EXHIBIT INDEX                                            TOTAL NUMBER OF PAGES
FOUND ON PAGE 53.                                        INCLUDED IN THIS ANNUAL
                                                         REPORT IS 174.
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                       ----------------------------------

                                    FORM 10-K



[ X ]     ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 1997
                          ------------------

                                       OR


[   ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to ________________

                          Commission file number 1-5110

                            BERGEN BRUNSWIG CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          New Jersey                                           22-1444512
-------------------------------                            --------------------
(State or other jurisdiction of                             (I.R.S. Employer
 Incorporation or organization)                             Identification No.)

4000 Metropolitan Drive, Orange, California                    92868-3598
-------------------------------------------                --------------------
 (Address of principal executive offices)                      (Zip Code)

Registrant's telephone number, including area code            (714) 385-4000
                                                           --------------------


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

<TABLE>
<CAPTION>
                                                       Name of each exchange on
   Title of each class                                     which registered
---------------------------------                      ------------------------
<S>                                                    <C>
Class A Common Stock                                    New York Stock Exchange
Par Value $1.50 per share

6 7/8% Exchangeable Subordinated                        New York Stock Exchange
Debentures due July 15, 2011

$150,000,000 7 3/8% Senior Notes                        New York Stock Exchange
due 2003
</TABLE>

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

7%  Convertible  Subordinated  Debentures  due  March  1,  2006 -  Durr-Fillauer
Medical, Inc.

===============================================================================
                            (Cover page continued)

<PAGE>


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. [x]

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__

At  November  30,  1997,   50,425,459  shares  of  Class  A  Common  Stock  were
outstanding.  The  aggregate  market  value of the Class A Common  Stock held by
nonaffiliates of the registrant on November 30, 1997 was $2,062,652,922.



                       Documents Incorporated by Reference
                       -----------------------------------


List hereunder the following documents if incorporated by reference and the part
of the Form 10-K into which the document is incorporated:

Within 120 days after  September  30,  1997,  the  Company  will  either  file a
definitive proxy statement for its 1998 annual meeting of shareowners which will
be  incorporated  by reference in Part III of this Annual Report on Form 10-K or
will file an amendment to this Annual Report to provide the  information  called
for by such Part III.



<PAGE>



                                TABLE OF CONTENTS

                                     PART I
                                     ------
ITEM                                                                  PAGE
----                                                                  ----

       Forward-looking Statements                                     I - 1

1.     Business                                                       I - 1

2.     Properties                                                     I - 5

3.     Legal Proceedings                                              I - 6

4.     Submission of Matters to a Vote of Security Holders            I - 10

4A.    Executive Officers of the Registrant                           I - 10


                                     PART II
                                     -------

5.     Market for the Registrant's Common Equity and                 II - 1
              Related Stockholder Matters

6.     Selected Financial Data                                       II - 2

7.     Management's Discussion and Analysis of Financial             II - 3
              Condition and Results of Operations

8.     Financial Statements and Supplementary Data                   II - 9

9.     Changes in and Disagreements with Accountants                 II - 30
              on Accounting and Financial Disclosure


                                    PART III
                                    --------

10.    Directors of the Registrant                                  III - 1

11.    Executive Compensation                                       III - 1

12.    Security Ownership of Certain Beneficial Owners              III - 1
              and Management

13.    Certain Relationships and Related Transactions               III - 1


                                     PART IV
                                     -------

14.    Exhibits, Financial Statement Schedules and Reports           IV - 1
              on Form 8-K

       Signatures                                                    IV - 6



<PAGE>



Portions of this Annual Report on Form 10-K include "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to risks, uncertainties and other factors
which could cause actual  results to materially  differ from those  projected or
implied. The most significant of such risks, uncertainties and other factors are
described in Exhibit 99(a) to this Annual Report.


                                     PART I

ITEM 1.  BUSINESS

                  A.       General Development of Business
                           -------------------------------

                           Bergen Brunswig Corporation, a New Jersey corporation
formed  in  1956,  and its  subsidiaries  (collectively,  the  "Company")  are a
diversified drug and health care distribution  organization.  The Company is the
nation's largest supplier of  pharmaceuticals to the managed care market and the
second largest  wholesaler to the retail pharmacy market.  The Company is one of
the largest  pharmaceutical  distributors  to provide both  pharmaceuticals  and
medical-surgical supplies on a national basis.

                           On August 23, 1997,  the Company  signed a definitive
merger  agreement  with Cardinal  Health,  Inc.  ("Cardinal"),  a distributor of
pharmaceuticals  and provider of  value-added  pharmaceutical-related  services,
headquartered in Dublin, Ohio. The merger agreement,  which has been unanimously
approved by the Boards of Directors of the Company and  Cardinal,  calls for the
Company to become a wholly-owned subsidiary of Cardinal. The combined company is
expected to be known as Cardinal Bergen Health,  Inc. and would be headquartered
in Dublin,  Ohio.  Under the terms of the proposed  merger,  shareowners  of the
Company  would  receive  0.775 of a Cardinal  Common  Share in exchange for each
outstanding  share of the Company's  Class A Common Stock.  Cardinal would issue
approximately  40 million Common Shares in the  transaction and would assume the
Company's long-term debt which was approximately $418.2 million at September 30,
1997.  The merger has been  structured  as a tax-free  transaction  and would be
accounted for as a pooling of interests for financial  reporting  purposes.  The
merger is currently expected to be completed by the end of the second quarter of
fiscal  1998,  subject  to the  satisfaction  of certain  conditions,  including
approvals by the Company's  shareowners  and  Cardinal's  shareholders,  and the
receipt of certain regulatory  approvals.  Additional  information regarding the
proposed  merger is set forth in the Company's  Current Report on Form 8-K dated
August 23, 1997, as filed with the  Securities and Exchange  Commission,  and is
incorporated herein by reference.

                           On November 18, 1997, the Company signed an agreement
to acquire substantially all of the net assets of Besse Medical Services,  Inc.,
a privately-held  distributor of injectables,  diagnostics and medical supplies.
Under the agreement,  the Company would pay approximately $20.0 million in cash,
plus estimated expenses and assume certain liabilities. This transaction is more
fully  described  in Note  12 of  Notes  to  Consolidated  Financial  Statements
appearing in Part II, Item 8, "Financial  Statements and Supplementary  Data" of
this Annual Report.

                           On April 24,  1997,  the  Company  declared a 5-for-4
stock split on the Company's Class A Common Stock which was paid on June 2, 1997
to shareowners of record on May 5, 1997.

                           On March 20, 1997, the Company  announced that it had
terminated  its previously  announced  merger  agreement  with IVAX  Corporation
("IVAX").  See  Notes 9 and 10 of Notes  to  Consolidated  Financial  Statements
apprearing in Part II, Item 8, "Financial  Statements and Supplementary Data" of
this Annual Report.



                                      I - 1
<PAGE>

                  B.       Narrative Description of Business
                           ---------------------------------

                           Bergen Brunswig Drug Company (the "Drug Company"),  a
wholly-owned  and the largest  subsidiary of the Company,  is one of the largest
national  distributors of products sold or used by institutional  (hospital) and
retail  pharmacies.  The  Drug  Company  distributes  a full  line of  products,
including  pharmaceuticals,   proprietary  medicines,   cosmetics,   toiletries,
personal health products,  sundries,  and home healthcare supplies and equipment
from 31  locations  in 23 states.  These  products are sold to a large number of
hospital pharmacies,  managed care facilities,  health maintenance organizations
("HMOs"),   independent  retail  pharmacies,   pharmacy  chains,   supermarkets,
food-drug  combination  stores and other retailers located in all 50 states, the
District of Columbia, Guam and Mexico. During fiscal 1997, no single customer or
affiliated group of customers of the Drug Company accounted for more than 10% of
its net sales and other  revenues.  However,  purchasing  groups are expected to
represent increasing percentages of total sales in the future.

                           The  Drug  Company  has  been  an  innovator  in  the
development and utilization of  computer-based  retailer order entry systems and
of electronic data interchange  ("EDI") systems  including  computer-to-computer
ordering systems with suppliers.  During fiscal 1997,  substantially  all of the
Drug Company's customer orders were received via electronic order entry systems.
These systems,  combined with daily delivery, are designed to improve customers'
cash and inventory  management and profitability by freeing them from the burden
of  maintaining  large  inventories.  Although  these  systems  require  capital
expenditures by the Company, benefits from these systems to the Drug Company are
expected to be realized  through  increased  productivity.  The Drug  Company is
expanding its  electronic  interface  with its suppliers and now  electronically
processes a substantial  portion of its purchase orders,  invoices and payments.
The Drug Company has opened eight regional  distribution  centers ("RDCs") since
fiscal 1986, replacing 20 older, smaller,  less efficient facilities.  RDCs help
improve  customer  service  levels  because a wider  product  selection  is more
readily  available.  These  facilities  serviced 51% of the Drug  Company  sales
volume in fiscal 1997.

                           In June 1996,  the  Company  introduced  its  Generic
Purchasing   Program  ("GPP").   Designed  to  streamline   customers'   generic
pharmaceutical  costs,  GPP utilizes the products of a selected group of generic
manufacturers  and combines  that benefit  with  substantial  volume to leverage
buying power for the Company's customers.


                                      I - 2
<PAGE>


                           In July 1994, the Company introduced AccuSource(R), a
multimedia  communication,  product information,  and electronic ordering system
for pharmacies.  Developed jointly by the Drug Company and Apple Computer, Inc.,
Accusource  links the supplier,  wholesaler  and retailer in the  pharmaceutical
distribution  process.  AccuSource  simplifies  the  ordering  process and gives
retailers  detailed  information on thousands of products,  services and special
purchase opportunities,  as well as prescription  substitution  alternatives and
Medicaid coverage  information.  AccuSource's on-line feature provides retailers
with a convenient  method for ensuring product  availability by giving immediate
information on quantity levels at their Drug Company distribution center.

                           The Drug  Company  also  provides  a wide  variety of
promotional, advertising, merchandising, and marketing assistance to independent
community  pharmacies.  For  example,  the  Good  Neighbor  Pharmacy(R)  program
utilizes  circular and media advertising to strengthen the consumer image of the
independent pharmacy without sacrificing its local individuality. Other programs
for the independent community pharmacy include in-store merchandising  programs,
private label  products,  shelf  management  systems,  pharmacy  computers and a
fully-integrated   point-of-sale   system  marketed  under  the  Drug  Company's
trademark of OmniPhaseTM.

                           Hospital and other institutional accounts are offered
a wide  variety of inventory  management  and  information  services by the Drug
Company to better manage  inventory  investment and contain  costs.  AccuLineTM,
introduced  in June 1995,  provides an on-line,  real-time,  hospital,  pharmacy
management  system in a WindowsTM  (a  trademark  of  Microsoft(R)  Corporation)
environment and features local area network capability.

                           Bergen Brunswig Medical  Corporation  (formerly known
as  Durr  Medical   Corporation),   Southeastern  Hospital  Supply  Corporation,
Professional  Medical  Supply  Co.,  Biddle  &  Crowther  Company  and  Colonial
Healthcare Supply Co. (collectively,  "Medical"),  wholly-owned  subsidiaries of
the Company, distribute a variety of medical and surgical products to individual
hospitals  and  alternate  site  healthcare  providers  through 28  distribution
centers  located in 23 states in every  region of the United  States  except the
northeast.

                           Medical serves hospital  customers and alternate site
customers in 44 states and the District of Columbia.  Alternate  site  customers
include  outpatient  clinics,  nursing  homes,  surgery  centers,  dialysis  and
oncology centers, emergency centers, laboratories and veterinary clinics.

                           Alternate Site  Distributors  ("ASD"),  the Company's
specialty wholesale subsidiary,  supplies  pharmaceuticals and oncology products
to  physician  and clinic  accounts  through two  locations  in two states.  The
Company  created ASD during  fiscal  1994 to respond to the rapid  growth in the
alternate  site  market  business.  As a major  supplier to the  alternate  site
market,  ASD  seeks to give  its  customers  quick  access  to a broad  range of
specialty, value-added products and services, and commercial outsourcing.


                                      I - 3
<PAGE>


                           In September 1995, the Company formed IntePlexTM Inc.
("IntePlex"),  a subsidiary of the Company, to focus exclusively on the evolving
integrated  healthcare  marketplace.  The  foundation  of IntePlex  involves the
development  of an electronic  catalog for  one-stop-shopping  and a centralized
database for tracking customers'  purchasing  information.  IntePlex's offerings
are  expected  to  include  logistics  management,   continuous   replenishment,
just-in-time  delivery,  and benefit plan  compliance for both  medical-surgical
supplies and pharmaceuticals  combined with delivery to all points in a network:
hospitals, alternate sites, physician offices and retail stores.


                           1.       Competition
                                    -----------
                           The  Drug  Company,   which  is  the  second  largest
national pharmaceutical distributor measured by sales, faces intense competition
from other national pharmaceutical  distributors,  as well as regional and local
full-line  and  short-line   distributors,   direct  selling  manufacturers  and
specialty  distributors.  The principal competitive factors of the businesses of
the Drug Company,  Medical and ASD are service and price.  During periods of low
price inflation, which has occurred the last few years, wholesalers receive less
benefit from manufacturers' price increases but also incur lower last-in,  first
out ("LIFO")  charges.  Also,  pharmaceutical  distributors are impacted because
service fee revenue is  generally  based on cost plus a markup  percentage.  Low
inflation  has  limited  markup  growth  due to slow  growth  in the base  cost.
Competition   during  this  period  has  driven  down  the  service  fee  markup
percentage, thereby lowering pharmaceutical distributors' gross profit margins.


                           2.       Employees
                                    ---------
                           As  of  November  30,  1997,  the  Company   employed
approximately  5,100 people.  The Company  considers its  relationship  with its
employees  and  the  unions   representing   certain  of  its  employees  to  be
satisfactory.


                           3.       Other
                                    -----
                           While the  Company's  operations  may show  quarterly
fluctuations,  the  Company  does not  consider  its  business to be seasonal in
nature, on a consolidated basis.

                           Although the Company's  computer  service  operations
expend time and effort on the  development  and  marketing of computer  programs
relating to the  services  for its  subsidiaries,  which are  described  in part
elsewhere  herein,  the Company  has not,  during the past three  fiscal  years,
expended any material  amounts on research and development of computer  software
for sale.

                           The Company  relies  heavily on  computer  technology
throughout its businesses to effectively carry out its day-to-day operations. As


                                      I - 4
<PAGE>

the millennium approaches,  the Company is assessing all of its computer systems
to ensure  that they are "Year  2000"-compliant.  In this  process,  the Company
expects to both  replace  some  systems  and upgrade  others  which are not Year
2000-compliant,  in order to meet its internal needs and those of its customers.
The Company  expects its Year 2000 project to be  completed  on a timely  basis.
However,  there can be no assurance that the systems of other companies on which
the  Company  may rely also will be timely  converted  or that such  failure  to
convert by another  company  would not have an adverse  effect on the  Company's
systems.  To date, the Company has spent  approximately $1.5 million on the Year
2000 project. Costs related to this project will continue through calendar 1999.
These costs are difficult to estimate  accurately and they will not  necessarily
be  incremental.  The  Company's  stated  expectations  regarding  its Year 2000
project  constitute  forward-looking  statements.  Actual  results  could differ
materially from the Company's  expectations due to  unanticipated  technological
difficulties,  project vendor delays and project vendor cost overruns. Reference
is also made to the  introductory  paragraph  of this Annual  Report and Exhibit
99(a) hereto.



ITEM 2.  PROPERTIES

         Because of the nature of the Company's business, office and warehousing
facilities are operated in widely dispersed locations in the United States. Some
of the facilities  are owned by the Company,  but most are leased on a long-term
basis.  The Company  considers  its operating  properties to be in  satisfactory
condition and well utilized with adequate capacity for growth.

         As of November 30, 1997, the Drug Company's  operations were located in
37 owned and  leased  warehouse  and  office  facilities  in  Alabama,  Arizona,
California,    Colorado,    Florida,   Georgia,   Hawaii,   Indiana,   Kentucky,
Massachusetts,  Michigan, Mississippi, Missouri, Nevada, New Jersey, New Mexico,
North  Carolina,   Oklahoma,  Oregon,  Tennessee,   Texas,  Utah,  Virginia  and
Washington.  Leased facilities range in size from approximately 5,800 to 181,300
square feet and have a combined area of approximately 1,612,300 square feet. The
expiration  dates of the leases range from 1998 to 2008.  Owned facilities range
in size from approximately 46,000 to 231,500 square feet.

         As of November 30, 1997,  Medical's operations were located in 34 owned
and  leased  warehouse  and  office  facilities  in  Alabama,  Alaska,  Arizona,
California,  Colorado,  Florida,  Georgia, Idaho, Illinois,  Indiana,  Michigan,
Minnesota,  Missouri,  Nevada,  North Carolina,  Ohio,  Oklahoma,  Oregon, South
Carolina,  Tennessee,  Texas, Utah,  Virginia and Washington.  Leased facilities
range in size from approximately 6,600 to 97,000 square feet and have a combined
area of approximately  1,002,100 square feet. The expiration dates of the leases
range from 1998 to 2005.  Owned  facilities range in size from 30,800 to 188,000
square feet.

         As of November 30, 1997,  ASD's operations were located in three leased
warehouse and office  facilities in Alabama,  Kentucky and Texas ranging in size
from 9,800 to 64,000  square feet,  respectively.  The  expiration  dates of the
leases range from 1999 to 2001.


                                      I - 5
<PAGE>


         The combined area of the Company's owned  facilities was  approximately
2,200,000 square feet as of November 30, 1997.

         The  Company   maintains  general  and  executive  offices  in  Orange,
California,  with approximately 208,800 square feet which are leased pursuant to
a 15-year  lease which  expires in 2000,  at which time Bergen has the option to
purchase the premises at the then fair market value.

         For additional  information  regarding the Company's lease obligations,
see Note 6 of Notes to  Consolidated  Financial  Statements  in Part II, Item 8,
"Financial Statements and Supplementary Data" of this Annual Report.


ITEM 3.  LEGAL PROCEEDINGS

         On July 7, 1992, two putative class action complaints were filed in the
Delaware Court of Chancery against  Durr-Fillauer  Medical, Inc. and subsdiaries
("Durr")  and its  directors:  Steiner v.  Adair,  et al.,  C.A.  No.  12634 and
Goldwurm v. Adair,  et al., C.A. No. 12635.  These actions were  consolidated on
July 15, 1992. On July 17, 1992,  another  putative  class action  complaint was
filed in the Delaware Court of Chancery against Durr and its directors: Trief v.
Adair, et al., C.A. No. 12648. This action was consolidated with C.A. Nos. 12634
and 12635 on August 7, 1992. The named  plaintiffs in the three  complaints (the
"Class Action  Complaints")  allegedly owned an undisclosed  number of shares of
Durr Common Stock. The plaintiffs sought  certification of a class consisting of
all public stockholders of Durr who held Durr stock at the time of the filing of
the  Class  Action  Complaints  and who  were  not  affiliated  with  any of the
defendants. The Class Action Complaints alleged, among other things, that Durr's
directors  breached  their  fiduciary  duties  in  entering  into a June 2, 1992
Agreement and Plan of  Reorganization  which  contemplated  the merger of Durr's
wholesale  drug business with  Cardinal  Distribution,  Inc. and the spin-off of
Durr's  remaining  businesses  into a newly  formed  entity.  The  Class  Action
Complaints  sought a variety of relief,  including an  injunction  requiring the
Durr directors to consider competing offers, damages,  attorneys fees and costs.
The Company subsequently acquired Durr in September 1992.

         In  connection  with the  acquisition  of Durr,  and for the purpose of
settling  the  expressed  concern  of the  Attorneys  General  of the  States of
Alabama, Florida and Louisiana (collectively,  the "Attorneys General") over the
alleged  potential  lessening of  competition in the wholesale  distribution  of
pharmaceutical  products,  the Company and Durr entered into an agreement  dated
September 18, 1992, with the Attorneys  General wherein the Company agreed that:
(1) subject to certain exceptions, no existing customer of either the Company or
Durr  in  Alabama,  Florida  and  Louisiana  (the  "Customers")  will  suffer  a
diminution  of  service  levels  until  April 30,  1997;  (2)  except  for price
increases  resulting  from  taxes,  fees or  governmental  charges,  neither the
Company  nor Durr will  increase  the markup  percentage  for the  Customers  in
Alabama, Florida and Louisiana for a period of two years and from September 1994
through April 1997 will not increase such percentage in excess of the percentage


                                      I - 6
<PAGE>


increase in the Consumer  Price Index;  (3) Durr will maintain its  distribution
facilities in Montgomery and Mobile, Alabama; Lakeland, Florida; and Shreveport,
Louisiana for a period of at least two years; (4) Durr will maintain and enhance
its AccuNetR system for a period of at least two years; and (5) the Company will
reimburse  the States of Alabama,  Florida and  Louisiana  for their legal fees,
costs and expenses  incurred in the  investigation of the acquisition of Durr by
the Company.

         Drug Barn,  Inc.  ("Drug Barn"),  a former retail pharmacy chain in the
San Francisco Bay Area, owed the Company approximately $6.2 million in principal
obligations  as of  October  31,  1997,  of  which  approximately  $1.2  million
represents trade receivables and $5.0 million represents a note which matured on
March  25,  1993  and has not been  paid to date.  The  Company  has a  security
interest in virtually all of Drug Barn's assets, as well as personal guaranties,
which collaterize the note and trade receivables.

         In May 1992, Drug Barn requested additional financing which the Company
denied to extend.  In December  1992,  Drug Barn commenced an action against the
Company in the Santa Clara Superior Court (State of California)  alleging breach
of contract,  misrepresentation  and violations of certain California  antitrust
and unfair practices laws. Drug Barn sought a variety of damage claims including
compensatory,  treble and punitive damages,  an injunction against collection on
the note,  and  declaratory  judgment as to Drug Barn's  rights under an alleged
oral joint venture agreement with the Company.

         On April 20, 1993,  the Company  filed a complaint in the Orange County
Superior  Court (State of  California),  Case No.  709136  against Drug Barn and
Milton Sloban and Barbara  Sloban,  as guarantors on the defaulted note and open
trade  receivables,  alleging  breach of contract and guaranty,  and  requesting
judicial foreclosure of and the possession of collateral.

         Drug Barn commenced a Chapter 11 case in U.S.  Bankruptcy Court for the
Northern  District of California,  Case No.  93-3-3437 TC, by filing a voluntary
petition for relief under  Chapter 11 of the United  States  Bankruptcy  Code on
July 29, 1993 and remained in possession pursuant to 11 U.S.C.  Section 1107. In
April 1994, this matter  (excluding the bankruptcy court matter) was transferred
to the San Francisco  County  Superior Court with the  California  state actions
referenced  in the next  paragraph.  In April 1996,  the Company filed a plan of
reorganization  with the Bankruptcy Court to resolve all of its claims with Drug
Barn and its guarantors.  The plan of  reorganization  provides for, among other
things,  a sale of all Drug  Barn's  assets,  a  distribution  of the asset sale
proceeds to creditors and a settlement  of all claims of any nature  between the
Company and Drug Barn (but not its guarantors,  Milton and Barbara Sloban).  The
Company's  plan was  confirmed by the  Bankruptcy  Court on June 14,  1996.  The
actions  brought by Milton and Barbara Sloban and the Company's  collection suit
commenced  trial on August 14, 1996 in San Francisco  County  Superior Court. On
August 29, 1996, the Company won a $3.4 million jury verdict  against Milton and
Barbara Sloban. Milton and Barbara Sloban have filed a Notice of Appeal with the
aforementioned court, which the court rejected on October 31, 1996. The judgment
debtors  have since filed a Notice of Appeal to a higher state court of appeals,


                                      I - 7
<PAGE>


which is still  pending.  In the meantime,  on September 11, 1997,  the judgment
debtors filed for protection under the federal bankruptcy laws.

         Between August 3, 1993 and February 14, 1994,  the Company,  along with
various  other  pharmaceutical   industry-related  companies,  was  named  as  a
defendant  in  eight  separate  state  antitrust  actions  in  three  courts  in
California.  These  lawsuits  are  more  fully  detailed  in  "Item  1  -  Legal
Proceedings" of Part II of the Company's  Quarterly  Report on Form 10-Q for the
quarter ended June 30, 1994 as filed with the Securities and Exchange Commission
and is incorporated  herein by reference.  In April 1994, these California state
actions were all coordinated as Pharmaceutical Cases I, II and III, and assigned
to a single  judge in San  Francisco  Superior  Court.  On August  22,  1994,  a
Consolidated Amended Complaint  ("California  Complaint"),  which supersedes and
amends the eight prior complaints, was filed in these actions.

         The  California  Complaint  alleges  that  the  Company  and  35  other
pharmaceutical  industry-related companies violated California's Cartwright Act,
Unfair Practices Act, and the Business and Professions  Code unfair  competition
statute. The California Complaint alleges that defendants jointly and separately
engaged  in secret  rebating,  price  fixing  and price  discrimination  between
plaintiffs and  plaintiffs'  alleged  competitors  who sell  pharmaceuticals  to
patients or retail  customers.  Plaintiffs  seek, on behalf of themselves  and a
class of similarly situated California pharmacies,  injunctive relief and treble
damages  in an amount to be  determined  at trial.  The judge  struck  the class
allegations from the Unfair Practices Act claims.

         Between  August 12, 1993 and November  29,  1993,  the Company was also
named in 11 separate Federal antitrust actions. All 11 actions were consolidated
into one multidistrict action in the Northern District of Illinois entitled,  In
Re Brand-Name Prescription Drugs Antitrust Litigation,  No. 94 C. 897 (MDL 997).
On March 7, 1994,  plaintiffs in these 11 actions filed a  consolidated  amended
class action complaint  ("Federal  Complaint")  which amended and superseded all
previously filed Federal complaints  against the Company.  The Federal Complaint
names as  defendants  the Company and 30 other  pharmaceutical  industry-related
companies.  The Federal  Complaint  alleges,  on behalf of a nationwide class of
retail  pharmacies,  that the  Company  conspired  with  other  wholesalers  and
manufacturers  to  discriminatorily  fix prices in violation of Section 1 of the
Sherman Act. The Federal  Complaint seeks injunctive  relief and treble damages.
On November 15,  1994,  the Federal  court  certified  the class  defined in the
Federal  Complaint  for the time period  October 15, 1989 to the present.  These
lawsuits are more fully detailed in "Item 1 - Legal  Proceedings"  of Part II of
the Company's  Quarterly Report on Form 10-Q for the quarter ended June 30, 1994
as filed with the Securities and Exchange  Commission and is incorporated herein
by reference.

         On  March  9,  1995,   the  Company  was  named  along  with  30  other
pharmaceutical  industry-related  companies in a separate complaint filed in the
U.S. District Court,  Eastern District of Arkansas entitled Lawrence Adams d/b/a
Mc  Spadden  Drug  Store,  et al.  v.  Abbott  Laboratories,  et al.,  Case  No.
LR-C-95-153,  alleging similar claims as in the Federal  Complaint.  The Company
believes that this action will be  consolidated  into the Federal  multidistrict
action.


                                      I - 8
<PAGE>


         On May 2,  1994,  the  Company  and Durr  Drug  Company  were  named as
defendants, along with 25 other pharmaceutical  related-industry companies, in a
state  antitrust  class action in the Circuit  Court of Greene  County,  Alabama
entitled Durrett v. UpJohn Company,  et al., No. 94-029  ("Alabama  Complaint").
The Alabama  Complaint alleges on behalf of a class of Alabama retail pharmacies
and  a  class  of  Alabama   consumers   that  the   defendants   conspired   to
discriminatorily  fix prices to  plaintiffs  at  artificially  high levels.  The
Alabama Complaint seeks injunctive relief and treble damages.

         On October 21, 1994, the Company entered into a sharing  agreement 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 $1.0  million;  (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 pharmaceutical defendants for
related  legal fees and expenses up to $9.0 million  total (of which the Company
will receive a proportionate  share);  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 the cases which have been filed in various
state courts.  In December  1994,  plaintiffs in the Federal action had moved to
set aside the agreement, but plaintiffs' motion was denied on April 25, 1995. On
February 9, 1996, the class plaintiffs  filed a motion for preliminary  approval
of a settlement with 15 of the  manufacturer  defendants,  which, if approved by
the  court,   would  have   resulted  in  dismissal  of  claims   against  those
manufacturers  and a reduction of the  potential  claims  against the  remaining
defendants,  including  those  against  the  Company.  The  Court  did not grant
approval for the settlement and the decision was appealed by the  plaintiffs.  A
second motion was filed by the class  plaintiffs for  preliminary  approval of a
settlement  with  12 of the  manufacturer  defendants,  which  would  result  in
dismissal of claims against those manufacturers and a reduction of the potential
claims against the remaining  defendants,  including  those against the Company.
The Court granted preliminary approval for the settlement.  The Company is not a
party to this proposed settlement but retains protection afforded by the sharing
agreement  referenced  above.  The effect of the sharing  agreement  is that the
Company's potential loss would be $1.0 million, regardless of the outcome of the
lawsuits,   plus  possible  legal  fee  expenses  in  excess  of  the  Company's
proportionate share of $9.0 million reimbursement of such fees to be paid by the
manufacturer defendants. In April 1996, summary judgment was granted in favor of
the Company and the other  wholesaler  defendants  and the Company was dismissed
from the Federal  Class  Action.  However,  this  decision was appealed  and, on
August 15, 1997, the Court of Appeals for the Seventh Circuit,  along with other
rulings, reversed the District Court's decision granting summary judgment to the
wholesaler defendants.

         In November  1995, in the U.S.  District  Court,  Northern  District of
Illinois, Abbott Laboratories filed a complaint seeking damages of approximately
$4.0 million  against the Company and various  affiliates for credits  allegedly
due in connection  with the purchase and subsequent  sale of Abbott  products by
the  Company.  The Company  has filed  various  counterclaims  and has asked for


                                      I - 9
<PAGE>


damages  according  to proof at trial.  This matter is in the  discovery  stage.
After  discussions  with counsel,  management  of the Company  believes that the
allegations of liability set forth in these lawsuits are without merit as to the
wholesaler defendants and that any attendant liability of the Company,  although
unlikely, would not have a material adverse effect on the Company's consolidated
financial position or results of operations.

         On March 20, 1997,  the Company  announced  that it had  terminated its
previously  announced  merger  agreement  with  IVAX.  In  connection  with such
termination  the  Company  filed a lawsuit  against  IVAX in the  United  States
District  Court for the  Southern  District  of New York  alleging,  among other
things, various breaches of its merger agreement.  On May 2, 1997, IVAX filed an
Answer and Counterclaim  against the Company denying various  allegations in the
Company's complaint,  raising various affirmative defenses and alleging that the
Company has breached the merger agreement  entered into between the parties.  On
August 15, 1997,  the Company and IVAX settled the lawsuits  over the  abandoned
merger.

         The  Company is  involved in various  additional  items of  litigation.
Although the amount of  liability  at  September  30, 1997 with respect to these
items of litigation  cannot be  ascertained,  in the opinion of management,  any
resulting  future  liability  will not have a  material  adverse  effect  on the
Company's consolidated financial position or results of operations.



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

         No matter  was  submitted  to a vote of  shareowners  during  the three
months ended September 30, 1997.


ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

         Identification of Executive Officers.

         The executive  officers of the Company are elected by, and serve at the
pleasure of, the Board of Directors.  Each executive  officer holds office until
the next election of officers  which is generally  held in December,  January or
February of each year. The current executive officers of the Company,  and their
respective principal occupations and employment during the last five years ended
September 30, 1997, are listed alphabetically as follows:

         Linda M. Burkett,  47,  Executive  Vice  President,  Chief  Information
Officer (since September 1996);  Executive Vice President and Chief  Information
Officer,  Bergen Brunswig Drug Company (since 1995); Vice President,  IR Support
Services (1992-1995).


                                      I - 10
<PAGE>


         John Calasibetta, 92, Senior Vice President since 1974. Mr. Calasibetta
is also a member of the Board of Directors.

         Charles J. Carpenter,  48, Executive Vice President,  Chief Procurement
Officer (since September 1996); Executive Vice President, Supplier Relations and
Operations (1995-1996),  Bergen Brunswig Drug Company; Executive Vice President,
Northeast Region (1994-1995); Vice President, Northeast Region (1989-1994).

         Neil F. Dimick,  48, Executive Vice President,  Chief Financial Officer
(since 1992);  President,  Alternate Site  Distributors,  Inc. (since  September
1996). Mr. Dimick is also a member of the Board of Directors.

         William J. Elliott, 48, President,  Bergen Brunswig Medical Corporation
(since October 1996). Formerly Senior Vice President of Supply Chain Management,
VHA Inc. (1984-October 1996).

         Brent R. Martini,  38,  President,  Bergen Brunswig Drug Company (since
September 1996);  Executive Vice President,  Bergen Brunswig Drug Company,  West
Region  (1994-1996);  Vice  President,  Quality  Organizational  Development and
Training (1991-1994). Brent R. Martini is the son of Robert E. Martini.

         Robert E.  Martini,  65,  Chairman of the Board  (since 1992) and Chief
Executive Officer (1990-January 1997). Mr. Martini is also a member of the Board
of Directors.

         John P. Naughton,  59, Vice President and Controller of Bergen Brunswig
Drug Company since 1981.

         Donald R. Roden, 51, President  (since 1995);  Chief Executive  Officer
(since January 1997); Chief Operating Officer  (1995-December  1996); formerly a
healthcare  industry  consultant  (1993-1995);  formerly Chief Executive,  North
America of Reed Elsevier Medical (publishing)  (1989-1993).  Mr. Roden is also a
member of the Board of Directors.

         Milan A.  Sawdei,  51,  Secretary  (since  July 1992);  Executive  Vice
President (since April 1992); Chief Legal Officer (since 1989).

         Carol E. Scherman, 42, Executive Vice President, Human Resources (since
September 1996); Executive Vice President,  Human Resources (since 1994), Bergen
Brunswig Drug Company;  Vice President,  Human Resources and Associate Relations
(1993-1994); Director, Human Resources and Associate Relations (1991-1993).

         Eric J.  Schmitt,  47, Vice  President,  Finance and  Treasurer  (since
February 1994); Vice President, Financial Planning (1989-1994).




                                      I - 11
<PAGE>


                                     PART II


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

         For  certain  information  regarding  shares of the  Company's  Class A
Common Stock, including cash dividends per share, market prices per share, stock
market  information and number of shareowners,  see "Selected  Quarterly Results
(unaudited)"  as set  forth  in Part  II,  Item  8,  "Financial  Statements  and
Supplementary Data," of this Annual Report.

         On February 9, 1994,  the Board adopted a Shareowner  Rights Plan which
provides for the issuance of one Preferred  Share  Purchase Right (the "Rights")
for each  outstanding  share of Common  Stock.  The  Rights  are  generally  not
exercisable  until 10 days after a person or group (an "Acquiror")  acquires 15%
of the Common  Stock or  announces a tender offer which could result in a person
or group owning 15% or more of the Common Stock (an "Acquisition").  Each Right,
should it become  exercisable,  will entitle the owner to buy 1/100th of a share
of a new series of the Company's  Series A Junior Preferred Stock at an exercise
price of $80.00.

         In the event of an Acquisition  without the approval of the Board, each
Right will entitle the owner, other than an Acquiror, to buy at the Rights' then
current  exercise  price a number of shares of Common  Stock with a market value
equal to twice the exercise  price. In addition,  if, after an Acquisition,  the
Company were to be acquired by merger, shareowners with unexercised Rights could
purchase  common stock of the Acquiror with a value of twice the exercise  price
of the  Rights.  The Board may redeem the Rights for $0.01 per Right at any time
prior to an  Acquisition.  Unless  earlier  redeemed,  the Rights will expire on
February 18, 2004.

         Pursuant to action of the Company's Board of Directors, consummation of
the pending merger with Cardinal will not constitute an Acquisition or otherwise
trigger the exercise of Rights under the Shareowner Rights Plan.




                                     II - 1

<PAGE>


Item 6.   SELECTED FINANCIAL DATA (unaudited)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Dollars in thousands, except for per share amounts
===================================================================================================================

                                                              September 30,                           August 31,
                                          ----------------------------------------------------      -------------  
Years Ended:                                   1997          1996         1995         1994(c)          1993
===================================================================================================================
<S>                                        <C>            <C>          <C>          <C>              <C>       
Net sales and other revenues               $11,660,496    $9,942,697   $8,447,607   $7,483,801       $6,823,552

Net earnings                                    81,679(b)     73,533       63,942       56,120(d)        28,607(e)

Earnings per share (a)                            1.61(b)       1.46         1.29         1.16(d)          0.60(e)

Cash dividends per share (a):
  Class A Common                                 0.432         0.384        0.379        0.350            0.305
  Class B Common                                     -             -            -        1.597            2.904

Pre-tax margin                                    1.19%(b)      1.26%        1.30%        1.31%(d)         0.71%(e)


At Years Ended:
===================================================================================================================
Total assets                                $2,707,123    $2,489,826   $2,405,530   $1,995,057       $1,772,337
Long-term obligations                          437,956       419,275      557,771      342,094          309,781
Shareowners' equity                            644,861       578,966      519,349      461,851          417,800
Return on average shareowners' equity            13.35%(b)     13.39%       13.03%       12.76%(d)         7.04%(e)
===================================================================================================================
<FN>
(a) Gives effect to the 5-for-4 stock split declared April 24, 1997.

(b) Includes provision for merger expenses of $3.4 million, net of income tax benefit of $2.4 million, relating to the terminated
    IVAX merger.  See Item I of the Annual Report.

(c) Reflects change in year-end from August 31 to September 30.

(d) Includes gain recognized from sale of investment securities of $2.9 million, net of income tax of $2.2 million, and provision
      for an earthquake-related charge of $0.8 million, net of income tax benefit of $0.6 million.

(e) Includes provision for restructuring charge of $20.8 million, net of income tax benefit of $12.2 million.

</FN>

                                                           II - 2
</TABLE>

<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
         CONDITION ANDRESULTS OF OPERATIONS


         Results of Operations Fiscal 1997 Compared with Fiscal 1996
         -----------------------------------------------------------

         Net sales and other  revenues  in fiscal  1997 were 17% higher  than in
fiscal 1996,  while operating  earnings and pre-tax earnings showed increases of
9% and 11%,  respectively.  Operating  earnings and pre-tax  earnings for fiscal
1997 were impacted by a pre-tax charge of $5.8 million for expenses  recorded in
the second quarter of fiscal 1997, related to the proposed merger agreement with
IVAX  which was  terminated  on March 20,  1997.  See Notes 9 and 10 of Notes to
Consolidated Financial Statements. Had the Company not recorded the $5.8 million
pre-tax charge,  operating  earnings and pre-tax  earnings for fiscal 1997 would
have increased 13% and 15%, respectively, compared to fiscal 1996.

         Substantially  all of the net  sales and other  revenues  increase  for
fiscal  1997  reflects  internal  growth  within  both  the  Company's  existing
pharmaceutical and medical-surgical supply distribution businesses.

         Earnings per share  increased 10% compared to fiscal 1996.  The average
number of common and common equivalent shares  outstanding  increased 1% for the
earnings per share computation.  The after-tax merger expenses referred to above
were equivalent to $.07 per share.

         Cost of sales  increased 17% compared to fiscal 1996, due mainly to the
Company's  increased sales levels.  The overall gross profit as a percent of net
sales and other revenues  ("gross profit margin") for fiscal 1997 decreased as a
result of a  decrease  in gross  margins  due to  continued  price  competition,
partially offset by a higher mix of sales from the Company's higher gross margin
medical-surgical  supply distribution  business.  The gross profit margin in the
Company's  pharmaceutical  distribution  business for fiscal 1997  declined 2.6%
from the prior year,  primarily  due to  competitive  factors.  The gross profit
margin in the Company's medical-surgical supply distribution business for fiscal
1997 declined  6.1% over the prior year,  primarily due to a higher mix of lower
gross   margin   acute   care   business.   In  both  the   pharmaceutical   and
medical-surgical supply distribution  industries,  it has been customary to pass
on to customers price increases from  manufacturers.  Investment  buying enables
distributors  such as the Company to benefit from  anticipated  price increases.
During  periods  of low  inflation,  which  has  occurred  the last  few  years,
wholesalers  receive less benefit from  manufacturers'  price increases but also
incur lower LIFO  charges.  The rate or frequency  of future price  increases by
manufacturers, or the lack thereof, influences the profitability of the Company.

         Management  of the Company  anticipates  further  downward  pressure on
gross  margins  in the  Company's  pharmaceutical  and  medical-surgical  supply
distribution   businesses   during  fiscal  1998  because  of  continued   price
competition  influenced  by large  customers.  The  Company  expects  that these
pressures on operating margin may be offset to some extent by increased sales of
more profitable products,  such as generic drugs and medical-surgical  supplies,


                                      II - 3
<PAGE>


and continued  reduction of distribution,  selling,  general and  administrative
expenses  ("DSG&A") as a percentage of net sales and other revenues through more
efficient operations.

         DSG&A,  including  the expenses  associated  with the  terminated  IVAX
merger  agreement,  increased 16%, while net sales and other revenues  increased
17%. These expenses  decreased as a percent of net sales and other revenues from
4.21% in fiscal 1996 to 4.16% in fiscal 1997.  Excluding  such merger  expenses,
DSG&A in fiscal 1997 were 4.11% of net sales and other  revenues.  The decreased
DSG&A as a  percent  of net sales and other  revenues  in fiscal  1997  reflects
continued  operating  efficiencies,   including  the  positive  effects  of  the
consolidation of distribution locations.

         Net interest  expense  increased  from $30.2  million in fiscal 1996 to
$30.8 million in fiscal 1997,  primarily due to increased  borrowings  under the
the Company's $400 million Credit Agreement (the "Credit Agreement"),  partially
offset by  decreased  interest on the $100  million 5 5/8% Senior Notes ("5 5/8%
Notes") which were repaid on January 15, 1996.

         The effective tax rate in fiscal 1997  decreased to 41.0% from 41.3% in
fiscal  1996  reflecting  the higher  earnings  in fiscal  1997 and,  therefore,
minimizing the impact of non-deductible expenses.

         Inflation has not been a significant factor in either year. The Company
uses the LIFO method of accounting for  inventory,  which reduces the effects of
inflation by reporting the cost of products sold at approximate current cost.


         Results of Operations Fiscal 1996 Compared with Fiscal 1995
         -----------------------------------------------------------


         Net sales and other  revenues  in fiscal  1996 were 18% higher  than in
fiscal 1995,  while operating  earnings and pre-tax earnings showed increases of
11% and 14%, respectively.

         Of the 18% increase in net sales and other revenues,  approximately  2%
was  attributable  to  the  acquisition  of  Colonial   Healthcare  Supply  Co.,
("Colonial")  in  August  1995.  Approximately  16% of the net  sales  and other
revenues increase  reflected  internal growth within both the Company's existing
pharmaceutical and medical-surgical supply distribution businesses.

         Earnings per share  increased 13% compared to fiscal 1995.  The average
number of common and common equivalent shares  outstanding  increased 1% for the
earnings per share computation.

         Cost of sales increased 18%, compared to fiscal 1995, due mainly to the
Company's  increased  sales  levels.  The overall gross profit margin for fiscal
1996 decreased as a result of a decrease in gross margins due to continued price
competition  and a  change  in  customer  mix  in the  Company's  pharmaceutical


                                      II - 4
<PAGE>


distribution business, partially offset by sales from the Company's higher gross
margin medical-surgical supply distribution business. The gross profit margin in
the Company's pharmaceutical distribution business for fiscal 1996 declined 3.2%
from the prior year,  primarily  due to  competitive  factors.  The gross profit
margin in the Company's medical-surgical supply distribution business for fiscal
1996 declined 11.7% over the prior year,  primarily due to a higher mix of lower
gross margin acute care business.

         DSG&A  increased  15% over  fiscal  1995,  while  net  sales  and other
revenues  increased  18% over the prior  year.  These  expenses  decreased  as a
percentage of net sales and other revenues from 4.30% in fiscal 1995 to 4.21% in
fiscal 1996. The decreased DSG&A as a percentage of net sales and other revenues
in  fiscal  1996  reflected  continued  operating  efficiencies,  including  the
positive effects of the continuing  consolidation of distribution divisions into
larger regional distribution centers, partially offset by increased DSG&A in the
Company's medical-surgical supply distribution business,  principally due to the
acquisition of Colonial.

         Net interest  expense  decreased  from $30.5  million in fiscal 1995 to
$30.2 million in fiscal 1996,  primarily due to decreased interest on the 5 5/8%
Notes which were repaid on January 15, 1996, and decreased  borrowings under the
Credit  Agreement,  partially  offset by interest on the 7 1/4% Senior Notes due
June 1, 2005 ("7 1/4% Notes"), which were issued June 1, 1995.

         The effective  tax rate in fiscal 1996  decreased to 41.30% from 41.60%
in fiscal 1995  reflecting  the higher  earnings in fiscal 1996 and,  therefore,
minimizing the impact of non-deductible expenses.



         Liquidity and Capital Resources
         -------------------------------

         At  September  30, 1997,  capitalization  consisted of 39% debt and 61%
equity,  as compared to 41% and 59%,  respectively,  at September 30, 1996.  The
decreased debt percentage  primarily reflects an increase in shareowners' equity
of $65.9  million  offset by increased  borrowings  under the Credit  Agreement.
Borrowings  under the Credit Agreement were $140.0 million and $120.0 million at
September 30, 1997 and 1996,  respectively.  Cash and cash  equivalents of $54.5
million at September  30, 1997,  increased  from $21.4  million at September 30,
1996,  primarily  as a  result  of an  increase  in cash  flows  from  operating
activities  principally due to the Company's profitable operations and increased
borrowings  under the Credit  Agreement,  partially  offset by increases in both
accounts  receivable and  investment in  inventories  (net of increases in trade
accounts payable).

         The Company filed a shelf  registration  statement  with the Securities
and  Exchange   Commission  which  became  effective  on  March  27,  1996.  The
registration  statement allows the Company to sell senior and subordinated  debt
or equity  securities to the public from time to time up to an aggregate maximum
principal  amount of $400 million.  The Company  intends to use the net proceeds


                                      II - 5
<PAGE>


from the sale of any such securities for general corporate  purposes,  which may
include, without limitation,  the repayment of indebtedness of the Company or of
any of its subsidiaries, possible acquisitions, capital expenditures and working
capital needs. See Note 2 of Notes to Consolidated Financial Statements.

         The Company's  Credit  Agreement  provides for maximum  borrowing up to
$400  million  and has loan  covenants  which  require  the  Company to maintain
certain  financial  statement  ratios.  The  Company is in  compliance  with all
required  ratios at  September  30,  1997.  See Note 2 of Notes to  Consolidated
Financial Statements.

         On April 24, 1997,  the Company  declared a 5-for-4  stock split on the
Company's Class A Common Stock, which was paid on June 2, 1997 to shareowners of
record on May 5, 1997.

         Dividends on Class A Common Stock  amounted to $21.7  million in fiscal
1997 compared to $19.2 million in fiscal 1996, and $18.8 million in fiscal 1995,
reflecting,  primarily, a 20% increase in the quarterly dividend rate during the
second  quarter of fiscal  1997.  While the Company has no policy with regard to
the payment of dividends, during the three-year period ended September 30, 1997,
dividends have averaged 27% of earnings.

         Capital  expenditures  for fiscal  1997 were $23.8  million and related
principally to additional investments in existing locations,  the acquisition of
automated  warehouse  equipment and additional  investments  in data  processing
equipment.

         The Company's  working  capital of $531.2 million at September 30, 1997
increased from the $440.6 million at September 30, 1996 and  represented  20% of
total assets at September  30, 1997.  The  Company's  current  ratio was 1.33 at
September 30, 1997,  compared to 1.30 at September 30, 1996.  Trade  receivables
outstanding,  net of customer credit balances, were 15 days for both fiscal 1997
and fiscal 1996.  The inventory  turnover rate on first-in,  first-out  ("FIFO")
basis was 7.7 times for fiscal 1997 and 7.0 times for fiscal 1996.

         The  Company  relies  heavily on  computer  technology  throughout  its
businesses to effectively carry out its day-to-day operations. As the millennium
approaches,  the Company is assessing all of its computer systems to ensure that
they are "Year  2000"-compliant.  In this process,  the Company  expects to both
replace some systems and upgrade  others which are not Year  2000-compliant,  in
order to meet its internal needs and those of its customers. The Company expects
its Year 2000 project to be completed on a timely basis.  However,  there can be
no assurance  that the systems of other  companies on which the Company may rely
also will be timely converted or that such failure to convert by another company
would not have an adverse effect on the Company's systems.  To date, the Company
has spent approximately $1.5 million on the Year 2000 project.  Costs related to



                                      II - 6
<PAGE>


this project will continue  through  calendar 1999. These costs are difficult to
estimate accurately and they will not necessarily be incremental.  The Company's
stated expectations  regarding its Year 2000 project constitute  forward-looking
statements.   Actual  results  could  differ   materially   from  the  Company's
expectations due to  unanticipated  technological  difficulties,  project vendor
delays and project vendor cost overruns.  Reference is made to the  introductory
paragraph of this Annual Report and Exhibit 99(a) hereto.

         The Company believes that internally  generated funds,  funds available
under the existing Credit  Agreement and funds  potentially  available under the
existing  shelf  registration  will be sufficient to meet  anticipated  cash and
capital needs.

         On November  18,  1997,  the  Company  signed an  agreement  to acquire
substantially  all  of the  net  assets  of  Besse  Medical  Services,  Inc.,  a
privately-held  distributor of injectables,  diagnostics  and medical  supplies.
Under the agreement,  the Company would pay approximately $20.0 million in cash,
plus estimated expenses, and assume certain liabilities. See Note 12 of Notes to
Consolidated Financial Statements.

         On August 23, 1997,  the Company signed a definitive  merger  agreement
with  Cardinal,  a distributor  of  pharmaceuticals  and provider of value-added
pharmaceutical-  related  services,  headquartered  in Dublin,  Ohio. The merger
agreement, which has been unanimously approved by the Boards of Directors of the
Company and Cardinal,  calls for the Company to become a wholly-owned subsidiary
of  Cardinal.  The combined  company is expected to be known as Cardinal  Bergen
Health, Inc. and would be headquartered in Dublin,  Ohio. Under the terms of the
proposed  merger,  shareowners  of the Company would receive 0.775 of a Cardinal
Common Share in exchange for each  outstanding  share of the  Company's  Class A
Common Stock. Cardinal would issue approximately 40 million Common Shares in the
transaction   and  would  assume  the   Company's   long-term   debt  which  was
approximately  $418.2  million  at  September  30,  1997.  The merger of the two
companies has been  structured as a tax-free  transaction and would be accounted
for as a pooling of interests for financial  reporting  purposes.  The merger is
currently  expected to be completed  by the end of the second  quarter of fiscal
1998, subject to the satisfaction of certain conditions,  including approvals by
the  Company's  shareowners  and  Cardinal's  shareholders,  and the  receipt of
certain regulatory approvals.

         On March 20, 1997,  the Company  announced  that it had  terminated its
previously  announced merger agreement with IVAX. See Notes 9 and 10 of Notes to
Consolidated Financial Statements.



         Accounting Pronoucements
         ------------------------

         During  fiscal  1997,  the  Company  adopted   Statement  of  Financial
Accounting  Standards  ("SFAS")  No.  121,  "Accounting  for the  Impairment  of
Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed Of". This standard
requires  recognition  of  impairment  losses on  long-lived  assets and certain
identifiable   intangibles,   including  goodwill,  used  in  operations,   when
indications of impairment are present and the undiscounted  cash flows estimated
to be generated by those assets are less than the assets' carrying  amount.  The


                                      II - 7
<PAGE>


adoption of this new  standard did not have a material  effect on the  Company's
consolidated financial position, results of operations or cash flows. See Note 1
of Notes to Consolidated Financial Statements.

         During  fiscal  1997,  the Company  also  adopted  the  disclosure-only
provisions  of SFAS No.  123,  "Accounting  for  Stock-Based  Compensation."  No
compensation  cost has been  recognized  for the  Company's  stock option plans.
Therefore, adoption of this standard had no effect on the Company's consolidated
financial position,  results of operations or cash flows. See Note 3 of Notes to
Consolidated Financial Statements.

         During fiscal 1997, the Company also adopted SFAS No. 125,  "Accounting
for  Transfers  and  Servicing  of  Financial  Assets  and   Extinguishments  of
Liabilities,"  which requires  recognition of financial  assets and liabilities,
including receivables sold with recourse, using a financial-components  approach
which focuses on control of the assets transferred.  This standard was effective
for  transfers  and  servicing  of  financial  assets  and   extinguishments  of
liabilities occurring after December 31, 1996. The adoption of this new standard
did not have a material effect on the consolidated  financial  statements of the
Company.

         In February 1997,  the Financial  Accounting  Standards  Board ("FASB")
issued SFAS No. 128,  "Earnings Per Share (EPS)," which will require the Company
to  disclose  basic  EPS and  diluted  EPS for all  periods  for which an income
statement is presented,  and which will replace disclosure  currently being made
for primary  EPS and  fully-diluted  EPS.  The Company is required to adopt this
standard  in its  quarter  ended  December  31,  1997.  See  Note 5 of  Notes to
Consolidated  Financial  Statements  for pro forma  disclosure  of basic EPS and
diluted EPS for the three years ended September 30, 1997.

         In June 1997,  the FASB issued SFAS No. 130,  "Reporting  Comprehensive
Income" ("SFAS 130"), which establishes  standards for the reporting and display
of  comprehensive  income and its components in financial  statements.  This new
statement  defines  comprehensive  income as "all  changes  in  equity  during a
period, with the exception of stock issuances and dividends."

         In June 1997,  the FASB also issued SFAS No.  131,  "Disclosures  about
Segments of an Enterprise and Related  Information"  ("SFAS 131") which requires
companies  to define and report  financial  and  descriptive  information  on an
annual and quarterly  basis about their operating  segments.  This new statement
also establishes  standards for related disclosures about products and services,
geographic areas and major customers.

         Both SFAS 130 and SFAS 131 will be adopted by the Company's in its 1999
fiscal year. Management believes the adoption of these standards will not have a
material effect on the Company's  consolidated  financial  position,  results of
operations or cash flows, and any effect will be limited to the form and content
of its disclosures.


                                      II - 8
<PAGE>

<TABLE>

Item 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          a.     Supplementary Data
<CAPTION>

SELECTED QUARTERLY RESULTS (unaudited)
Dollars in thousands, except for per share amounts
====================================================================================================================================
                                                 First              Second           Third          Fourth            Fiscal
Year Ended September 30, 1997                   Quarter             Quarter          Quarter        Quarter           Year
====================================================================================================================================
<S>                                              <C>             <C>              <C>               <C>             <C>        
Net sales and other revenues                     $2,822,122      $2,890,457       $2,927,874        $3,020,043      $11,660,496
Gross margin                                        153,976         169,664          158,981           171,810          654,431
Net earnings                                         18,178           0,505(b)        22,224            20,772           81,679

Earnings per share (a)                                 0.36            0.40(b)          0.44              0.41             1.61
Cash dividends per Class A Common share (a)           0.096           0.096            0.120             0.120            0.432

Market prices per Class A Common share (a)   $26 3/8-20 3/4      $26 5/8-22       $31-22 1/2   $45 3/4-28 1/16   $45 3/4-20 3/4


Year Ended September 30, 1996
====================================================================================================================================
Net sales and other revenues                     $2,377,362      $2,454,360       $2,492,194        $2,618,781       $9,942,697
Gross margin                                        134,227         147,883          144,892           146,802          573,804
Net earnings                                         15,627          20,389           19,195            18,322           73,533

Earnings per share (a)                                 0.31            0.41             0.38              0.36             1.46
Cash dividends per Class A Common share (a)           0.096           0.096            0.096             0.096            0.384

Market prices per Class A Common share (a)   $20 3/4-16 3/8  $21 7/8-19 1/4   $22 3/4-20 1/4        $26-19 3/4       $26-16 3/8
====================================================================================================================================

<FN>
(a) Gives effect to the 5=for=4 stock split declared April 24, 1997.
(b) Includes provision for merger expenses of $3.4 million, net of income tax benefit of $2.4 million, relating to the termination
    of the proposed IVAX merger.

    Bergen Brunswig Corporation Class A Common Stock is listed on the New York Stock Exchange.  There were approximately 2,300 Class
    A Common Stock shareowners of record on September 30, 1997.
</FN>


                                                                              II - 9

</TABLE>

<PAGE>
<TABLE>

          b.     Financial Statements

<CAPTION>
STATEMENTS OF CONSOLIDATED EARNINGS AND RETAINED EARNINGS

Dollars in thousands, except for per share amounts
==========================================================================================

Years Ended September 30,                   1997              1996                1995
==========================================================================================
<S>                                        <C>               <C>               <C>       
CONSOLIDATED EARNINGS

Net sales and other revenues               $11,660,496       $9,942,697        $8,447,607
                                           ----------------------------------------------
Costs and expenses:
  Cost of sales                             11,006,065         9,368,893        7,944,396
  Distribution, selling, general and
    administrative expenses                    479,399           418,364          363,179
  Merger expenses                                5,800                 -                -
                                           ----------------------------------------------
    Total costs and expenses                11,491,264         9,787,257        8,307,575
                                           ----------------------------------------------
Operating earnings                             169,232           155,440          140,032
Net interest expense                            30,793            30,170           30,542
                                           ----------------------------------------------
Earnings before taxes on income                138,439           125,270          109,490
Taxes on income                                 56,760            51,737           45,548
                                           ----------------------------------------------
Net earnings                               $    81,679       $    73,533       $   63,942
                                           ==============================================


EARNINGS PER COMMON AND
     COMMON EQUIVALENT SHARE               $        1.61     $        1.46     $     1.29
                                           ==============================================


CONSOLIDATED RETAINED EARNINGS

Balance at beginning of year                $  432,580       $  378,229        $  378,867
Net earnings                                    81,679           73,533            63,942
5% stock dividend on Class A Common Stock            -                -           (44,207)
Excess cost of Treasury shares issued
     for an acquisition                              -                -            (1,579)
Cash dividends on Class A Common Stock
     ($0.432 in 1997, $0.384 in 1996 and
     $0.379 in 1995 per share)                 (21,694)         (19,182)          (18,794)
                                           ----------------------------------------------
Balance at end of year                      $  492,565       $  432,580        $  378,229
                                           ==============================================


=========================================================================================
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>


                                                   II - 10
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS

Dollars in thousands
=======================================================================================

September 30,                                                     1997          1996
=======================================================================================
<S>                                                            <C>           <C>       
ASSETS
Current assets:
  Cash and cash equivalents                                    $   54,494    $   21,408
  Short-term investments                                            2,786             -
  Accounts and notes receivable, less allowance for
    doubtful receivables: 1997, $29,022; 1996, $23,459            772,342       667,255
  Inventories                                                   1,309,359     1,220,975
  Income taxes receivable                                           6,628        13,915
  Prepaid expenses                                                  9,866         8,656
                                                               ------------------------
      Total current assets                                      2,155,475     1,932,209
                                                               ------------------------



Property - at cost:
  Land                                                             12,602        12,452
  Buildings and leasehold improvements                             83,829        79,048
  Equipment and fixtures                                          173,875       163,827
                                                               ------------------------
    Total property                                                270,306       255,327
  Less accumulated depreciation and amortization                  131,944       112,600
                                                               ------------------------
      Property - net                                              138,362       142,727
                                                               ------------------------



Other assets:
  Excess of cost over net assets of acquired companies - net      329,100       339,030
  Other investments                                                 5,895         5,161
  Noncurrent receivables                                           12,651         9,939
  Deferred charges and other assets                                65,640        60,760
                                                               ------------------------
      Total other assets                                          413,286       414,890
                                                               ------------------------
      Total assets                                             $2,707,123    $2,489,826
                                                               ========================



========================================================================================
<FN>

See accompanying Notes to Consolidated Financial Statements.
</FN>


                                                  II - 11

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS
Dollars in thousands

=======================================================================================

September 30,                                                     1997          1996
=======================================================================================
<S>                                                            <C>           <C>       
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
  Accounts payable                                             $1,336,070    $1,249,167
  Accrued liabilities                                              82,070        92,005
  Customer credit balances                                        176,864       133,282
  Deferred income taxes                                            28,281        16,006
  Current portion of long-term obligations                          1,021         1,125
                                                               ------------------------
      Total current liabilities                                 1,624,306     1,491,585
                                                               ------------------------
Long-term obligations:
  7 3/8% senior notes                                             149,411       149,300
  7 1/4% senior notes                                              99,732        99,696
  Revolving bank loan payable                                     140,000       120,000
  7% convertible subordinated debentures                           20,609        20,609
  6 7/8% exchangeable subordinated debentures                       8,425         8,425
  Deferred income taxes                                             1,791         3,489
  Other                                                            17,988        17,756
                                                               ------------------------
    Total long-term obligations                                   437,956       419,275
                                                               ------------------------
Shareowners' equity:
  Capital stock:
    Preferred - Authorized 3,000,000 shares; issued: none               -             -
    Class A Common - Authorized 100,000,000 shares;
      issued: 1997, 55,870,183 shares; 1996, 55,521,175 shares     83,805        83,282
  Paid-in capital                                                 156,361       150,652
  Net unrealized gain on investments, net of income
    tax of: 1997, $260; 1996, $231                                    409           363
  Retained earnings                                               492,565       432,580
                                                               ------------------------
      Total                                                       733,140       666,877
  Less Treasury shares, at cost: 1997, 5,454,983 shares;
      1996, 5,443,198 shares                                       88,279        87,911
                                                               -------------------------
      Total shareowners' equity                                   644,861       578,966
                                                               ------------------------
      Total liabilities and shareowners' equity                $2,707,123    $2,489,826
                                                               ========================


=======================================================================================

<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>

                                                  II - 12

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
STATEMENTS OF CONSOLIDATED CASH FLOWS

Dollars in thousands
================================================================================================================

Years Ended September 30,                                                    1997          1996         1995
================================================================================================================
<S>                                                                        <C>          <C>          <C>      
OPERATING ACTIVITIES
--------------------
Net earnings                                                               $  81,679    $  73,533    $  63,942
Adjustments to reconcile net earnings to net cash flows
  from operating activities:
    Provision for doubtful accounts                                           11,899        8,213        5,810
    Depreciation and amortization of property                                 26,919       25,183       21,474
    (Gain) loss on dispositions of property                                     (382)          12        1,570
    Amortization of customer lists                                             1,749        1,749        1,749
    Amortization of excess of cost over net assets of acquired companies       9,709        9,647        9,003
    Amortization of other intangible assets                                    2,232        1,645        1,748
    Amortization of original issue discount on senior notes                      147          162          180
    Deferred compensation                                                      2,266        2,242        1,394
    Deferred income taxes                                                     10,577        9,070        3,178
    Effects of changes, net of acquisitions:
      Receivables                                                           (103,814)     (76,926)     (74,683)
      Inventories                                                            (88,384)     (60,699)    (225,555)
      Income taxes receivable                                                  7,287       (9,114)      (2,514)
      Prepaid expenses and other assets                                       (8,043)      (5,985)        (423)
      Accounts payable                                                        86,903      108,701      129,553
      Accrued liabilities                                                     (9,935)       2,252      (31,223)
      Customer credit balances                                                43,582       38,516       11,979
                                                                           -----------------------------------
        Net cash flows from operating activities                              74,391      128,201      (82,818)
                                                                           -----------------------------------
INVESTING ACTIVITIES
--------------------
Property acquisitions                                                        (23,806)     (16,696)     (41,078)
Proceeds from dispositions of property                                         1,634        1,833        7,228
(Purchase) sale of other investments                                          (3,447)        (327)      17,824
Repurchase of notes receivable with recourse                                 (17,740)           -            -
Proceeds from sale of notes receivable with recourse                           1,856        7,712       13,791
Acquisition of businesses, less cash acquired                                      -       (5,999)     (50,983)
                                                                           -----------------------------------
        Net cash flows from investing activities                             (41,503)     (13,477)     (53,218)
                                                                           -----------------------------------
FINANCING ACTIVITIES
--------------------
Proceeds from revolving bank loan                                             20,000            -      119,000
Repayment of revolving bank loan                                                   -      (39,000)           -
Repayment of senior notes                                                          -     (100,000)           -
Proceeds from issuance of senior notes                                             -            -       99,650
Redemption of convertible subordinated debentures                                  -         (305)         (20)
Redemption of exchangeable subordinated debentures                                 -       (2,150)           -
Repayment of other obligations                                                (3,972)      (2,565)      (6,556)
Increase in other obligations                                                      -          902            -
Shareowners' equity transactions:
  Exercise of stock options                                                    5,786        4,584        1,892
  Cash dividends on Common Stock                                             (21,694)     (19,182)     (18,794)
  Acquisition of Treasury shares                                                 (36)           -            -
  Other                                                                          114            -            -
                                                                           -----------------------------------
        Net cash flows from financing activities                                 198     (157,716)     195,172
                                                                           -----------------------------------
Net increase (decrease) in cash and cash equivalents                          33,086      (42,992)      59,136
Cash and cash equivalents at beginning of year                                21,408       64,400        5,264
                                                                           -----------------------------------
Cash and cash equivalents at end of year                                   $  54,494    $  21,408    $  64,400
                                                                           ===================================

================================================================================================================
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>

                                                          II - 13

</TABLE>
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended September 30, 1997, 1996, and 1995


1.       Summary of Significant Accounting Policies

         The consolidated  financial  statements  include the accounts of Bergen
Brunswig Corporation and its subsidiaries (the "Company"),  after elimination of
the effect of intercompany transactions and balances.  Certain reclassifications
have been made in the consolidated  financial statements and notes to conform to
1997 presentations.

         The preparation of the Company's  consolidated  financial statements in
conformity with generally accepted accounting  principles  necessarily  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the balance sheet dates and the reported  amounts of revenue and expense  during
the reporting  periods.  Actual  results  could differ from these  estimates and
assumptions.

         The Company  records  revenues  when product is shipped or services are
provided to its customers.

         Net sales and other revenues include service fees of $1.4 million, $1.1
million and $5.4 million for the years ended September 30, 1997, 1996, and 1995,
respectively,  related  to bulk  shipments  of  pharmaceuticals.  Bulk  shipment
transactions  are  arranged by the  Company  with its  suppliers  at the express
direction  of the  customer,  and involve  either  shipments  from the  supplier
directly to customers'  warehouse  sites or shipments of customer bulk orders to
Company warehouses for immediate  shipments to customers'  warehouse sites. Bulk
sales of  pharmaceuticals  do not impact the Company's  inventory  levels in any
respect, since the Company merely processes the orders that it receives from its
customers directly to the applicable suppliers. Because the nature of these bulk
sales are significantly different,  both in terms of the processing involved and
the financial return to the Company, as compared with the Company's  traditional
wholesaling  activities,  and because the approach of including the gross amount
of such sales in the Company's  revenues would make it more difficult to analyze
the Company's  traditional revenues from wholesaling  activities,  cost of sales
and gross margins,  the Company presents such sales on a net basis.  Service fee
income from bulk sales was not material to the  Company's  overall  gross profit
for the years ended September 30, 1997,  1996 and 1995.  Service fee income from
bulk sales was $1.4  million,  $1.1 million and $5.4 million for the years ended
September  30,  1997,  1996  and  1995,  respectively.  As a  percentage  of the
Company's  total gross profit,  such income  amounted to .21%, .19% and 1.06% of
overall  gross profit for the years ended  September  30,  1997,  1996 and 1995,
respectively.

         The Company considers all highly-liquid debt instruments purchased with
an original maturity of three months or less to be cash equivalents.  Short-term
investments  include debt  instruments,  principally  variable rate demand notes
having  maturities  of more than  three  months  but less  than one year.  Other
investments  consist  of equity  securities  and are  classified  as  noncurrent
assets.


                                      II - 14
<PAGE>


         The  Company  has  classified  its   investments  in  debt  and  equity
securities as "available for sale"  securities and has reported such investments
at fair value,  with  unrealized  gains and losses  excluded from earnings,  and
reported as a separate  component of  shareowners'  equity.  Realized  gains and
losses on investments are determined by the specific  identification  method and
are included in net earnings.  Such unrealized gains and losses at September 30,
1997,  1996 and 1995 and realized gains and losses for the years then ended were
not material.

         Inventories  are valued at the lower of cost or market,  determined  on
the last-in,  first-out  (LIFO)  method.  If the Company had used the  first-in,
first-out  (FIFO)  method of inventory  valuation,  which  approximates  current
replacement cost,  inventories would have been higher than reported at September
30, 1997, by $136.4 million, and at September 30, 1996, by $144.1 million.

         Depreciation and amortization of property are computed principally on a
straight-line basis over estimated useful lives. Generally, the estimated useful
lives are 15 to 40 years for buildings and leasehold  improvements,  and 3 to 10
years for equipment and fixtures.

         The  excess  of cost  over net  assets of  acquired  companies  (net of
accumulated  amortization of $57.3 million at September 30, 1997;  $47.6 million
at September 30, 1996) is amortized on a straight-line basis principally over 40
years.  Customer  lists,  included in deferred  charges and other assets,  ($7.1
million at September 30, 1997, net of accumulated amortization of $19.1 million;
$8.8 million at September 30, 1996,  net of  accumulated  amortization  of $17.4
million) are  amortized on a  straight-line  basis over 15 years.  During fiscal
1997, the Company adopted Statement of Financial  Accounting  Standards ("SFAS")
No. 121,  "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of. " This  standard  requires  recognition  of impairment
losses on  long-lived  assets and certain  identifiable  intangibles,  including
goodwill, used in operations, when indications of impairment are present and the
undiscounted  cash flows estimated to be generated by those assets are less than
the assets'  carrying  amount.  At each balance sheet date,  management  reviews
tangible  and  intangible  assets  for  possible  impairment  based  on  several
criteria,  including,  but not limited to, sales trends,  undiscounted operating
cash flows and other  operating  factors.  The adoption of this new standard did
not have a material  effect on the Company's  consolidated  financial  position,
results of operations or cash flows.

         Noncurrent  receivables  include notes  receivable  from  employees and
officers due at the Company's  discretion in the amount of $4.9 million and $3.6
million at September 30, 1997 and 1996, respectively.

         During fiscal 1997, the Company also adopted SFAS No. 125,  "Accounting
for  Transfers  and  Servicing  of  Financial  Assets  and   Extinguishments  of
Liabilities,"  which requires  recognition of financial  assets and liabilities,
including receivables sold with recourse, using a financial-components  approach
which focuses on control of the assets transferred.  This standard was effective
for  transfers  and  servicing  of  financial  assets  and   extinguishments  of
liabilities occurring after December 31, 1996. The adoption of this new standard


                                      II - 15
<PAGE>


did not have a material effect on the consolidated  financial  statements of the
Company.

         In June 1997,  the FASB issued SFAS No. 130,  "Reporting  Comprehensive
Income" ("SFAS 130") which  establishes  standards for the reporting and display
of  comprehensive  income and its components in financial  statements.  This new
statement  defines  comprehensive  income as "all  changes  in  equity  during a
period, with the exception of stock issuances and dividends."

         In June 1997,  the FASB also issued SFAS No.  131,  "Disclosures  about
Segments of an Enterprise and Related  Information"  ("SFAS 131") which requires
companies  to define and report  financial  and  descriptive  information  on an
annual and quarterly  basis about their operating  segments.  This new statement
also establishes  standards for related disclosures about products and services,
geographic areas and major customers.

         Both SFAS 130 and SFAS 131 will be adopted in the Company's 1999 fiscal
year as required.  Management  believes the adoption of these standards will not
have a material effect on the Company's consolidated financial position, results
of  operations  or cash  flows,  and any effect  will be limited to the form and
content of its disclosures.


2.       Borrowing Arrangements

         On  March  15,  1996,  the  Company's  credit  agreement  (the  "Credit
Agreement")  with a group of domestic  and foreign  banks was amended to,  among
other  things,  increase  the  maximum  borrowing  to $400  million,  extend the
maturity date to March 15, 2001, and allow borrowing under discretionary  credit
lines  ("discretionary  lines")  outside  of the  Credit  Agreement.  Borrowings
outstanding  under the Credit Agreement were $140 million at September 30, 1997.
The  maximum  outstanding   borrowings  under  the  Credit  Agreement  including
discretionary lines for the year ended September 30, 1997 were $393 million. The
Credit  Agreement  has loan  covenants  which  require  the  Company to maintain
certain  financial  statement  ratios.  The  Company is in  compliance  with all
required ratios at September 30, 1997.

         On May 23,  1995,  the Company sold $100  million  aggregate  principal
amount of 7 1/4% Senior Notes due June 1, 2005 (the "7 1/4% Notes").  On June 1,
1995,  the Company  received net proceeds of $99.0 million  (after  underwriting
discount of $0.6 million)  from the 7 1/4% Notes.  The net proceeds were used to
reduce the outstanding balance under the Credit Agreement.  On January 14, 1993,
the Company sold $100 million aggregate  principal amount of 5 5/8% Senior Notes
due January 15, 1996 (the "5 5/8% Notes") and $150 million  aggregate  principal
amount of 7 3/8% Senior  Notes due January  15,  2003 (the "7 3/8%  Notes").  On
January 15, 1996, the Company repaid the $100 million aggregate principal amount
of the 5 5/8% Notes  plus  accrued  interest.  The 7 1/4% Notes and 7 3/8% Notes
were issued pursuant to the $400 million shelf registration filed by the Company
in December 1992 and are not  redeemable  prior to maturity and are not entitled
to any sinking fund.  Interest on the 7 1/4% Notes is payable  semi-annually  on
June 1 and  December  1 of each  year.  Interest  on the 7 3/8% Notes is payable


                                      II - 16
<PAGE>


semi-annually  on January 15 and July 15 of each year. The carrying value of the
7 1/4% Notes and 7 3/8% Notes represents gross proceeds plus amortization of the
original issue discount ratably over the life of each issue.

         The Company filed a shelf  registration  statement  with the Securities
and  Exchange  Commission,  which  became  effective  on  March  27,  1996.  The
registration  statement allows the Company to sell senior and subordinated  debt
or equity securities to the public from time to time, up to an aggregate maximum
principal  amount of $400 million.  The Company  intends to use the net proceeds
from the sale of any such securities for general corporate  purposes,  which may
include, without limitation,  the repayment of indebtedness of the Company or of
any of its subsidiaries, possible acquisitions, capital expenditures and working
capital  needs.  Pending such  application,  the net proceeds may be temporarily
invested in short-term securities.  No offering has occurred since the effective
date of the the registration statement. Any offering of such securities shall be
made only by means of prospectus.

         In July 1986, the Company  issued $43.0 million of 6 7/8%  Exchangeable
Subordinated Debentures due July 2011 (the "6 7/8% Debentures") and during March
1990,  $32.1 million  principal amount of the 6 7/8% Debentures was tendered and
purchased  pursuant to an offer from the Company.  On July 15, 1996, the Company
elected to redeem an additional  $2.2 million of principal  amount of the 6 7/8%
Debentures  plus accrued  interest.  Between  March 1990 and July 15,  1996,  an
additional  $0.3  million  aggregate  principal  amount had been  redeemed.  The
remaining  unredeemed 6 7/8% Debentures  receive interest on January 15 and July
15 of each year.

         In connection  with the acquisition of  Durr-Fillauer  Medical Inc. and
subsidiaries  ("Durr") in September  1992, the Company  assumed $69.0 million of
Durr's  7%  Convertible  Subordinated  Debentures  due  March 1,  2006  (the "7%
Debentures").  The  acquisition  of Durr by the Company  resulted in each holder
receiving the right,  at such  holder's  option,  to require Durr to redeem,  on
November 22, 1992,  all or any portion of such holder's 7%  Debentures  for cash
equal to the  principal  amount  plus all accrued  interest  to that date.  As a
result,  the  Company  redeemed  $45.6  million  aggregate  principal  amount on
November  23,  1992.  Since  that  date an  additional  $2.8  million  aggregate
principal  amount has been  redeemed.  The  remaining  unredeemed  7% Debentures
receive interest on March 1 and September 1 of each year.

         Cash paid for  interest  was $32.1  million,  $31.3  million  and $28.4
million in fiscal 1997, 1996, and 1995, respectively.

         Scheduled future principal payments of long-term obligations, excluding
deferred income taxes,  for the next five fiscal years are $1.0 million in 1998,
$5.0 million in 1999, $0.9 million in 2000,  $141.0 million in 2001, $.8 million
in 2002, and $288.5 million thereafter.





                                      II - 17
<PAGE>


3.       Capital Stock, Paid-in Capital and Stock Options

         The  authorized  capital stock of the Company  consists of  100,000,000
shares of Class A Common Stock,  par value $1.50 per share (the "Common Stock");
and  3,000,000  shares of  Preferred  Stock  without  nominal  or par value (the
"Preferred Stock").

         The Board of  Directors  (the  "Board")  is  authorized  to divide  the
Preferred  Stock into one or more series and to determine  the relative  rights,
preferences and limitations of the shares of any such series.  In addition,  the
Board may give the Preferred Stock (or any series) special, limited, multiple or
no voting rights.

         Subject to the preferences and other rights of the Preferred Stock, the
Common  Stock may receive  stock or cash  dividends as declared by the Board and
each share of Common Stock is entitled to one vote per share at every meeting of
shareowners.  In the event of any liquidation,  dissolution or winding up of the
affairs of the Company,  after payment to the owners of the  Preferred  Stock of
the full  amounts to which  they have a  liquidation  preference,  the owners of
Common  Stock  shall be entitled  to receive a  distribution  of all assets then
remaining.

         On February 9, 1994,  the Board adopted a Shareowner  Rights Plan which
provides for the issuance of one Preferred  Share  Purchase Right (the "Rights")
for each  outstanding  share of Common  Stock.  The  Rights  are  generally  not
exercisable until 10 days after a person or group  ("Acquiror")  acquires 15% of
the Common  Stock or  announces a tender offer which could result in a person or
group  owning 15% or more of the Common  Stock (an  "Acquisition").  Each Right,
should it become  exercisable,  will entitle the owner to buy 1/100th of a share
of a new series of the Company's  Series A Junior Preferred Stock at an exercise
price of $80.00.

         In the event of an Acquisition  without the approval of the Board, each
Right will  entitle  the owner,  other than an  Acquiror,  to buy at the Rights'
then-current  exercise  price a number of shares of Common  Stock  with a market
value equal to twice the exercise price. In addition,  if, after an Acquisition,
the Company were to be acquired by merger,  shareowners with unexercised  Rights
could  purchase  common stock of the Acquiror with a value of twice the exercise
price of the Rights.  The Board may redeem the Rights for $0.01 per Right at any
time prior to an Acquisition. Unless earlier redeemed, the Rights will expire on
February 18, 2004.

         Pursuant to action of the Company's Board of Directors, consummation of
the pending merger with Cardinal Health,  Inc.  ("Cardinal")  (see Note 12) will
not constitute an Acquisition or otherwise  trigger the exercise of Rights under
the Shareowner Rights Plan.

         On April 24, 1997,  the Company  declared a 5-for-4  stock split on the
Company's  Class A Common Stock which was paid on June 2, 1997 to shareowners of
record on May 5, 1997.  Share and per share amounts included in the accompanying
consolidated financial statements and notes are based on the increased number of
shares giving retroactive effect to the stock dividend.



                                      II - 18
<PAGE>


         Changes in Class A Common Stock,  Paid-in  capital and Treasury  shares
for the fiscal years ended September 30, 1997, 1996, and 1995 were as follows:
<TABLE>
<CAPTION>
                                                          Class A Common        Paid-in    Treasury
     Dollars and shares in thousands                     Shares     Amount      Capital     Shares
    ================================================================================================
    <S>                                                  <C>       <C>        <C>         <C>       
     Balance, September 30, 1994
       as previously reported                             44,059    $66,088    $155,079   $(138,183)
     1997 5-for-4 Class A Common Stock split              11,015     16,523     (16,523)          -
                                                       --------------------------------------------
     Balance, September 30, 1994 as adjusted              55,074     82,611     138,556    (138,183)
     5% Class A Common Stock dividend                          -          -       5,996      38,185
     Exercise of stock options                               155        232       1,955        (295)
     Acquisition of Biddle & Cowther Company                   -          -           -      12,382
                                                       --------------------------------------------
     Balance, September 30, 1995                          55,229     82,843     146,507     (87,911)
     Exercise of stock options                               292        439       4,145           -
                                                       ---------------------------------------------
     Balance, September 30, 1996                          55,521     83,282     150,652     (87,911)
     Exercise of stock options                               344        515       5,603        (332)
     Acquisition of Treasury shares                            -          -           -         (36)
     Other                                                     5          8         106           -
                                                       --------------------------------------------
     Balance, September 30, 1997                          55,870    $83,805    $156,361   $ (88,279)
                                                       ============================================
</TABLE>


         At  September  30,  1997,  there were  outstanding  options to purchase
57,395 shares of Class A Common Stock, under a 1983 stock option plan, at prices
per share  not less than the fair  market  value on the dates the  options  were
granted. No additional options may be granted under this plan.

         The Company has an amended and restated 1989 stock incentive plan which
authorizes  the granting of stock  options to officers,  key employees and other
recipients to purchase  shares of Class A Common Stock within a ten-year  period
from  date of  grant at such  price  per  share  as may be set by the  Company's
Compensation/Stock  Option  Committee.  The number of shares available for grant
under the plan is  formula-based,  providing that, upon certain  conditions,  no
more than 1% of the number of issued shares at the immediately  preceding fiscal
year-end may be added to the shares  available  for the grant pool in any fiscal
year to this class of  optionees.  Stock  option  grants are also  available  to
nonemployee directors and only at a price per share equal to the market value on
the grant date. At September 30, 1997,  there were 213,503 shares  available for
grant under the plan, with 109,130 shares specifically  reserved for nonemployee
directors.

         Stock  appreciation  rights  may  be  offered  to  some  or  all of the
employees,  but not nonemployee  directors,  who hold or receive options granted
under the stock option plans. No stock  appreciation  rights were outstanding as
of September 30, 1997, 1996, or 1995.

         The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based  Compensation,"  ("SFAS 123"). No compensation  cost
has been recognized for the Company's stock option plans. Had compensation  cost
for the Company's 1989 stock  incentive plan been  determined  based on the fair
value at the grant date for grants in fiscal  1997 and  fiscal  1996  consistent
with the provisions of SFAS 123,


                                      II - 19
<PAGE>


         the   Company's  net  earnings  and  earnings  per  common  and  common
equivalent  share  would have been  reduced to the pro forma  amounts  indicated
below:
<TABLE>
<CAPTION>
                                                    1997               1996
         ===========================================================================
                                        (in thousands, except for per share amounts)
         <S>                                       <C>                 <C>    
         Net earnings - as reported                $81,679             $73,533
         Net earnings - pro forma                  $80,474             $73,000
         Earnings per common and common
          equivalent share - as reported           $  1.61             $  1.46
         Earnings per common and common
          equivalent share - pro forma             $  1.59             $  1.45

</TABLE>

         The fair value of options  granted under the 1989 stock  incentive plan
during  fiscal  1997 and fiscal  1996 were used to  calculate  the pro forma net
earnings  and  earnings per common and common  equivalent  share  above,  on the
various grant dates,  using a binomial  option=pricing  model with the following
weighted average assumptions:

<TABLE>
<CAPTION>
                                                  1997               1996
         ===========================================================================
         <S>                                     <C>                <C> 
         Dividend yield                            2.0%               2.0%
         Expected volatility                      36.6%              31.7%
         Risk=free interest rate                   5.9%               5.8%
         Expected life                             4 years            4 years
         Fair value of grants                     $8.29              $5.80

</TABLE>


         Changes  in the number of shares  represented  by  outstanding  options
during the years ended  September  30, 1997,  1996,  and 1995 are  summarized as
follows:


<TABLE>
<CAPTION>
                                                         1997                  1996                  1995
                                                =====================  ===================   ===================
                                                            Weighted              Weighted              Weighted
                                                  Actual     Average    Actual     Average    Actual     Average
         =======================================================================================================
         <S>                                     <C>         <C>       <C>         <C>      <C>          <C>   
         Outstanding at beginning of year        2,361,783   $16.01    1,761,368   $13.16   1,603,729    $13.07
         Options granted ($12.00 to
           $29.15 per share)                       393,753   $25.71      943,750   $20.24     399,375    $12.55
         Options exercised ($5.94 to
           $20.80 per share)                      (344,171)  $12.67     (292,332)  $12.64    (158,040)   $11.00
         Options cancelled ($5.94 to
           $26.00 per share)                      (177,573)  $17.00      (51,003)  $14.99     (83,696)   $12.82
                                                  -------------------------------------------------------------
         Outstanding at end of year
           (1997, $5.94 to $29.15 per share)     2,233,792   $18.26    2,361,783   $16.01   1,761,368    $13.16
                                                ===============================================================

         Exercisable at end of year              1,290,796               833,415              711,825
                                                ==========               =======              =======

         Available for grant at end of year        213,503               443,203              839,385
                                                ==========               =======              =======
</TABLE>


                                      II - 20
<PAGE>


         The following table summarizes  information  concerning outstanding and
exercisable options at September 30, 1997:

<TABLE>
<CAPTION>
                                                                  Options Outstanding        Options Exercisable
                                                           -------------------------------  ---------------------
                                                                       Weighted
                                                                        Average   Weighted              Weighted
                                                                       Remaining   Average               Average
                                                             Number   Contractual Exercise    Number    Exercise
         Range of exercise prices                          Outstanding   Life       Price   Exercisable   Price
         =======================================================================================================
         <S>                                               <C>        <C>         <C>        <C>        <C>   
            $5.94  =  $11.86                                244,040      5.82      $11.59     238,724    $11.59
           $12.00  =  $13.52                                353,249      6.69      $12.57     211,147    $12.71
           $14.48  =  $16.95                                398,288      4.12      $15.62     398,288    $15.62
           $17.03  =  $17.81                                104,290      7.42      $17.35      44,946    $17.38
           $19.55                                           496,417      8.11      $19.55     248,209    $19.55
           $20.80  =  $23.10                                266,255      8.89      $22.74      63,856    $22.68
           $24.60  =  $29.15                                371,253      9.15      $26.18      85,626    $26.00
                                                       --------------------------------------------------------
                                                          2,233,792                         1,290,796
                                                       ============                       ===========

</TABLE>

         At  September  30, 1997,  an  aggregate of 3,328,445  shares of Class A
Common Stock was  reserved  for the  exercise of stock  options and for issuance
under the elective retirement savings plan (see Note 8).


4.       Acquisitions

         On August 7, 1996, the Company completed the acquisition of certain net
assets of Oncology Supply Company, a privately-held  oncology supply distributor
located in Dothan, Alabama. The Company paid approximately $5.8 million in cash,
plus  expenses of $.2 million,  acquired  assets at fair value of  approximately
$6.5 million and assumed liabilities of approximately $5.4 million.  The Company
recorded  an excess of cost  over net  assets  acquired  of  approximately  $4.9
million in the transaction.

          On August 2, 1995, the Company  completed the  acquisition of Colonial
Healthcare Supply Co.  ("Colonial"),  a privately-held  medical-surgical  supply
distributor  headquartered in Lake Zurich,  Illinois,  for  approximately  $50.7
million in cash plus  expenses of $.3 million.  The Company  acquired  assets at
fair  value  of   approximately   $47.3  million  and  assumed   liabilities  of
approximately $19.7 million,  including  approximately $2.7 million of long-term
debt which was paid by the Company on the acquisition date. This acquisition was
financed from borrowings  under the Credit  Agreement.  The Company  recorded an
excess of cost over net assets  acquired of  approximately  $23.4 million in the
transaction.

         On January 10, 1995, the Company  completed the acquisition of Biddle &
Crowther  Company,   a  privately-held   medical-surgical   supply   distributor
headquartered in Seattle,  Washington, for 804,505 shares of the Company's Class
A Common Stock,  previously held as Treasury shares.  The transaction was valued
at approximately  $10.8 million,  plus expenses;  the Company acquired assets at
fair  value  of   approximately   $12.0  million  and  assumed   liabilities  of


                                      II - 21
<PAGE>


approximately  $5.2  million.  The  Company  recorded an excess of cost over net
assets acquired of approximately $4.4 million in the transaction.


5.       Earnings per Common and Common Equivalent Share

         Earnings  per  common  and  common  equivalent  share  are based on the
weighted  average  number of shares of Class A Common Stock  outstanding  during
each year and the assumed  exercise of dilutive  employees'  stock options (less
the number of Treasury  shares  assumed to be purchased  from the proceeds using
the average market price of the Company's  Class A Common  Stock).  Earnings per
share are based upon  50,714,317  shares in fiscal  1997,  50,323,840  shares in
fiscal 1996 and 49,751,193 shares in fiscal 1995.

         In February  1997,  the FASB issued SFAS No. 128,  "Earnings  Per Share
(EPS)," which will require the Company to disclose basic EPS and diluted EPS for
all periods for which an income  statement is presented,  and which will replace
disclosure  currently  being made for primary  EPS and  fully-diluted  EPS.  The
Company will adopt this standard in its quarter  ending  December 31, 1997.  Pro
forma basic EPS and diluted EPS for the three years ended September 30, 1997 are
indicated below, had the Company applied the provisions of this pronouncement:

<TABLE>
<CAPTION>
                                                Years Ended September 30,
                                                -------------------------
                                               1997        1996        1995
         =======================================================================
         <S>                                  <C>          <C>         <C>  
         Earnings Per Share:
                  Basic                       $1.63        $1.47       $1.29
                  Diluted                     $1.61        $1.46       $1.29
</TABLE>



6.       Leases

         The Company  conducts most of its operations from leased  warehouse and
office  facilities and uses certain data processing,  transportation,  and other
equipment under lease agreements  expiring at various dates through fiscal 2008,
excluding  renewal options.  Future minimum rental  commitments at September 30,
1997, under operating leases having  noncancelable  lease terms in excess of one
year,  aggregated $73.3 million, with rental payments during the five succeeding
fiscal years of $22.7 million,  $18.6 million,  $11.7 million,  $7.8 million and
$4.7  million,  respectively.  Future  minimum  rentals  to  be  received  under
noncancelable  subleases at  September  30, 1997 were not  material.  Net rental
expense  for the years ended  September  30,  1997,  1996,  and 1995,  was $22.3
million,  $17.9  million,  and  $17.0  million,  respectively,  after  deducting
sublease income of $0.3 million, $0.1 million, and $0.1 million, respectively.




                                      II - 22
<PAGE>


7.       Taxes on Income

         The  Company  uses the asset and  liability  method of  accounting  for
income  taxes.  Under this  method,  deferred  tax assets  and  liabilities  are
established for temporary  differences between the financial reporting bases and
the tax bases of the Company's  assets and  liabilities at tax rates expected to
be in effect when such assets or liabilities are realized or settled.

         Total  Federal and state taxes on income for the years ended  September
30, 1997, 1996, and 1995 are summarized as follows:

<TABLE>
<CAPTION>
         Dollars in thousands                 1997        1996         1995
         ======================================================================
         <S>                                <C>         <C>          <C>    
         Currently payable
           Federal                           $38,964     $35,985      $35,865
           State                               7,219       6,682        6,505
         Deferred (principally Federal)       10,577       9,070        3,178
                                            ---------------------------------

                  Total                      $56,760     $51,737      $45,548
                                            =================================
</TABLE>



         Taxes on income vary from the statutory Federal income tax rate applied
to earnings before taxes on income as the result of the following:

<TABLE>
<CAPTION>
         Dollars in thousands                               1997      1996      1995
         =============================================================================
         <S>                                              <C>       <C>       <C>    
         Statutory Federal income tax rate applied
           to earnings before taxes on income              $48,454   $43,844   $38,322
         Increase (decrease) in taxes resulting from:
           Amortization of excess of cost over
             net assets of acquired companies                3,262     2,447     3,055
           State income taxes - net of Federal benefits      5,578     4,992     4,610
           Governmental investment income                     (184)     (157)     (366)
           Other                                              (350)      611       (73)
                                                         -----------------------------

         Total taxes on income                             $56,760   $51,737   $45,548
                                                         =============================
</TABLE>




                                      II - 23
<PAGE>



         The tax effects of  significant  items  comprising  the  Company's  net
deferred tax liability as of September 30, 1997 and 1996 are as follows:

<TABLE>
<CAPTION>
         Dollars in thousands                              1997         1996
         =====================================================================
         <S>                                             <C>          <C>    
         Deferred tax liabilities:
           Inventory basis difference due to LIFO
               method and uniform capitalization          $49,142      $38,602
           Accelerated depreciation                         8,223        8,722
           Employee benefits                                4,048            -
           Other                                            3,074        2,918
                                                         ---------------------
                  Total                                    64,487       50,242
                                                         ---------------------
         Deferred tax assets:
           Reserves for doubtful receivables               15,639       12,527
           Restructuring charge not currently deductible    1,264        2,203
           Vacation pay not currently deductible            1,933        1,659
           Accrued liabilities not currently deductible    15,579       13,641
           Other                                               -           717
                                                         ---------------------
                  Total                                    34,415       30,747
                                                         ---------------------
         Net deferred tax liability                       $30,072      $19,495
                                                         =====================
</TABLE>


         Deferred taxes result from temporary  differences in the recognition of
revenues and expenses for tax and financial reporting purposes.

         Cash paid for income  taxes was $50.7  million,  $51.1  million,  $41.0
million, and $39.0 million in fiscal 1997, 1996, and 1995, respectively.

         In the opinion of  management  of the  Company,  no  valuation  reserve
related to deferred tax assets is considered necessary.


8.       Retirement and Savings Plans

         The  Company  provides  for  retirement  benefits  through an  elective
retirement savings plan and supplemental retirement plans.

         The Company has an elective retirement savings plan generally available
to all employees  with six months of service.  Under the terms of the plan,  the
Company  guarantees  a  contribution  of $0.50 for each  $1.00  invested  by the
participant up to the participant's  investment of 6% of salary, subject to plan
and regulatory  limitations.  The Company may also make additional cash or stock
contributions  to the plan at its discretion.  The Company's  contributions  are
vested to participants  over five years. The Company made  contributions of $3.8
million,  $3.4 million,  and $3.9 million to the plan in fiscal 1997,  1996, and
1995, respectively.

         The supplemental retirement plans provide benefits for certain officers
and key employees.  The Company has a  Supplemental  Executive  Retirement  Plan


                                      II - 24
<PAGE>


("SERP") for officers and key employees.  SERP is a "target"  benefit plan, with
the annual  lifetime  benefit based upon a percentage of salary during the final
five years of pay at age 62, offset by several other sources of income including
benefits payable under a prior supplemental retirement plan.

         The  components  of net  periodic  pension  cost  for the  supplemental
retirement plans for fiscal 1997, 1996, and 1995 are as follows:

<TABLE>
<CAPTION>
         Dollars in thousands                         1997      1996      1995
         ======================================================================
         <S>                                        <C>       <C>       <C>   
         Service cost                               $  598    $  294    $  221
         Interest cost                               1,596     1,519     1,261
         Amortization of prior service cost            378       378       378
         Amortization of initial unrecognized
           net obligation                              264       264       264
                                                  ----------------------------
                    Total                           $2,836    $2,455    $2,124
                                                  ============================
</TABLE>


         Assumptions   used  to  develop  the  net  periodic  pension  cost  for
supplemental retirement plans were:

<TABLE>
<CAPTION>

                                                   1997          1996          1995
         ==============================================================================
         <S>                                   <C>           <C>           <C>        
         Discount rate                          7.00-8.00%    7.00-8.00%    7.25%-8.25%
         Rate of increase in salary levels         5.50%         5.50%         5.25%
</TABLE>

         The funded status of the supplemental retirement plans at September 30,
1997 and 1996 is as follows:

<TABLE>
<CAPTION>

         Dollars in thousands                                              1997      1996
         ====================================================================================
         <S>                                                             <C>       <C>    
         Actuarial present value of benefit obligations:
           Vested benefits                                                $15,961   $15,572
           Nonvested benefits                                                   -         -
                                                                          -----------------
           Accumulated benefit obligation                                  15,961    15,572
           Effect of assumed increase in future compensation levels         5,522     3,998
                                                                          -----------------
         Projected benefit obligation                                      21,483    19,570
         Assets of plans at fair value                                     (2,865)   (2,898)
                                                                          ------------------
         Excess of projected benefit obligation over assets                18,618    16,672
         Unrecognized prior service cost                                   (2,132)   (2,510)
         Unrecognized net loss                                             (7,882)   (5,166)
         Unrecognized net obligation remaining from date of adoption       (3,314)   (3,578)
                                                                          ------------------
         Pension liability recognized in the consolidated balance sheets  $ 5,290   $ 5,418
                                                                          =================
</TABLE>


         At September 30, 1997 and 1996, the Company owned life insurance in the
aggregate  amounts of $46.5 million and $45.0  million,  respectively,  covering


                                      II - 25
<PAGE>


substantially all of the participants in the supplemental  retirement plans. The
Company  intends to keep this life  insurance  in force  until the demise of the
participants.

         Contributions  are also made to  multi-employer  defined  benefit plans
administered  by labor unions for certain union  employees.  Amounts  charged to
pension expense and contributed to these plans were $0.4 million,  $0.4 million,
and $0.4 million in fiscal 1997, 1996, and 1995, respectively.


9.       Contingencies

         The Company received  proceeds of $1.9 million and $7.7 million in 1997
and 1996,  respectively,  from  receivables sold with recourse by the Company to
financial  institutions and repurchased $17.7 million of such receivables during
1997.

         The  Company  has  been  named  as  a  defendant,  along  with  several
pharmaceutical industry-related companies, in several state antitrust actions in
California  and  Alabama  and a  Federal  multidistrict  antitrust  action.  The
California  State  action  purports  to  be a  coordinated  class  action  under
California's  Cartwright Act, Unfair  Practices Act and Business and Professions
Code.  The Alabama State  complaint  purports to be a class action under Alabama
antitrust law. The Federal class action  complaint  alleges that the Company and
numerous  manufacturers  and other  wholesalers  violated  the  Sherman  Act. In
November  1994,  the Federal  court  certified  the class defined in the Federal
class action  complaint  from October 15, 1989 to the present.  Plaintiffs  seek
injunctive relief and treble damages in an amount to be determined at trial.

         In October 1994, the Company entered into a sharing agreement 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 $1.0  million;  (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 pharmaceutical defendants for
related  legal fees and expenses up to $9.0 million  total (of which the Company
will receive a proportionate  share);  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 the cases  which  have been  filed in the
various state courts.  In April 1996,  summary  judgment was granted in favor of
the Company and the other  wholesaler  defendants  and the Company was dismissed
from the Federal class action. However, the decision was appealed and, on August
15,  1997,  the Court of  Appeals  for the  Seventh  Circuit,  along  with other
rulings, reversed the District Court's decision granting summary judgment to the
wholesaler defendants. The effect of the sharing agreement is that the Company's
maximum  potential loss would be $1.0 million,  regardless of the outcome of the
lawsuits,   plus  possible  legal  fee  expenses  in  excess  of  the  Company's
proportionate share of the $9.0 million reimbursement of such fees to be paid by
the manufacturer defendants.


                                      II - 26
<PAGE>


         The Company  believes  that the  allegations  of liability set forth in
these  lawsuits are without merit as to the  wholesaler  defendants and that any
attendant liability of the Company, although unlikely, would not have a material
effect  on  the  Company's   consolidated  financial  condition  or  results  of
operations.

         On March 20, 1997,  the Company  announced  that it had  terminated its
previously  announced merger agreement with IVAX Corporation  ("IVAX") (See Note
10). In connection  with such  termination  the Company filed a lawsuit  against
IVAX in the United States  District Court for the Southern  District of New York
alleging,  among other things, various breaches of its merger agreement.  On May
2, 1997,  IVAX filed an Answer and  Counterclaim  against  the  Company  denying
various  allegations in the Company's  complaint,  raising  various  affirmative
defenses and alleging that the Company has breached the merger agreement entered
into between the parties.  On August 15, 1997,  the Company and IVAX settled the
lawsuits over the abandoned merger.

         The  Company is  involved in various  additional  items of  litigation.
Although the amount of  liability  at  September  30, 1997 with respect to these
items of litigation  cannot be  ascertained,  in the opinion of management,  any
resulting  future  liability  will not have a  material  adverse  effect  on the
Company's consolidated financial position or results of operations.


10.      Other Unusual Items

         During  the second  quarter  of fiscal  1997,  the  Company  recorded a
one-time,  pre-tax  charge of $5.8  million  ($3.4  million,  net of income  tax
benefit  of $2.4  million,  or $.07  per  share)  for  expenses  related  to the
terminated merger with IVAX (see Note 9).


11.      Disclosures About Fair Value of Financial Instruments

         The  recorded  amounts  of the  Company's  cash and  cash  equivalents,
short-term  investments,  accounts  and  notes  receivable,  other  investments,
noncurrent  receivables,  accounts  payable and the revolving bank loan payable,
the 6 7/8%  Debentures  and the 7% Debentures at September 30, 1997  approximate
fair value.  The fair values of the  Company's 7 3/8% Notes and 7 1/4% Notes are
estimated  as follows,  based on the market  prices of these  instruments  as of
September 30, 1997:

<TABLE>
<CAPTION>
                                    Recorded
          Dollars in thousands       Amount          Fair Value
         =====================================================
         <S>                         <C>              <C>     
          7 3/8%  Notes               $149,411         $154,140
          7 1/4%  Notes                 99,732          103,801

</TABLE>


                                      II - 27
<PAGE>


12.      Pending Business Combinations

         On November  18,  1997,  the  Company  signed an  agreement  to acquire
substantially  all  of the  net  assets  of  Besse  Medical  Services,  Inc.,  a
privately-held  distributor of injectables,  diagnostics  and medical  supplies.
Under the agreement,  the Company would pay approximately $20.0 million in cash,
plus  estimated  expenses  of $.2  million,  acquire  assets  at fair  value  of
approximately $6.6 million and assume liabilities of approximately $4.6 million.
Consummation  of  this  transaction,  to be  accounted  for  as a  purchase  for
financial  reporting purposes,  is subject to certain conditions,  including the
receipt of regulatory  approvals,  and is expected to be completed in the second
quarter of fiscal 1998. The acquisition  will be financed from borrowings  under
the Credit Agreement.


         On August 23, 1997,  the Company signed a definitive  merger  agreement
with  Cardinal,  a distributor  of  pharmaceuticals  and provider of value-added
pharmaceutical  related  services,  headquartered  in Dublin,  Ohio.  The merger
agreement, which has been unanimously approved by the Boards of Directors of the
Company and Cardinal,  calls for the Company to become a wholly-owned subsidiary
of  Cardinal.  The combined  company is expected to be known as Cardinal  Bergen
Health, Inc. and would be heardquartered in Dublin, Ohio. Under the terms of the
proposed  merger,  shareowners  of the Company would receive 0.775 of a Cardinal
Common Share in exchange for each  outstanding  share of the  Company's  Class A
Common Stock. Cardinal would issue approximately 40 million Common Shares in the
transaction   and  would  assume  the   Company's   long-term   debt  which  was
approximately  $418.2  million  at  September  30,  1997.  The merger of the two
companies has been  structured as a tax-free  transaction and would be accounted
for as a pooling of interests for financial  reporting  purposes.  The merger is
currently  expected to be completed  by the end of the second  quarter of fiscal
1998, subject to the satisfaction of certain conditions,  including approvals by
the  Company's  shareowners  and  Cardinal's  shareholders,  and the  receipt of
certain regulatory approvals.








                                      II - 28
<PAGE>



INDEPENDENT AUDITORS' REPORT


To the Directors and Shareowners of
  Bergen Brunswig Corporation:


         We have audited the accompanying  consolidated balance sheets of Bergen
Brunswig  Corporation and subsidiaries as of September 30, 1997 and 1996 and the
related statements of consolidated earnings and retained earnings and cash flows
for each of the three  years in the  period  ended  September  30,  1997.  These
consolidated  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 in accordance with generally  accepted auditing
standards.  Those standards 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.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present  fairly,  in all material  respects,  the  financial  position of Bergen
Brunswig  Corporation  and  subsidiaries at September 30, 1997 and 1996, and the
results of their  operations and their cash flows for each of the three years in
the period ended  September  30, 1997,  in conformity  with  generally  accepted
accounting principles.





/s/ Deloitte & Touche LLP
-------------------------
Costa Mesa, California
October 31, 1997


                                      II - 29
<PAGE>





ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          
          FINANCIAL DISCLOSURE


          None.










































                                      II - 30
<PAGE>


                                    PART III


ITEM 10.          DIRECTORS OF THE REGISTRANT

                  The registrant incorporates by reference herein information to
be set forth in its  definitive  proxy  statement for its 1998 annual meeting of
shareowners that is responsive to the information  required with respect to this
Item. If such proxy  statement is not mailed to  shareowners  and filed with the
Securities  and  Exchange  Commission  within  120  days  after  the  end of the
registrant's  most recently  completed  fiscal year, the registrant will provide
such information by means of an amendment to this Annual Report on Form 10-K.



ITEM 11.          EXECUTIVE COMPENSATION

                  The registrant incorporates by reference herein information to
be set forth in its  definitive  proxy  statement for its 1998 annual meeting of
shareowners that is responsive to the information  required with respect to this
Item. If such proxy  statement is not mailed to  shareowners  and filed with the
Securities  and  Exchange  Commission  within  120  days  after  the  end of the
registrant's  most recently  completed  fiscal year, the registrant will provide
such information by means of an amendment to this Annual Report on Form 10-K.



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

                  The registrant incorporates by reference herein information to
be set forth in its  definitive  proxy  statement for its 1998 annual meeting of
shareowners that is responsive to the information  required with respect to this
Item. If such proxy  statement is not mailed to  shareowners  and filed with the
Securities  and  Exchange  Commission  within  120  days  after  the  end of the
registrant's  most recently  completed  fiscal year, the registrant will provide
such information by means of an amendment to this Annual Report on Form 10-K.



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                  The registrant incorporates by reference herein information to
be set forth in its  definitive  proxy  statement for its 1998 annual meeting of
shareowners that is responsive to the information  required with respect to this
Item. If such proxy  statement is not mailed to  shareowners  and filed with the
Securities  and  Exchange  Commission  within  120  days  after  the  end of the
registrant's  most recently  completed  fiscal year, the registrant will provide
such information by means of an amendment to this Annual Report on Form 10-K.











                                     III - 1

<PAGE>

                                     PART IV


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

(a)        Documents filed as part of this report:

         1.       Financial Statements
                  --------------------

                           The following  Consolidated  Financial  Statements of
                  Bergen Brunswig  Corporation and  Subsidiaries are included in
                  Part II, Item 8:

                           Statements  of  Consolidated  Earnings  and  Retained
                                    Earnings for the Years Ended  September  30,
                                    1997, 1996, and 1995

                           Consolidated Balance Sheets, September 30, 1997 and
                                    1996

                           Statements of  Consolidated  Cash Flows for the Years
                                    Ended September 30, 1997, 1996, and 1995

                           Notes to Consolidated Financial Statements

                           Independent Auditors' Report




         Financial  statements  and schedules not listed are omitted  because of
         the absence of the conditions  under which they are required or because
         all  material  information  is included in the  consolidated  financial
         statements or notes thereto.















                                      IV - 1
<PAGE>


ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON 
           FORM 8-K (Continued)


         3.       Exhibits
                  --------

                    ***2            Agreement and Plan of Merger,  dated August
                                    23, 1997, among Cardinal Health,  Inc.,
                                    Bruin Merger Corp. and the Company.

                      *3(a)         The  By-Laws as  amended  and  restated  and
                                    dated  November  8,  1996  are set  forth as
                                    Exhibit 3(a) in the Company's  Annual Report
                                    on Form  10-K  for  the  fiscal  year  ended
                                    September 30, 1996.

                      *3(b)         The Restated  Certificate  of  Incorporation
                                    dated May 23, 1994 is set forth as Exhibit 3
                                    to the Company's  Current Report on Form 8-K
                                    dated May 23, 1995.

                      *4(a)         The Senior  Indenture  for  $400,000,000  of
                                    Debt Securities dated as of December 1, 1992
                                    between  the  Company  and  Chemical   Trust
                                    Company  of  California  as  Trustee  is set
                                    forth  as  Exhibit  4.1  to  the   Company's
                                    Registration  Statement  on Form  S-3  dated
                                    December 1, 1992 (file no. 33-55136).

                                    The   Company   agrees  to  furnish  to  the
                                    Securities  and  Exchange  Commission,  upon
                                    request,  a copy  of  each  instrument  with
                                    respect to other issues of long-term debt of
                                    the Company, the authorized principal amount
                                    of which  does not  exceed  10% of the total
                                    assets  of  the  Company  on a  consolidated
                                    basis.

                     *4(b)          Rights  Agreement,  dated as of  February 8,
                                    1994,  between Bergen  Brunswig  Corporation
                                    and Chemical Trust Company of California, as
                                    Rights   Agent,   including   all   exhibits
                                    thereto, is incorporated herein by reference
                                    to Exhibit 1 to the  Company's  Registration
                                    Statement  on Form 8-A  dated  February  14,
                                    1994.

                 ***10(a)           Stock Option  Agreement,  dated August 23,
                                    1997 between Cardinal  Health,  Inc. and
                                    the Company.

                 ***10(b)           Support/Voting  Agreement,  dated August 23,
                                    1997, by and between Robert E. Martini
                                    and Cardinal Health, Inc.

                  **10(c)           Bergen Brunswig Corporation Deferred
                                    Compensation Plan.

                  **10(d)           Director  Indemnification  Agreement  and 
                                    Amendment  to  Director  Indemnification
                                    Agreement.



                                      IV - 2
<PAGE>


ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                  FORM 8-K (Continued)


         3.       Exhibits (Continued)
                  --------

                    10(e)           Bergen  Brunswig  Corporation  Bonus Plan as
                                    adopted  September 1, 1977 and amended
                                    October 19, 1990.

                  **10(f)           Bergen  Brunswig  Corporation  Stock  Option
                                    Plans,  other  than the  Amended  and
                                    Restated 1989 Stock Incentive Plan.

                    10(g)           Amended and Restated 1989 Stock Incentive
                                    Plan of Bergen  Brunswig  Corporation and
                                    Subsidiary Companies.

                   *10(h)           Form of Amended and Restated Supplemental
                                    Executive Retirement Plan.

                   *10(i)           Form of Amended and Restated Capital
                                    Accumulation Plan.

                                    Exhibits 10(h) and 10(I) above are set forth
                                    as Exhibits  10.1 and 10.2 in the  Company's
                                    Registration   Statement  on  Form  S-3  and
                                    Amendment  No.1 thereto  relating to a shelf
                                    offering of $400 million in securities filed
                                    February   1,  1996  and  March  19,   1996,
                                    respectively (file no. 333-631).

                   *10(j)           Amendment  No.1 to the Amended and  Restated
                                    Capital  Accumulation  Plan is set  forth as
                                    Exhibit 10(m) in the Company's Annual Report
                                    on Form  10-K  for  the  fiscal  year  ended
                                    September 30, 1996.

                   *10(k)           Amended and Restated  Executive Loan Program
                                    dated  March 3, 1995 is set forth as Exhibit
                                    10(g) in the Company's Annual Report on Form
                                    10-K for the fiscal year ended September 30,
                                    1995.

                   *10(l)           Employment Agreement and Schedule.

                   *10(m)           Severance Agreement and Schedule.

                                    Exhibits 10(l) and 10(m) above are set forth
                                    as Exhibit  10(q) and 10(r) in the Company's
                                    Annual  Report on Form  10-K for the  fiscal
                                    year ended September 30, 1994.

                   10(n)            Supplemental Agreement and Schedule.

                   10(o)            Retired Officers' Medical Plan.


                                      IV - 3
<PAGE>


ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                  FORM 8-K (Continued)


         3.       Exhibits (Continued)
                  --------

                      11            Computation of earnings per share for the
                                    three years ended September 30, 1997.

                      21            List of subsidiaries of Bergen Brunswig
                                    Corporation.

                      23            Independent Auditors' Consent.

                      24            Power of  Attorney  is set forth on the
                                    Signature  pages in Part IV of this Annual
                                    Report.

                      27            Financial Data Schedule for the year ended
                                    September 30, 1997.

                     99(a)          Statement Regarding Forward-Looking
                                    Information.

                     99(b)          Split Dollar Life Insurance Plan with
                                    Robert E. Martini.

                    *99(c)          Amended and Restated Credit  Agreement dated
                                    as  of  September   30,  1994  among  Bergen
                                    Brunswig  Drug  Company,   Bergen   Brunswig
                                    Corporation  and  Bank of  America  National
                                    Trust and Savings  Association  is set forth
                                    as  Exhibit  99(h) in the  Company's  Annual
                                    Report  on Form  10-K  for the  fiscal  year
                                    ended September 30, 1994.

                    *99(d)          First and Second  Amendments  to Amended and
                                    Restated   Credit   Agreement  dated  as  of
                                    February   27,  1995  and  March  16,  1996,
                                    respectively,  are  set  forth  as  Exhibits
                                    99(a)  and  99(b),   respectively,   in  the
                                    Company's  Quarterly Report on Form 10-Q for
                                    the quarter ended March 31, 1996.

                    *99(e)          Item 1 - Legal Proceedings of Part II of the
                                    Company's  Quarterly Report on Form 10-Q for
                                    the  quarter  ended  June 30,  1994 as filed
                                    with the Securities and Exchange Commission,
                                    are incorporated herein by reference in Part
                                    I, Item 3 of this Annual Report.

                    *99(f)          The  Company's  Current  Report  on Form 8-K
                                    dated  August  23,  1997,  relating  to  the
                                    execution of a definitive  merger  agreement
                                    with Cardinal Health,  Inc., is incorporated
                                    herein  by  reference  in Part I,  Item 1 of
                                    this Annual Report.


                                      IV - 4
<PAGE>


ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                  FORM 8-K (Continued)

         3.       Exhibits (Continued)
                  --------



 *       Document has  heretofore  been filed with the  Securities  and Exchange
         Commission  and is  incorporated  herein by  reference  and made a part
         hereof.

**       Incorporated  herein by reference to the exhibits  filed as part of the
         Company's Registration Statement on Form S-3 (Registration No. 33-5530)
         and  Amendment  Nos.  1 and  2  thereto  relating  to  an  offering  of
         $43,000,000  principal  amount  of  6  7/8%  Exchangeable  Subordinated
         Debentures due 2011, filed with the Securities and Exchange  Commission
         on May 8, July 1, and July 8, 1986, respectively.

***      Incorporated  herein by reference to the exhibits  filed as part of the
         Company's  Current  Report on Form 8-K  relating to the  execution of a
         definitive merger agreement with Cardinal Health,  Inc., filed with the
         Securities and Exchange Commission on August 27, 1997.


(b)      Reports on Form 8-K:

         On August 27,  1997,  a Current  Report on Form 8-K,  dated  August 23,
         1997, was filed  reporting  under Item 5, the execution of a definitive
         merger agreement with Cardinal Health, Inc.










                                      IV - 5
<PAGE>


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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.

                                        BERGEN BRUNSWIG CORPORATION


December 19, 1997                       By /s/  Donald R. Roden
                                           -------------------------------------
                                                Donald R. Roden
                                                President and
                                                Chief Executive Officer

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below,  hereby  constitutes and appoints Robert E. Martini,  Donald R. Roden and
Milan A. Sawdei and each of them  singly,  his true and lawful  attorney-in-fact
and agent,  with full power of substitution and  resubstitution,  for him and in
his  name,  place  and  stead,  in any and all  capacities,  to sign  any or all
amendments (including pre-effective amendments and post-effective amendments) to
this Annual Report on Form 10-K, and to file the same with all exhibits  thereto
and other  documents in connection  therewith,  with the Securities and Exchange
Commission,  granting  unto  said  attorney-in-fact  and  agent  full  power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in  person,  hereby  ratifying  and  confirming  all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

SIGNATURE                        TITLE                              DATE
---------                        -----                              ----

/s/   Robert E. Martini          Chairman of the Board         December 19, 1997
-----------------------          and Director
      Robert E. Martini          


/s/   Donald R. Roden            President and Chief           December 19, 1997
---------------------            Executive Officer
      Donald R. Roden            and Director (Principal
                                 Executive Officer)

/s/   Neil F. Dimick             Executive Vice President,     December 19, 1997
--------------------             Chief Financial Officer
      Neil F. Dimick             and Director
                                 (Principal Financial
                                 Officer and Principal
                                 Accounting Officer)


                                      IV - 6
<PAGE>


SIGNATURE                         TITLE                             DATE
---------                         -----                             ----

/s/   John Calasibetta            Senior Vice President        December 19, 1997
----------------------            and Director
      John Calasibetta            

/s/   Jose E. Blanco, Sr.         Director                     December 19, 1997
-------------------------
      Jose E. Blanco, Sr.

/s/   Rodney H. Brady             Director                     December 19, 1997
---------------------
      Rodney H. Brady

/s/   Charles C. Edwards, M.D.    Director                     December 19, 1997
------------------------------
      Charles C. Edwards, M.D.

/s/   Charles J. Lee              Director                     December 19, 1997
--------------------
      Charles J. Lee

/s/   George R. Liddle            Director                     December 19, 1997
----------------------
      George R. Liddle

/s/   James R. Mellor             Director                     December 19, 1997
---------------------
      James R. Mellor

/s/   George E. Reinhardt, Jr.    Director                     December 19, 1997
------------------------------
      George E. Reinhardt, Jr.

/s/   Francis G. Rodgers          Director                     December 19, 1997
------------------------
      Francis G. Rodgers








                                      IV - 7
<PAGE>



                                INDEX TO EXHIBITS
                                -----------------

EXHIBIT NO.                                                           PAGE NO.
-----------                                                           --------

   ***2           Agreement and Plan of Merger,  dated August 23,
                  1997,  among  Cardinal  Health, Inc., Bruin Merger
                  Corporation and the Company.

     *3(a)        The  By-Laws  as  amended  and  restated  and  dated
                  November 8, 1996 is set forth as Exhibit 3(a) in the
                  Company's  Annual Report on Form 10-K for the fiscal
                  year ended September 30, 1996.

     *3(b)        The Restated  Certificate of Incorporation dated May
                  23, 1994 is set forth as Exhibit 3 to the  Company's
                  Current Report on Form 8-K dated May 23, 1995.

     *4(a)        The  Senior   Indenture  for  $400,000,000  of  Debt
                  Securities  dated as of December 1, 1992 between the
                  Company and Chemical  Trust Company of California as
                  Trustee is set forth as Exhibit 4.1 to the Company's
                  Registration Statement on Form S-3 dated December 1,
                  1992 (file no. 33-55136).

                  The Company agrees to furnish to the Securities  and
                  Exchange  Commission,  upon request,  a copy of each
                  instrument with respect to other issues of long-term
                  debt of the Company, the authorized principal amount
                  of which does not exceed 10% of the total  assets of
                  the Company on a consolidated basis.

     *4(b)        Rights  Agreement,  dated as of  February  8,  1994,
                  between  Bergen  Brunswig  Corporation  and Chemical
                  Trust  Company  of  California,   as  Rights  Agent,
                  including  all  exhibits  thereto,  is  incorporated
                  herein by  reference  to Exhibit 1 to the  Company's
                  Registration  Statement  on Form 8-A dated  February
                  14, 1994.

  ***10(a)        Stock  Option  Agreement,  dated  August  23,  1997,
                  between Cardinal Health, Inc. and the Company.

  ***10(b)        Support/Voting Agreement,  dated August 23, 1997, by
                  and between  Robert E. Martini and Cardinal  Health,
                  Inc.

   **10(c)        Bergen Brunswig  Corporation  Deferred  Compensation
                  Plan.

   **10(d)        Director Indemnification  Agreement and Amendment to
                  Director Indemnification Agreement.

     10(e)        Bergen  Brunswig  Corporation  Bonus Plan as adopted       56
                  September 1, 1977 and amended October 19, 1990.

   **10(f)        Bergen  Brunswig  Corporation  Stock  Option  Plans,
                  other  than the  Amended  and  Restated  1989  Stock
                  Incentive Plan.


<PAGE>


                          INDEX TO EXHIBITS (CONTINUED)
                          -----------------------------

EXHIBIT NO.                                                            PAGE NO.
-----------                                                            --------

     10(g)        Amendments  to the Amended and  Restated  1989 Stock
                  Incentive Plan of Bergen  Brunswig  Corporation  and
                  Subsidiary Companies.

    *10(h)        Form of Amended and Restated Supplemental  Executive
                  Retirement Plan.

    *10(i)        Form of Amended and  Restated  Capital  Accumulation
                  Plan.

                  Exhibits 10(h) and 10(i) above are set forth as
                  Exhibits 10.1 and  10.2 in the  Company's
                  Registration  Statement Form S-3 and Amendment  No. 1
                  thereto  relating to a shelf  offering of $400 million
                  in securities  filed February  1, 1996 and March 19,
                  1996,  respectively (file no. 333-631).

    *10(j)        Amendment No. 1 to the Amended and Restated  Capital
                  ccumulation  Plan is set forth as  Exhibit  10(m) in
                  the  Company's  Annual  Report  on Form 10-K for the
                  fiscal year ended September 30, 1996.

    *10(k)        Amended and Restated  Executive  Loan Program  dated
                  March 3, 1995 is set forth as  Exhibit  10(g) in the
                  Company's  Annual Report on Form 10-K for the fiscal
                  year ended September 30, 1995.

    *10(l)        Employment Agreement and Schedule.

    *10(m)        Severance Agreement and Schedule.

                  Exhibit 10(l) and 10(m) above are set forth as 
                  Exhibits 10(q) and 10(r) in the Company's Annual Report
                  on Form 10-K for the fiscal  year ended September 
                  30, 1994.

     10(n)        Supplemental Agreement and Schedule.                       79

     10(o)        Retired Officers' Medical Plan.                            94

     11           Computation  of  earnings  per  share  for the three      166
                  years ended September 30, 1997.

     21           List of subsidiaries of Bergen Brunswig  Corporation      167

     23           Independent Auditors' Consent.                            168

     24           Power of  Attorney  is set  forth  on the  Signature
                  pages in Part IV of this Annual Report.



<PAGE>


                          INDEX TO EXHIBITS (CONTINUED)
                          -----------------------------

EXHIBIT NO.                                                            PAGE NO.
-----------                                                            --------

     27           Financial Data Schedule for the year ended September    169
                  30, 1997.

     99(a)        Statement Regarding Forward-Looking Information.        170

     99(b)        Split  Dollar  Life  Insurance  Plan with  Robert E.    171
                  Martini. 

    *99(c)        Amended and Restated  Credit  Agreement  dated as of
                  September  30,  1994  among  Bergen   Brunswig  Drug
                  Company,  Bergen  Brunswig  Corporation  and Bank of
                  America  National  Trust and Savings  Association is
                  set forth as Exhibit 99(h) in the  Company's  Annual
                  Report  on Form  10-K  for  the  fiscal  year  ended
                  September 30, 1994.

    *99(d)        First and Second  Amendments to Amended and Restated
                  Credit  Agreement  dated as of February 27, 1995 and
                  March  16,  1996,  respectively,  are set  forth  as
                  Exhibits  99(a)  and  99(b),  respectively,  in  the
                  Company's  Quarterly  Report  on Form  10-Q  for the
                  quarter ended March 31, 1996.

    *99(e)        Item  1 -  Legal  Proceedings  of  Part  II  of  the
                  Company's  Quarterly  Report  on Form  10-Q  for the
                  quarter  ended  June  30,  1994 as  filed  with  the
                  Securities and Exchange Commission, are incorporated
                  herein by reference in Part I, Item 3 of this Annual
                  Report.

    *99(f)        The  Company's  Current  Report  on Form  8-K  dated
                  August 23,  1997,  relating  to the  execution  of a
                  definitive  merger  agreement with Cardinal  Health,
                  Inc., is incorporated herein by reference in Part I,
                  Item 1 of this Annual Report.



*        Document has  heretofore  been filed with the  Securities  and Exchange
         Commission  and is  incorporated  herein by  reference  and made a part
         hereof.

**       Incorporated  herein by reference to the exhibits  filed as part of the
         Company's Registration Statement on Form S-3 (Registration No. 33-5530)
         and  Amendment  Nos.  1 and  2  thereto  relating  to  an  offering  of
         $43,000,000  principal  amount  of  6  7/8%  Exchangeable  Subordinated
         Debentures due 2011, filed with the Securities and Exchange  Commission
         on May 8, July 1, and July 8, 1986, respectively.

***      Incorporated  herein by reference to the exhibits  filed as part of the
         Company's  Current  Report on Form 8-K  relating to the  execution of a
         definitive merger agreement with Cardinal Health,  Inc., filed with the
         Securities and Exchange Commission on August 27, 1997.