About McKesson Corp

McKesson Corporation (McKesson) operates as a diversified healthcare service company that is dedicated to advancing health outcomes for patients everywhere. The company’s teams partner with biopharma companies, care providers, pharmacies, manufacturers, governments, and others to deliver insights, products, and services to help make quality care more accessible and affordable. Segments The company operates through four segments: U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International. U.S. Pharmaceutical segment This segment distributes branded, generic, specialty, biosimilar and over-the-counter (OTC) pharmaceutical drugs, and other healthcare-related products. This segment provides practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices. In addition, the segment sells financial, operational, and clinical solutions to pharmacies (retail, hospital, and alternate site); and provides consulting, outsourcing, technological, and other services. The company’s U.S. Pharmaceutical segment provides distribution and logistics services for branded, generic, specialty, biosimilar, and OTC pharmaceutical drugs along with other healthcare-related products to customers. This business provides solutions and services to pharmacies, hospitals, oncology and other specialty practices, pharmaceutical manufacturers, biopharma partners, physicians, payers, and patients throughout the U.S. and Puerto Rico. The company also sources generic pharmaceutical drugs through its ClarusONE Sourcing Services LLP joint venture with Walmart, Inc (Walmart) (ClarusONE). The company’s U.S. Pharmaceutical segment operates and serves customers through a network of 29 distribution centers, including two strategic redistribution centers. The company invests in technology and other systems at all of its distribution centers to enhance safety, reliability, and product availability. For example, the company offers McKesson Connect, an internet-based ordering system that provides item look-up and real-time inventory availability, as well as ordering, purchasing, third-party reconciliation, and account management functionality. The company provides solutions to its customers, including supply management technology, marketing programs, managed care, repackaging products, and services to help them meet their business and quality goals. The company has four primary customer pharmaceutical distribution channels, such as retail national accounts, which include national and regional chains, food and drug combinations, mail order pharmacies, and mass merchandisers; community pharmacies and health; institutional healthcare providers, such as hospitals, health systems, integrated delivery networks, and long-term care providers; and oncology, biopharma, and other specialty partners. Retail National Accounts: The company provides business solutions that help retail national account customers increase revenues and profitability. Solutions include: Central Fill: Prescription refill service that enables pharmacies to more quickly refill prescriptions remotely, more accurately, and at a lower cost, while reducing inventory levels and improving customer service. Strategic Redistribution Centers: Two facilities totaling over 740,000 square feet that offer access to inventory for single source warehouse purchasing, including pharmaceuticals and biologics. These distribution centers also provide the foundation for a two-tiered distribution network that supports best-in-class direct store delivery. McKesson SynerGx: Generic pharmaceutical purchasing program and inventory management that helps pharmacies maximize their cost savings with a broad selection of generic drugs, competitive pricing, and one-stop shopping. Inventory Management: An integrated solution comprising forecasting software and automated replenishment technologies that reduce inventory-carrying costs. ExpressRx Track: Pharmacy automation solution featuring state-of-the-art robotics, upgraded imaging, and expanded vial capabilities, and industry-leading speed and accuracy in a small footprint. Community Pharmacy and Health: The company provides managed care contracting, branding and advertising, merchandising, purchasing, operational efficiency, and automation that help community pharmacists focus on patient care while improving profitability. Solutions include: Health Mart: A national network of approximately 4,700 independently-owned pharmacies and one of the industry’s most comprehensive pharmacy franchise programs. Health Mart provides franchisees support for managed care contracting, branding and local marketing solutions, the Health Mart private label line of products, merchandising solutions, and programs for enhanced patient support. Health Mart Atlas: Comprehensive managed care and reconciliation assistance services that help community pharmacies save time, access competitive reimbursement rates, and improve cash flow. McKesson Reimbursement Advantage (MRA): MRA is one of the industry’s most comprehensive reimbursement optimization packages, comprising financial services (automated claim resubmission), analytic services, and customer care. McKesson OneStop Generics: Generic pharmaceutical purchasing program that helps pharmacies maximize their cost savings with a broad selection of generic drugs, competitive pricing, and one-stop shopping. Health Mart and Sunmark: Complete line of products that provide community pharmacies with value-priced alternatives to national brands. FrontEdge: Strategic planning, merchandising, and price maintenance program that helps community pharmacies maximize store profitability. McKesson RxOwnership Program: Assist independent pharmacist owners with the opportunity to remain independent via succession planning and business operation loans. Health Mart Digital Portfolio: Introducing an enhanced online experience for pharmacies and patients. Institutional Healthcare Providers: Solutions include: RxO Advisory Services: A suite of supply chain management, pharmacy optimization, and 340B program advisory services. McKesson Plasma and Biologics: A robust portfolio of plasma-derivatives and biologic products. Outpatient and Specialty Pharmacy: A portfolio of services and solutions customized to each customer’s business and clinical strategy. Contracting and Contract/Purchasing Optimization: Solutions across generics, specialty, branded products, biosimilars, and 340B products, for inpatient and outpatient settings. Supply Assurance: Solutions and strategies to enhance product availability and proactively manage inventory of critical items. Patient Assistance Solutions: Solutions and resources for patient financial assistance and community benefit programs. Oncology, Biopharma, and Other Specialty Partners The U.S. Pharmaceutical segment provides a range of solutions to oncology and other specialty practices and offers community specialists (oncologists, rheumatologists, ophthalmologists, urologists, neurologists, and other specialists) an extensive set of customizable products and services designed to strengthen core practice operations, enhance value-based care delivery, and expand their service offering to patients. Community-based physicians in this business have broad flexibility and discretion to select the products and commitment levels that best meet their practice needs. Services in provider solutions include specialty drug distribution, group purchasing organizations (GPO) like Onmark, technology solutions, practice consulting services, and vaccine distribution, including its exclusive distributor relationship with the Centers for Disease Control and Prevention’s (CDC) Vaccines for Children program. Additionally, to support the U.S. efforts to fight the pandemic caused by the SARS-CoV-2 coronavirus (COVID-19), this segment has been distributing certain COVID-19 vaccines since December 2020 at the direction of the U.S. government. This business provides a variety of solutions, including practice operations, healthcare information technology, revenue cycle management and managed care contracting solutions, evidence-based guidelines, and quality measurements to support the U.S. Oncology Network (USON), one of the nation’s largest networks of physician-led, integrated, community-based oncology practices dedicated to advancing high-quality, evidence-based cancer care. The company also supports the U.S. Oncology Research, one of the nation’s largest research networks, specializing in oncology clinical trials. This segment includes the company’s Ontada business, providing software to support the clinical, financial, and operational needs of the company’s oncology practice partners. Ontada also partners with oncology providers and biopharma partners to perform real-world evidence studies, retrospective research, and to provide clinical data insights, advisory solutions and education opportunities. This segment also offers solutions, which enable its customers to drive greater efficiencies in their day to day operations, effectively managing their inventories and complying with complex government regulations. Solutions include McKesson Pharmacy Systems, MacroHelix, and Supply Logix, all of which provide innovative software technology and services that support retail pharmacies and hospitals. When the company discusses specialty products or services, it considers various factors, such as diseases requiring complex treatment regimens, such as cancer and rheumatoid arthritis; plasma and biologics products; ongoing clinical monitoring requirements, high-cost, special handling, storage, and delivery requirements and in some cases, exclusive distribution arrangements. Prescription Technology Solutions segment This segment serves the company’s biopharma and life sciences partners and patients. RxTS addresses medication challenges for patients throughout their journeys by working across healthcare to connect pharmacies, providers, payers, and biopharma companies to deliver innovative access and adherence solutions, as well as dispensing support services, third-party logistics and wholesale distribution support designed to benefit stakeholders. The company’s Prescription Technology Solutions segment works across healthcare to connect pharmacies, providers, payers, and biopharma companies to deliver medication access and adherence solutions that support patients from first prescription fill to ongoing therapy, regardless of their insurance coverage. RxTS has connections with most electronic health record systems, over 50,000 pharmacies, more than 750,000 providers, most payers and pharmacy benefit managers, and over 650 biopharma brands representing most therapeutic areas. Through its industry connections and ability to navigate the healthcare ecosystem, RxTS accelerates innovative solutions created to benefit healthcare stakeholders. Its comprehensive solution suites span across the entire patient journey, including medication access and affordability, prescription decision support and dispensing support services, as well as third-party logistics and wholesale distribution support, to help increase speed to therapy, reduce prescription abandonment, and support improved health outcomes for the patient. Medical-Surgical Solutions segment This segment provides medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. The company offers more than 285,000 national brand medical-surgical products, as well as McKesson’s own line of high-quality products through a network of distribution centers within the United States (U.S.). The company’s Medical-Surgical Solutions segment delivers medical-supply distribution, logistics, biomedical maintenance, and other services to healthcare providers across the alternate-site spectrum. The company’s more than 275,000 customers include physician offices, surgery centers, post-acute care facilities, hospital reference labs, and home health agencies. The company partners with manufacturers and channel partners to support its key target end-markets, including primary care, extended care, government, and other markets. The company distributes medical-surgical supplies (such as gloves, needles, syringes, and wound care products), infusion pumps, laboratory equipment, and pharmaceuticals. Through a network of distribution centers within the U.S., the company offers more than 285,000 products from national brand manufacturers and McKesson’s own brand of high-quality products. The company develops customized plans to address the product, operational, and clinical support needs of its customers, including tackling inventory management, reducing administrative burdens, and training and educating clinical staff. The company delivers for its customers, so they can deliver and care for their patients. Additionally, under contracts with the Department of Health and Human Services (HHS) and Pfizer, Inc., McKesson’s Medical-Surgical business leverages its expertise to manage the assembly, storage, and distribution of supply kits needed to administer COVID-19 vaccines, as well as some of the sourcing of those supplies. The kits are produced and distributed at the direction of HHS to support the administration of all COVID-19 vaccines approved in the U.S. International segment This segment provides distribution and services to wholesale, institutional, and retail customers in 11 European countries and Canada where the company owns, partners or franchises with retail pharmacies; and supports better, safer patient care by delivering vital medicines, supplies, and information technology solutions. The company operates through two businesses: Pharmaceutical Distribution and Retail Pharmacy. The company’s operations in Canada support better, safer patient care by delivering vital medicines, supplies, and information technology solutions to customers, and through several retail health and wellness brands, across Canada. The company’s European Pharmaceutical Distribution business delivers pharmaceutical and other healthcare-related products to pharmacies across Europe. This business functions as a vital link, using technology-enabled management systems at the company’s regional wholesale branches to connect manufacturers to retail pharmacies, supplying medicines and other products sold in pharmacies. The company’s European Retail Pharmacy business serves patients and consumers in European countries directly through approximately 2,000 of its own pharmacies and 4,800 participant pharmacies operating under brand partnership arrangements. This business provides customers with traditional prescription pharmaceuticals, non-prescription products, and medical services, as well as e-commerce operating under the Lloyds pharmacy branding in Belgium, Ireland, and Italy. In addition, the company partners with independent pharmacies under local banner programs. In fiscal 2022, the company announced its intention to exit its businesses in Europe. The company entered into an agreement to sell certain of its businesses in the European Union (E.U.) located in France, Italy, Ireland, Portugal, Belgium, and Slovenia, its German headquarters and wound-care business, part of a shared services center in Lithuania, and its ownership stake in a joint venture in the Netherlands (E.U. disposal group). The company also completed the sale of its Austrian business. On April 6, 2022, the company completed the sale of its retail and distribution businesses in the United Kingdom (U.K. disposal group). Of the owned and banner pharmacies, all except for approximately 300 owned and 100 partner pharmacies are included within these disposal groups. In executing its strategy to exit Europe, the company continues to evaluate suitable exit alternatives for its remaining businesses in Norway and Denmark. McKesson Canada Corporation (McKesson Canada) is one of the largest pharmaceutical wholesale and retail distributors in Canada. The wholesale business delivers products to retail pharmacies, hospitals, long-term care centers, clinics, and institutions in Canada through a national network of distribution centers; and provides logistics and distribution services for manufacturers. Beyond wholesale pharmaceutical logistics and distribution, McKesson Canada provides automation and technology solutions to its retail and hospital customers. Additionally, McKesson Canada provides comprehensive specialty health services to Canadians, including a national network of specialty pharmacies, personalized patient care and support programs, and INVIVA, Canada’s first and largest accredited network of private infusion clinics. McKesson Canada also owns and operates PDCI, Canada’s leading market access consultancy, supporting manufacturers as they introduce new products into the Canadian market. The Canada retail business includes over 2,700 banner pharmacies under the IDA, Guardian, The Medicine Shoppe, Remedy’sRx, Proxim, and Uniprix banners; and approximately 400 owned pharmacies under the Rexall brand where the company provides patients with greater choice and access, integrated pharmacy care and industry-leading service levels. McKesson Canada also owns and operates Well.ca, a leading Canadian online health and wellness retailer. Customers During 2022, sales to the company’s ten largest customers, including group purchasing organizations (GPOs) accounted for approximately 52% of its total consolidated revenues. Sales to the company’s largest customer, CVS Health Corporation (CVS), accounted for approximately 21% of its total consolidated revenues in 2022. The company’s ten largest customers included approximately 43%, and CVS was approximately 28%, of total trade accounts receivable as of March 31, 2022. The company also has agreements with GPOs, each of which functions as a purchasing agent on behalf of member hospitals, pharmacies, and other healthcare providers, as well as with government entities and agencies. Research and Development The company’s research and development expenses included $70 million for the year ended March 31, 2022. Government Regulation The company is subject to the operating and security standards of the U.S. Drug Enforcement Administration (DEA), the U.S. Food and Drug Administration (FDA), the Department of Health and Human Services (HHS), the Centers for Medicare & Medicaid Services (CMS), and various state boards of pharmacy, state health departments, and comparable agencies in the U.S. and other countries. Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the company must maintain administrative, physical, and technological safeguards to protect individually identifiable health information (protected health information) and ensure the confidentiality, integrity, and availability of electronic protected health information. The company is subject to significant compliance obligations under privacy laws, such as the General Data Protection Regulation (GDPR) in the European Union, the Personal Information Protection and Electronic Documents Act (PIPEDA) in Canada, and an expanding list of comprehensive state privacy laws in the United States, including the California Consumer Protection Act (CCPA). Laws, such as the federal Cyber Incident Reporting for Critical Infrastructure Act of 2022 may require the company to provide notifications of significant data privacy breaches or cybersecurity incidents before its investigations are complete. The company is subject to many environmental and hazardous materials regulations, including those relating to radiation-emitting equipment operated at the U.S. Oncology Network practices. History McKesson Corporation was founded in 1833. The company was incorporated in the state of Delaware in 1994.