McKesson FY 1Q17 Earnings Call Notes

McKesson (MCK) John H. Hammergren on Q1 2017

Strategic sourcing partnership with Walmart is a clear endorsement of our capabilities

“Last, in May we announced a strategic sourcing partnership with Walmart. Walmart is a very sophisticated company, not just on the logistics side, but around their sourcing and procurement operations. The selection of McKesson is a clear endorsement of not only our long-term partnership, but also McKesson’s world-class pharmaceutical sourcing and procurement capabilities. Building a long-term relationship made sense for Walmart and we were the right partner”

Both party platforms are emphasizing cost and quality

“I think the thing that’s most notable is that in both platforms, you hear a discussion about cost and quality at some level. And clearly we believe the healthcare industry is headed on a continued improvement front on both of those dimensions. We need to take cost out of the healthcare system, and we need better visibility to quality, and people are increasingly going to be paid in a way that reflects the value they deliver on those two dimensions.”

That theme should stay in place regardless of which candidate wins

“So I think regardless of the candidate that wins, or the party platform that gets adopted, we’re trying to help our customers prepare for that environment of more cost pressure, and more inspection of their ability to deliver value. And part of that is also going to require them to collaborate and connect across the boundaries of their individual businesses. So I would say that that theme is the thing that stuck out the most, is that I think the issues that have been raised in the previous administration around these issues, or I should say the interest raised around these issues in the previous administration will continue.”

James A. Beer – Chief Financial Officer & Executive Vice President