McKesson Corporation, together with its subsidiaries, is a diversified healthcare services leader 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.
Business Segments
The company operates its business in four reportable segments: U.S. Pharmaceutical, Prescripti...
McKesson Corporation, together with its subsidiaries, is a diversified healthcare services leader 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.
Business Segments
The company operates its business in four reportable segments: U.S. Pharmaceutical, Prescription Technology Solutions (‘RxTS’), Medical-Surgical Solutions, and International.
The company’s U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter (‘OTC’) pharmaceutical drugs, and other healthcare-related products in the United States (‘U.S.’). 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, alternate sites) and provides consulting, outsourcing, technological, and other services.
The company’s Prescription Technology Solutions segment helps solve medication access, affordability, and adherence challenges for patients by working across healthcare to connect patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma. RxTS serves the company’s biopharma and life sciences partners, delivering innovative solutions that help people get the medicine they need to live healthier lives. RxTS also offers prescription price transparency, benefit insight, dispensing support services, as well as third-party logistics and wholesale distribution support designed to benefit stakeholders.
The company’s Medical-Surgical Solutions 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 245,000 national brand medical-surgical products, as well as McKesson’s own line of high-quality products through a network of distribution centers in the U.S.
The company’s International segment provides distribution and services to wholesale, institutional, and retail customers in Canada and Europe where the company owns, partners, or franchises with retail pharmacies, and support better, safer patient care by delivering vital medicines, supplies, and information technology solutions.
U.S. Pharmaceutical Segment
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, payors, and patients throughout the U.S. The company also sources generic pharmaceutical drugs through the company’s ClarusONE Sourcing Services LLP joint venture with Walmart Inc. (‘ClarusONE’).
The company’s U.S. Pharmaceutical segment operates and serves customers through a network of 27 distribution centers in the U.S., including two strategic redistribution centers. The company invests in technology and other systems at all of the company’s distribution centers to enhance safety, reliability, and product availability. For example, the company offers McKesson ConnectSM, 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 makes extensive use of technology as an enabler to ensure customers have the right products at the right time in the right place.
To maximize distribution efficiency and effectiveness, the company follow the Six Sigma methodology, which is an analytical approach that emphasizes setting high-quality objectives, collecting data, and analyzing results to a fine degree in order to improve processes, reduce costs, and enhance service accuracy and safety. The company provides solutions to its customers including supply management technology, world-class marketing programs, managed care, repackaging products, and services to help them meet their business and quality goals. The company continues to implement information systems to help achieve greater consistency and accuracy both internally and for the company’s customers, as well as make investments to increase capacity and automation.
The company has four primary customer pharmaceutical distribution channels: (i) retail national accounts, which include national and regional retail chains, food and drug combinations, mail order pharmacies, and mass merchandisers, (ii) community pharmacies and health (formerly described as independent, small, and medium chain retail pharmacies), (iii) institutional healthcare providers such as hospitals, health systems, integrated delivery networks, and long-term care providers, and (iv) oncology, biopharma, and other specialty partners.
Retail National Accounts: The company provides business solutions that help the company’s 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 consisted of 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 strengthens the overall health of community pharmacies and elevate the role they play in people’s lives. The company accomplishes this by providing supply chain excellence, pharmacy and patient solutions, as well as supporting independent pharmacies through industry and legislative advocacy. The company’s pharmacy and patient solutions include:
Health Mart – A national network of approximately 4,500 independently-owned pharmacies and one of the industry’s most comprehensive pharmacy franchise programs. Health Mart provides franchisees support for operational excellence, managed care contracting, marketing, merchandising solutions, and clinical programs to enhance patient care.
Health Mart Atlas – Comprehensive managed care 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 Provider Pay – Provider Pay is an automated reconciliation and payment management solution designed to maximize third-party cash flow and pursue unpaid claims.
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.
Pinpoint Community Solutions – McKesson’s perpetual inventory management system targeted to independent pharmacy owners with five or fewer stores. The solution provides customers the opportunity to improve cash flow and increase efficiency with inventory visibility to help maximize operational performance.
FrontEdge – Strategic planning, merchandising, and price maintenance program that helps community pharmacies maximize store profitability.
McKesson RxOwnership Program – A confidential, no-fee resource for pharmacists and pharmacy owners interested in buying, starting, or selling an independent pharmacy, regardless of their pharmacy affiliation.
Institutional Healthcare Providers: At McKesson, the company is relentless in its pursuit of opportunities to achieve operational efficiency, reduce waste, and improve the financial performance of the company’s customers so they can achieve more of their goals today and into the future. Solutions include:
RxO Advisory Services – A suite of supply chain management, pharmacy optimization, and 340B program advisory services driven by data and analytics.
McKesson Plasma and Biologics – Specialty and plasma drug distributor that leads in market exclusive drug access; partner to health systems customers in navigating the complexities of limited distribution drug; and optimization of McKesson Distribution benefits.
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 – Technologies and services that enable health systems and providers to better financially support their patients and community benefit programs.
The U.S. Pharmaceutical 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.
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 solutions 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 the company’s exclusive distributor relationship with the Centers for Disease Control and Prevention’s (‘CDC’) Vaccines for Children program. Additionally, McKesson has proudly supported the U.S. efforts to fight the pandemic caused by the SARS-CoV-2 coronavirus (‘COVID-19’) by distributing certain COVID-19 vaccines since December 2020 at the direction of the U.S. government. This program concluded in the second quarter of fiscal 2024, at which point the company began transitioning the distribution of COVID-19 vaccines commercially through the company’s customer pharmaceutical distribution channels.
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. SCRI Oncology, LLC, an oncology research business in which the company owns a 51% controlling interest, is one of the nation’s largest research networks and specializes in enhancing clinical trial access and availability across the country.
This segment includes Ontada, McKesson’s oncology technology and insights business providing software to support the clinical, financial, and operational needs of the company’s oncology practice customers. 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.
Prescription Technology Solutions Segment
The company’s Prescription Technology Solutions segment works across healthcare to connect patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma to deliver medication access 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, approximately 950,000 providers, most pharmacy benefit managers and health plans, and has supported over 650 biopharma brands representing most therapeutic areas. Through its industry connections and ability to navigate the healthcare ecosystem, RxTS offers 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, prescription price transparency, benefit insight 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. In the past year, RxTS helped patients save more than $8.8 billion on brand and specialty medications, helped to prevent an estimated 10.7 million prescriptions from being abandoned due to affordability challenges, and helped patients access their medicine more than 94 million times.
Medical-Surgical Solutions Segment
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 285,000 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 in the U.S., the company offers more than 245,000 products from national brand manufacturers and McKesson’s own brand of high-quality products. Through the right mix of products and services, the company helps improve efficiencies, profitability, and compliance. The company also never loses focus on helping customers improve patient and business outcomes. The company develops customized plans to address the product, operational, and clinical support needs of the company’s customers, including 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.
International Segment
The company’s International segment provides distribution and services to wholesale, institutional, and retail customers in Canada and Europe where the company owns, partners, or franchises with retail pharmacies. The company’s operations in Canada also 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.
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 and provides biopharma services to manufacturers, 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 approximately 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.caTM, a leading Canadian online health and wellness retailer.
In July 2021, the company announced its intention to exit the company’s businesses in Europe. The company divested the majority of its European businesses during fiscal 2022 and fiscal 2023. The company’s remaining operations in Europe provide distribution and services to wholesale and retail customers in Norway where the company own, partner, or franchise with retail pharmacies. The company continues to evaluate suitable exit alternatives for the company’s retail and distribution businesses in Norway.
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 U.S. Department of Health and Human Services (‘HHS’), the Centers for Medicare & Medicaid Services (‘CMS’), various state boards of pharmacy, state health departments, and comparable agencies in the U.S. and other countries.
The company is subject to significant compliance obligations under privacy laws such as the Health Insurance Portability and Accountability Act of 1996 (‘HIPAA’), 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 U.S.
Customers
During fiscal 2024, sales to the company’s ten largest customers, including group purchasing organizations (‘GPOs’) accounted for approximately 69% of the company’s total consolidated revenues. Sales to the company’s largest customer, CVS Health Corporation (‘CVS’), accounted for approximately 28% of the company’s total consolidated revenues in fiscal 2024. The company’s ten largest customers comprised approximately 43%, and CVS was approximately 24%, of the company’s total trade accounts receivable at March 31, 2024. 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. The accounts receivable balances are with individual members of the GPOs, and therefore no significant concentration of credit risk exists. Substantially all of these revenues and accounts receivable are included in the company’s U.S. Pharmaceutical segment.
Research and Development
The company’s research and development expenses were $77 million for the year ended March 31, 2024 (fiscal 2024).
History
McKesson Corporation was founded in 1833. The company was incorporated in the state of Delaware in 1994.
