Chain Drug Review, July 9, 2018

McKesson never wavers from focus on customers is equally as important notes Hammergren It will deliver information to the pharmacy in a way thats embedded in the workflow and the information will be current specific to the patient and actionable The system will also be connected with providers and payers who want to make sure the patient is on the SAN FRANCISCO Throughout its 185 year history McKesson Corp has always found ways to flourish by concentrating on the needs of its customers That singular emphasis has been a constant but the companys response to the changing circumstances of its business partners has frequently taken it in new directions a process that is currently much in evidence Weve been around a long time and our longevity is made possible by an unwavering focus on the success of our customers Everything we do is to help our customers be more successful tomorrow than they are today says McKesson chairman president and chief executive officer John Hammergren who has led the nations largest pharmaceutical distributor which also has a major presence in retail pharmacy community oncology and specialty care and information technology for the past 17 years We can make an important difference in the health care industry going forward as much as we have in the past McKesson has undergone some significant changes in recent months involving its strategy leadership team organizational structure and suite of assets All of the moves were designed to better position the company to assist its customers in three primary areas We want to have an even greater impact on the fundamental issues of how do we take care of the patients who are so dependent on us how do we do that in a more efficient and less expensive way and how do we enhance access to health care explains Hammergren Whats great about our pharmaceutical business in particular is that the customers we serve particularly in the United States are doing a Delivering Better Health to All great job of continuing to reinvent themselves as they focus on the needs of the patient and the world in which we continue to operate Retail pharmacy is a central pillar of McKessons strategy as the pages that follow and the second part of this special report which will appear in the August 13 issue of Chain Drug Review demonstrate McKesson either owns or has a banner relationship with 15000 pharmacies around the world including the 4950 independent drug stores that are part of the Health Mart franchise network in this country and provides supply chain solutions and other services to tens of thousands more Hammergren takes an expansive view of the pharmacy profession and McKessons role in supporting it Many folks want to look at pharmaceutical product delivery as a simple logistics transaction McKesson At A Glance he says We think pharmacy care is much more than that We think its very integral to the total health care process We think its supportive of the care plan that has been developed between the patient and the physician And we think the pharmacist plays a critical role in the delivery of that care plan So unlike a lot of transactions that consumers or patients have the pharmaceutical transaction is one of the most important and probably one of the most intimate for the patient Therefore we want to make sure that pharmacists are able to practice at the top of their license They should not be relegated into a fulfillment job but into a fulfilling job that is focused on a better patient outcome McKesson is committed to equipping members of the pharmacy profession to take on that role The companys robust logistics capabilities innovative pharmacy technology offerings and other tools are tailored to make basic tasks more efficient and free pharmacists to spend more time interacting with patients If pharmacy is going to be successful going forward and be a bigger part of the system of health care in this country it will require the contributions of enlightened pharmacists knowledgeable patients who understand the growing roster of resources available in the pharmacy and those who pay for the services being supportive of integrating the pharmacist more and more into the overall health care workflow Hammergren asserts I believe its absolutely necessary if were to achieve the best outcomes at the lowest possible cost and in the most convenient location for the patient And frankly if we dont leverage the value of pharmacy in the construct of health care going forward we will spend more money well get lower quality and we certainly wont serve the patient in a convenient way As part of the multifaceted McKesson 2021 initiative the company is investing heavily in its vision of retail pharmacys future The work centers on developing a new approach to the brick and mortar drug store format coupled with a drive to enhance the traditional strengths of community pharmacy through the use of digital technology We try to bring new omnichannel tools to the market every day Hammergren says In international markets where we actually own the stores were experimenting with ways to get our pharmacies more involved with the patient both in terms of the logistics of delivering the product and also in terms of the intimacy with the patient We want to begin to interact with patients in new ways in a technology enabled world McKessons innovative approach involves creating multiple touchpoints with patients giving them the option of receiving products and services whenever wherever and however they chose The in store experience remains at the heart of pharmacy care but the companys technology and logistics capabilities extend the virtual reach of the pharmacist supplementing it with access to online information and call centers for complex specialty medications Real time access to patient specific data is another important part of the initiative An omnichannel experience from an information perspective John Hammergren right treatment plan one supported by a platform that is easy to use and that the economics are right The new model is intended to serve as a blueprint for the pharmacies that McKesson controls a turnkey solution for other pharmacy operators and an essential building block for a health care system struggling with issues of access quality and cost If we going to provide highquality care at an affordable price we need to think about the needs of the patient in an all encompassing way says Hammergren Physicians and pharmacists need better information at the time they interact with the patient Patients need to be more informed about their own condition as well as their cost and quality alternatives and what adherence to a protocol or a prescription means and why thats important Clearly the payers need to take a more comprehensive view of all of us that are in the supply chain who are delivering care They need to make sure that the economics are properly adjusted and the incentives are properly aligned We also have to make sure that the people who are able to impact quality and cost measures are part of the process Hammergren is confident that retail pharmacy will fare well as the health care paradigm in this country evolves Pharmacy is one of the lowest if not the lowest cost setting to deliver care he says and its one of the highest yields in terms of impact on the total expenditures At McKesson were doing everything we can to help unlock the full potential of community pharmacy Fortune 5 company Founded in 1833 More than 15000 owned and banner pharmacies At A Glance 208B FY18 revenues Delivering 1 3 of all prescription medicine in North America1 43B FY18 operating cash flow 75 ooo employees worldwide Value creation Serving 2 million customers each day in 13 countries across Europe 250000 SKUs of brand private label medical surgical supplies 1This information is an estimate derived from the use of information under license from the following IQVIA information service Market Prognosis North America for the period 2017 2021 published March 2017 Note IQVIA expressly reserves all rights including rights of further copying distribution and republication McKesson does not warrant or represent the accuracy of IQVIA data or McKessons interpretations of IQVIA data Any subsequent use or interpretation of this data will be the liability of the receiving party and not of McKesson or IQVIA Financial data reported for Fiscal Year ended March 31 2018 Operational and employee data reflected as of March 31 2017 Chain Drug Review July 9 2018 9