McKesson Corporation
McKesson Corporation is an American company distributing pharmaceuticals and providing health information technology, medical supplies, and care management tools. The company had revenues of $208.4 billion in 2018.
McKesson is based in Irving, Texas and distributes health care systems, medical supplies and pharmaceutical products. Additionally, McKesson provides extensive network infrastructure for the health care industry; also, it was an early adopter of technologies like bar-code scanning for distribution, pharmacy robotics, and RFID tags.
It is a Fortune Global 500 company, and the 7th highest revenue generating company in the United States.
History
Founded in New York City as Charles M. Olcott in 1828 and later as Olcott, McKesson & Co. by Charles Olcott and McKesson in 1833, the business began as an importer and wholesaler of botanical drugs. A third partner, McKesson joined the enterprise as it grew, and it was renamed McKesson & Robbins following Olcott's death in 1853.The company successfully emerged from one of the most notorious business/accounting scandals of the 20th century—the McKesson & Robbins scandal, a watershed event that led to major changes in American auditing standards and securities regulations after being exposed in 1938. In the 1960s, McKesson & Robbins merged with Foremost Dairies of San Francisco to form Foremost-McKesson Inc. Foremost was sold in 1982.
Since the mid-20th century, McKesson has derived an increasing proportion of its income from medical technology, rather than pharmaceuticals. This culminated in its purchase of medical information systems firm HBO & Company in 1999; the combined firm was briefly known as McKessonHBOC. Accounting irregularities at HBOC reduced the company's share price by half, and resulted in the dismissal and prosecution of many HBOC executives. The firm's name reverted to "McKesson" in 2001. McKesson Technology Solutions, as the information technology branch of the company is now known, has continued to increase its market share through acquisitions, notably Per Se Technologies, RelayHealth, and Practice Partner.
In 2010, McKesson acquired the oncology and physician services company US Oncology, Inc. for $2.16 billion, which was integrated into the McKesson Specialty Health business.
On June 24, 2013, The Wall Street Journal reported that McKesson Chairman and CEO John Hammergren's pension benefits of $159 million had set a record for "the largest pension on file for a current executive of a public company, and almost certainly the largest ever in corporate America".
In addition to its offices throughout North America, McKesson also has international offices in Australia, Ireland, France, the Netherlands, and the United Kingdom. Today, McKesson is one of the oldest operating businesses in the United States.
In 2014, McKesson acquired Celesio to become one of the world's largest health care companies, with over $179 billion in annual revenue.
In June 2016, McKesson announced plans to merge its IT business with Change Healthcare.
In 2017, McKesson was involved in a number of lawsuits against the state of Arkansas over the supply of vecuronium bromide. McKesson was under contract by Pfizer not to sell to any correctional facility that authorized and carried out Capital punishment.
In November 2018, the company announced it would relocate its headquarters from San Francisco to Irving, Texas in April 2019.
On April 1, 2019, the company officially moved their headquarters to Irving, Texas.
In February 2020, McKesson Corp announced that it would part ways with Change Healthcare. McKesson would give up its three seats on Change's board of directors, and as an entity will no longer own any portion of Change.
Finances
For the fiscal year 2018, McKesson reported earnings of US$67 million, with an annual revenue of US$208.357 billion, an increase of 5.0% over the previous fiscal cycle. McKesson's shares traded at over $142 per share, and its market capitalization was valued at over US$24.3 billion in October 2018. As of 2018, McKesson is ranked #6 on the Fortune 500 rankings of the largest United States corporations by total revenue.| Year | Revenue | Net income | Total assets | Price per share | Employees |
| 2005 | 79,096 | −157 | 18,775 | 38.30 | |
| 2006 | 86,983 | 751 | 20,961 | 46.28 | |
| 2007 | 92,977 | 913 | 23,943 | 54.33 | |
| 2008 | 101,703 | 990 | 24,603 | 48.16 | |
| 2009 | 106,632 | 823 | 25,267 | 45.48 | |
| 2010 | 108,702 | 1,263 | 28,189 | 60.50 | |
| 2011 | 112,084 | 1,202 | 30,886 | 75.10 | |
| 2012 | 122,321 | 1,403 | 33,093 | 85.10 | |
| 2013 | 122,196 | 1,338 | 34,786 | 119.47 | 43,500 |
| 2014 | 137,392 | 1,263 | 51,759 | 182.26 | 42,800 |
| 2015 | 179,045 | 1,476 | 53,870 | 208.52 | 70,400 |
| 2016 | 190,884 | 2,258 | 56,523 | 165.02 | 68,000 |
| 2017 | 198,533 | 5,070 | 60,969 | 149.21 | 78,000 |
| 2018 | 208,357 | 67 | 60,381 | 142.30 | 78,000 |
Divisions
McKesson Provider Technologies
McKesson Provider Technologies is the retail name for McKesson Technology Solutions; the software development division of McKesson. Their customer base in the United States includes 50% of all health systems, 20% of all physician practices, 25% of home care agencies, and 77% of health systems with more than 200 beds.On June 20, 2005, McKesson Provider Technologies acquired Medcon, Ltd., an Israeli company which provides Web-based cardiac image and information management solutions for heart centers, that includes: diagnostic digital image management, archiving, procedure reporting, and workflow management.
In October 2013, McKesson agreed to buy a 50% stake in German peer Celesio for $8.3 billion.
McKesson Medical Supplies and Equipment
McKesson Medical-Surgical offers a large selection of national health care brands, along with McKesson's exclusive brand of medical products.Their online medical supply ordering platform serves the needs of physician offices, surgery centers, home health agencies, DMEs, labs, and long-term-care facilities.
In 2015 McKesson Medical-Surgical opened its new headquarters in Richmond, Virginia.
Health Mart pharmacy franchise
is a network of over 4,000 independently owned and operated pharmacies. It is a wholly owned subsidiary of McKesson Corporation, which owns the name "Health Mart". McKesson acquired Health Mart owner FoxMeyer in October 1996.Former divisions
McKesson operated the Mosswood Wine Company from 1978 until 1987, when the division was sold to maintain their focus on pharmaceuticals. The division was founded and run by wine writer Gerald Asher.NDC Health
NDC became NDC-Health Corp in 2001.National Data Corporation
National Data Corporation was a Time-sharing company that began in 1967 and subsequently absorbed competitor Rapidata. Rapidata held on, and became part of National Data Corporation. It was still of sufficient interest in 1982 to be the focus of "A User's Guide to Statistics Programs: The Rapidata Timesharing System". Even as revenue fell by 66% and National Data subsequently developed its own problems, attempts were made to keep this timesharing business going.Rapidata was listed in 'The AUERBACH Guide to Time Sharing in 1973.
Opioid crisis settlements and lawsuits
In 2008, McKesson paid $13 million in fines for failing to report huge orders of hydrocodone. In January 2017, McKesson agreed to pay a $150 million civil penalty for alleged similar violations of the Controlled Substances Act regarding the distribution of opioids.In May 2020, Oklahoma Attorney General Mike Hunter sued McKesson in Bryan County District Court, Oklahoma. The lawsuit alleged that he company's actions helped fuel Oklahoma's opioid crisis. The suit was filed along with lawsuits against Cardinal Health and AmerisourceBergen, and the three lawsuits allege that the three companies provided "enough opioids to Bryan County that every adult resident there could have had 144 hydrocodone tablets."
International
McKesson Canada
In 1991, McKesson Corporation acquired a 100 percent interest in Medis Health and Pharmaceutical Services from Provigo. In 2002, the McKesson Canada name was adopted. McKesson Canada is a wholly owned subsidiary of McKesson Corporation. It includes various business units: McKesson Pharmaceutical, McKesson Automation, McKesson Specialty, McKesson Health Solutions and McKesson Information Solutions.In March 2016, McKesson agreed to purchase Canadian pharmacy chain Rexall from the Katz Group of Companies for $3 billion. The deal was finalized in December 2016 following approval received under the Investment Canada Act.
In May 2018, McKesson Canada closed 40 Rexall locations in Ontario and Western Canada.
United Kingdom
In the United Kingdom, McKesson was a provider of information technology services to the health care industry. In addition to numerous clinical software systems and finance and procurement services, McKesson also was responsible for developing the Electronic Staff Record system for the National Health Service which provided an integrated payroll system for NHS's 1.3 million staff, making it the world's largest single payroll IT system. McKesson Shared Services also provided payroll services for over 20 NHS Trusts, paying over 100,000 NHS members.McKesson's United Kingdom base was in Warwick with data centers in Newcastle upon Tyne and Brent Cross and offices in Sheffield, Bangor, Glasgow and Vauxhall, London. Across the United Kingdom, it employed over 500 people.
In June/July 2014 McKesson sold most of their healthcare software business to the private equity firm Symphony Technology Group and indicated also that they would not be re-bidding for the Electronic Staff Record contract. This came after the company had posted significant year on year losses in revenue after taking over a very successful British operation in 2011.
Australia and New Zealand
In 2010, McKesson Asia-Pacific was acquired by Medibank Private Ltd.McKesson ANZ is a fully owned subsidiary of McKesson Corporation. McKesson expanded its footprint in Australia and New Zealand by acquiring Emendo in November, 2012. McKesson ANZ develops and sells healthcare optimization services and software. The company has traditionally been focused on the public markets in Australia and New Zealand. The majority of the District Health Boards in NZ use one or more of McKesson's Capacity Management solutions.
Christchurch, New Zealand, is one of McKesson's global Capacity Management R&D centers of excellence. All of McKesson's R&D for McKesson Capacity Planner is performed in New Zealand. The company employs approximately 40 team members across Australia and New Zealand including general management, R&D, sales, services and support employees.
McKesson Capacity Planner is used in more than 40 hospitals in Australia, New Zealand, Britain, Canada and the US to forecast future patient activity and help health systems to allocate resources efficiently and identify unnecessary costs.