McKesson Corporation (McKesson)

McKesson Corporation (McKesson)

 

McKesson Corporation (McKesson) provides supply, information and care management products and services across the healthcare industry. It conducts business through three segments. Through the Pharmaceutical Solutions segment, the Company is a distributor of drugs, and health and beauty care products throughout North America. This segment also provides medical management and specialty pharmaceutical solutions for biotech and pharmaceutical manufacturers, patient and other services for payors, software and consulting and outsourcing services to pharmacies and, through its investment in Parata Systems, LLC (Parata), sells automated pharmaceutical dispensing systems for retail pharmacies. Its Medical-Surgical Solutions segment distributes medical-surgical supplies, first-aid products and equipment, and provides logistics and other services within the United States and Canada. Its Provider Technologies segment delivers enterprise-wide patient care, clinical, financial, supply chain, and strategic management software solutions, pharmacy automation for hospitals, as well as connectivity, outsourcing and other services, to healthcare organizations throughout North America, the United Kingdom and other European countries.

 

In February 2007, the Company acquired Physician Micro Systems, Inc., known as Practice Partner, a provider of integrated software for electronic health records (EHRs), medical billing and appointment scheduling for independent physician practices. On January 26, 2007, the Company completed the acquisition of Per-Se Technologies, Inc. In 2007, the Company's Provider Technologies segment acquired RelayHealth Corporation (RelayHealth) based in Emeryville, California. RelayHealth is a provider of secure online healthcare communication services linking patients, healthcare professionals, payors and pharmacies. This segment also acquired two other entities, one specializing in patient billing solutions designed to simplify and enhance healthcare providers' financial interactions with their patients, as well as a provider of integrated software for electronic health records, medical billing and appointment scheduling for independent physician practices. The Company's Medical-Surgical Solutions segment acquired Sterling Medical Services LLC (Sterling) based in Moorestown, New Jersey. Sterling is a provider and distributor of disposable medical supplies, health management services and quality management programs to the home care market. This segment also acquired a medical supply sourcing agent. During the year ended December 31, 2006, the Company acquired D&K Healthcare Resources, Inc., which is primarily a wholesale distributor of branded and generic pharmaceuticals and over-the-counter health and beauty products to independent and regional pharmacies, primarily in the Midwest; Medcon, Ltd., which provides Web-based cardiac image and information management services to healthcare providers, and Moore Medical Corp., which is an Internet-enabled, multi-channel marketer and distributor of medical-surgical and pharmaceutical products to non-hospital provider settings. In 2007, McKesson sold its Medical-Surgical Solutions segment's Acute Care supply business to Owens & Minor, Inc. In 2007, the Company also sold a wholly owned subsidiary, Pharmaceutical Buyers Inc. In 2006, it sold its wholly owned subsidiary, McKesson BioServices Corporation.

 

Pharmaceutical Solutions

 

McKesson Pharmaceutical Solutions consists of businesses, which include McKesson U.S. Pharmaceutical, McKesson Canada Corporation, McKesson Health Solutions, McKesson Pharmacy Systems, McKesson Medication Management and McKesson Specialty Distribution. The Company also owns an approximate 49% interest in Nadro, S.A. de C.V. (Nadro) and an approximate 39% interest in Parata Systems, LLC.

 

U.S. Pharmaceutical Distribution business supplies pharmaceuticals and other healthcare related products to customers in three primary customer segments: retail national accounts, independent retail pharmacies, and institutional healthcare providers. U.S. Pharmaceutical business operates and serves customer locations through a network of 30 distribution centers, as well as a master distribution center, a distribution center and a repackaging facility, serving all 50 states and Puerto Rico.

 

McKesson's U.S. Pharmaceutical Distribution business' major value-added offerings, by customer group, include Retail National Accounts (including national and regional chains, food/drug combinations, mail order pharmacies, and mass merchandisers). The business solutions provided by the national retail chains include Central Fill, a prescription refill service; Re-Distribution Centers, two large facilities that offer access to inventory for single source warehouse purchasing, including pharmaceuticals and biologicals; RxPak, a bulk repackaging service, and Inventory Management, an integrated solution, comprising forecasting software and automated replenishment technologies. Retail independent pharmacies provides solutions for managed care contracting, branding and advertising, merchandising and purchasing, and provides solutions, such as Health Mart, a franchise program; AccessHealth, managed care and reconciliation assistance services; McKesson OneStop Generics, a generic pharmaceutical purchasing program, Prefer Rx, a discount program; Sunmark, a line of more than 1,000 products; FrontEdge, a planning, merchandising, and price maintenance program, and McKesson Home Health Care, a line of more than 1,800 home healthcare products.

 

Institutional Providers include hospitals and health systems, integrated delivery networks, clinics and other acute-care facilities, and long-term care providers. Electronic ordering/purchasing and supply chain management systems provides solutions, such as Fulfill-Rx, an integrated ordering and inventory management solution; Asset Management, a program designed to improve inventory management, SKY Packaging, a format packaging; McKesson 340B Manager, a software solution that manages, tracks, and reports on the medication replenishment; AccessHealth, a service for third-party contracting, and high-performance pharmacy.

 

McKesson Canada Corporation, a wholly owned subsidiary, is a pharmaceutical distributor in Canada. The Company also owns an approximately 49% interest in Nadro, a pharmaceutical distributor in Mexico. The suite of services and software products marketed to payors, employers and government organizations include disease management programs; nurse triage services; clinical and analytical software; business intelligence tools; InterQual Criteria, and Claims performance solutions.

 

McKesson Specialty Distribution business' product-specific solutions are directed towards manufacturers, payors and physicians to enable delivery and administration of high-cost, often injectable, bio-pharmaceutical drugs used to treat patients with chronic disease. The business facilitates patient and provider access to specialty pharmaceuticals across multiple delivery channels (direct-to-physician wholesale, patient-direct specialty pharmacy dispensing, and access to retail pharmacy), provides clinical support and treatment compliance programs that help patients stay on complex therapies, and offers reimbursement, data collection and analysis services.

 

Medical-Surgical Solutions

 

McKesson's Medical-Surgical Solutions segment provides medical-surgical supply distribution, equipment, logistics and other services to healthcare providers that include physicians' offices, surgery centers, extended care facilities, homecare and occupational health sites through a network of 29 distribution centers within the United States. This segment is a provider of supplies to the range of alternate-site healthcare facilities, including physicians' offices, clinics and surgery centers (primary care), long-term care, occupational health facilities and homecare sites (extended care). This segment also includes ZEE Medical, North America's provider of first aid, safety and training solutions, providing services to industrial and commercial customers.

 

Provider Technologies

 

The Provider Technologies segment provides a portfolio of software, automation, support and services. This segment markets its products and services to integrated delivery networks, hospitals, physician practices, home health providers, retail pharmacies and payors. The segment also sells its solutions internationally through subsidiaries and/or distribution agreements in Canada, the United Kingdom, Ireland, France, the Netherlands, Australia, New Zealand and Israel.

The segment offers automation technologies that help hospitals to re-engineer and enable medication use and supply management processes. Examples include centralized pharmacy automation for unit-dose medications, unit-based cabinet technologies for secure medication storage and rapid retrieval, point-of-use supply automation systems for inventory management and revenue capture, and an automated medication administration system for ensuring accuracy at the point of care. In addition to the product offerings, the Provider Technologies segment offers a range of services, which include technology services, professional services and outsourcing services.