McKesson FY 2Q15 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Generic price inflation may be coming down a bit

“we believe that some of our second quarter inflation was pulled slightly ahead into the first quarter. Our outlook for the year remains unchanged, down slightly from the inflation rates we experienced last year but still pretty robust.”

We’ve been surprised by the strength in Hep C volumes

“We have been surprised by the strength of the hepatitis C volumes. And they come along with lower margins, as I intimated. Without those 2 hepatitis C drugs, our margin would have been right around the 250 basis point level for Distribution Solutions.”

German, French and Brazilian markets have been challenging for Celesio

” think stepping away from Celesio specifically and looking at the markets, clearly, there is continued price pressure in Germany, in the wholesaler side of the business, and which I think the industry has been talking about for some time. Clearly, the French economy has not performed at the level that some would have had expected. And there’s additional pressure in that market. And Brazil has been a challenge for many of the companies that are competing in the Brazilian market.”

Not everyone is affected in the same way by inflation and reimbursement pressures

“I think it’s interesting when you talk about customers because each one of our customers experience their business in an individual way because they’re a mix of payers, their view of inflation, their contracting processes, how they price their book, are all different. So I think it’s difficult to lump everybody into a giant basket and say this is how they’re being affected”

People who are saying that purchasing scale has not yielded benfits may be people who have something to lose

“I would point out that there are many voices in this discussion. And the voices have different objectives perhaps. And that maybe the objectives of some of those voices is to try to make sure that these purchasing collaboratives, cooperatives, joint ventures, whatever you want to call them are not successful in aggregating volume because it may be to the disadvantage of other people in these channels. And so I — all I can speak to is the fact that we continue to get the benefits that we had expected as we entered these arrangements. “