MCKESSON CORP (MCK)

McKesson Corporation, incorporated in Delaware in 1994 with business roots dating to 1833, is a diversified healthcare services company operating on an April-to-March fiscal year that partners with biopharma companies, care providers, pharmacies, manufacturers, and governments to deliver products, services, and insights that make quality care more accessible and affordable. Since the second quarter of 2021, the company has operated through four reportable segments: U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International, with its former equity investment in the Change Healthcare LLC joint venture (split off in fiscal 2020) reported in "Other" for retrospective periods. The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar, and OTC pharmaceutical drugs and other healthcare products through 29 distribution centers, serving retail national accounts, community pharmacies (including the Health Mart network of roughly 4,700 franchised pharmacies), institutional healthcare providers, and oncology/specialty practices (including the U.S. Oncology Network and Ontada), while also sourcing generics via the ClarusONE joint venture with Walmart and distributing COVID-19 vaccines for the U.S. government.

The RxTS segment connects pharmacies, providers, payers, and biopharma companies to deliver medication access, affordability, and adherence solutions, dispensing support, and third-party logistics, working with over 50,000 pharmacies, 750,000 providers, and 650 biopharma brands. The Medical-Surgical Solutions segment distributes over 285,000 medical-surgical products, including McKesson's own brand, to more than 275,000 customers such as physician offices, surgery centers, post-acute facilities, and home health agencies, and also manages COVID-19 vaccine supply-kit assembly and distribution under contracts with HHS and Pfizer. The International segment provides pharmaceutical distribution and retail pharmacy services across 11 European countries and Canada, operating roughly 2,000 owned and 4,800 partner pharmacies in Europe under brands like Lloyds, and over 2,700 banner and 400 owned pharmacies in Canada under brands such as Rexall, IDA, Guardian, and Uniprix, alongside specialty pharmacy, market access consulting (PDCI), and online retail (Well.ca) operations; the company announced its intent in fiscal 2022 to exit its European businesses, completing sales of Austrian and UK operations and agreeing to sell additional EU assets, while continuing to evaluate exit options for Norway and Denmark.

McKesson's primary competitors in pharmaceutical distribution include AmerisourceBergen and Cardinal Health, with additional competition from various retail, technology, and medical-surgical supply companies; the company considers its scale and product/service diversity to be key competitive advantages, with price, service quality, product breadth, and innovation as critical competitive factors. As of March 31, 2022, McKesson employed approximately 75,000 people worldwide (33,000 in the U.S., 13,000 in Canada, and 29,000 in Europe, the majority of whom are expected to transfer with pending European divestitures), supported by workplace culture initiatives (I2CARE values and ILEAD leadership principles) and diversity programs, with women representing 64% and people of color 47% of its overall workforce. The company operates in a heavily regulated environment, subject to oversight from agencies such as the DEA, FDA, HHS, and CMS regarding controlled substances, government contracting rules, healthcare fraud and abuse statutes, drug pricing and supply-chain pedigree tracking laws, data privacy and security regulations (including HIPAA, GDPR, and CCPA), and environmental laws, and is a defendant in numerous opioid-related lawsuits, having reached a February 2022 agreement with two other major distributors to settle a substantial majority of state and local government opioid claims.

McKesson also holds a portfolio of patents, trademarks, and other intellectual property that it considers important but not individually material to its operations, and continues to invest in compliance, employee benefits, safety programs, and its evolving real estate and work-from-home strategies in response to the COVID-19 pandemic.