McKesson 2005 Annual Report Download - page 3

McKESSON CORPORATION
PART I
Item 1. Business
General
McKesson Corporation (“McKesson,” the “Company,” the “Registrant,” or “we” and other similar pronouns), is a Fortune 15 corporation
providing supply, information and care management products and services designed to reduce costs and improve quality across the healthcare
industry.
The Company’s fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, all references in this document to a particular
year shall mean the Company’s fiscal year.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed
or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) are available free of charge on
our Web site (www.mckesson.com under the “Investors — SEC Filings” caption) as soon as reasonably practicable after we electronically file
such material with, or furnish it to, the Securities and Exchange Commission (“SEC” or the “Commission”).
Business Segments
We conduct our business through three segments. Through our Pharmaceutical Solutions segment, we are a leading distributor of ethical
and proprietary drugs, and health and beauty care products throughout North America. This segment also manufactures and sells automated
pharmaceutical dispensing systems for retail pharmacies, and provides medical management and specialty pharmaceutical solutions for biotech
and pharmaceutical manufacturers, patient and other services for payors, and software, and consulting and outsourcing services to pharmacies.
Our 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. Our Provider Technologies segment delivers enterprise-wide patient care, clinical,
financial, supply chain, managed care and strategic management software solutions, automated pharmaceutical dispensing systems for
hospitals, as well as outsourcing and other services, to healthcare organizations throughout North America, the United Kingdom and other
European countries. The Company’s strategy is to create strong, value-based relationships with customers, enabling us to sell additional
products and services to these customers over time.
Net revenues for our segments for the last three years were as follows:
Pharmaceutical Solutions
Our Pharmaceutical Solutions segment consists of the following businesses: Pharmaceutical Distribution, McKesson Canada Corporation,
Retail Automation, Payor Group and McKesson Specialty. We also own an approximately 49% interest in Nadro, S.A. de C.V. (“Nadro”), a
pharmaceutical distributor in Mexico.
U.S. Pharmaceutical Distribution. This business supplies pharmaceuticals and other healthcare related products to customers in three
primary customer segments: national and regional retail chains, institutional providers, and retail independent pharmacies.
The U.S. Pharmaceutical Distribution business operates and serves thousands of customer locations through a network of 28 distribution
centers, as well as a master distribution center and a repackaging facility, serving all 50 states. We invest in technology and other systems at all
of our distribution centers to enhance safety, reliability and the best product availability for our customers. For example, in all of our
distribution centers we use Acumax® Plus, a Smithsonian award-winning technology, which integrates and tracks all internal functions, such
as receiving, put-away and order fulfillment. Acumax® Plus uses bar code technology, wrist-mounted computer hardware, and
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(Dollars in billions) 2005 2004 2003
Pharmaceutical Solutions $ 76.3 95% $ 65.5 94% $ 53.1 93%
Medical-Surgical Solutions 2.9 4 2.8 4 2.8 5
Provider Technologies 1.3 1 1.2 2 1.2 2
Total $ 80.5 100% $ 69.5 100% $ 57.1 100%