McKesson Corporation

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McKesson Corporation
Formerly
Olcott & McKesson
(1833–1853)
McKesson & Robbins (1853–1999)
McKessonHBOC
(1999–2001)
Public
Traded as
ISINUS58155Q1031 Edit this on Wikidata
IndustryHealthcare
FoundedNew York City, United States
1833; 187 years ago (1833)
FounderMcKesson
Charles Olcott
HeadquartersIrving, Texas, U.S.
Key people
Brian S. Tyler
CEO
ProductsPharmaceuticals
Medical technology
Health care services
RevenueIncrease US$231.1 billion (2020)[1]
Increase US$1.1 billion (2020)[1]
Increase US$900 million (2020)[1]
Total assets56,563,000,000 US dollar[2] (31 March 2016) Edit this on Wikidata
Total equityIncrease US$24.3 billion (2020)[1]
Number of employees
~70,000 (2020)[1]
SubsidiariesRexall Pharmacy Group
Health Mart
McKesson Europe (76%)
WebsiteMcKesson.com

McKesson Corporation is an American company distributing pharmaceuticals and providing health information technology, medical supplies, and care management tools. The company had revenues of $231.1 billion in 2020.[3]

McKesson is based in Irving, Texas and distributes health care systems, medical supplies and pharmaceutical products. Additionally, McKesson provides extensive network infrastructure for the health care industry; also, it was an early adopter of technologies like bar-code scanning for distribution, pharmacy robotics, and RFID tags.[4]

It is a Fortune Global 500 company, and the 7th[5] highest revenue generating company in the United States.

History[edit]

Founded in New York City as Charles M. Olcott in 1828 and later as Olcott, McKesson & Co. by Charles Olcott and McKesson in 1833,[6] the business began as an importer and wholesaler of botanical drugs.

A third partner, Daniel Robbins, who had joined the enterprise as it grew, and who previously "was an assistant to the original partners," [7] was the Robbins when the company was renamed McKesson & Robbins following Olcott's death in 1853.

The company successfully emerged from one of the most notorious business/accounting scandals of the 20th century—the McKesson & Robbins scandal, a watershed event that led to major changes in American auditing standards and securities regulations after being exposed in 1938. In the 1960s, McKesson & Robbins merged with Foremost Dairies of San Francisco to form Foremost-McKesson Inc.[8] Foremost was sold in 1982.[9]

Since the mid-20th century, McKesson has derived an increasing proportion of its income from medical technology, rather than pharmaceuticals. This culminated in its purchase of medical information systems firm HBO & Company (HBOC) in 1999; the combined firm was briefly known as McKessonHBOC. Accounting irregularities at HBOC reduced the company's share price by half, and resulted in the dismissal and prosecution of many HBOC executives. The firm's name reverted to "McKesson" in 2001.[10] McKesson Technology Solutions, as the information technology branch of the company is now known, has continued to increase its market share through acquisitions, notably Per Se Technologies, RelayHealth, and Practice Partner.

In 2010, McKesson acquired the oncology and physician services company US Oncology, Inc. for $2.16 billion, which was integrated into the McKesson Specialty Health business.

On June 24, 2013, The Wall Street Journal reported that McKesson Chairman and CEO John Hammergren's pension benefits of $159 million had set a record for "the largest pension on file for a current executive of a public company, and almost certainly the largest ever in corporate America".[11]

In addition to its offices throughout North America, McKesson also has international offices in Australia, Ireland, France, the Netherlands, and the United Kingdom. Today, McKesson is one of the oldest operating businesses in the United States.

In 2014, McKesson acquired Celesio to become one of the world's largest health care companies, with over $179 billion in annual revenue.[12]

In June 2016, McKesson announced plans to merge its IT business with Change Healthcare.[13]

In 2017, McKesson was involved in a number of lawsuits against the state of Arkansas over the supply of vecuronium bromide. McKesson was under contract by Pfizer not to sell to any correctional facility that authorized and carried out Capital punishment.[14][15]

In November 2018, the company announced it would relocate its headquarters from San Francisco to Irving, Texas in April 2019.[16]

On April 1, 2019, the company officially moved their headquarters to Irving, Texas.[17]

In February 2020, McKesson Corp announced that it would part ways with Change Healthcare.[18] McKesson would give up its three seats on Change's board of directors, and as an entity will no longer own any portion of Change.[18]

Finances[edit]

For the fiscal year 2018, McKesson reported earnings of US$67 million, with an annual revenue of US$208.357 billion, an increase of 5.0% over the previous fiscal cycle. McKesson's shares traded at over $142 per share, and its market capitalization was valued at over US$24.3 billion in October 2018.[19] As of 2018, McKesson is ranked #6 on the Fortune 500 rankings of the largest United States corporations by total revenue.[20]

Year Revenue
(US$M)
Net income
(US$M)
Total assets
(US$M)
Price per share
(USD$)
Employees
2005 79,096 −157 18,775 38.30
2006 86,983 751 20,961 46.28
2007 92,977 913 23,943 54.33
2008 101,703 990 24,603 48.16
2009 106,632 823 25,267 45.48
2010 108,702 1,263 28,189 60.50
2011 112,084 1,202 30,886 75.10
2012 122,321 1,403 33,093 85.10
2013 122,196 1,338 34,786 119.47 43,500
2014 137,392 1,263 51,759 182.26 42,800
2015 179,045 1,476 53,870 208.52 70,400
2016 190,884 2,258 56,523 165.02 68,000
2017 198,533 5,070 60,969 149.21 78,000
2018 208,357 67 60,381 142.30 78,000

Divisions[edit]

McKesson Provider Technologies[edit]

McKesson Provider Technologies is the retail name for McKesson Technology Solutions; the software development division of McKesson. Their customer base in the United States includes 50% of all health systems, 20% of all physician practices, 25% of home care agencies, and 77% of health systems with more than 200 beds.

On June 20, 2005, McKesson Provider Technologies acquired Medcon, Ltd., an Israeli company which provides Web-based cardiac image and information management solutions for heart centers, that includes: diagnostic digital image management, archiving, procedure reporting, and workflow management.[21]

In October 2013, McKesson agreed to buy a 50% stake in German peer Celesio for $8.3 billion.[22]

McKesson Medical Supplies and Equipment[edit]

McKesson Medical-Surgical Corporate campus in Richmond, Virginia
McKesson Medical-Surgical Corporate campus in Richmond, Virginia

McKesson Medical-Surgical (MMS) offers a large selection of national health care brands, along with McKesson's exclusive brand of medical products.

Their online medical supply ordering platform serves the needs of physician offices, surgery centers, home health agencies, DMEs, labs, and long-term-care facilities.[23]

In 2015 McKesson Medical-Surgical opened its new headquarters in Richmond, Virginia.[24]

Health Mart pharmacy franchise[edit]

McKesson's previous global headquarters building in downtown San Francisco
McKesson Pharmacy Systems, Livonia, MI

Health Mart is a network of over 4,000[25] independently owned and operated pharmacies. It is a wholly owned subsidiary of McKesson Corporation, which owns the name "Health Mart". McKesson acquired Health Mart owner FoxMeyer in October 1996.[26]

Former divisions[edit]

McKesson operated the Mosswood Wine Company from 1978 until 1987, when the division was sold to maintain their focus on pharmaceuticals. The division was founded and run by wine writer Gerald Asher.[27]

NDC Health[edit]

NDC (from the initials of its former identity as National Data Corporation) became NDC-Health Corp in 2001.[28]

National Data Corporation[edit]

National Data Corporation was a Time-sharing company that began in 1967 and subsequently absorbed competitor Rapidata. Rapidata held on, and became part of National Data Corporation.[29] It was still of sufficient interest in 1982 to be the focus of "A User's Guide to Statistics Programs: The Rapidata Timesharing System".[30] Even as revenue fell by 66%[31] and National Data subsequently developed its own problems, attempts were made to keep this timesharing business going.[32]

Rapidata was listed in 'The AUERBACH Guide to Time Sharing in 1973.[33]

2008 Opioid crisis, 2017 settlements, 2020 lawsuits[edit]

In 2008, McKesson paid $13 million in fines for failing to report huge orders of hydrocodone.[34] In January 2017, McKesson agreed to pay a $150 million civil penalty for alleged similar violations of the Controlled Substances Act regarding the distribution of opioids.[35]

In May 2020, Oklahoma Attorney General Mike Hunter sued McKesson in Bryan County District Court, Oklahoma. The lawsuit alleged that he company's actions helped fuel Oklahoma's opioid crisis. The suit was filed along with lawsuits against Cardinal Health and AmerisourceBergen, and the three lawsuits allege that the three companies provided "enough opioids to Bryan County that every adult resident there could have had 144 hydrocodone tablets."[36]

International[edit]

McKesson Canada[edit]

McKesson Canada

In 1991, McKesson Corporation acquired a 100 percent interest in Medis Health and Pharmaceutical Services from Provigo. In 2002, the McKesson Canada name was adopted. McKesson Canada is a wholly owned subsidiary of McKesson Corporation. It includes various business units: McKesson Pharmaceutical, McKesson Automation, McKesson Specialty, McKesson Health Solutions and McKesson Information Solutions.

In March 2016, McKesson agreed to purchase Canadian pharmacy chain Rexall from the Katz Group of Companies for $3 billion.[37] The deal was finalized in December 2016 following approval received under the Investment Canada Act.[38]

In May 2018, McKesson Canada closed 40 Rexall locations in Ontario and Western Canada.[39]

United Kingdom[edit]

In the United Kingdom, McKesson (operating as McKesson Information Solutions UK Ltd) was a provider of information technology services to the health care industry. In addition to numerous clinical software systems and finance and procurement services, McKesson also was responsible for developing the Electronic Staff Record system for the National Health Service which provided an integrated payroll system for NHS's 1.3 million staff, making it the world's largest single payroll IT system. McKesson Shared Services also provided payroll services for over 20 NHS Trusts, paying over 100,000 NHS members.

McKesson's United Kingdom base was in Warwick with data centers in Newcastle upon Tyne and Brent Cross and offices in Sheffield, Bangor, Glasgow and Vauxhall, London. Across the United Kingdom, it employed over 500 people.

In June/July 2014 McKesson sold most of their healthcare software business to the private equity firm Symphony Technology Group and indicated also that they would not be re-bidding for the Electronic Staff Record contract.[40][41] This came after the company had posted significant year on year losses in revenue (16% in the 2012/13 financial year[42]) after taking over a very successful British operation in 2011.[43]

Australia and New Zealand[edit]

In 2010, McKesson Asia-Pacific was acquired by Medibank Private Ltd.[44][45]

McKesson ANZ is a fully owned subsidiary of McKesson Corporation. McKesson expanded its footprint in Australia and New Zealand by acquiring Emendo in November, 2012.[46] McKesson ANZ develops and sells healthcare optimization services and software. The company has traditionally been focused on the public markets in Australia and New Zealand. The majority of the District Health Boards in NZ use one or more of McKesson's Capacity Management solutions.

Christchurch, New Zealand, is one of McKesson's global Capacity Management R&D centers of excellence. All of McKesson's R&D for McKesson Capacity Planner is performed in New Zealand. The company employs approximately 40 team members across Australia and New Zealand including general management, R&D, sales, services and support employees.

McKesson Capacity Planner (formerly Emendo CapPlan) is used in more than 40 hospitals in Australia, New Zealand, Britain, Canada and the US[47] to forecast future patient activity and help health systems to allocate resources efficiently and identify unnecessary costs.[46][48]

Facilities[edit]

In addition to its global headquarters in Irving, Texas, McKesson maintains facilities around North America.[49]

See also[edit]

References[edit]

  1. ^ a b c d e "2018 Form 10-K, McKesson Corporation". United States Securities and Exchange Commission.
  2. ^ http://investor.mckesson.com/sites/mckesson.investorhq.businesswire.com/files/report/file/2016_Annual_Report_and_Letter_to_Stockholders.pdf; annual report.
  3. ^ Corporate, Corporate (May 18, 2017). "Corporate Website". Corporate Website. Archived from the original on October 6, 2017. Retrieved October 5, 2017.
  4. ^ Mitchell, Luke (February 1, 2009). "Sick in the Head". Harper's Magazine. Archived from the original on May 25, 2017. Retrieved April 24, 2017.
  5. ^ "McKesson". Fortune. Retrieved June 24, 2020.
  6. ^ McKesson & Robbins, First Aid In Emergencies, 1930, p. 63.
  7. ^ David Morrell (January 22, 2010). "San Francisco's McKesson: 'The largest company no one has heard of'". East Bay Times.
  8. ^ "History of McKesson Corporation". mckesson.com. Archived from the original on April 24, 2015. Retrieved April 20, 2015.
  9. ^ Ap (September 3, 1982). "Foremost Dairies". The New York Times. ISSN 0362-4331. Archived from the original on May 24, 2015. Retrieved March 10, 2019.
  10. ^ Milt Freudenheim (January 13, 2005). "McKesson Agrees to Pay $960 Million in Fraud Suit". The New York Times. Archived from the original on May 31, 2013. Retrieved March 17, 2008.
  11. ^ Mark Maremont (June 25, 2013). "McKesson CEO Is Due $159 Million Pension". Wall Street Journal. Archived from the original on April 27, 2015. Retrieved April 20, 2015.
  12. ^ "McKesson Launches Public Takeover Offer for Celesio | McKesson". www.mckesson.com. Archived from the original on August 7, 2018. Retrieved January 21, 2019.
  13. ^ Kennedy, Eleanor (June 28, 2016). "Change Healthcare merger to create health IT giant". Nashville Business Journal.
  14. ^ "Can big pharma stop the Arkansas mass executions?". The Guardian. April 16, 2017. Archived from the original on April 21, 2017. Retrieved April 21, 2017.
  15. ^ Supplier: Drug sold to Arkansas not intended for executions Archived April 22, 2017, at the Wayback Machine | CBS News
  16. ^ "McKesson, nation's sixth largest company, is moving corporate HQ from California to Irving". Dallas News. November 30, 2018. Archived from the original on December 4, 2018. Retrieved December 4, 2018.
  17. ^ "Brian Tyler Becomes McKesson's New CEO - McKesson". www.mckesson.com. Archived from the original on April 12, 2019. Retrieved April 12, 2019.
  18. ^ a b Stinnett, Joel (February 5, 2020). "Three years after merger, McKesson to part ways with Change Healthcare". Nashville Business Journal. Retrieved March 3, 2020.
  19. ^ "Financial Information | McKesson Investor Relations". investor.mckesson.com. Archived from the original on January 14, 2019. Retrieved November 7, 2018.
  20. ^ "Fortune 500 Companies 2018: Who Made the List". Fortune. Archived from the original on November 10, 2018. Retrieved November 9, 2018.
  21. ^ McKesson Completes Acquisition of Medcon Ltd. | Business Wire Archived December 3, 2013, at the Wayback Machine August 15, 2005
  22. ^ Ludwig Burger (October 24, 2013). "McKesson $8.3 billion deal for drugs trader Celesio to create market leader". Reuters. Archived from the original on September 24, 2015. Retrieved July 1, 2017.
  23. ^ "McKesson Medical Supplies and Equipment". Archived from the original on January 21, 2019. Retrieved March 1, 2018.
  24. ^ Times-Dispatch, GREGORY J. GILLIGAN Richmond. "McKesson Medical-Surgical opens its new headquarters". Richmond Times-Dispatch. Retrieved January 12, 2018.
  25. ^ "Health Mart Pharmacy of the Year Spotlight". healthmart.com.
  26. ^ "McKesson Corp, Form 8-K, Current Report, Filing Date Nov 22, 1996". secdatabase.com. Archived from the original on April 24, 2018. Retrieved April 23, 2018.
  27. ^ [1] Archived June 1, 2013, at the Wayback Machine
  28. ^ "National Data Corp. changes name to NDCHealth Corp". Atlanta Business Chronicle. October 30, 2001. Retrieved June 24, 2020.
  29. ^ "NDC started in 1967, and paralleled Rapidata". Bloomberg. Archived from the original on September 10, 2016.
  30. ^ Bruce Bosworth, ISBN 978-089529-1-677
  31. ^ Computerworld, Oct. 6, 1986, p.179, "Rapidata revenue was $11 million ... in 1986, down from ... ($31 million in 1982)."
  32. ^ Computerworld, Aug.25,1986, p.5, "National Data Corp. said it is close to reaching an agreement with a buyer of its Rapidata timesharing division. In May, National Data said it would close down ..."
  33. ^ "Guide to Time Sharing" (PDF).
  34. ^ Bill Whittaker (December 17, 2017). "Whistleblowers: DEA attorneys went easy on McKesson, the country's largest drug distributor". CBS News. Archived from the original on December 24, 2017. Retrieved December 24, 2017.
  35. ^ "McKesson Corp, Form DEF 14A, Filing Date Jun 16, 2017" (PDF). SECdatabase.com. Archived (PDF) from the original on April 24, 2018. Retrieved April 23, 2018.
  36. ^ Carey, Liz (May 5, 2020). "Oklahoma Attorney General refiles opioid lawsuit against three distributors". Health Crisis Alert. Retrieved May 5, 2020.
  37. ^ Strauss, Marina (March 2, 2016). "Rexall takeover shakes up Canada's drugstore industry". The Globe and Mail. Archived from the original on August 26, 2017. Retrieved September 4, 2017.
  38. ^ "McKesson Completes Acquisition of Rexall Health and Appoints Domenic Pilla as CEO of McKesson Canada | McKesson Investor Relations". investor.mckesson.com. Archived from the original on January 21, 2019. Retrieved July 17, 2018.
  39. ^ "Rexall closing after less than 5 years in London's downtown core". 980 CFPL. Archived from the original on July 17, 2018. Retrieved July 17, 2018.
  40. ^ Jon Hoeksma (May 8, 2013). "McKesson UK put up for sale". ehiNEWS. Archived from the original on April 3, 2015. Retrieved March 26, 2015.
  41. ^ Jon Hoeksma (June 2, 2014). "Symphony buys McKesson UK health ops". ehiNEWS. Archived from the original on April 2, 2015. Retrieved March 26, 2015.
  42. ^ "Article: Symphony Technology Group snaps up McKesson divestments". HealthInvestor. Archived from the original on September 25, 2015. Retrieved January 2, 2016.
  43. ^ "McKesson To Acquire British Software Vendor System C | HIStalk". Histalk2.com. March 3, 2011. Archived from the original on September 23, 2015. Retrieved January 2, 2016.
  44. ^ "McKesson to Sell Its McKesson Asia-Pacific Business to Medibank Private Ltd". Archived from the original on April 13, 2016. Retrieved March 30, 2016.
  45. ^ "Medibank finalises acquisition of McKesson Asia-Pacific". Archived from the original on April 8, 2016. Retrieved March 30, 2016.
  46. ^ a b "McKesson NZ aims for growth with plans to add staff and products - Computerworld New Zealand". Computerworld.co.nz. May 23, 2014. Archived from the original on July 20, 2015. Retrieved July 30, 2015.
  47. ^ Tamlyn Stewart (November 8, 2012). "Pharma giant snaps up Emendo". Stuff.co.nz. Archived from the original on September 24, 2015. Retrieved July 30, 2015.
  48. ^ Tamlyn Stewart (November 7, 2012). "Fortune 500 firm buys Kiwi tech company". Stuff.co.nz. Archived from the original on September 24, 2015. Retrieved July 30, 2015.
  49. ^ "Contact Us, Location Addresses & Phone Numbers - McKesson". www.mckesson.com. Archived from the original on September 13, 2018. Retrieved September 13, 2018.

External links[edit]