McKesson Company Teardown Report 2025

2025

COMPANY TEARDOWN

McKesson

Alexa DiLuca

Marketing Manager

Michael McEwen

Pharmacy500 Market Analyst

michael.mcewen@rxinsider.com

Gregory Cianfarani, RPh

Founder & CEO

MEET THE

MARKET INTELLIGENCE TEAM

About RXinsider

Founded in 1999, RXinsider is a pharmacist-founded marketing/

communications (MARCOM) and market intelligence (INTEL) company

focused on pharmacy operations and the companies supporting

dispensing pharmacies. Through our publications, digital platforms,

market research, and training resources, RXinsider educates pharmacy

management and industry professionals on the products, services,

and trends that impact pharmacy operations across the supply chain.

RXinsider’s Market Intelligence (INTEL) Group performs market research

on the pharmacy operations supply chain and the Pharmacy500

companies. Through our weekly reports, digital awareness, and online

training, the INTEL Group educates Pharmacy500 professionals and

pharmacy management on the products and services impacting

pharmacy operations.

Jeff Rackliff

Pharmacy500 Market Analyst

jeff.rackliff@rxinsider.com

Emma Cidade

Pharmacy500 Market Analyst

emma.cidade@rxinsider.com

Lexi Cianfarani

Pharmacy500 Market Analyst

lexi.cianfarani@rxinsider.com

Report Lead

Lexi Cianfarani

A Breakdown of McKesson

The pharmacy operations supply chain contains many

companies that may be difficult to understand due to their size,

complexity, and dynamic M&A nature. The spirit of RXinsider’s

“Company Teardown” reports is to educate pharmacy

professionals, pharmacists, and pharmacy students on our

industry’s largest companies by simplifying, organizing, and

presenting publicly available information in a consistent and

organized format. Future Company Teardown reports will focus

on other complex companies including Cardinal Health, BD,

Cencora, Omnicell, RedSail, and others.

This McKesson Teardown report is independent and has not been

funded, reviewed, or edited by McKesson employees or company

representatives. All information in the following report is publicly

available. Company Teardown reports are training aids developed

for general education purposes and are biased toward presenting

the information we feel our pharmacy audience would find most

relevant. These reports may be incomplete, are general in nature,

and should not be used for making investing decisions. Please

refer to the McKesson website and 2024 annual report for details.

McKesson defines itself the following way: “McKesson is a

diversified healthcare services leader dedicated to advancing

health outcomes for patients everywhere. Their 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.”

Table of Contents

• Introduction.................................................... 2-3

• Company Snapshot..........................................4

• Strategic Initiatives............................................5

• McKesson History and Timeline....................6

• Corporate Map (National)................................7

• McKesson Division Breakdown......................8

• McKesson Division Org Charts:

• U.S Pharmaceutical.....................................9

• Prescription Technology Serv. (RxTS)...10

• Medical-Surgical........................................12

• International................................................13

• McKesson Market Risks .........................14-15

• McKesson Ventures........................................16

• Finance & Stock Performance......................17

• Customers & Competition ............................18

• 2025 Conferences ..........................................19

• References .......................................................20

• Pharmacy500 Companies ......................21-24

“Thanks to the hard work and

dedication to our 51,000-plus

employees, I know we will never

cease to find new ways to drive

a positive and lasting impact as

one Team McKesson.”

– CEO Brian Tyler

EMPLOYEE BREAKDOWN:

35,000 employees (U.S.)

13,000 employees (Canada)

3,000 employees (Europe)

Ranked ninth on Fortune500

$309B

FY24 revenue

285,000+

Customers served with medical-

surgical products

$270M

McKesson investments in technology generated

over $270 million in customer savings.

40M+

Pharmaceutical and medical

supply deliveries annually

COMPANY

SNAPSHOT

1,000+

Clinical trials actively enrolling

FISCAL YEAR:

April 1 — March 31

Connected to payers representing 94% of U.S. prescription volume

Strategic Initiatives of 2024

What’s new at McKesson?

•

Launched a new, centralized Human Resources (HR) portal and expanded capabilities for their virtual HR chatbot

to simplify processes, empower employees, and increase satisfaction.

•

Deployed a suite of new programs and technology enhancements to improve quality and productivity across

McKesson facilities, including the opening of two new distribution centers in the U.S. and continued the

modernization of our distribution network in Canada.

•

The U.S Oncology Network: The Network experienced record growth with the addition of several new practices,

expansion into four new states and for the first time, exceeded over 2,550 providers. Impact now extends to over

600 sites of care across 31 states.

•

The U.S Oncology Network: Rolled out Genospace clinical trial matching capabilities at the practices in The

Network.

•

Ontada: Integrated the biomarker testing guide and real-time genomics results into iKnowMed (EHR for

oncology).

•

Launch of a pilot initiative (Advancing Health Outcomes for All) aimed at advancing health equity in underserved

communities.

For more information, refer to the McKesson 2024 Annual Report.

CORE MCKESSON

INVESTMENTS

Artificial

Intelligence

Automation

Advanced

Analytics

Foundational Data

& Governance

McKesson

History and Timeline

1929: Despite the Great Depression, McKesson

achieved sales of $140 million.

1940s: McKesson Laboratories joins the wartime

effort through penicillin production.

1970s: Barcoded shelf labels and Economist™,

the 1st electronic order transmission system,

revolutionize drug distribution.

1990s: McKesson expands footprint by acquiring HBO

& Company, the world’s largest healthcare services

company and General Medical Supply, the nation’s largest

distributor of medical supplies and equipment. McKesson

also gained traction in Canada with the acquisition

of Medis Health and Pharmaceutical Services.

McKesson pioneers Acumax™, a barcode

warehouse-management solution.

1993: McKesson receives the Computerworld

Smithsonian Award for IT innovation.

1833: John McKesson and Charles Olcott open Olcott

& McKesson, a drug import and wholesale business.

1840s: McKesson forms the first-ever nationwide

wholesale pharmaceutical drug distribution network.

Ships carry McKesson products all over the world.

1853: To expand product offerings, John

McKesson partners with Daniel Robbins. McKesson

becomes the largest U.S. distributor of wholesale

pharmaceutical drugs, beverages and chemicals.

1900s

1800s

2000s

2010s

2006: McKesson acquires RelayHealth, the nation’s

leading pharmacy network. The CDC selects McKesson to

distribute vaccines for the Vaccines for Children Program.

2020s

2010: McKesson becomes a leader in specialty

cancer care with the acquisitions of The US

Oncology Network and US Oncology Research.

2017: McKesson acquires CoverMyMeds®

to provide patients cost-effective

solutions for medications.

2020: McKesson serves as the U.S. government’s

centralized distributor of COVID-19 vaccines and

ancillary supply kits; McKesson Europe distributes

COVID-19 vaccines in several countries.

2021: McKesson launches Ontada, an oncology business

designed to advance cancer research and care.

2024 and Beyond: Establishing new

ventures to broaden scope and innovate as a

diversified healthcare services leader.

McKesson Corporate Office Locations

(National)

HQ – Gold Star

Distribution

Pharmacy Technology and Services (RxTS)

CoverMyMeds (Under RxTS)

Oncology & Specialty

McKesson Ventures

KEY:

INTERNATIONAL LOCATIONS:

Laint-Laurent Quebec, CA

London, UK

McKesson Divisions Breakdown

U.S. Pharmaceutical

U.S. Pharmaceutical is a reportable segment that distributes branded, generic, specialty, biosimilar,

and over-the counter pharmaceutical drugs and other healthcare-related products in the United States

(“U.S.”). This segment also 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.

McKesson operates its business in four reportable segments:

U.S. Pharmaceutical, Prescription Technology Solutions (“RxTS”),

Medical-Surgical Solutions, and International.

Prescription Technology Solutions

(RxTS)

Prescription Technology Solutions (RxTS) is a reportable segment that combines automation and

McKesson’s ability to navigate the healthcare ecosystem to connect patients, pharmacies, providers,

pharmacy benefit managers, health plans, and biopharma to address patients’ medication access,

affordability, and adherence challenges. RxTS also offers prescription price transparency, benefit

insight, dispensing support services, as well as third-party logistics and wholesale distribution support

across various therapeutic categories and temperature ranges to biopharma customers throughout

the product lifecycle.

Medical-Surgical Solutions

Medical-Surgical Solutions is a reportable segment that 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. This segment offers national

brand medical-surgical products as well as McKesson’s own line of high-quality products through a

network of distribution centers within the U.S.

International

International is a reportable segment that includes our operations in Canada and Europe, bringing

together non-U.S.-based drug distribution services, specialty pharmacy, retail, and infusion care

services. McKesson’s Canadian operations deliver medicines, supplies, and information technology

solutions throughout Canada and includes Rexall Health retail pharmacies. During fiscal 2023,

McKesson completed transactions to sell certain of our businesses in the European Union (“E.U.

disposal group”), and their retail and distribution businesses in the United Kingdom (“U.K. disposal

group”). McKesson’s remaining operations in Europe provide distribution and services to wholesale

and retail customers in Norway where they own, partner, or franchise with retail pharmacies.

Retail National

Accounts

Community

Pharmacy and Health

Institutional

Healthcare

Providers

Oncology, Biopharma,

and Other Specialty

Partners

Central FillSM

Prescription refill service

Strategic Redistribution Centers

Two inventory facilities totaling over

740,000 square feet for single source

warehouse purchasing

McKesson SynerGx®

Generic drug purchasing, distribution,

and inventory management solution

Inventory Management

An integrated solution of forecasting

software and automated replenishment

technologies

ExpressRx TrackTM

Pharmacy automation solution

Health Mart®

A national network of approximately

4,500 independently-owned pharmacies

Health Mart Atlas®

Comprehensive managed care services

that help community pharmacies

McKesson Reimbursement AdvantageSM

(“MRA”)

Reimbursement optimization package

that includes financial services, analytic

services, and customer care.

McKesson Provider Pay®

Provider Pay is an automated

reconciliation and payment management

solution

McKesson OneStop Generics®

Generic pharmaceutical purchasing

program

Pinpoint Community Solutions

An inventory management system

targeted to independent pharmacy

owners with five or fewer stores

FrontEdgeTM

Strategic planning, merchandising, and

price maintenance program

McKesson RxOwnership Program

A no-fee resource for pharmacists and

pharmacy owners interested in buying,

starting, or selling an independent

pharmacy

RxO Advisory Services

A suite of supply chain management,

pharmacy optimization, and 340B

program advisory services

McKesson Plasma and Biologics

Specialty and plasma drug distributor

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 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

Onmark®

Group purchasing organizations (“GPO”)

SCRI Oncology, LLC

An oncology research business (51%

controlling interest)

Ontada®

McKesson’s oncology technology and

insights business

Biologics by McKesson

An independent specialty pharmacy in

oncology and other complex and rare

diseases

The US Oncology Network

Network of phsyician-led, integrated,

community based oncology practices

dedicated to advancing high quality,

evidence based cancer care

ClarusONE Sourcing Services LLP

Joint venture with Walmart Inc. that

sources generic pharmaceutical

drugs

Masters Pharmaceutical

A national drug distributor

specializing in independent, chain,

specialty, LTCs, and mail-order

pharmacies

McKesson Pharmacy Systems

Clinical workflow suite of solutions

EnterpriseRx

Pharmacy Management System

(In MPS)

Macro Helix

Develops innovative technology

and solutions for covered entities

and contract pharmacies for 340B

program participation

Supplylogix

A McKesson company providing

innovative pharmacy supply chain

solutions

McKesson ConnectSM

An internet-based ordering system

that provides item look-up and real-

time inventory availability

Other

McKesson Division:

U.S. Pharmaceutical

McKesson U.S Pharmaceutical segment 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)

(iv) oncology, biopharma, and other specialty partners

CoverMyMeds

Rx Savings Solutions

(RxSS)

RelayHealth

Connectivity solutions that enable

consumers and healthcare organizations to

securely exchange information

RxCrossroads by McKesson

Provides commercial support, customized

pharmacy dispensing, and logistics

services to manufacturers

McKesson Third Party LogisticsSM

Third-party logistics provider, is a d/b/a for

RxCrossroads

McKesson Prescription Automation

High-volume pharmacy dispensing

software

Central Fill as a Service (CFaaS)

Pay-per-script centralized fulfillment

solution

Software that helps employers,

health plans and members

reduce prescription drug costs

Electronic prior authorization

solutions (encompasses

RelayHealth, RxCrossroads

by McKesson, McKesson

Prescription Automation and

CoverMyMeds)

Helped to prevent an estimated

10.7 million prescriptions

from being abandoned due to

affordability challenges.

RxTS helped patients save more

than $8.8 billion on brand and

specialty medications

McKesson Division:

Prescription Technology

Solutions (“RxTS”)

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.

Programs

Partners

Products

UPrevent

Infection prevention program

McKesson FluWise

Offers healthcare facilities year-round

access to flu vaccines, supplies, and

resources

McKesson WoundCare Companion

Educational tools, clinical resources and

training materials dedicated to supporting

staff in providing the best wound care to

patients

Swift Medical

AI-powered digital wound care

technology platform

Relias

Accredited educational courses

for nurses and healthcare

professionals for wound and

ostomy care.

Remetric Health

Remote patient monitoring

provider

TruMed Systems (Accuvax)

Vaccine inventory storage and

handling biometric fridge, freezer,

and reporting system

MedPro Disposal

Medical waste disposal service

MedFlats

Returns and disposal solution

Brightree

Business Management Software

for Pharmacy

MedSol Laboratory Consulting

Clinical laboratory consulting

services

Orchard Software

Laboratory testing workflow

software solution

Medical & Surgical Supplies

Supplies (such as gloves, needles,

syringes, wound care, products) infusion

pumps, laboratory equipment, and

pharmaceutiucals

McKesson VerbalCare

VerbalCare is a mobile app that helps

support and automate communication

between providers and patients

McKesson Biomedical SolutionsTM

A full offering of sales, rental, equipment

service and device management for

infusion, enteral and ventilator devices

McKesson SupplyManagerSM

Inventory control management system

McKesson Capital

Medical equipment financing

McKesson Business AnalyticsSM

Interactive business analytics dashboard

McKesson’s 285,000+

customers include physician

offices, surgery centers, post-

acute care facilities, hospital

reference labs, and home health

agencies.

McKesson offers 245,000+

products from national brand

manufacturers and McKesson’s

own brand of high-quality

products

Relaymed

Cloud service that sends point

of care lab test results from

connected devices to your EHR

MedTrainer

Cloud-based healthcare training

software

Coronis Health

Medical billing and revenue cycle

management software

Sidra

Commercial real estate solutions

Steris

Surgical instrument management

services

McKesson Division:

Medical Surgical

McKesson’s Medical-Surgical Solutions segment delivers medical-supply

distribution, logistics, biomedical maintenance, and other services to healthcare

providers across the alternate-site spectrum.

Europe

Canada

McKesson

Europe

leading

international wholesale and retail company

and provider of logistics and services to

the pharmaceutical and healthcare sector.

McKesson’s

remaining

operations

Europe provide distribution and services to

wholesale and retail customers in Norway

where they own, partner, or franchise with

retail pharmacies.

RexallTM

Approximately 400 owned

pharmacies

Well.caTM

Online health and wellness retailer

Propel Rx

Pharmacy software solution to

support Canadian pharmacies

Mckesson Central Pharmacy

Services

Highly automated central fill

pharmacy for retail

McKesson SPS Pharmacy

A national network of pharmacies

offering specialty drug solutions

Sivem

Private label generic

pharmaceutical brand

Amega Health

Medical products and services

supplier

INVIVA

Accredited network of private

infusion clinics

PDCI

Market access consultancy

The Canada retail business

includes approximately 2,700

banner pharmacies under:

IDA®

Guardian®

The Medicine Shoppe®

Remedy’sRx®

Proxim®

Uniprix®

McKesson Canada Automation is a

leader in innovative solutions that help

hospitals improve their medication-use

processes. These solutions are reducing

medication errors and increasing levels

of patient safety while connecting with

all stages of the health care continuum.

HOSPITAL

PACMED / PACVision

Fully automated strip packager and

pouch verification device

RETAIL

PACMED (Series: NS, C, D)

Fully automated strip packagers

PACVision / PACVision C

Pouch verification devices

BlistAssist / BlistMed

Manual preparation and verification of

blister cards and Blister card packager

VBM 200F

A productive technology automating

blister card preparation and verification

HealthAssist

Health Monitoring Technology

CountMate

Fully-automated vial filling machine

CountAssist

Semi-automatic vial filling machine

Banner

Pharmacies

Solutions and

Businesses

Automation

McKesson Division:

International

The international segment provides distribution and services to wholesale,

institutional, and retail customers in Canada and Europe where McKesson owns,

partner, or franchise with retail pharmacies, and support better, safer patient care

by delivering vital medicines, supplies, and information technology solutions.

Beyond wholesale pharmaceutical logistics and distribution, McKesson Canada

provides automation and technology solutions to its retail and hospital customers.

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.

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

specialty

pharmacies,

personalized patient care and support

programs.

Overview of Business Revenues

U.S. Pharmaceutical

U.S. Pharmaceutical revenues for the year ended March 31st, 2024 increased $38.1 billion or 16%

compared to the prior year. Within the segment, sales to pharmacies and institutional healthcare

providers increased $34.1 billion and sales to specialty practices and other increased $4 billion.

Increases were primarily due to:

• Growth in specialty pharmaceuticals

• Higher volumes from retail national account customers

• Branded pharmaceutical price increases, partially offset by branded to generic drug conversions

Prescription Technology Solutions (“RxTS”)

Prescription Technology Solutions RxTS revenues for the year ended March 31, 2024 and increased

$382 million or 9% compared to the prior year.

Increases were primarily due to:

• Higher technology service revenues

• Increased volumes primarily in our third-party logistics and wholesale distribution services

Medical-Surgical Solutions

Medical-Surgical Solutions revenues for the year ended March 31st, 2024 increased $203 million or

2% compared to the prior year. Within the segment, sales to primary care customers increased $205

million and sales to extended care customers increased $185 million. Other sales declined $187 million.

Increases were primarily due to:

• Underlying business growth

Decreases were primarily due to:

• Lower contribution from the kitting and distribution of ancillary supplies used to administer

COVID-19 vaccines

International

International revenues for the year ended March 31st, 2024 and decreased $6.5 billion

or 31% compared to the prior year which included $323 million unfavorable effects of

foreign currency exchange fluctuations. Within the segment, sales in Europe declined

by $6.8 billion. This was partially offset by increased sales in Canada of $674 million.

Increases were primarily due to:

• Higher pharmaceutical distribution volumes

In FY24, revenue grew

12% to $309 Billion

Decreases were primarily due to:

• Completed divestitures of the E.U. disposal group

Research and development

expenses were $77 million

Notable McKesson Industry & Economic Risks

Healthcare reform such as changes in pricing and

reimbursement models

•

The healthcare industry and related government

programs are changing. Those changes have included

cuts in Medicare and Medicaid reimbursement levels,

changes in the basis for payments, shifts from fee-

for-service pricing towards value-based payments

and risk-sharing models, and increases in the use of

managed care..

Private challenges to government healthcare policy

•

Many pharmaceutical manufacturers have unilaterally

restricted sales under the 340B drug pricing program

to contract pharmacies. The 340B drug pricing

program requires manufacturers to offer discounts on

certain drugs purchased by “covered entities,” which

include safety-net providers. The Health Resources

and Services Administration has taken the position

that a covered entity may dispense such discounted

drugs through multiple contract pharmacies. Starting

in 2020, some manufacturers began to restrict such

practices..

Competition and industry consolidation

•

A few large suppliers control a significant share of the

pharmaceuticals market. This concentration reduces

our ability to negotiate favorable terms with suppliers

and causes us to depend on a smaller number

of suppliers. Many of our customers, including

healthcare organizations, have consolidated or joined

group purchasing organizations and have greater

power to negotiate favorable prices. Consolidation

by our customers, suppliers, and competitors might

reduce the number of market participants and give

the remaining enterprises greater bargaining power.

Changes or disruptions in product supply and difficulties

in sourcing or selling products

•

We experience difficulties and delays in sourcing

and selling products due to difficulties in complying

with the legal requirements for export or import of

pharmaceuticals or components; suppliers’ failure

to satisfy production demand; manufacturing or

supply problems such as inadequate resources; new

innovative therapies that are expensive, complex,

and fast-growing; product rationalization; and real or

perceived quality issues.

•

The FDA banned certain manufacturers from selling

raw materials and drug ingredients or finished goods

in the U.S. due to quality issues. Difficulties in product

manufacturing or access to raw materials or finished

goods could result in supplier production shutdowns,

product shortages, and other supply disruptions.

Distribution of generic pharmaceuticals

•

We have been impacted when, due to regulatory and

supply chain challenges, our supplier partners are not

able to deliver products that we have committed to

purchase and source from them. Input cost increases

and market shortages could result in ClarusONE, our

joint venture with Walmart Inc., being unsuccessful in

sourcing product to meet the needs of our customers,

or negatively impacting our margin.

•

Generic drug manufacturers offer a generic version of

branded pharmaceuticals and routinely challenge the

validity or enforceability of branded pharmaceutical

patents in order to launch the drug pre- or post-

loss of exclusivity. Patent holders have asserted

infringement claims against us for distributing those

generic versions they believed to have infringed a

patent, and the generic drug manufactures may not

fully indemnify us against such claims.

Impacted by tax legislation

•

The tax laws are extremely complex and subject to

varying interpretations. The European Union and other

countries (including countries in which we operate)

have committed to enacting changes to numerous

long-standing tax principles impacting how large

multinational enterprises are taxed. In particular,

the Organization for Economic Cooperation and

Development’s Pillar Two initiative introduces a 15%

global minimum tax applied on a country-by-country

basis which many jurisdictions have now committed

to enact.

Global climate change or by legal, regulatory, or market

responses to such change

•

Generic drug manufacturers offer a generic version of

branded pharmaceuticals and routinely challenge the

validity or enforceability of branded pharmaceutical

patents in order to launch the drug pre- or post-

loss of exclusivity. Patent holders have asserted

infringement claims against us for distributing those

generic versions they believed to have infringed a

patent, and the generic drug manufactures may not

fully indemnify us against such claims.

The following exerpts are from the McKesson 2024 Annual Report.

Cybersecurity incidents that might significantly

compromise our technology systems or might result in

material data breaches

•

The risk and efficacy of cyberattacks increases from

time to time due to a variety of internal and external

factors, including the adoption of sophisticated and

rapidly evolving techniques, such as adversarial AI,

and during political tensions, military conflicts, or

civil unrest. A cybersecurity incident might result in

harm to patients, consumers, or employees; litigation

or regulatory action; disruption of our business

operations; loss of customers or revenue; cash flow

impacts; and increased expense.

Contracts with government entities involve future funding

and compliance risks

•

The future volume of products or services purchased

by a government customer is often uncertain.

Our government contracts might not be renewed

or might be terminated for convenience with little

prior notice. Government contracts typically expose

us to higher potential liability than do other types

of contracts. Government contracts typically are

subject to procurement laws that include socio-

economic, employment practices, environmental

protection, recordkeeping and accounting, and other

requirements.

•

We are subject to government audits, investigations,

and oversight proceedings. If we fail to comply with

these requirements, or we fail an audit, we may be

subject to various sanctions such as monetary

damages, criminal and civil penalties, termination

of contracts, and suspension or debarment from

government contract work. These requirements

complicate

our

business

and

increase

our

compliance burden.

Third-party data is subject to limitations that could impede

the growth of our data services business.

•

We attempt to structure our diligence processes to

satisfy contractual and other operative data usage

rights and limitations associated with customer,

industry partners, and other third-party data flowing

through our businesses. These rights and limitations

can apply to confidential commercial data and

personal data provided to us. Failure to satisfy these

data usage rights and limitations can lead to legal

claims such as contractual breaches or privacy law

violations.

•

If our use of data is not consistent with our rights and

limitations, we might be required to pay substantial

damages; we might need to stop using, sharing,

and/or selling certain products and services; or we

might incur other financial, legal, and/or reputational

consequences. In order to reach our data strategy

growth and AI objectives, we might be unable to

negotiate and/or obtain at an acceptable cost the

data usage rights needed to advance such goals.

For more information, refer to the McKesson 2024 Annual Report.

Notable McKesson Company & Operational Risks

The following exerpts are from the McKesson 2024 Annual Report.

McKesson Ventures

McKesson Ventures describes itself as a strategic venture firm backed by McKesson

Corporation focusing on early and growth stage digital health and tech-enabled healthcare

services companies. McKesson Ventures targets companies that both catalyze and benefit

from the key changes taking place in the U.S. healthcare landscape.

Select Alumni Investments

Health-Tech Services

Current Portfolio Companies

Pharma Services

Current Portfolio Companies

IPO: HIMS

RECAP: NEA

IPO: ACCD

ACQ: WELLSKY

ACQ:

ILLUMINA

IPO: AMWL

ACQ:

HEALTHGRADES

ACQ: OPTUM

ACQ: ARSENAL

CAPITAL

ACQ: RESMED

ACQ: MEDIDATA

IPO: TDOC

Stock Analysis

Stock Price Performance Graph*: The following graph compares the

cumulative total stockholder return on McKesson’s common stock for

the periods indicated with the Standard & Poor’s (“S&P”) 500 Index and

the S&P 500 Health Care Index. The S&P 500 Health Care Index was

selected as a comparator because it is generally available to investors

and broadly used by other companies in the same industry.

The following is a one-year performance snapshot of notable publicly

traded companies in the Pharmacy500 for the previous year, ending on

Feruary 14th, 2025 at 4:00 PM EST.

Publicly Traded Pharmacy500 Companies

Customers & Competition

During fiscal 2024, sales to McKesson’s ten largest customers,

including group purchasing organizations (“GPOs”) accounted for

approximately 69% of their total consolidated revenues.

Sales to their largest customer, CVS Health Corporation (“CVS”),

accounted for approximately 28% of their total consolidated

revenues.

In fiscal 2023, McKesson extended their pharmaceutical

distribution partnership with CVS to June 2027.

Customers

U.S. Pharmaceutical and International Segments:

McKesson faces strong competition from international, national,

regional, and local full-line, short-line, and specialty distributors,

service merchandisers, self-warehousing chain drug stores,

manufacturers engaged in direct distribution, third-party logistics

companies, and large payer organizations. McKesson’s retail

businesses, which primarily operate in their International

segment, face competition from various global, national, regional,

and local retailers, including chain and independent pharmacies.

McKesson considers the largest competitors in distribution,

wholesaling, and logistics to be Cencora, Inc. and Cardinal

Health, Inc.

Competition

RxTS:

McKesson’s RxTS business experiences substantial competition

from many companies, including other biopharma services

companies, software services firms, consulting firms, shared

service vendors, and internet-based companies with technology

applicable to the healthcare industry. Competition in this business

varies in size from large to small companies, in geographical

coverage, and in scope and breadth of products and services

offered.

Medical-Surgical Solutions:

McKesson’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, home health

care agencies, and other alternative sites with competition

from a wide range of national and regional medical supply and

equipment distributors throughout the U.S.

In addition, McKesson competes with other service providers and

healthcare manufacturers, as well as other potential customers

of our businesses, which may from time to time decide to develop,

for their own internal needs, supply management capabilities

that might otherwise be provided by our businesses.

Key competitive factors include:

• Price

• Quality of service

• Breadth of product lines

• Innovation

• Adoption of new and evolving technologies

• Convenience to the customer

2025 Conferences

McKesson Ideashare

NASHVILLE | JULY 10-13, 2025

McKesson ideaShare is the nation’s premier community

pharmacy event that empowers current and future

independent pharmacists to foster deeper connections,

discover ways to innovate and thrive, and strengthen their

collective voice.

2,500+

Pharmacy locations represented every year

140+

Exhibitors and solutions available to attendees

50+

Educational sessions, workshops and networking events

Learn more: https://mckessonideashare.com/

Mckesson Accelerate

LAS VEGAS | NOVEMBER 3-5, 2025

McKesson Accelerate is a one-of-a-kind event that will bring

together more than 1,000 physicians, clinicians, practice

leaders and industry experts for invaluable leadership

sessions, unparalleled networking opportunities, and peer-to-

peer learning, all aimed at bringing the future of oncology to

your practice and patients today.

Bringing together The US Oncology Network Annual

Conference and the Onmark Oncology Practice Summit while

adding more must-see experiences to create the community

oncology event you can’t miss.

Learn more: https://www.mckessonaccelerate.com/

References

McKesson. (2024). Annual report.https://s24.q4cdn.com/128197368/files/doc_financials/

annual/2024/756587_002_web_bmk.pdf

McKesson. (n.d.). Contact us. McKesson.

https://www.mckesson.com/contact-us/

McKesson. (n.d.). McKesson.

https://www.mckesson.com/

CoverMyMeds. (n.d.). CoverMyMeds.

https://www.covermymeds.health/

McKesson Canada. (n.d.). McKesson Canada.

https://www.mckesson.ca/

McKesson Ventures. (n.d.). McKesson Ventures.

https://ventures.mckesson.com/

McKesson Medical-Surgical. (n.d.). McKesson Medical-Surgical. https://mms.mckesson.com/

McKesson Corporation. (n.d.). McKesson Pharmaceutical. https://www.mckesson.com/about-

mckesson/businesses/mckesson-pharmaceutical/

McKesson Pharmacy Management: McKesson Corporation. (n.d.). Pharmacy management.

https://www.mckesson.com/pharmacy-management/

McKesson Biopharma: McKesson Corporation. (n.d.). Biopharma. https://www.mckesson.com/

biopharma/

McKesson History: McKesson Corporation. (n.d.). Our history. https://www.mckesson.com/

about-mckesson/our-history/

McKesson Corporation. (n.d.). About McKesson. https://careers.mckesson.com/en/about-

mckesson

McKesson Corporation. (n.d.). McKesson Accelerate.

https://www.mckessonaccelerate.com/

McKesson Corporation. (n.d.). McKesson ideaShare.

https://mckessonideashare.com/

MastersRX. (n.d.). Masters Pharmaceutical distributor & pharmaceutical wholesaler.

https://mastersrx.com/