Mckesson Corp's Sales Model: Direct Hospital Sales?

Founded in 1833, McKesson Corporation is a publicly traded American company that is the largest pharmaceutical distributor in North America, delivering a third of all prescription medications used in the continent. The company has a wide range of customers, including retail pharmacies, hospital systems, health systems, long-term care facilities, and specialty pharmacies and clinics. McKesson's Medical-Surgical Solutions segment provides medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. McKesson also offers financial, operational, and clinical solutions to hospitals and provides extensive infrastructure for the healthcare industry.

McKesson Corp's role in pharmaceutical distribution

McKesson Corporation is a publicly traded American company that distributes pharmaceuticals and provides health information technology, medical supplies, and health management tools. It is the largest pharmaceutical distributor in North America, delivering a third of all pharmaceutical products used in the continent. It is also the largest health care company in the United States.

McKesson supports over 75% of U.S. hospitals in some aspect of supply, logistics, or support. The company delivers medical-surgical supplies, equipment, and logistics services to physician offices, surgery centers, home care agencies, and extended care providers. McKesson also supplies pharmaceuticals, health solutions, and logistics infrastructure to Canadian and other international healthcare systems.

The company has established two strategic objectives. The first is to extend its recognition as the distributor of choice from the retail to the institutional market. The second is to take advantage of changes in the health care industry and achieve superior growth by serving the needs of all sites where pharmaceuticals are prescribed or dispensed.

McKesson has been an early adopter of technologies, including barcode scanning for distribution, pharmacy robotics, and RFID tags. It has also developed automated pharmacy distribution systems. The company has a network of over 4,000 independently owned and operated pharmacies, known as Health Mart, and provides wholesale supplies and equipment for high-performing labs, physician practices, and post-acute care settings.

McKesson has faced criticism and legal action for its role in the opioid epidemic in the United States, including failing to report large orders of hydrocodone and not doing enough to track and stop suspicious opioid sales.

McKesson's support for US hospitals

McKesson Corp is one of the largest and oldest healthcare companies in the United States, specialising in pharmaceutical distribution, medical supply chain management, and health IT solutions. The company was founded in 1833 by John McKesson and Charles Olcott, and has since become a global healthcare leader. McKesson is responsible for delivering a third of all pharmaceutical products consumed in North America, serving over 50,000 pharmacy locations and supporting more than 75% of US hospitals in some aspect of supply, logistics, or support.

In addition to its direct support for hospitals, McKesson also provides solutions for medication access, affordability, and adherence. The company's Prescription Technology Solutions (RxTS) segment works across healthcare sectors to connect patients, pharmacies, providers, and health plans to improve access to medication. McKesson also offers consulting, outsourcing, and other technological services to hospitals and healthcare providers.

McKesson has been an early adopter of technologies such as barcode scanning, pharmacy robotics, and RFID tags, which have improved the efficiency of distribution and supply chain management. The company's acquisition of medical information systems firms and health management services providers has also contributed to its ability to support US hospitals.

McKesson's acquisition of Red Line HealthCare Corp

McKesson Corporation is a publicly traded American company that distributes pharmaceuticals and provides health information technology, medical supplies, and health management tools. It is the largest pharmaceutical distributor in North America, delivering a third of all pharmaceutical products used in the continent.

McKesson has a long history of acquisitions, which have fuelled its expansion. On November 17, 1998, McKesson announced its acquisition of Red Line HealthCare Corporation, a Novartis subsidiary based in Golden Valley, Minnesota. Red Line was a distributor of medical services and supplies for extended care facilities, with around 750 employees and annual sales of about $375 million. The acquisition of Red Line HealthCare strengthened McKesson's position as a supplier of medical supplies and services to the long-term-care industry.

The acquisition of Red Line Healthcare was part of McKesson's strategy to increase its market share in the medical technology sector. This acquisition, along with others such as Per Se Technologies and RelayHealth in 2006, and Practice Partner in 2007, helped McKesson expand its footprint in the healthcare industry.

Today, McKesson services over 50,000 pharmacy locations and supports more than 75% of U.S. hospitals in some aspect of supply, logistics, or support. The company has a vast infrastructure network and has been an early adopter of technologies such as barcode scanning, pharmacy robotics, and RFID tags. McKesson's acquisitions have played a significant role in its growth and dominance in the healthcare industry.

McKesson's divestment from hospital med/surg business

McKesson Corporation is a publicly traded American company that distributes pharmaceuticals and provides health information technology, medical supplies, and health management tools. It is the largest pharmaceutical distributor in North America, delivering a third of all prescription medications used in the US.

McKesson has a long history in the healthcare industry, dating back to its founding in 1833. Over the years, it has expanded its market in medical technology through acquisitions, including Per Se Technologies and RelayHealth in 2006 and Practice Partner in 2007. In 1997, McKesson entered the med/surg market with the acquisition of General Medical Corp. and Red Line HealthCare Corp., a distributor of med/surg supplies and services.

However, in 2025, McKesson announced its decision to spin off its Medical-Surgical Solutions business as a separate entity. This strategic move aims to enhance the company's focus on pharmaceutical and specialty services, particularly in high-growth areas like oncology. The Medical-Surgical Solutions division handles the distribution of medical-surgical supplies, logistics, and related services to healthcare providers such as clinics, surgical centers, elder care facilities, and home healthcare agencies.

This divestment is expected to result in two well-capitalized companies with improved operational focus and strategic opportunities. While McKesson will no longer directly provide med/surg products to hospitals, it will retain its Corporate Solutions group, which will continue to represent the company's offerings in acute care.

The exit from the hospital med/surg business is not expected to significantly impact McKesson's distribution franchise, according to analysts like McFadden, who highlights the modest competitive advantage of cross-marketing med/surg products and pharmaceuticals.

McKesson's international distribution and services

McKesson Corporation is a publicly traded American company that distributes pharmaceuticals and provides health information technology, medical supplies, and health management tools. It is among the largest and oldest healthcare companies in the United States, specialising in pharmaceutical distribution, medical supply chain management, and health IT solutions.

McKesson delivers a third of all pharmaceutical products consumed in North America and serves over 50,000 pharmacy locations. The company supplies medications and medical products to hospitals, pharmacies, clinics, and other care facilities across North America. McKesson supports more than 75% of U.S. hospitals in some aspect of supply, logistics, or support.

In addition to its presence in North America, McKesson has expanded its footprint internationally. McKesson ANZ, a fully owned subsidiary of the corporation, operates in Australia and New Zealand, providing healthcare optimisation services and software. McKesson Capacity Planner, formerly known as Emendo CapPlan, is used in more than 40 hospitals across Australia, New Zealand, Britain, Canada, and the United States.

McKesson's international reach also extends to Canada, where it delivers pharmaceuticals, health solutions, and logistics infrastructure to Canadian healthcare systems. The company's website mentions providing prescription and over-the-counter drugs, medical supplies, healthcare IT, and pharmacy management software to its customers.

Through its global network, McKesson connects pharmaceutical manufacturers and payers, helping patients gain access to medication access, affordability, and adherence programs. The company has established itself as an innovator in supply chain automation, pharmacy technology, digital solutions, and data analytics, offering automated pharmacy distribution systems.

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