McKesson 2009 Annual Report Download - page 15

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McKESSON CORPORATION
9
Our Technology Solutions segment experiences substantial competition from many firms, including other
computer services firms, consulting firms, shared service vendors, certain hospitals and hospital groups, hardware
vendors and Internet-based companies with technology applicable to the healthcare industry. Competition varies in
size from small to large companies, in geographical coverage and in scope and breadth of products and services
offered.
Intellectual Property
The principal trademarks and service marks of the Distribution Solutions segment include: AccessHealth®,
Acumax®, Closed Loop DistributionSM, Comets®, ConsumerScriptSM,.com Pharmacy Solutions®, Econolink®,
Empowering Healthcare®, EnterpriseRx™, Expect More From MooreSM, FrontEdge™, Health Mart®, High
Performance PharmacySM, LoyaltyScript®, Lynx®, Max ImpactSM, McKesson®, McKesson Advantage®,
McKesson Empowering Healthcare®, McKesson Max Rewards®, McKesson OneStop Generics®, McKesson
Priority Express®, McKesson Supply ManagerSM, MediNet™, Medi-Pak®, Mobile ManagerSM, Moore Medical®,
MoorebrandSM, NOA®, Northstar RXSM, Onmark®, Pharma360®, PharmacyRx™, Pharmaserv®, PharmAssureSM,
ProIntercept®, ProMed®, ProPBM®, RX PakSM, RX Savings Access®, ServiceFirst®, Staydry®, Sunmark®,
Supply Management OnlineSM, TrialScript®, Valu-Rite®, XVIII B Medi Mart® and ZEE®.
The substantial majority of technical concepts and codes embodied in our Technology Solutions segment’s
computer programs and program documentation are protected as trade secrets. The principal trademarks and service
marks for this segment are: AcuDose-Rx®, ANSOS™, Ask-A-Nurse®, Care Fully Connected™, CareEnhance®,
Connect-RN™, Connect-Rx®, CRMS®, DataStat®, ePremis®, Episode Profiler®, E-Script™, Fulfill-RxTM,
HealthQuest®, Horizon Admin-Rx™, Horizon Clinicals®, HorizonWP®, InterQual®, Lytec®, MedCarousel®,
Medisoft®, One-Call®, One-Staff®, ORSOS™, PACMED™, PakPlus-Rx®, Paragon®, Pathways 2000®, Patterns
Profiler™, Per-Se®, Per-Se Technologies® (and logo), PerYourHealth.com®, Practice Partner®, Premis®,
RelayHealth®, ROBOT-Rx®, SelfPace®, Series 2000™, STAR 2000™, SupplyScan™, TRENDSTAR® and
WebVisit™.
We also own other registered and unregistered trademarks and service marks and similar rights used by our
business segments. All of the principal trademarks and service marks are registered in the United States, or
registrations have been applied for with respect to such marks, in addition to certain other jurisdictions. The United
States federal registrations of these trademarks have terms of ten or twenty years, depending on date of registration,
and are subject to unlimited renewals. We believe we have taken all necessary steps to preserve the registration and
duration of our trademarks and service marks, although no assurance can be given that we will be able to
successfully enforce or protect our rights thereunder in the event that they are subject to third-party infringement
claims. We do not consider any particular patent, license, franchise or concession to be material to our business.
We also hold copyrights in, and patents related to, many of our products.
Other Information about the Business
Customers: During 2009, sales to our ten largest customers accounted for approximately 52% of our total
consolidated revenues. Sales to our two largest customers, CVS Caremark Corporation (“Caremark,”) and Rite Aid
Corporation (“Rite Aid”) accounted for 14% and 12% of our total consolidated revenues. At March 31, 2009,
accounts receivable from our ten largest customers were approximately 49% of total accounts receivable. Accounts
receivable from Caremark and Rite Aid were approximately 14% and 10% of total accounts receivable.
Substantially all of these revenues and accounts receivable are included in our Distribution Solutions segment.
Suppliers: We obtain pharmaceutical and other products from manufacturers, none of which accounted for
more than approximately 9% of our purchases in 2009. The loss of a supplier could adversely affect our business if
alternate sources of supply are unavailable. We believe that our relationships with our suppliers on the whole are
good. The ten largest suppliers in 2009 accounted for approximately 46% of our purchases.
A significant portion of our distribution arrangements with the manufacturers provides us compensation based
on a percentage of our purchases. However, we also have certain distribution arrangements with manufacturers that
include an inflation-based compensation component whereby we benefit when the manufacturers increase their
prices as we sell our inventory being held at the new higher prices. For these manufacturers, a reduction in the
frequency and magnitude of price increases, as well as restrictions in the amount of inventory available to us, could
adversely impact our gross profit margin.