McKesson 2005 Annual Report Download - page 7

McKESSON CORPORATION
Competition
In every area of healthcare distribution operations, our Pharmaceutical Solutions and Medical-Surgical Solutions segments face strong
competition, both in price and service, from national, regional and local full-line, short-line and specialty wholesalers, service merchandisers,
self-warehousing chains, manufacturers engaged in direct distribution and large payor organizations. In addition, these segments face
competition from various other service providers and from pharmaceutical and other healthcare manufacturers (as well as other potential
customers of the segments) which may from time to time decide to develop, for their own internal needs, supply management capabilities
which are provided by the segments and other competing service providers. Price, quality of service, and, in some cases, convenience to the
customer are generally the principal competitive elements in these segments.
Our Provider Technologies 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 Pharmaceutical Solutions and Medical-Surgical Solutions segments include:
ECONOLINK®, VALU-RITE®, Valu-Rite/CareMax®, McKesson OneStop GenericsSM, Health Mart®, ASK-A-NURSE , Episode
Profiler , InterQual , coSource®, Baker Cells™, Baker Cassettes™, Baker Universal™, Autoscript™, Pharmacy 2000™, Productivity
Station™, CRMS, Patterns Profiler, CareEnhanceSM, Closed Loop DistributionSM, .com Pharmacy Solutions®, Supply Management
OnLineSM, Optipak®, Comets®, e-Comets™, MediNet™, OPTIMA®, OPTYXSM, XVIII B Medi Mart®, AccuscriptSM , Zee®, Pharmaserv®,
Staydry®, Sunmark™, McKesson Max RewardsSM , MaxImpactSM, Medi-Pak®, McKesson® Brand and Empowering HealthcareSM.
The substantial majority of technical concepts and codes embodied in our Provider Technologies segment’s computer programs and
program documentation are not protected by patents or copyrights but constitute trade secrets that are proprietary to us. The principal
trademarks and service marks for this segment are: HealthQuest®, Paragon®, Pathways 2000®, TRENDSTAR®, Horizon Clinicals™,
HorizonWP®, Series 2000™, STAR 2000™, PracticePoint®, ROBOT-Rx™, MedCarousel™, PACMED™, AcuDose-Rx™, CarePoint-
RN™, Connect-Rx®, Connect-RN™, Horizon Admin-Rx™, Pak Plus-Rx®, SelfPace®, Fulfill-RxSM and SupplyScan™.
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 there under in the event that they are subject to third-party infringement claims. We do not, however, consider any particular patent,
license, franchise or concession to be material to our business.
Other Information About the Business
Customers. In recent years, a significant portion of our revenue growth has been with a limited number of large customers. During 2005,
sales to our largest customer, Rite Aid Corporation, and ten largest customers accounted for approximately 10% and 50% of our total
consolidated revenues. At March 31, 2005, accounts receivable from Rite Aid Corporation and our ten largest customers were approximately
7% and 49% of total accounts receivable. The majority of these revenues and accounts receivable are included in our Pharmaceutical Solutions
segment.
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