McKesson 2009 Annual Report Download - page 4
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•Executed a balanced capital deployment strategy to
create additional stockholder value. We generated $1.4
billion in operating cash, ending the year with a cash
balance of more than $2.1 billion. Though we slowed
our capital deployment due to the economic environ-
ment, we repurchased $484 million of McKesson stock,
committed $358 million to strategic acquisitions, made
$392 million in internal capital investments, and paid
stockholders $116 million in dividends.
•Renewed key customer accounts and expanded our
solution footprint. We retained all of our national
retail pharmacy customers, who increasingly benefit
from our broad array of services, from pharmacy systems
and centralized fulfillment, to claims processing,
automation, and many other solutions designed
to meet their specialized needs.
•Built our lead in the generic pharmaceutical market.
In a year in which the generics market grew 6% accord-
ing to IMS Health, sales in the proprietary McKesson
OneStop GenericsSM program rose 35%. This perform-
ance further supports our leadership in generics, which
account for more than 70% of all prescriptions written in
the United States.
•Strengthened our relationships with suppliers, further
improving the stability and predictability of our earnings.
We have excellent relationships with pharmaceutical
manufacturers, and compensation under our agreements
with our supplier partners showed a solid increase
year-over-year.
•Took key steps to expand in higher-margin segments.
Our acquisition of regional distributor McQueary
Brothers helped us increase our market share in the
retail independent pharmacy market. Further, we
continued to grow our Health Mart®franchise, which
is now one of the largest pharmacy networks in the
United States, numbering more than 2,000 stores.
•Enhanced our competitive position in Canada.
We continued to extend our market leadership in
Canada with our banner strategy, which allows inde-
pendent pharmacies to remain independently owned
while achieving the scale and benefits of a larger
chain. We also took advantage of McKesson’s global
purchasing scale to deliver value to customers and
improve margins in our Canadian distribution business.
•Used our distribution infrastructure and expertise to
expand into adjacent markets. With the launch of
McKesson Plasma and Biologics, we are now providing
plasma and related biologic products to our hospital,
specialty pharmacy, and physician practice customers,
creating new opportunities for our distribution business.
• Expanded our position in the fast-growing specialty
marketplace. We completed the integration of
McKesson Specialty Care Solutions and Oncology
Therapeutics Network, positioning McKesson as one
of the leading distributors in the rapidly growing
specialty-biotech marketplace.
Extending Our Legacy of Strong Performance
In the Annual Report that follows this letter, you will find details of our
fiscal year 2009 results by business and customer segment. The following
are a few highlights that illustrate the progress we made across the
Company last year: