidiary to focus on the higher margin alternate care/alternate
site services market.  These services are provided by facilities outside of the
hospital environment. Priority Healthcare's distribution divisions, located in
Altamonte Springs, FL and Santa Ana, CA, cater to doctors and clinics serving
patients in need of renal care, oncology, and infectious disease therapy while
its provider businesses, located in Altamonte Springs, FL and Indianapolis, IN,
deal directly with patients suffering from various chronic diseases.  Priority
Healthcare's customers are located in 50 states, Mexico, and Central and South
America.
             The Company's sales of $4.7 billion for 1995 represented the 27th
consecutive year of record sales, equating to a compound growth rate of 20%
since its inception in 1968.  This
<PAGE>     3
growth is the result of market share gains in existing markets, expansion into 
new markets and overall growth in the health care delivery industry.  While the
Company does service customers in Mexico and Central and South America through 
its Priority Healthcare subsidiary, most of the growth has been provided from 
domestic sales.  Export sales have not exceeded one percent in any given year.

Suppliers

             During  each of the last five fiscal years, more than 90% (based
on dollar volume) of the Company's purchases  were  ethical  pharmaceutical
products.  Of the thousands  of  ethical  pharmaceutical products  carried  in
inventory, a comparatively small number account for a disproportionately large
share of the total dollar volume of products sold.  The Company's largest
supplier, Glaxo Wellcome, accounted for 11% and the five largest suppliers,
Glaxo Wellcome, Pfizer, Inc., Eli Lilly and Company, Bristol-Myers Squibb 
Company and SmithKline Beecham, accounted for approximately 38% of its net sales
during fiscal 1995.  The Company maintains many competing products in inventory
and is not dependent upon any single supplier, although the loss of a major 
supplier could adversely affect the business of the Company if alternate sources
of supply were unavailable.  The Company's arrangements with its suppliers 
typically may be canceled by either party, without cause, on one month's notice,
although many of these arrangements are not governed by formal agreements.   The
Company believes its relationships with its suppliers are generally good.   See,
also, Manufacturer Pricing and Distribution Policies in Part I, Item 1.

Customers and Markets

Direct Store Delivery Market.

             The Company provides direct store delivery service to customers
from each of its 10 distribution centers.  Independent drug stores,
non-warehouse chain drug stores, hospitals, clinics, HMOs, state and federal
agencies and other health care providers comprise the primary types of
customers.  Purchases by these customers generally consist of less than
full-case lots which are generated on a daily basis when a customer needs a
particular item. While smaller in quantity, these sales typically generate
higher margins than sales to warehouse customers.  Shipments to direct store
customers are delivered on a daily basis by the Company's vehicles or by a
for-hire carrier.

             While much less concentrated than chain warehouse sales, the
direct store delivery business has experienced significant growth as the
Company has successfully expanded its business scope.  Since 1987,  direct
store sales have increased from $171 million to $1,482 million, demonstrating a
compound annual growth rate of 31%.  During 1995, direct store delivery sales
were comprised of approximately 38% to chain drug stores, 33% to independent
pharmacies and 29% to managed care institutions.  Direct store delivery sales
have increased from approximately 16% of net sales in 1987 to approximately
32% in 1995.  During 1995, no single direct store delivery customer exceeded
10% of the Company's total net sales and the loss of any one of these customers
should not  have  a  material adverse effect on the Company's
operations.

<PAGE>     4
             As part of the Company's goal of providing value-added solutions
to its customers' business needs, the Company implemented the "Profit Partners"
and the "1st Choice for Value" programs in 1993 and 1994.  These competitive,
PC-based, marketing support and merchandising programs include a generic
pharmaceutical source program, a home health care program, a private label over
the counter program and the Rx LINX and MASTER LINX purchasing and inventory
management systems.  Designed to enhance the competitiveness of
retail, small chain and managed care pharmacies, these programs reflect the
Company's commitment to adding value to the services provided to its customers.
The Company believes that it would not be feasible for these customers to
independently develop and maintain these services on their own.

             The Company believes that the opportunities for growth for this
market of the business should continue through expansion into new geographical
areas and increasing market share in existing markets.  The Company is focused
on the development of new services and programs through interaction and
cooperation with both customers and suppliers.  These programs are designed to
enhance profitability, provide added value to the customer, and strengthen the
Company's role in the distribution channel.  These programs include
computerized ordering systems, inventory management programs, generic
pharmaceutical source programs, repack programs, innovative advertising and
marketing campaigns and merchandising programs, including private label product
lines.

Chain Warehouse Market.
 
             Chain warehouse customers purchase in full-case lots for
redistribution to individual retail outlets.  Approximately 68% of the
Company's 1995 net sales are attributable to chain drug warehouse customers.
The Company's largest chain drug customers and the approximate period of time
they have done business with the Company are:  Eckerd Corporation (23 years);
Peyton (6 years); Thrifty-Payless Corporation (13 years); Revco D.S., Inc. (18
years); CVS (26 years); and Rite Aid Corporation (23 years).  The following
chain drug warehouse customers each accounted for over 10% of the Company's net
sales during the years shown:   Eckerd Corporation (19%), Rite Aid 
Corporation (15%), and Revco D.S., Inc. (10%) in 1995; Eckerd Corporation
(22%) and Rite Aid Corporation (11%) in 1994; and Eckerd Corporation (23%)
and Peyton (13%) in 1993.  Net sales to these customers aggregated 44%, 33% 
and 36% of net sales for the past three years, respectively.
 
             By using the Company as a primary source of pharmaceuticals, the
Company believes that a chain drug customer can centralize purchasing
functions, exercise better inventory control, maintain better security and
reduce handling costs.  Inventory control and security are particularly
important to these customers because of the relatively high dollar value of
pharmaceuticals in relation to their physical size.  In addition, the Company
has developed systems and procedures which the Company believes facilitate
customer compliance with the recordkeeping and physical security requirements
of the Controlled Substances Act of 1970 and the Prescription Drug Marketing
Act of 1987.  For example, shipments of controlled substances are billed on
separate invoices and special security procedures are followed to reduce the
possibility of theft during the distribution process.  Additionally, the
Company offers these customers software to permit direct communication with the
ordering computers, thus avoiding the need to change the customers'
existing software.

<PAGE>     5
              The Company, from time to time, has entered into written
understandings with certain of its major chain warehouse customers setting
forth various terms and conditions of sale.  The Company, however, does not
have any long-term contracts with its major customers and all relationships
with such customers are terminable at will by either party.  The loss of any
one of the Company's chain warehouse customers could have a material adverse
effect on the Company's operations.  Although the Company believes that the
effect could be minimized through increasing sales to existing customers,
securing additional customers within current distribution areas and by expanding
into new markets, there can be no assurance thereof.  See, also, Note 10 - 
Major Customers in the Company's financial statements, which is incorporated 
herein by reference.

Alternate Care/Alternate Site Market.

             In 1993, the Company purchased Charise Charles, a wholesale
distributor of oncology and renal care pharmaceuticals and biotech drugs.  PRN
Medical, also acquired in 1993, was a wholesale distributor of renal care
supplies and dialysis equipment.  PRN's market, which included Central and
South America, complimented Charise Charles and the two companies were combined
in 1994 as part of Priority Healthcare Corporation, a wholly-owned subsidiary
created by the Company to provide a greater management focus and an enhanced
ability to meet the needs of the higher margin alternate care/alternate site
markets.  3C Medical, located in Santa Ana, CA, also joined the corporate
family in 1994.  It distributes acute dialysis products to its West Coast
customers.  Sales in this specialized division are aided by exclusive
distribution agreements with major vendors.  Charise Charles, PRN Medical and
3C Medical are now called Priority Distribution.  Priority Distribution
currently services over 2,000 customers in 50 states, Mexico and Central
and South America.

             The IV One Companies, acquired by Priority Healthcare Corporation
effective January 1,1995, are comprised of IV-1, Inc., a national infusion
pharmacy and nursing service company; National Pharmacy Providers, Inc., a
nationwide clinical pharmacy; and IV-One Services, Inc., a specialty wholesale
distributor.  These three companies are located in Altamonte Springs, FL  in
facilities that adjoin those of Priority Distribution.  IV-1, Inc., the
principal company, provides innovative, nationwide pharmacy services and
ambulatory infusion therapy.  Its emphasis is on high acuity specialty pharmacy
and nursing services in addition to providing comprehensive disease state
management.  In early 1995, it received Accreditation with Commendation for its
pharmacy and nursing services from the Joint Commission on Accreditation of
Healthcare Organizations.  National Pharmacy Providers, Inc. is available to
patients and physicians who require pharmacy products and services but do not
require extensive clinical monitoring.  Both IV-1, Inc. and National Pharmacy
Providers, Inc. have registered nurses and pharmacists available 24 hours a
day, seven days a week for patients and referring physician offices.

             The IV One Companies' vision is to provide affordable,
patient-centered services to patients outside the acute care setting and to
provide high quality clinical pharmacy and nursing services.  Though their
original market focused on biotech drugs  that are available for self
administration via subcutaneous injection and disease management, therapies
have now expanded to include a variety of infusion services such as total
parenteral nutrition, antibiotic therapy, hydration therapy and chemotherapy.
The IV One Companies provide these services in both the home setting and in
their in-house infusion suites.

<PAGE>     6
             National Infusion Services, Inc. (NIS) was incorporated in January
1996 to purchase the infusion services business of one of the country's largest
infectious disease group medical practices located in Indianapolis, IN.  In
conjunction with the IV One Companies, NIS intends to expand its business as a
physician managed provider of quality care to patients in a variety of
settings, including the home, extended care facilities and NIS'
state-of-the-art outpatient center in Indianapolis.

             Through its Priority Healthcare Corporation subsidiary, the
Company has strategically positioned itself as a leading national provider in
these important  markets  and is moving towards being a one-stop-shop for
physicians, patients and other customers for alternate care/alternate site
health care needs.

Internal Systems Development

             The Company has developed and  continues to improve its
specialized internal operating and management systems.  Inventories and
accounts receivable are controlled through the use of Company developed data
processing and management information systems.  These assets are monitored by
distribution center management using on-site data processing equipment.  At
present, many operational functions, including accounting, cash management,
accounts receivable and inventory control are conducted through data processing
operations at the Altamonte Springs, Indianapolis, Brockton, Shelby, and
Portland facilities.  Data is transmitted to and from on-site data processing
equipment at the distribution centers.


Expansion/Acquisitions

             The Company continues to seek opportunities to expand its
operations geographically through the development of new distribution centers
or the acquisition of existing wholesale drug distributors or alternate
care/alternate site distributors or providers.  Presented below is a brief
discussion of recent acquisitions by the Company.   All of the acquisitions
have been accounted for under the purchase method and, accordingly, the results
of operations of the acquired companies have been included in the Company's
financial statements from the effective date of acquisition. The purchase price
has been allocated based on a determination of the fair value of the assets
acquired and liabilities assumed.  The goodwill associated with these
acquisitions is being amortized on a straight line basis not exceeding 40
years.  See, also, Note 11 - Statement of Cash Flows in the Company's financial
statements, which is incorporated herein by  reference.

J.E. Goold.

             On March 25, 1992, the Company effected a merger with J.E. Goold,
a full-line, full-service distributor of pharmaceutical, health and beauty care
and home health care products based in Portland, ME.

Charise Charles and PRN Medical.

             On February 28, 1993 and October 6, 1993, the Company acquired
Charise Charles Ltd., Inc., a wholesale distributor of oncology and dialysis
products based in Altamonte Springs, 
<PAGE>     7
FL and PRN Medical, Inc., a wholesale distributor of renal and dialysis supplies
and equipment based in Orlando, FL, respectively.

Kendall Drug Company.

             Effective July 1, 1994, the Company acquired the net assets of
Kendall Drug Company, a wholesale distributor of pharmaceutical products and
health and beauty care products based in Shelby, NC.

3C Medical.

             On October 31, 1994, the Company, through its Priority Healthcare
Corporation subsidiary, acquired  in a merger all of the outstanding stock of
3C Medical, Inc., a Santa Ana, CA based distributor of hemodialysis products.
This division specializes in the acute dialysis market in Southern California
and Mexico through exclusive distribution agreements with major vendors.

IV One Companies.

             Effective January 1, 1995, the Company, through its Priority
Healthcare Corporation subsidiary, acquired all of the outstanding stock of the
IV One Companies in a cash transaction.  The IV One Companies are comprised of
IV-1, Inc., IV-One Services, Inc., and National Pharmacy Providers, Inc.  These
companies focus on high acuity specialty pharmacy services for patients
requiring home and ambulatory infusion therapy and are operated as subsidiaries
of Priority Healthcare Corporation from Altamonte Springs, FL.

National Infusion Services, Inc.
 
             On February 7, 1996, the Company through its Priority Healthcare
Corporation subsidiary, acquired all of the assets of the Infusion Services
Division of Infectious Disease of Indiana, P.S.C.  This business will be
operated as National Infusion Services, Inc., which is a physician managed
provider of infusion services programs to patients in a variety of settings,
including the home, extended care facilities and its state-of-the-art
outpatient center in Indianapolis, IN.  The acquisition was not a significant 
acquisition in relation to the Company and was accounted for as a purchase and,
accordingly, the 1996 financial statements will include the results of
operations of NIS from the date of acquisition.  The Company expended 
approximately $9.0 million and incurred a long-term obligation of approximately
$1.5 million, resulting in approximately $9.8 million in intangible assets.  
Although the acquisition was not significant to the Company as a whole, it 
provides further opportunities for the Company's growth in the 
alternate care/alternate site market.

Employees

             As of February 29, 1996, the Company employed 912 persons, of
which approximately 4% are covered by a single collective bargaining agreement.
The Company believes that  its  relationship  with  its employees is good.

<PAGE>     8
Competition

             The markets in which the Company competes are highly competitive.
Not only does the Company compete with national and regional full-line,
full-service wholesale drug distributors, some of which are larger and have
substantially greater financial resources, but additional competition is
provided by direct selling manufacturers and specialty distributors. While
competition is primarily price oriented, it can also be affected by delivery
requirements, credit terms, depth of product line and other customer service
requirements.    There can be no assurance that the Company will not encounter
increased competition in the future that could adversely affect the Company's
business.  In recent years there has been a trend toward consolidation in the 
wholesale drug industry, as evidenced by the purchase of a number of 
distributors by national wholesalers.  The Company estimates that there are 
currently less than 50 wholesale drug distributors in the United States.

             The alternate care/alternate site markets in which Priority
Healthcare operates are also highly competitive.  Principal competitors
include:  regional or national multi-market specialty distributors; national
full-line, full-service wholesale drug distributors which operate their own
specialty distribution businesses; mail order distributors which distribute
medical supplies on a regional or national basis; certain manufacturers which
sell their products both to distributors and directly to users, including
clinics and physician's offices; and local, regional or national home infusion
nursing and therapy businesses.  While competition is primarily price and
service oriented, it can also be affected by depth of product line, technical
support, specific patient requirements and reputation.  There can be no
assurance that Priority Healthcare will not encounter increased competition in
the future that could adversely affect its business.

Regulation

             The Company, including Priority Healthcare Corporation, is subject
to regulation by federal, state  and local  government agencies. As a result,
the Company is required to register for permits and/or licenses with, and
comply with certain operating and security standards, of the United States Drug
Enforcement Administration, the Food and Drug Administration, and appropriate
state agencies.  Each of the Company's existing distribution centers is
licensed to distribute ethical pharmaceutical products and  certain controlled
substances in accordance with the requirements of the Controlled Substances Act
of 1970 and the Prescription Drug Marketing Act of 1987.   Similarly, the
health care provider businesses of Priority Healthcare Corporation are licensed
by the appropriate state board of pharmacy, department of health, home health
agency or related governmental agency.  In addition, Priority Healthcare
Corporation's physician customers are subject to significant federal and state
regulations, including the so called fraud and abuse laws.  The fraud and abuse
laws impose criminal and civil sanctions on (a) persons who solicit, offer,
receive or pay any remuneration in return for inducing the referral of a
patient for treatment or the ordering or purchasing of items or services that
are in any way paid for by Medicare, Medicaid or similar state programs and (b)
physicians who make referrals for clinical laboratory or certain designated
health services to entities with which the physician has a financial
relationship.  The fraud and abuse laws and regulations are broad in scope and
are subject to frequent modification and varied interpretation.

<PAGE>     9
             Failure to comply with these laws and regulations could subject
the Company to significant civil sanctions, especially under the strict
liability standards imposed by the Controlled Substances Act and the broad
scope of coverage imposed by the fraud and abuse laws.  The Company believes it
complies in all material respects with applicable laws and regulations.
Because the health care industry will continue to be subject to substantial
regulations, however, the Company can give no assurance that its activities
will not be reviewed or challenged by regulatory agencies in the future.

Industry Overview

             The wholesale drug industry in the United States continues to
experience significant growth.  As reported by the National Wholesale
Druggists' Association, industry sales have grown from $30.2 billion in 1990 
to approximately  $55 billion in 1995, a compound annual growth rate of 13%.  
Today, industry analysts estimate approximately 85% of pharmaceutical 
manufacturers distribute through wholesalers compared to less than 60% in 1980. 
Order processing, inventory management and product delivery by wholesale 
distributors allow manufacturers to better allocate their resources to research 
and development, manufacturing and marketing their products.  Customers benefit 
from wholesale distribution by having access to a single supply source for a 
full line of pharmaceutical and health care products from hundreds of individual
manufacturers.  Further, inventory costs are lower, delivery is more timely and 
efficient, and purchasing and inventory information improved.  Customers 
additionally benefit from the range of value added programs developed by 
wholesale drug distributors that are targeted to their specific needs which, in 
turn, reduce their costs and increase their operating efficiencies.

             The alternate care/alternate site industry is comprised of health
care distributors and providers serving health care facilities outside the
hospital environment, including physicians' offices, clinics and patients'
homes.  The shift from the hospital has occurred primarily as a result of cost
containment pressures exerted by payers and the improvement in the treatment of
various types of diseases in alternate care/alternate site facilities.
These facilities administer pharmaceutical drugs and related medical supplies
to patients who generally require dialysis therapy for treatment of kidney
failure, chemotherapy for treatment of cancer or infusion therapy for treatment
of a number of conditions, including infectious diseases such as HIV and
hepatitis.  The combined market for alternate care/alternate site distributors
and providers serving dialysis, cancer and infusion therapy facilities is much
smaller than the market being served by the wholesale drug industry.  These
three markets are expected to continue to grow, however, as more health care
services are shifted from the hospital to the alternate care/alternate site
facility.  At the same time, the consolidation exhibited within each market the
past few years is also expected to continue.  See, also, Competition in Part I,
Item 1, which is incorporated herein by reference.

             Industry experts believe that the pharmaceutical industry,
including drug wholesalers and related health care distributors and providers,
will continue to grow as a result of the following trends:

Aging Population.

             The number of individuals over 65 in the United States has grown
23% from approximately 26 million in 1980 to approximately 32 million in 1990
and is projected in increase 
<PAGE>     10
an additional 9% to more than 35 million by the year 2000.  This age group 
suffers from a greater incidence of chronic illnesses and disabilities than the
rest of the population and is estimated to account for approximately two-thirds 
of total health care expenditures by the end of the decade.

Introduction of New Pharmaceuticals.

             Traditional research and development as well as the advent of new
research and production methods, such as biotechnology, continue to generate
new compounds that are more effective in treating diseases.  These compounds
have been responsible for significant increases in pharmaceutical sales.  The
Company believes that ongoing research and development expenditures by the
leading pharmaceutical manufacturers will contribute to the continued growth of
the industry.  While national attention has recently been focused on the
overall increase in aggregate health care costs, drug therapy has had a
beneficial impact on such costs by reducing expensive surgeries and prolonged
hospital stays.  Pharmaceuticals currently account for less than 9% of overall
health care costs, and manufacturers' emphasis on research and development is
expected to continue the introduction of cost effective drug therapies.
Analysts expect the overall sales of pharmaceuticals to continue double-digit
increases through the year 2000.

Managed Care Market.

             To remain competitive, pharmaceutical manufacturers are required
to sell their products to the managed care market, wherein employers negotiate
discounts from health care providers by committing to long-term contracts
involving thousands of patients.  Health care costs are linked more tightly to
the provision of managed health care services, especially with hospitals and
doctors, than under traditional medical insurance plans.  Managed care
organizations generally provide full coverage for prescription drugs to lower
health care costs by improving access to medical treatment rather than delaying
treatment until more expensive services are required.  The costs associated
with the prescription drug benefit are monitored by the managed care
organization primarily through the establishment of tightly controlled
formularies of approved prescription drugs, including generic substitutes, and
by drug utilization review procedures wherein physicians' prescribing practices
and patients' usage are closely scrutinized.

Increased Use of Generic Drugs.

             The growth of managed care's influence on pharmacy along with the
introduction of generic equivalent products for many top selling brand name
drugs has caused the generic market to grow substantially.  In the next five
years, the size of the market is expected to nearly double from $3.8 billion to
$6.5 billion.

Pharmaceutical Price Increases.

              As a result of competitive market-driven cost containment
measures implemented by both the private and public sectors during the past
three years, pharmaceutical price increases are significantly less than in
prior years.  Nevertheless, analysts estimate that price increases by
pharmaceutical manufacturers will continue to equal or exceed the overall
Consumer Price Index which is due in large part to relatively inelastic demand
in the face of 
<PAGE>     11
higher prices charged for patented drugs as manufacturers have attempted to 
recoup costs associated with the research and development, clinical testing and
FDA approval of new products.

Continued Industry Consolidation.

              In response to cost containment pressure from private and
governmental payers and the current focus on health care reform in the United
States, there has been significant consolidation within the industry during the
past two years at the manufacturer, wholesaler and customer levels.
Pharmaceutical manufacturers have consolidated to reduce operating expenses,
gain access to new drugs in the pipeline and enhance marketing efforts in a
managed care environment.  Likewise, chain drug stores are continuing to
purchase independent drug stores and, in some cases, other drug chains.
Independent drug stores are also consolidating into regional and national
affiliations.  At the same time that sales through the wholesale drug industry
have increased, the number of pharmaceutical wholesalers in the United States
has decreased from 139 in 1980 to less than 50 at the end of 1995.  During
1996, it is estimated that the six national wholesalers will distribute nearly
85% of the prescription drugs in the United States.

Manufacturers' Pricing and Distribution Policies.

             Some manufacturers distribute their products solely through
franchised wholesalers, while others also sell directly to retailers.
Functional price discounts to wholesalers are offered by many manufacturers.  A
limited number of manufacturers have a one-price system of distribution and
sell directly to wholesalers and retailers at the same price.  The Company does
not transact as much business with direct selling manufacturers that have
adopted a one-price system.  In recent years, certain manufacturers have
adopted wholesaler only policies, while certain other manufacturers have
adopted one-price systems for wholesalers and retailers.  Although
pharmaceutical manufacturers may adopt one-price systems in the future, or may
be required to pursuant to federal or state legislation, such developments have
not had a material adverse effect on the Company's business in the past.  See,
also,  Note 12 - Legal Proceedings in the Company's financial statements, which
is incorporated herein by reference.

             In response to the above trends, the Company has focused its
efforts on higher margin direct store delivery sales, alternate care/alternate
site sales, managed care sales, better asset and cash flow management, and
containment of selling, general and administrative expenses through improved
technology, consolidation of distribution centers and increased sales through
market expansion and acquisitions.

Item 2.      PROPERTIES.

             The Company currently has 10 operating divisions, nine
wholly-owned subsidiaries,  and 12 distribution centers that have  warehouse
and delivery facilities.  Each center has been constructed or adapted to the
Company's specifications for climate control, alarm systems and segregated
security areas for controlled substances.  The Company utilizes modern
warehousing techniques and equipment designed to accommodate both the wholesale
drug and alternate care/alternate site customers.  At each location, a manager
supervises warehouse, delivery and local sales functions.  The Company utilizes
owned vans and trucks, contract carriers, common carriers and couriers to
deliver its products.  The Company believes 
<PAGE>     12
that its properties are adequate to serve the Company's current and anticipated 
needs without making capital expenditures materially higher than historical 
levels.  See, also, Note 9 -Commitments in the Company's financial statements, 
which is incorporated herein by reference.

                 These distribution centers are listed below:
<TABLE>
       <S>                                                      <C>                                  <C>

                                                                SQUARE                               OWNED OR
                  LOCATION                                      FOOTAGE                               LEASED
                  --------                                      -------                               ------

       Altamonte Springs, FL                                     33,000                               Leased
       Austell, GA                                               56,160                               Leased
       Dallas, TX                                                44,000                                Owned
       Houston, TX                                               15,000                               Leased
       Indianapolis, IN                                          57,200                                Owned
       Middletown, PA                                            40,650                               Leased
       Orange, CT                                               185,000                                Owned
       Orlando, FL                                               94,600                                Owned
       Portland, ME                                              60,000                                Owned
       San Dimas, CA                                             65,400                               Leased
       Santa Ana, CA                                             11,941                               Leased
       Shelby, NC                                               103,500                                Owned
</TABLE>

             The Company has scheduled to close the Brockton, MA distribution
center in the first quarter of 1996.  The current customers of this distribution
center will be serviced from other existing facilities.  The owned 60,000
square foot facility in Brockton, MA will be sold or leased thereafter.  Based 
on a review of the anticipated cash flows, the carrying value of the building is
considered recoverable in all material respects.

             In addition, the Company purchased its corporate offices in
Indianapolis, IN from a partnership controlled by the Company's principal
shareholder at its fair market value.  Prior to the purchase, the Company
leased the building under a capital lease.  This building provides 32,000
square feet of office space for the  accounting, contracts, credit, human
resources, information systems and purchasing departments.  The Company also
leases 8,000 square feet of office space located in Indianapolis, IN.  This
office currently houses certain of the Company's executive officers and related
staff.    The National Infusion Services, Inc. subsidiary leases 4,810 square
feet of office and medical building space in Indianapolis, IN.

Item 3.      LEGAL PROCEEDINGS.

             The Company is subject to ordinary and routine litigation
incidental to its business, none of which is material to the Company's results
of operations or financial condition. See, also, Note 12 - Legal Proceedings in
the Company's financial statements, which is incorporated herein by reference.

Item 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

             No matters were submitted during the fourth quarter of 1995 to a
vote of security holders of the registrant, through the solicitation of proxies
or otherwise.

<PAGE>     13
Executive Officers.

             The following is a list  of the Company's executive officers,
their ages and their positions held by the named individuals.  These positions
may exclude other positions held with subsidiaries of the Company.  These
executive officers serve at the discretion of the Board.  There is no family
relationship between any of the executive officers of the Company.

<TABLE>
             <S>                                   <C>              <C>                                        <C>
                 NAME                              AGE                       POSITION
                 ----                              ---                       --------

             William E. Bindley                    55               Chairman of the Board, Chief
                                                                    Executive Officer, and President
             Keith W. Burks                        38               Executive Vice President
             Michael D. McCormick                  48               Executive Vice President, General
                                                                    Counsel, and Secretary
             Thomas J. Salentine                   56               Executive Vice President, Chief
                                                                    Financial Officer
             Gregory S. Beyerl                     38               Vice President and Controller
             Michael L. Shinn                      41               Treasurer
             Thomas G. Slama, M.D.                 49               President and Chief Executive 
                                                                    Officer of National Infusion Services,
                                                                    Inc.
</TABLE>

                Gregory S. Beyerl, who is a certified public accountant, joined
the Company's Bindley Western Drug Company Division in 1986 as Assistant
Controller and was promoted to division Controller in 1987, division Vice
President in 1990, and corporate Vice President and Controller in 1992.  He was
previously with the accounting firm of Price Waterhouse.  Mr. Beyerl also holds
an MBA degree.

             Michael L. Shinn joined the Company as Treasurer in May 1992.  Mr.
Shinn is a certified public accountant and was previously the Director of
Corporate Taxation for the Indianapolis office of the accounting firm of Price
Waterhouse.  His duties include responsibility for the Company's entire tax
function, including those of its subsidiaries and divisions.


             (Pursuant to general Instruction (G)(3) of Form 10-K, the
foregoing information pertaining to executive officers who are not standing for
election as members of the Board of Directors is included as an un-numbered
Item in Part I of this Annual Report in lieu of being included in the Company's
Proxy Statement for its 1996 Annual Meeting of Shareholders.)
<PAGE>   14
                                    PART II

Item 5.      MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
             MATTERS.

             The Company's common stock, $.01 par value, is traded on the New
York Stock Exchange under the symbol "BDY".   Prior to listing on the New York
Stock Exchange, the common stock was quoted on the NASDAQ National Market
System under the symbol "BIND". The following table reflects the range of the
reported high and low prices for the Company's common stock as reported on the
New York Stock Exchange from August 2, 1995 through December 31, 1995 and on
the NASDAQ National Market prior thereto.


<TABLE>
               <S>                                       <C>              <C>
                         1995                              HIGH             LOW
               January 1 - March 31                      $16.13           $13.75
               April 1 - June 30                         $16.13           $14.50
               July 1 - September 30                     $19.00           $15.25
               October 1 - December 31                   $18.38           $14.75

                          1994                             HIGH             LOW
               January 1 - March 31                      $14.00           $11.88
               April 1 - June 30                         $13.25           $11.13
               July 1 - September 30                     $14.75           $11.25
               October 1 - December 31                   $15.63           $11.75
</TABLE>
 
 
             At March 15, 1996 there were outstanding 11,345,847 shares of the
Company's common stock, which were held by approximately 800  holders of
record.

             The Company has paid cash dividends on its common stock of 1-1/2
cents per share on twelve different quarterly dates for the period beginning
September 5, 1990 and ending June 30, 1993. This dividend was increased to 2
cents per share for cash dividends paid on 11 different quarterly dates for the
period beginning September 7, 1993 and ending March 25, 1996.  Prior to
September 5, 1990, the Company had not declared a cash dividend on its common
stock.  Future dividends will be paid in accordance with declarations by the
Board of Directors in its sole discretion.  The Company's primary bank line of
credit agreement requires the Company to maintain specified levels of working
capital and net worth, which may limit the Company's ability to pay dividends
in the future.

             During the third quarter of 1994, the Company established an
Automatic Dividend Reinvestment Plan for its shareholders.  This voluntary plan
provides for periodic investment of shareholder dividends in shares of the
Company's common stock plus the opportunity to make voluntary cash payments up
to $5,000 per quarter to purchase additional shares without incurring any
service charges or brokerage fees.
<PAGE>   15
Item 6.                   Selected Financial Data


  The selected financial data set forth below should be read in conjunction with
the Company's financial statements and related notes included elsewhere in this
report.


            Five Year Financial Review and Selected Financial Data
                       BINDLEY WESTERN INDUSTRIES, INC.


<TABLE>
<CAPTION>

(in thousands, except share data)
---------------------------------------------------------------------------------------------------------------
                                             1995          1994          1993          1992           1991
---------------------------------------------------------------------------------------------------------------
<S>                                     <C>           <C>           <C>             <C>            <C>
Net sales                               $4,670,153    $4,034,107    $3,426,097      $2,911,741     $2,392,801
Other income                                 2,322         3,317         4,363           3,578          4,164
Cost of products sold                    4,565,750     3,945,172     3,350,119       2,844,880      2,334,669
Selling, general and administrative         62,555        50,279        43,322          36,707         27,419
Other expenses                              16,406        16,998        20,601          17,761         17,141

Earnings before income taxes
 and cumulative effect of
 change in accounting principle             27,764        24,975        16,418          15,971         17,736
Provision for income taxes                  11,383        10,240         6,854           5,590          6,376
Net earnings before 
 Cumulative effect of change 
 in accounting principle                    16,381        14,735         9,564          10,381         11,360
 Cumulative effect of change
 in accounting principle                                                                 2,510
Net Earnings                                16,381        14,735         9,564          12,891         11,360

Earnings per share:
 Before cumulative effect of change
 in accounting principle
  Primary                               $     1.42    $     1.34    $     0.88      $     1.02     $     1.61
  Fully diluted                               1.27          1.20          0.86            1.00           1.33
 Net earnings
  Primary                                     1.42          1.34          0.88            1.27           1.61
  Fully diluted                               1.27          1.20          0.86            1.21           1.33

Cash dividends declared per
 Common Share                           $     0.08          0.08          0.07            0.06           0.06

Other financial data:
Current assets                          $  772,761    $  736,687    $  665,412      $  555,429     $  431,077
Total assets                               844,103       803,447       732,204         629,759        495,863
Current liabilities                        568,764       547,131       489,904         395,353        341,647
Long-term debt                              69,473        69,461        69,733          69,246         53,660
Total liabilities                          643,343       623,196       566,486         473,072        409,693
Shareholders equity                        200,760       180,251       165,718         156,687         86,170
Book value per share                         17.90         16.64         15.38           14.59          12.54

</TABLE>

<PAGE>   16
ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS.

        The discussion and analysis that follows should be read in conjunction
with the Consolidated Financial Statements and related notes included elsewhere
in this report.

RESULTS OF OPERATIONS.

         The Company has made several acquisitions which affect the comparison
of the results of operations on a year to year basis.  All acquisitions have
been accounted for under the purchase method and, accordingly, the results of
operations of the acquired entities are included in the Company's financial
statements from the respective dates of acquisition.

         The Company acquired Charise Charles Ltd. (Charise Charles), a
wholesale distributor of oncology and renal care pharmaceuticals and biotech
drugs on February 28, 1993, and PRN Medical, Inc. (PRN), a wholesale
distributor of renal care supplies and dialysis equipment on October 6, 1993.

         On June 23, 1994 the Company formed a new wholly owned subsidiary,
Priority Healthcare Corporation (PHC), to provide a greater management focus
and an enhanced ability to meet the needs of the higher margin alternate
care/alternate site business.  The new company, based in Altamonte Springs, FL,
was  initially comprised of the Charise Charles and PRN divisions of the
Company.

         PHC continued to expand through the acquisitions of 3C Medical  and
the IV One Companies (IV One).  The acquisition of 3C Medical, a distributor of
hemodialysis products, was effective October 31, 1994.  IV One is comprised of
IV-1, Inc., IV-One Services, Inc., and National Pharmacy Providers, Inc..
These companies focus on high acuity specialty pharmacy services for patients
requiring home and ambulatory infusion therapy.  PHC acquired all of the
outstanding stock of IV One in a cash transaction effective January 1, 1995.

         The Company also acquired Kendall Drug Company (Kendall), a wholesale
pharmaceutical distributor, effective July 1, 1994.

         Net sales of $4,670 million for 1995 were an increase of 16% over
1994.  These sales increases resulted from internal growth of 12%, with the
remaining 4% attributable to the aforementioned acquisitions of Kendall, 3C and
IV One.  The internal growth reflected increased sales to existing customers,
the addition of new customers and price increases.  The 18% increase of 1994
sales over 1993 resulted from internal growth of 15% and the remaining 3% from 
the acquisitions of Charise Charles, Kendall, 3C and PRN.   The commitment to 
the direct store delivery portion of the business continued through 1995 and 
accounted for 32% and 29% of total sales in 1995 and 1994, respectively.  This
represented a 25% increase of 1995 direct store sales over 1994 and a 30% 
increase for 1994 over 1993.

         Gross margin of $104 million in 1995 increased by 17% over 1994,
primarily because of the increase in net sales.    The increase in gross margin
for 1994 over 1993 was also 17%. The primary reason for this increase was also
the increase in net sales.  Gross margin as a percent of net sales had a slight
increase in 1995 to 2.24% from 2.20% in 1994,  which had 
<PAGE>     17
decreased slightly from the 2.22% of 1993.  The decrease in 1994 resulted from 
competitive selling pressures and the timing of purchasing gains associated with
pharmaceutical price inflation. In 1995, the pressure on sell side margins
continued and the purchasing gains remained relatively constant.  However,
there was an infusion of higher margins from the recent acquisitions of the
alternate care/alternate site businesses of PHC and the commitment to growth of
the direct store delivery portion of the business.  This growth included a
greater emphasis on providing new value added information systems programs, new
marketing programs with manufacturers and increased sales of higher margin
products such as generics, home health care and private label.

         Other income decreased in 1995 and 1994 as a result of reduced gains
on the sale of marketable securities and a decrease in service fee income on
certain customer receivable balances.

         Selling, general and administrative (SGA) expenses increased from
$43.3 million in 1993 to $50.3 million in 1994 and to $62.6 million in 1995.
The increase from 1993 to 1994 included incremental SGA of $3.7 million related
to acquisitions.  For 1995, the increase attributable to the acquired companies
was $6 million.  The remainder of the increases resulted from normal
inflationary increases and costs to support the growing direct store delivery
business of Bindley Western Drug Company and the alternate care/alternate site
business of PHC.  The cost increases related to the direct store delivery and
alternate care/alternate site business include, among others, delivery expense,
warehouse expense, and labor costs, which are variable with the level of sales
volume.  In 1995, SGA expense also included sales and development costs
associated with the new information systems and marketing programs and
incremental costs associated with the consolidation of the Charlotte division
into the expanded facility in Shelby, NC.  SGA expenses will continue to
increase as direct store delivery and alternate care/alternate site sales
increase.  However, management remains focused on controlling this increase
through improved technology, better asset management and opportunities to
consolidate distribution centers.

         Depreciation and amortization increased from $5.7 million in 1993 to
$5.8 million in 1994 and to $6.3 million in 1995.  These increases were the
result of the inclusion of acquired entities and the depreciation and
amortization on new facilities and equipment, particularly in management
information systems.

         Interest expense for 1993, 1994 and 1995 was $8.1 million, $11.2
million and $10.1 million, respectively. The average short-term borrowings
outstanding were $105 million, $142 million and $104 million at an average
short-term interest rate of 4.9%, 5.9% and 7.1% for 1993, 1994 and 1995,
respectively.  In all years presented, the Company has provided extended 
receivable terms on identifiable receivables of certain chain warehouse 
customers and charged interest on these balances.  To the extent this
interest offsets borrowing costs incurred to support these receivables, it was
treated as a reduction of interest expense.

         The interest received from chain warehouse customers as a result of 
extended receivable terms is immaterial in relation to total interest expense,
and therefore, presented on a net basis.

<PAGE>     18
         The 1993 writedown of accounts receivable of $1.42 million represented
the Company's remaining exposure from the Reliable bankruptcy claim.  Reliable
entered bankruptcy on December 9, 1992.

             On February 22, 1995, Pic 'N Save, a 32-store chain based in
Jacksonville, FL, filed a petition for reorganization under the federal
Bankruptcy Code.  As of the date of filing, Pic 'N Save was indebted to the
Company in an amount approximating $3.46 million.  During 1995, the Company's
sales to Pic 'N Save approximated $25 million.  These sales were made to Pic 'N
Save on a cash basis and the Company is continuing to sell to Pic 'N Save on a 
cash basis.  The Company believes that its reserves for doubtful accounts should
be sufficient to absorb any uncollectible amounts resulting from the Pic 'N Save
plan of reorganization.

         The restructuring charge of $5.39 million in 1993 was attributable
primarily to consolidation programs for the Company's East Coast operations
which should provide increased efficiency, reduced costs and enhanced data
processing based programs for all customer categories. This charge included
lease commitments to third parties, writedowns of various assets to realizable
values and facilities consolidation costs.  The charge was comprised of noncash
asset writedowns of approximately $2.7 million, product consolidation costs of
approximately $.3 million and anticipated probable cash expenditures of $2.4
million related to payments on lease commitments, data processing and inventory
conversion costs and other employee costs.  The anticipated probable cash
expenditures will be funded from operating revenues.  The Company believes
that, as of December 31, 1995, the consolidation of the East Coast operations
was on schedule and  the Company had expended $1.8 million of the probable cash
expenditures on a basis substantially consistent with the original plan and
believes that the $5.39 million charge taken at December 31, 1993 should be
sufficient to complete the consolidation.

         The provision for income taxes represented 41.0%,  41.0% and 41.7%  of
earnings before taxes in 1995, 1994 and 1993, respectively.  The 1993 rate
included the effect of the statutory rate increase on the Company's deferred
tax liabilities at the beginning of 1993.  In accordance with the provisions of
Statement of Accounting Standards No. 109 "Accounting for Income Taxes," the
Company accounts for income taxes using the asset and liability method.  The
asset and liability method requires the recognition of deferred tax assets and
liabilities for expected future tax consequences of temporary differences that
currently exist between the tax bases and financial reporting bases of the
Company's assets and liabilities.

         The Company is considering a pro rata distribution to its shareholders
of all of the stock of PHC.  The proposed spin-off would separate the Company's
wholesale drug business from the wholesale drug and alternate care/alternate
site business of PHC.  The contemplated spin-off would be subject to, among
other business considerations, obtaining a favorable tax ruling and compliance
with applicable securities and other governmental regulations.

LIQUIDITY-CAPITAL RESOURCES.

         The Company's operations provided $63 million in cash for the year
ended December 31, 1995.  The source of funds was primarily a result of a
reduction in merchandise inventory and an increase in accounts payable.  These
sources were partially offset by an increase in accounts receivable.  The
decrease in merchandise inventories resulted from management's efforts to
control inventory levels to minimize carrying costs and maximize 
<PAGE>     19
purchasing opportunities while the increase in accounts payable was attributed 
to the timing of payment terms.  The increase in accounts receivable resulted 
from the increase in the current year sales and the timing of large purchases by
chain warehouse customers at the end of 1995.

         Capital expenditures, predominantly for the expansion and automation
of existing warehouses and the investment in additional management information
systems, were $7.9 million during 1995.  Proceeds from the sale of marketable
securities during 1995 were $1.3 million.  Amounts paid to acquire the stock of
the IV One Companies and to satisfy amounts owed pursuant to a prior year 
acquisition agreement totaled approximately $4.1 million.
 
         Net decrease in borrowings under the bank credit agreement was $62
million during 1995.  At December 31, 1995, the Company had borrowed $74.5
million under the bank credit agreement and had a remaining availability of
$175.5 million.

         The Company believes that its cash on hand, cash equivalents, bank
line of credit and working capital management efforts are sufficient to meet
future working capital requirements.  As of December 31, 1995, the Company's
short-term bank line of credit was $250,000,000.

         The Company's principal working capital needs are for inventory and
accounts receivable.  The Company sells inventory to its chain drug warehouse
and other customers on various payment terms.  This requires significant
working capital to finance inventory purchases and entails accounts receivable
exposure in the event any of its chain warehouse or other major customers
encounter financial difficulties.  Although the Company monitors closely the
creditworthiness of its major customers and, when feasible, obtains security
interests in the inventory sold, there can be no assurance that the Company
will not incur some collection loss on chain drug or other major customer
accounts receivable in the future.

INFLATION.

         The Company's financial statements are prepared on the basis of
historical costs and are not intended to reflect changes in the relative
purchasing power of the dollar.  Because of its ability to take advantage of
forward purchasing opportunities, the Company believes that its gross profits
generally increase as a result of manufacturers price increases in the products
it distributes.  Gross profits may decline if the rate of price increases by
manufacturers declines.

         Generally, price increases are passed through to customers as they are
received by the Company and therefore reduce the negative effect of inflation.
Other non-inventory cost increases, such as payroll, supplies and services,
have been partially offset during the past three years by increased volume and
productivity.


Item 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The financial data required to be included under this item is
submitted in a separate section of this report and incorporated herein by
reference.


<PAGE>     20
Item 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE.

         Not applicable.
<PAGE>   21
                                    PART III

Item 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

             The information required by this Item concerning the Directors and
nominees for Directors of the Company is incorporated herein by reference to
the Company's definitive Proxy Statement for its 1996 annual meeting of common
shareholders, to be filed with the Commission pursuant to Regulation 14A within
120 days after the end of the Company's last fiscal year.  Information
concerning the executive officers of the Company is also included under
"Executive Officers " at the end of Part I of this Annual Report.  Such
information is incorporated herein by reference, in accordance with General
Instruction G(3) to Form 10-K and Instruction 3 to Item 401(b) of Regulation
S-K.

Item 11.     EXECUTIVE COMPENSATION.

             The information required by this Item concerning remuneration of
the Company's officers and Directors and information concerning material
transactions involving such officers and Directors is incorporated herein by
reference to the Company's definitive Proxy Statement for its annual meeting of
common shareholders to be filed with the Commission pursuant to Regulation 14A
within 120 days after the end of the Company's last fiscal year.

Item 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

             The information required by this Item concerning the stock
ownership of management and five percent beneficial owners is incorporated
herein by reference to the Company's definitive Proxy Statement for its annual
meeting of common shareholders to be filed with the Commission pursuant to
Regulation 14A within 120 days after the end of the Company's last fiscal year.

Item 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

             The information required by this Item concerning certain
relationships and related transactions is incorporated herein by reference to
the Company's definitive Proxy Statement for its annual meeting of common
shareholders to be filed with the Commission pursuant to Regulation 14A within
120 days after the end of the Company's last fiscal year.
<PAGE>   22
                                    PART IV

Item 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

        The documents listed below are filed as a part of this report except as
otherwise indicated:

            (a)  1.  FINANCIAL STATEMENTS.  The following described financial
statements, required to be filed by Item 8 and incorporated therein by reference
are set forth on pages 23 though 40.



            Report of Independent Accountants                      23
            Statements of Earnings for each of the three years
              in the period ended December 31, 1995                24
            Balance Sheets as of December 31, 1995 and 1994        25
            Statements of Cash Flows for each of the three years
              in the period ended December 31, 1995                26
            Statements of Shareholders' Equity for each of the
              three years in the period ended December 31, 1995    27
            Notes to Consolidated Financial Statements             28 to 40

            (a)  2.  FINANCIAL STATEMENT SCHEDULES. No financial statement 
schedules are included as the information required by Rule 5-04 is not 
applicable, or is not material.

            (a)  3.  EXHIBITS.  The list of exhibits filed as part of this 
report is incorporated herein by reference to the Index to Exhibits at Page 39.

            (b)  4.  No reports on Form 8-K were filed by the Registrant during
the last quarter covered by this report. 


<PAGE>   23
                      REPORT OF INDEPENDENT ACCOUNTANTS



To the Board of Directors and Shareholders of
   Bindley Western Industries, Inc.



In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a) 1 on page 21 present fairly, in all material
respects, the financial position of Bindley Western Industries, Inc. and its
subsidiaries at December 31, 1995 and 1994, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1995, in conformity with generally accepted accounting principles.  These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits.  We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis for the
opinion expressed above.





Price Waterhouse LLP
Indianapolis, Indiana
February 28, 1996
<PAGE>   24
                       CONSOLIDATED STATEMENTS OF EARNINGS
               BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
<S>                                             <C>                     <C>                      <C>

FOR THE YEARS ENDED DECEMBER 31,                         1995                    1994                    1993
(In thousands, except share data)


Revenues:
  Net sales                                     $   4,670,153           $   4,034,107            $  3,426,097
  Other income                                          2,322                   3,317                   4,363
                                                -------------           -------------            ------------   
                                                    4,672,475               4,037,424               3,430,460


Cost and expenses:
  Cost of products sold                             4,565,750               3,945,172               3,350,119
  Selling, general and administrative                  62,555                  50,279                  43,322
  Depreciation and amortization                         6,279                   5,813                   5,671
  Interest                                             10,127                  11,185                   8,122
  Write down of accounts receivable                                                                     1,420
  Restructuring charge                                                                                  5,388
                                                -------------           -------------            ------------   
                                                    4,644,711               4,012,449               3,414,042
                                                                                    
Earnings before income taxes                           27,764                  24,975                  16,418
                                                -------------           -------------            ------------   

Provisions for income taxes:
  Current                                              13,944                  11,800                   8,193
  Deferred                                             (2,561)                 (1,560)                 (1,339)
                                                -------------           -------------            ------------   
                                                       11,383                  10,240                   6,854
                                                -------------           -------------            ------------   
Net earnings                                     $     16,381           $      14,735            $      9,564
                                                =============           =============            ============

Earnings per share:
  Primary                                        $       1.42           $        1.34            $       0.88
  Fully diluted                                          1.27                    1.20                    0.86


Average shares outstanding:
  Primary                                          11,529,092              11,035,912              10,915,751
  Fully diluted                                    15,042,597              14,539,770              14,315,902

</TABLE>


         (See accompanying notes to consolidated financial statements)

<PAGE>   25
                         CONSOLIDATED BALANCE SHEETS
              BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
DECEMBER 31,                                                         1995          1994
(In thousands, except share data)

<S>                                                              <C>           <C>
ASSETS
Current assets:
 Cash                                                            $ 34,819      $ 39,840
 Short-term investments                                                           1,024
 Accounts receivable, less allowance for doubtful
  accounts of $3,057 for 1995 and $2,455 for 1994                 397,924       318,344
 Finished goods inventory                                         332,054       374,557
 Other current assets                                               7,964         2,922
                                                                 --------      --------
                                                                  772,761       736,687 
                                                                 --------      --------
 Other assets                                                       1,220         1,430
                                                                 --------      --------
 Fixed assets, at cost                                             59,468        53,983
 Less: accumulated depreciation                                   (18,736)      (16,250)
                                                                 --------      --------
                                                                   40,732        37,733
                                                                 --------      --------
 Intangibles                                                       29,390        27,597
                                                                 --------      --------

  TOTAL ASSETS                                                   $844,103      $803,447
                                                                 ========      ========



LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
 Short-term borrowings                                           $ 74,500      $136,500
 Accounts payable                                                 491,844       404,813
 Deferred income taxes                                             (4,605)       (3,542)
 Other current liabilities                                          7,025         9,360
                                                                 --------      --------
                                                                  568,764       547,131
                                                                 --------      --------
Long-term debt                                                     69,473        69,461
                                                                 --------      --------
Deferred income taxes                                               5,106         6,604
                                                                 --------      --------


Shareholders' equity:
 Common stock, $.01 par value-authorized 30,000,000 shares;
  issued 11,562,388 and 11,179,994 shares, respectively             3,313         3,310
 Special shares, $.01 par value-authorized 1,000,000 shares
 Additional paid in capital                                        87,707        82,652
 Retained earnings                                                112,890        97,439
                                                                 --------      --------
                                                                  203,910       183,401
                                                                 --------      --------
 Less: 348,291 shares in treasury-at cost                          (3,150)       (3,150)
                                                                 --------      --------
 Total shareholders' equity                                       200,760       180,251
                                                                 --------      --------
Commitments and contingencies
                                                                 --------      --------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                      $844,103      $803,447
                                                                 ========      ========
</TABLE>

         (See accompanying notes to consolidated financial statements)



   
<PAGE>   26
                    Consolidated Statements Of Cash Flows
              Bindley Western Industries, Inc. And Subsidiaries
         

<TABLE>
<CAPTION>

FOR YEARS ENDED DECEMBER 31,                            1995                 1994                1993
(In thousands)
<S>                                                 <C>                <C>                   <C>
Cash flow from operating activities:
 Net income                                          $    16,381       $    14,735           $   9,564

 Adjustments to reconcile net income to
  net cash provided (used) by operating activities:
  Depreciation and amortization                            6,279             5,813               5,671
  Deferred income taxes                                   (2,561)           (1,560)             (1,339)
  Writedown of accounts receivable                                                               1,420
  Loss (gain) on sale of marketable securities               (96)             (183)             (1,450)
  Loss (gain) on sale of fixed assets                        (27)              (57)                  3
  Restructuring charge                                                                           5,388

Change in assets and liabilities,                                      
 net of acquisitions:                                                         
  Accounts receivable                                    (78,183)            6,327             (74,308)
  Finished goods inventory                                42,953           (46,987)            (24,535)
  Accounts payable                                        85,781             6,876              17,485
  Other current assets and liabilities                    (7,537)            2,849              (2,838)

  Net cash provided (used) by operating              -----------       -----------           ---------           
   activities                                             62,990           (12,187)            (64,939)
                                                     -----------       -----------           ---------                        


Cash flow from investing activities:
  Purchase of fixed assets and other assets               (7,922)           (3,575)             (5,738)
  Proceeds from sale of fixed assets                         597               491               1,769
  Proceeds from sale of investment securities              1,299             3,793              12,871
  Acquisition of businesses                               (4,125)          (10,361)             (5,980)
                                                     -----------       -----------           ---------                        
  Net cash provided (used) by investing activities       (10,151)           (9,652)              2,922
                                                     -----------       -----------           ---------                        

Cash flow from financing activities:
  Proceeds from sale of stock                              5,058               717                 284
  Addition (reduction) of long-term debt                      12              (272)                487
  Proceeds under line of credit agreement              1,049,000         1,184,500             984,000
  Payments under line of credit agreement             (1,111,000)       (1,156,000)           (921,000)
  Dividends                                                 (930)             (919)               (817)

  Net cash provided (used) by financing              -----------       -----------           ---------   
   activities                                            (57,860)           28,026              62,954
                                                     -----------       -----------           ---------                        

Net increase (decrease) in cash                           (5,021)            6,187                 937
Cash at beginning of year                                 39,840            33,653              32,716
                                                     -----------       -----------           ---------                        

Cash at end of year                                  $    34,819       $    39,840           $  33,653
                                                     ===========       ===========           =========                        

</TABLE>
         (See accompanying notes to consolidated financial statements)
<PAGE>   27
               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
               BINDLEY WESTERN INDUSTRIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>                  Common Stock                  Treasury Stock
                    ---------------------------------------------------------------


                                                                                     Additional
                             Shares                      Shares                         Paid in        Retained      Shareholders'
                        Outstanding       Amount    Outstanding           Amount        Capital        Earnings            Equity
------------------------------------------------------------------------------------------------------------------------------------
(In thousands, except 
 share data)

<S>                      <C>            <C>             <C>             <C>             <C>           <C>              <C>
Balances at
 December 31, 1992       11,089,834     $  3,309        348,291         $(3,150)        $81,652        $ 74,876         $  156,687

Net earnings                                                                                              9,564              9,564
Dividends                                                                                                  (817)              (817)
Shares issued upon 
 exercise of
 stock options               31,100                                                         284                                284
                         ----------     --------        -------         --------        -------         --------        ----------
Balances at 
 December 31, 1993       11,120,934        3,309        348,291          (3,150)         81,936          83,623            165,718
Net earnings                                                                                             14,735             14,735
Dividends                                                                                                  (919)              (919)
Shares issued upon 
 exercise of
 stock options               44,060            1                                            521                                522
Shares issued upon 
 acquisition of
 business                    15,000                                                         195                                195
                         ----------     --------        -------         ---------       -------         --------        ----------
Balances at
 December 31, 1994       11,179,994        3,310        348,291          (3,150)         82,652          97,439            180,251

Net earnings                                                                                             16,381             16,381
Dividends                                                                                                  (930)              (930)
Shares issued upon
 exercise of 
  Stock options             382,394            3                                          5,055                              5,058
                         ----------     ---------       -------         ---------       -------         --------        ----------
Balances at
 December 31, 1995       11,562,388     $  3,313        348,291         $(3,150)        $87,707        $112,890         $  200,760
                         ==========     ========        =======         ========        =======        ========         ==========

</TABLE>

         (See accompanying notes to consolidated financial statements)




<PAGE>   28

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

         PRINCIPLES OF CONSOLIDATION.  The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries.  All
significant intercompany accounts and transactions have been eliminated.

         MARKETABLE SECURITIES.  Effective January 1, 1994, the Company adopted
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" (SFAS 115).   This statement was
adopted prospectively, and had no impact on earnings.

         This statement requires the classification of certain debt and equity
securities as either held to maturity, available for sale, or trading.  Held to
maturity securities are reported at amortized cost while available for sale and
trading securities are reported at fair value. The cost of marketable
securities sold is determined on the specific identification method.  Prior to
adoption, marketable securities were carried at amortized cost.

         INVENTORIES.  Inventories are stated on the basis of lower of cost or
market using the first-in, first-out (FIFO) method.

         FIXED ASSETS.  Depreciation is computed on the straight-line method
for financial reporting purposes.  Accelerated methods are primarily used for
income tax purposes. Assets, valued at cost, are generally being depreciated
over their estimated useful lives as follows:

                                                Estimated useful life (years) 
Buildings and furnishings                          5-35 
Leasehold improvements                             3-20
Transportation and other equipment                 3-20

In the event facts and circumstances indicate an asset could be impaired, an
evaluation of the undiscounted estimated future cash flows is compared to the
assets carrying amount to determine if a write-down is required.

         DEBT ISSUE COSTS.  Debt issue costs are amortized on a straight-line
basis over the life of the Convertible Subordinated Debentures (Debentures).

         INTANGIBLES.  The Company continually monitors its cost in excess of 
net assets acquired (goodwill) and its other intangibles (customer lists and 
covenants not to compete) to determine whether any impairment of these assets 
has occurred.  In making such determination, the Company evaluates the 
performance, on an undiscounted basis, of the underlying businesses which gave
rise to such amounts.  Goodwill is being amortized on the straight-line method
over periods not exceeding 40 years.  Other intangibles are being amortized on
the straight-line method over 6 to 15 years.

         EARNINGS PER SHARE.   Primary earnings per share are computed based on
the average number of shares of common stock and equivalents outstanding during
the year.  Common stock equivalents included in the computation represent
shares issuable upon assumed 
<PAGE>     29
exercise of stock options which would have a dilutive effect.  Fully diluted 
earnings per share are computed based on the average number of shares of 
common stock assumed to be outstanding during the year, as if the Debentures 
had been converted into common stock and after giving effect to the elimination
of interest expense, net of tax benefit, applicable to the Debentures.

         INCOME TAXES.  In accordance with the provisions of Statement of
Accounting Standards No. 109 "Accounting for Income Taxes," the Company
accounts for income taxes using the asset and liability method.  The asset and
liability method requires the recognition of deferred tax assets and liabilities
for expected future tax consequences of temporary differences that currently 
exist between the tax bases and financial reporting bases of the Company's 
assets and liabilities.

         The 1992 adoption of SFAS 109 resulted in an after-tax increase to net
earnings of $2,510,000.  This amount is reflected in 1992 net income as the
effect of a change in accounting principle.

         USE OF ESTIMATES.  The preparation of financial statements in
accordance with generally accepted accounting principles requires the use of
estimates made by management.  Actual results could differ from those
estimates.

         FAIR VALUE OF FINANCIAL INSTRUMENTS.  The carrying values of
cash, accounts receivable, short-term borrowings, accounts payable and other
current liabilities approximate their fair market values due to the short-term
maturity of these instruments.  The fair market values of marketable securities
and long term debt were determined based on market quoted rates and are
disclosed in Notes 3 and 6, respectively.

NOTE 2 - SHORT-TERM BORROWINGS

         The Company's short-term bank line of credit was $250,000,000 as of
December 31,1995. The line was available, as necessary, for general corporate
purposes at rates based upon prevailing money market rates.  $74,500,000 was
borrowed under the short-term bank line of credit at a rate of 6.9% at December
31, 1995.  $136,500,000 was borrowed under the short-term bank line of credit
at a rate of 6.9% at December 31, 1994. $108,000,000 was borrowed under the
short-term bank line of credit at a rate of 4.9% at December 31, 1993.

         No compensating balance is required on the line. Certain conditions
relating to the maintenance of working capital, net worth and corporate
existence have been imposed by the lenders.

<PAGE>     30
         A summary of 1995, 1994 and 1993 borrowings follows:

<TABLE>
       <S>                             <C>                               <C>                   <C>
                                       Maximum short-term                   Average                  Average
       Year                                    borrowings                borrowings            interest rate
-------------------------------------------------------------------------------------------------------------------
       (in thousands)
       1995                                      $189,500                  $104,465                    7.1%
       1994                                      $240,000                  $142,275                    5.9%
       1993                                      $149,500                  $104,842                    4.9%
</TABLE>

 NOTE 3 - MARKETABLE SECURITIES AND INVESTMENT INCOME

         At December 31, 1995, the Company had liquidated substantially all of
its investments in debt and equity securities.  The proceeds from the 1995
sales of securities classified as available for sale approximated their
amortized cost.

         At December 31, 1994,  all securities owned by the Company were
categorized as either available for sale or trading.  Securities classified as
available for sale were debt securities with a maturity of five to ten years
and a fair market value of  $1,047,000, which approximated amortized cost.
During 1994 the proceeds on sales of securities classified as available for
sale were $2,524,000, which approximated the amortized cost of securities sold.

         The components of other income were as follows:

<TABLE>

       DECEMBER 31,                                  1995                      1994                     1993
-------------------------------------------------------------------------------------------------------------
       (in thousands)
<S>                                             <C>                      <C>                      <C>
       Interest income                          $   2,194                 $   3,076               $   2,832
       Dividends                                       32                         1                      54
       Realized gains
         and losses, net                               96                       240                   1,477
                           ----------------------------------------------------------------------------------
                                                $   2,322                 $   3,317               $   4,363
                           ==================================================================================
</TABLE>


NOTE 4 - FIXED ASSETS
<TABLE> 
<CAPTION>
       DECEMBER 31,                                                   1995                             1994
-------------------------------------------------------------------------------------------------------------
       (in thousands)
<S>                                                       <C>                             <C>
       Land                                                 $        2,919                  $         2,833
       Buildings and furnishings                                    22,864                           18,361
       Capitalized lease                                                                              1,390
       Leasehold improvements                                        2,556                            3,071
       Transportation and
          other equipment                                           31,129                           28,328
                           ----------------------------------------------------------------------------------
                                                                    59,468                           53,983
       Less: Accumulated
          depreciation                                             (18,736)                         (16,250)
                           ----------------------------------------------------------------------------------
                                                             $      40,732                     $     37,733
                           ==================================================================================
</TABLE>


<PAGE>     31
NOTE 5 - INTANGIBLES

December 31,                                   1995                 1994
-----------------------------------      -----------------     ----------------
(in thousands)

Goodwill                                      28,673                25,333  
Accumulated amortization                      (3,931)               (3,132)
                                         -----------------     ----------------

Goodwill, net                                 24,742                22,201

Other                                         10,136                10,136
Accumulated amortization                      (5,488)               (4,740)
                                         -----------------     ----------------
Other,net                                      4,648                 5,396
                                         -----------------     ----------------
Intangibles, net                              29,390                27,597
                                         =================     ================


NOTE 6 - INCOME TAXES

        The provision for income taxes includes state income taxes of
$1,925,000, $1,850,000 and $1,225,000 in 1995, 1994 and 1993, respectively.

        The following table indicates the significant elements contributing to
the difference between the U.S. federal statutory tax rate and the effective tax
rate:

<TABLE>
       YEAR ENDED DECEMBER 31,                                           1995                 1994             1993
--------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                  <C>                 <C>
       Percentage of earnings before taxes:
       U.S. federal statutory rate                                      35.0%                35.0%             35.0%
       State and local taxes on income, net of
          federal income tax benefit                                     4.5%                 4.8%              4.8%
       Other                                                             1.5%                 1.2%              1.9%
                           ------------------------------------------------------------------------------------------
       Effective rate                                                   41.0%                41.0%             41.7%
                           ==========================================================================================
</TABLE>
<PAGE>   32
         Presented below are the significant elements of the net deferred tax
balance sheet accounts at December 31, 1995 and 1994:

<TABLE>
       <S>                                                        <C>                <C>
       Deferred tax assets:                                           1995               1994
                                                                      ----               ----
         Current:
            Accounts receivable                                   $  4,893           $  3,846
            Inventories                                                677                888
            Restructuring costs                                        255                473
            Other, net                                               1,176                731
                                                            ---------------------------------
       Subtotal                                                      7,001              5,938

         Long-term:
            Acquired net operating loss benefits                       539                596
            Customer lists                                             278                403
            Other, net                                               1,022                669
                                                            ---------------------------------
       Subtotal                                                      1,839              1,668
                                                            ---------------------------------
       Total deferred tax assets                                  $  8,840           $  7,606
                                                            =================================
       Deferred tax liabilities:
        Current:
          Change in tax method for inventories                    $  2,396           $  2,396
                                                            ---------------------------------
       Subtotal                                                      2,396              2,396

       Long-term:
         Fixed assets                                                3,486              3,001
         Change in tax method for inventories                        2,396              4,793
         Other, net                                                  1,063                478
                                                           ----------------------------------
       Subtotal                                                      6,945              8,272
                                                           ----------------------------------
       Total deferred tax liabilities                             $  9,341           $ 10,668
                                                           ==================================
</TABLE>

         During 1992, the Company adopted the FIFO method of valuing
inventories for tax purposes.  Prior to 1992, the Company used the LIFO method
of valuing inventories for tax purposes.  The transition rules allow for the
Company to implement this change in accounting for tax purposes on a pro-rata
basis over the years 1992 through 1997.

         In connection with the acquisition of Goold, the Company acquired
federal net operating loss carryforwards of $2,318,468.  Due to certain tax law
limitations, annual utilization of the carryforward is limited to $162,945.
The remaining tax loss carryforward at December 31, 1995 is $1,704,188.  The
carryover period expires in 2006.
<PAGE>   33
NOTE 7 - LONG-TERM DEBT

         The primary component of long-term debt at December 31, 1995 is
$67,350,000 of Debentures.  The remaining $2,123,000 is comprised of non-voting
(mandatorily redeemable) preferred stock, mortgage obligations, and certain
other debt related to the purchase of the IV One Companies.

         On September 24, 1992 and October 20, 1992, the Company concluded a
public offering of $65,000,000 and $2,350,000, respectively, of Convertible
Subordinated Debentures, Due 2002, for approximately $65,565,000, net of
underwriting and other costs.  The 6.50% Debentures are convertible at any time
prior to maturity into the Company's common stock at $19.825 per share.  The
Company may redeem the Debentures at a decreasing premium after October 1,
1996.

         The market value of the 6.50% Debentures, based upon the publicly
quoted rate, was $70,212,375 and $64,487,625 as of December 31, 1995 and
December 31, 1994, respectively.

         In 1995, the Company purchased its corporate offices from a
partnership controlled by the Company's principal shareholder at its fair
market value of $1,450,000.  Prior to the purchase, the Company leased the
building under a capitalized lease with a minimum annual rental of $111,000 at
an implicit rate of 10.5%.

NOTE 8 - PROFIT SHARING PLAN

         The Company and its subsidiaries maintain a qualified Profit Sharing
Plan ("Profit Sharing Plan") for eligible employees.  All employees are
generally eligible to participate in the Profit Sharing Plan as of the first
January 1, April 1, July 1 or October 1 after having completed at least one
year of service (as defined in the Profit Sharing Plan) and  having reached
age  21 ("Participant").  The  annual contribution of the Company and its
subsidiaries to the Profit Sharing Plan is at the discretion of the Board and
is generally 8% of the Participant's compensation  for the year.  The employer
contribution for a year is allocated among the Participants employed on the
last day of the year in proportion to their relative compensation for the year.
The Company's contributions to the plan for the years ended December 31, 1995,
1994 and 1993 were $1,165,550, $933,600 and $961,798,  respectively.

         Subject to limitations imposed by the Internal Revenue Code, a
Participant may have a whole percentage (ranging from 1% to 13%) of his or her
compensation withheld from pay and contributed to the Profit Sharing Plan and
make "rollover" contributions to the Profit Sharing Plan of qualifying
distributions from other employers' qualified plans.

         A Participant's interest in amounts withheld from his or her pay and
contributed to the Profit Sharing Plan or in rollover contributions and in the
earnings on those amounts are fully vested at all times.  A Participant's
interest in employer contributions made on his or her behalf and the earnings
on those contributions become 20% vested after three years of service and an
additional 20% vested during each of the next four years.  A Participant's
interest in employer contributions made on his or her behalf and the earnings
on those contributions will also become fully vested when the employee retires
at age 65 or older, dies or becomes totally disabled.
<PAGE>   34
         All contributions to the Profit Sharing Plan are paid in cash to an
Indianapolis bank, as trustee, and are invested by the trustee until
distributed to Participants or their beneficiaries.  Participants are permitted
to direct the trustee as to the investment of their accounts by choosing among
several investment funds that are offered under the Profit Sharing Plan,
including one fund consisting of common stock of the Company.  Participants may
elect to invest in one fund or a combination of the available funds according
to their investment goals.  If a Participant does not make an investment
election, his or her Profit Sharing Plan accounts will be invested in a fund
designated by the Company.

         Except in certain cases of financial hardship, a Participant (or his
or her beneficiary) receives distributions from the Profit Sharing Plan only at
death, retirement or termination of employment.  At that time, the value of a
Participant's interest in the Profit Sharing Plan is distributed to him or her.

         Effective January 1, 1994, the Company adopted the PRISM Prototype
Retirement Plan and Trust, which differs from the prior plan document in the
following respects: (a)  the Company's contribution is discretionary instead of
mandatory; (b)  Participants' forfeitures are used to reduce the Company's
contribution instead of being allocated prorata among the remaining
Participants; (c)  the type and number of investment alternatives available for
Participants; and (d)  the entry dates for new Participants now include April 1
and October 1.  Generally, the new plan is considered an improvement in terms
of administration, cost and Participant access.

NOTE 9 - CAPITAL STOCK

         The Company's capitalization presently consists of 30,000,000
authorized shares of Common Stock and 1,000,000 authorized shares of Special
Stock.  Both the Common Stock and Special Stock have a $.01 par value per
share.

         Prior to May 20, 1993, the Company had a 1983 Incentive Stock Option
Plan, a 1983 Nonqualified Option Plan, and a 1987 Stock Option and Incentive
Plan.  The number of shares available for issuance pursuant to such plans
aggregated 2,500,000 shares.  Incentive stock options, granted at a minimum of
100% of fair market value, and nonqualified stock options, granted at a minimum
of 85% of fair market value, both exercisable for up to 10 years from the date
of grant, were authorized under such plans.

         On May 20, 1993, the Company's shareholders approved the 1993 Stock
Option and Incentive Plan authorizing 1,000,000 shares of the Company's common
stock for sale or award to officers and key employees (including any such
officer or employee who holds at least 10% of the Company's common stock) as
stock options or restricted stock. No further awards will be made from the
shares of common stock that remained available for grants under prior stock
option plans.

         On May 19, 1994, the Company's shareholders approved amendments to the
Company's 1983 Incentive Stock Option Plan, the 1983 Nonqualified Stock Option
Plan, the 1987 Stock Option and Incentive Plan and the 1993 Stock Option and
Incentive Plan to permit the Company's Compensation and Stock Option Committee
of the Board of Directors ("Committee") to allow participants under these
plans, including the holders of outstanding
<PAGE>   35
options, to exercise an option during its term following cessation of
employment by reason of death, disability or retirement.  Such amendments also
permitted the Committee, in its sole discretion, to change the exercise and
termination terms of options granted if such changes are otherwise consistent
with applicable federal and state laws.  In addition, the 1993 plan was amended
to (i) increase from 1,000,000 to 1,500,000 the number of shares authorized for
issuance pursuant to awards made under the 1993 plan; (ii) limit to 100,000
shares the number of shares that any one participant may receive under the 1993
plan during any calendar year; and (iii) provide that the Board of Directors
may amend the 1993 plan in any respect without shareholder approval, unless
such approval is required to comply with Rule 16b-3 under the Securities
Exchange Act of 1934 or Section 422 of the Internal Revenue Code of 1986.  At
its December 6, 1995 meeting, the Company's Board proposed to amend the 1993
Stock Option and Incentive Plan to increase by 1,500,000 the number of shares
authorized for issuance pursuant to awards made under the 1993 plan subject to
shareholder approval at the Company's May 16, 1996 annual meeting.

   Changes in stock options under all plans are shown below:

<TABLE>
<CAPTION>
                                            NUMBER OF SHARES                   OPTION PRICE PER SHARE
<S>                                             <C>                            <C>          <C>

Options outstanding
    at December 31, 1992                         1,407,354                      $5.42  to   $17.00
Forfeited during 1993                              (27,050)                    $12.88  to   $17.00
Granted during 1993                                667,000                     $11.00  to   $12.65
Exercised during 1993                              (31,100)                     $5.84  to   $11.63
                                                  --------                                       

Options outstanding
   at December 31, 1993                          2,016,204                      $5.42  to   $17.00
Forfeited during 1994                              (51,200)                     $6.38  to   $17.00
Granted during 1994                                708,417                     $11.50  to   $14.58
Exercised during 1994                              (43,950)                     $6.38  to   $13.38
                                                 ---------                                      

Options outstanding
   at December 31, 1994                          2,629,471                     $5.42  to   $17.00
Forfeited during 1995                             (102,598)                   $11.50  to   $17.00
Granted during 1995                                647,300                    $14.50  to   $19.39
Exercised during 1995                             (382,394)                    $5.42  to   $17.00
                                                  --------                                        

Options outstanding
   at December 31, 1995                          2,791,779                     $5.42  to   $19.39
                                                 =========                                         

Exercisable
   at December 31, 1995                          1,688,044
                                                 =========

Available for grant
   at December 31, 1995                          1,138,331
                                                 =========

</TABLE>
         In certain cases, the exercise of stock options results in state and
federal income tax deductions to the Company on the difference between the
market price at the date of exercise
<PAGE>   36
and the option price.  The tax benefits obtained from these deductions are
included in additional paid in capital.

         The Company will continue to apply Accounting Principles Board Opinion
No. 25 in accounting for its stock based plans and will implement the
disclosure requirements of SFAS 123 "Accounting for Stock Based Compensation"
in 1996.

NOTE 10 - COMMITMENTS

         The Company leases warehouse and office space under noncancelable
operating leases expiring at various dates through 2000, with options to renew
for various periods.  Minimum commitments under leases aggregate $1,758,000 for 
1996, $1,659,000 for 1997, $1,003,000 for 1998 and $270,000 for both 1999 and
2000.

         The consolidated rent expense for the years ended December 31, 1995,
1994 and 1993 was $1,708,691, $1,500,082 and $1,477,000, respectively, of which
approximately $76,875 in 1995, $45,000 in 1994 and $38,000 in 1993 pertained to
leases with terms of one year or less.

NOTE 11 -  MAJOR CUSTOMERS

             The Company services customers in 50 states,  Puerto Rico, Mexico
and Central and South America from its 12 distribution centers located in nine
states.  Its principal customers are chain drug companies that operate their
own warehouses.  Other customers include independent drug stores, chain drug
stores, hospitals, clinics, HMOs, state and federal government agencies, and
other health care providers.   The following chain drug warehouse customers
each accounted for over 10% of the Company's net sales during the years shown:
Eckerd Corporation (19%), Rite Aid Corporation (15%), and Revco D.S., Inc. (10%)
in 1995; Eckerd Corporation (22%) and Rite Aid Corporation (11%) in 1994; and
Eckerd Corporation (23%) and Peyton (13%) in 1993.  Sales to these customers
aggregated 44%, 33% and 36% of net sales in 1995, 1994 and 1993, respectively.  
The Company sells inventory to its chain drug warehouse and other customers on 
various payment terms.  This entails accounts receivable exposure, especially if
any of its chain warehouse customers encounter financial difficulties.  Although
the Company monitors closely the creditworthiness of its major customers and, 
when feasible, obtains security interests in the inventory sold, there can be no
assurance that the Company will not incur the write-off or writedown of chain 
drug accounts receivable in the future.     In  1993, the Company recorded a 
writedown of  $1.42 million for Reliable Drug Stores, Inc.  which represented 
the Company's remaining exposure from the Reliable bankruptcy claim.

             On February 22, 1995, Pic 'N Save, a 32 store chain based in
Jacksonville, FL, filed a petition for reorganization under the federal
Bankruptcy Code.  As of the date of filing, Pic 'N Save was indebted to the
Company in an amount approximating $3.46 million.  During 1995, the Company's
sales to Pic 'N Save approximated $25 million.  These sales were made to Pic 'N
Save on a cash basis and the Company is continuing to sell to Pic 'N Save on a
cash basis.  The Company believes that its reserves for doubtful accounts
should be sufficient to absorb any uncollectible amounts resulting from the Pic
'N Save plan of reorganization.
<PAGE>   37
NOTE 12 - STATEMENT OF CASH FLOWS

         Cash paid for interest expense and income taxes was as follows:

DECEMBER 31,               1995            1994            1993
(in thousands)
Interest                $13,395         $13,679         $10,074
Income Taxes            $16,469         $ 8,003         $12,677


        Presented below is a brief discussion of recent acquisitions by the
Company.  The purchase price has been allocated based on a determination of the
fair value of the assets acquired and liabilities assumed.  The goodwill
associated with these acquisitions is being amortized on a straight line basis
not exceeding 40 years.  All acquisitions were treated as purchases and the
financial statements include the results of operations from the respective
effective date of acquisition.  Results of operations of the acquired companies
from January 1 of the year of acquisition to the effective dates of the
transactions are not material to the consolidated results of operations of the
Company for the respective years.

         On February 28, 1993 and October 6, 1993, the  Company acquired
Charise Charles Ltd., Inc.,  a wholesale oncology and dialysis products
distributor based in Altamonte Springs, FL and PRN Medical, Inc., a wholesale
distributor of renal and dialysis supplies and equipment based in Orlando, FL,
respectively.  The consideration exchanged by the Company for Charise Charles
and PRN of approximately $10 million (of which approximately $1.2 million was
paid in 1995) exceeded the fair market value of the net assets acquired and
resulted in approximately $5.6 million of intangible assets.

         Effective July 1, 1994 and October 31, 1994, the Company purchased
Kendall Drug Co. (Kendall), a wholesale pharmaceutical distributor based in
Shelby, NC and 3C Medical, Inc. (3C), a distributor of hemodialysis products
based in Santa Ana, CA, respectively.  The Company expended approximately $8.1
million for the acquisition of Kendall which approximated the fair value of the
net assets acquired. The Company exchanged 15,000 shares of its common stock
(market value $195,000) and approximately $1.2 million in cash for 3C which
exceeded the fair value of the net assets acquired and resulted in
approximately $1.1 million of intangible assets.

         Effective January 1, 1995, the Company purchased the IV One Companies
(IV One).   IV One is comprised of IV-1, Inc., IV-One Services, Inc., and
National Pharmacy Providers, Inc..  These companies focus on high acuity
specialty pharmacy services for patients requiring home and ambulatory infusion
therapy.   The consideration exchanged for IV One was approximately $2.9
million which  exceeded the fair value of net assets  acquired and resulted in
approximately $2.1 million of intangible assets.

NOTE 13 - LEGAL PROCEEDINGS

         The Company is a defendant in a consolidated class action complaint
filed in the United States District Court for the Northern District of Illinois
which names Bindley Western, five other pharmaceutical wholesalers and 26
pharmaceutical manufacturers as defendants.  Plaintiffs allege that chargeback
agreements between pharmaceutical manufacturers and wholesalers
<PAGE>   38
are the result of price-fixing agreements in violation of the federal antitrust
laws.  The plaintiffs seek injunctive relief, unspecified treble damages,
costs, interest and attorneys fees.  On November 15, 1994, plaintiffs' motion
for class certification was granted, and the certified class consists of all
persons or entities who purchased from the manufacturer or wholesaler
defendants from October 15, 1989 to the present, with the exception of other
manufacturers, other wholesalers, governmental entities, mail order pharmacies,
HMOs, hospitals, clinics and nursing homes.  Discovery has been concluded and
the Court is considering disposition motions.  A majority of the manufacturer
defendants and the class plaintiffs have reached a settlement agreement, which
is subject to court approval after a hearing to consider its proposal.  No
specific trial date has been set.  On October 21, 1994, the Company entered
into an agreement in these cases with five other wholesalers and 26
pharmaceutical manufacturers.  Among other things, the agreement provides that:
(a) if a judgment is entered into against both the manufacturer and wholesaler
defendants, the total exposure for joint and several liability of the Company
is limited to $1,000,000; (b) if a settlement is entered into by, between and
among the manufacturer and wholesaler defendants, the Company has no monetary
exposure for such settlement amount; (c) the six wholesaler defendants will be
reimbursed by the 26 manufacturer defendants for related legal fees and
expenses up to $9,000,000 total (the Company's initial portion of this amount
is $1,000,000); and (d) the Company is to release certain claims which it might
have had against the manufacturer defendants for the claims presented by the
plaintiffs in these cases.  The agreement covers the federal court litigation
as well as cases which have been filed in various state courts.

         The Company is contesting the consolidated action vigorously and, at
the present time, is unable to form a conclusion regarding the likelihood of a
favorable or unfavorable outcome. The Company believes, however, that the
allegations of liability set forth in the action are without merit as to the
wholesaler defendants and that the attendant liability of the Company, if any,
would not have a material adverse effect on the Company's financial condition or
liquidity.  An adverse conclusion, although not anticipated, could have a 
material adverse effect on the Company's results of operations.

         On January 13, 1995, Publix Supermarkets filed a complaint in the
United States District Court for the Northern District of Illinois against the
manufacturer and wholesaler defendants in the consolidated action, including
the Company.  The wholesalers, including the Company, have been dismissed from
this complaint.

         On March 17, 1995, the Company was served a complaint that was filed
in the United States District Court for the Eastern District of Arkansas by 148
independent pharmacies.  The complaint names the manufacturer and wholesaler
defendants in the consolidated action plus a number of regional wholesalers
which sell pharmaceutical drugs in Arkansas.  No responsive pleadings have been
filed at this time. The Company has been informed by plaintiffs' counsel that
the Company will be dismissed as a defendant in their complaint.


NOTE 14 - RESTRUCTURING

         In 1993, the Company provided for a restructuring charge of $5.39
million associated with the consolidation of distribution, accounting and data
processing functions for its East Coast operations.  This charge included lease
commitments to third parties, writedowns of 
<PAGE>     39
various assets to realizable values and facilities consolidation costs.  The 
charge was comprised of noncash asset writedowns of approximately $2.7 million, 
product consolidation costs of approximately $.3 million and anticipated 
probable cash expenditures of $2.4 million related to payments on lease 
commitments, data processing and inventory conversion costs and other employee 
costs.  The anticipated probable cash expenditures are funded from operating 
revenues.  The Company believes that, as of December 31, 1995, the consolidation
of the East Coast operations was on schedule and  the Company had expended $1.8 
million of the probable cash expenditures on a basis substantially consistent 
with the original plan and believes that the $5.39 million charge taken at 
December 31, 1993 should be sufficient to complete the consolidation.

NOTE 15 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following table presents the quarterly financial data for 1995 and 1994.

<TABLE>
<CAPTION>
                                        FIRST               SECOND             THIRD             FOURTH
                                       QUARTER             QUARTER            QUARTER           QUARTER
----------------------------------------------------------------------------------------------------------------
(in thousands, except per share data)
       <S>                         <C>                <C>                  <C>             <C>
       1995
          Net sales                $1,113,717         $1,126,260           $1,121,533      $1,308,643
          Gross margin                 27,008             26,020               24,041          27,335
          Net earnings                  4,196              4,201                3,547           4,436
           Earnings per share:
            Primary                $      .37         $      .37           $      .31      $      .38
            Fully Diluted                 .33                .33                  .28             .34
                                                                           
       1994
          Net sales                $  916,839         $ 986,965            $1,012,641      $1,117,662
          Gross margin                 20,819            20,835                22,649          24,631
          Net earnings                  3,620             3,736                 3,348           4,030
          Earnings per share:
            Primary                $      .33     $         .34            $      .30      $      .36
            Fully Diluted                 .30               .31                   .28             .32
                                                                           
</TABLE>
<PAGE>   40
                                   SIGNATURES

             Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                                BINDLEY WESTERN INDUSTRIES, INC.

                                                By /s/ William E. Bindley
                                                  -----------------------

             Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                  SIGNATURE                                      TITLE                               DATE
 <S>                                               <C>                                              <C>

/s/ William E. Bindley                            Chairman of the Board and President              March  21, 1996
---------------------------------------           (Principal Executive Officer);
 William E. Bindley                               Director

 /s/ William F. Bindley, II                       Director                                         March 21, 1996
----------------------------------------                                                                  
 William F. Bindley,  II

/s/ Keith W. Burks                                Executive Vice President; Director               March 21, 1996
----------------------------------------
 Keith W. Burks

/s/ Seth  B. Harris                               Director                                         March 21, 1996
-----------------------------------------
 Seth B. Harris

/s/ Robert L. Koch, II                            Director                                         March  21, 1996
-----------------------------------------
 Robert L. Koch, II

 /s/ Michael D. McCormick                         Executive Vice President, General Counsel        March 21, 1996
-----------------------------------------         and Secretary; Director
 Michael D. McCormick                         

/s/ J. Timothy  McGinley                          Director                                         March 21, 1996
-----------------------------------------
 J. Timothy McGinley


/s/ James K. Risk, III                            Director                                         March 21, 1996
-----------------------------------------
James H. Risk, III

/s/ Thomas J.  Salentine                           Executive Vice President and Chief              March 21, 1996
 ----------------------------------------          Financial Officer (Principal Accounting
                                                   and Financial Officer); Director                                       
 Thomas J. Salentine                          

 /s/ Thomas G. Slama                              Chief Executive Officer, National Infusion       March 21, 1996
------------------------------------------        Services, Inc.  Subsidiary; Director                                              
 Thomas G. Slama                              

/s/ K. Clay Smith                                  Director                                        March 21, 1996   
------------------------------------------
 K. Clay Smith
</TABLE>