Pharmaceutical Distribution - The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar, and OTC pharmaceutical drugs, operating through a network of 27 distribution centers in the U.S.[20] - McKesson Canada is one of the largest pharmaceutical wholesale and retail distributors in Canada, providing logistics and distribution services through a national network of distribution centers[36] - The International segment completed the sale of Rexall and Well.ca businesses in Canada during fiscal 2025[23] - The U.S. Pharmaceutical segment utilizes Six Sigma methodology to enhance distribution efficiency and service accuracy[25] - The company extended its pharmaceutical distribution partnership with CVS to June 2027, indicating a strong ongoing relationship[72] Financial Performance - For the fiscal year ended March 31, 2025, revenues increased by 16% compared to the prior year, while gross profit increased by 4%[177] - Revenues for the year ended March 31, 2025, increased to 359,051million,a16308,951 million in 2024[185] - Gross profit rose to 13,323million,up43,295 million compared to 3,002millioninthepreviousyear[185]−Dilutedearningspercommonsharefromcontinuingoperationsroseto25.72 in fiscal 2025 from 22.39intheprioryear[177]CostManagementandInvestments−Thecompanyisinvestinginnewandexistingdistributioncenterstoimproveefficiencythroughautomationandtechnology,withafocusondataandanalytics,includingartificialintelligence(AI)capabilities[39]−Thecompanyrecordedrestructuringchargesof298 million related to an enterprise-wide initiative to drive operational efficiencies[177] - McKesson anticipates total charges of 650millionto700 million related to enterprise-wide initiatives aimed at modernizing technology and improving operational efficiency[202] Compliance and Regulatory Environment - The company is subject to significant compliance obligations under various privacy laws, including the Health Insurance Portability and Accountability Act (HIPAA) and the General Data Protection Regulation (GDPR)[67] - The regulatory framework affecting the company is continuously evolving, creating uncertainties regarding compliance costs and operational impacts[54] - The Drug Supply Chain Security Act (DSCSA) compliance deadlines have been extended to May 27, 2025, for manufacturers, August 27, 2025, for distributors, and November 27, 2025, for dispensers[65] - Compliance with climate change regulations may impose additional costs, including capital expenditures for data gathering and reporting systems[70] Competition and Market Challenges - The company is facing strong competition in the pharmaceutical distribution environment from major competitors such as Cencora, Inc. and Cardinal Health, Inc.[41] - Competition and industry consolidation are significant challenges, potentially leading to reduced profit margins and increased credit risk[115] - Changes in healthcare reform, including reimbursement methodologies, could negatively impact profit margins and create uncertainties for the business[110] Shareholder Returns - The quarterly dividend was raised from 0.62to0.71 per share, with regular cash dividends declared at 2.75,2.40, and 2.09persharefortheyearsendedMarch31,2025,2024,and2023,respectively[147]−Thecompanyreturned3.5 billion to shareholders during fiscal 2025 through 3.1billionincommonstockrepurchasesand345 million in dividend payments[177] - The total remaining authorization for repurchases of the company's common stock at March 31, 2025, was 7.5billion[177]CybersecurityandTechnologyRisks−ThecompanyhasimplementedaCybersecurityRiskManagementProgramalignedwithindustrybestpracticestomitigatematerialcybersecurityrisks[129]−Cybersecurityremainsakeyfocusforthecompany,withannualenterprise−wideriskassessmentsidentifyingitasaprincipalrisk[128]−Cybersecurityincidentsposeriskstotechnologysystems,potentiallyleadingtodatabreachesandoperationaldisruptions,affectingpatientcareandrevenue[91]EmployeeandOperationalConsiderations−Thecompanyiscommittedtoinvestinginemployeehealthandwellnessbenefits,training,andcompetitivecompensationtoattractandretaintalent[50]−AsofMarch31,2025,thecompanyhadapproximately45,000employeesworldwide,including36,000intheU.S.,5,000inCanada,and4,000inotherregions[49]AcquisitionsandDivestitures−Thecompanycompletedtheacquisitionofa702.49 billion cash[172] - The company completed the acquisition of an 80% interest in PRISM Vision Holdings, LLC, a provider of general ophthalmology and retina management services[173] - The company has divested the majority of its European businesses during fiscal 2022 and 2023, with ongoing evaluations for remaining operations in Norway[38] Legal and Environmental Risks - The company faces potential liabilities from litigation related to the distribution of controlled substances, which could adversely affect financial position[83] - The company incurred cleanup costs under environmental laws, which may increase due to new regulations[85] - There are potential intellectual property infringement claims against the company, which could result in substantial damages and affect financial results[106]