McKesson Corporation Summary

Business Overview

McKesson Corporation is a diversified healthcare services leader focused on improving health outcomes for patients globally. The company partners with biopharma firms, healthcare providers, pharmacies, manufacturers, and governments to deliver insights, products, and services that make quality care accessible and affordable.

Business Segments & Operations

The company operates through four primary reportable segments:

1. U.S. Pharmaceutical

• Distributes branded, generic, specialty, biosimilar, and OTC pharmaceutical drugs and healthcare products across the U.S.
• Provides practice management, clinical support, technology, and business solutions to community oncology and specialty practices.
• Sells financial, operational, and clinical solutions to various pharmacies (retail, hospital, alternate sites).
• Operates 27 distribution centers in the U.S.
• Sourcing: Includes a joint venture (ClarusONE) with Walmart for generic pharmaceuticals.
• Major customers include retail national accounts (e.g., large retail chains), community pharmacies, hospitals, and oncology and biotech clients.
• Sales to its ten largest customers, including GPOs, account for 72% of total revenues.
• Largest customer: CVS Health, accounting for approximately 24% of revenue in fiscal 2025.
• Revenue for U.S. Pharmaceutical segment: Not explicitly stated; overall company revenue for fiscal 2025 increased 16% year-over-year.

2. Prescription Technology Solutions (RxTS)

• Connects patients, pharmacies, providers, pharmacy benefit managers, and health plans to address medication access, affordability, and adherence.
• Offers technology services like electronic prior authorization, price transparency, benefit insights, dispensing support, and third-party logistics.
• Supported over 650 biopharma brands.
• Facilitated over 100 million medicine accesses and helped save over $10 billion on medications in the past year.
• Works across therapeutic categories with solutions spanning the entire medication journey.

3. Medical-Surgical Solutions

• Provides medical-surgical supply distribution, logistics, biomedical maintenance, and clinical services.
• Supplies over 340,000 customers, including physician offices, surgery centers, long-term care, hospitals, labs, and home health.
• Offers more than 245,000 products, including national brands and McKesson’s own line.
• Announced plans in May 2025 to separate this segment into an independent company.

4. International

• Operations in Canada and Norway.
• In Canada, McKesson Canada is a major distributor delivering medicines and supplies via its network of distribution centers to pharmacies, hospitals, clinics, and institutions.
• During fiscal 2025, completed the sale of Rexall and Well.ca businesses in Canada.
• Owns and franchises retail pharmacies under banners like IDA, Guardian, Remedy’sRx, and Uniprix.
• Norwegian operations provide distribution and services to wholesale and retail pharmacies.
• Exited most European operations during fiscal 2022-2023 but continues in Norway.

Employees and Customers

• Employees: Approximately 45,000 worldwide at fiscal year-end (March 31, 2025).
  • U.S.: ~36,000 employees.
  • Canada: ~5,000 employees.
  • Rest of the world: ~4,000 employees.
• Customers: Thousands across segments, with major focus on pharmacies, hospitals, and specialty practices.
• Top Customers: The top 10 customers, including GPOs, account for 72% of revenue.
• Largest Customer: CVS Health, representing roughly 24% of total revenue in fiscal 2025.

Revenue & Income

• Revenue: Increased by 16% in fiscal 2025 compared to the prior year.
• Earnings: Diluted EPS from continuing operations rose to $25.72 in fiscal 2025 from $22.39 in 2024.

Key Financial & Strategic Actions

• Completed Canadian retail business divestitures with a $667 million impairment charge.
• Acquired a 70% stake in Community Oncology Revitalization Enterprise Ventures, LLC for approximately $2.49 billion.
• Acquired an 80% controlling interest in PRISM Vision Holdings, LLC.
• Share repurchase programs and regular dividend payments; dividend per share increased to $0.71 quarterly in July 2024.

Summary

McKesson is a leading healthcare services and distribution company with a broad network of distribution centers, a large customer base mainly composed of pharmacies and healthcare providers, and significant revenue growth driven by strategic acquisitions, divestitures, and operational expansion. The company focuses on innovation through technology solutions, including AI and data analytics, to enhance healthcare delivery.