To our valued shareholders:
In Fiscal Year 2026 (FY26), McKesson delivered strong performance and made meaningful
progress toward our strategic priorities and our purpose of Advancing Health Outcomes
for All®.
As the healthcare landscape continued to transform, we operated with focus and rigor,
strengthening our foundation and positioning the company for growth. We supported our
customers, patients and partners, expanding access to care and driving innovation across
the healthcare system.
In FY26, our revenue grew 12% to $403.4 billion, earnings per diluted share was $38.38
íŠĐ̗ íĐŏƭƙƥĘĐ̗ ĘíƑŠľŠıƙ̗ ƎĘƑ̗ ĐľŕƭƥĘĐ̗ ƙĹíƑĘ̗ ıƑĘDž̗ ˜ˣΑ̗ íĈūDŽĘ̗ ƥĹĘ̗ ƎƑľūƑ̗ NjĘíƑ̠̗
ØĘ̗ íƑĘ̗ ĉūŠǝĐĘŠƥ̗ ľŠ̗
our ability to deliver continued business progress and generate shareholder return.
McKesson Strategy
Our enterprise strategy guides how we operate and allocate resources, grounded in clear
priorities and disciplined capital deployment. In FY26, that focus drove investment in our
people, capabilities and leadership – building measurable momentum across the company.
1 | Focus on People and Culture
Our people and culture sit at the heart of McKesson’s strategy. In FY26, we enhanced
engagement and performance by modernizing how work gets done and aligning
development and leadership expectations. We embedded digital and AI-enabled tools
and learning into daily work, building capabilities across our teams and enabling faster,
more informed decision-making.
We introduced McKesson’s Leadership Prescription — grounded in our I²CARE values
and activated through six LEADRx behaviors — providing greater clarity to how all
employees lead, make decisions and deliver results in a more complex environment.
Alongside this work, we expanded our investment in employee wellbeing, enhancing
ƙƭƎƎūƑƥ̗ İūƑ̗ ŞĘŠƥíŕ̗ ĹĘíŕƥĹ̡̗
DžūŞĘŠ͂ƙ̗ ĹĘíŕƥĹ̡̗
ĉíƑĘıľDŽľŠı̗ íŠĐ̗ ǝŠíŠĉľíŕ̗ DžĘŕŕĈĘľŠı̠̗
ØĘ̗ íŕƙū̗
deepened a culture of belonging through inclusion and community impact. More than
˞˞Α̗ ūİ̗ ĘŞƎŕūNjĘĘƙ̗ ŠūDž̗ ƎíƑƥľĉľƎíƥĘ̗ ľŠ̗ íƥ̗ ŕĘíƙƥ̗ ūŠĘ̗ .ŞƎŕūNjĘĘ̗ ¥ĘƙūƭƑĉĘ̗ GƑūƭƎ̡̗
ƑĘǞĘĉƥľŠı̗
increased connection. Through employee-led volunteering, Community Impact Days
and corporate charitable contributions, we extended our impact, supporting community
health and employee-driven service.
2 | Strengthen North American Distribution
North American distribution remains a core enterprise priority for McKesson. In FY26,
teams worked in a more demanding environment, shaped by rising volumes, increasing
therapeutic complexity and higher expectations. In response, we focused on increasing
capacity, maintaining regulatory readiness and ensuring the reliable delivery of medicines
and therapies to providers and patients across the U.S. and Canada. We expanded
key customer and manufacturer partnerships, securing renewals and extensions while
continuing to deliver broad, reliable access. We also advanced our multi-year investment
in the supply chain of the future, increasing refrigerated capacity and opening a cell and
gene therapy distribution facility to support highly specialized and emerging therapies.
In Canada, we launched a new state-of-the-art distribution center in Montreal, adding
critical capacity and advanced automation to improve precision, performance and service
reliability. Teams also reinforced supply chain integrity and trust by achieving compliance
with the Drug Supply Chain Security Act (DSCSA) without meaningful disruption.
3 | Grow Oncology, Multispecialty and Biopharma Platforms
Our oncology, multispecialty and biopharma platforms remain central to McKesson’s
growth, supporting high-quality, community-based care while broadening access to
innovative therapies. In FY26, The US Oncology Network (The Network) added more
than 570 providers, its largest net increase since 2010, further expanding access to
community-based care across more than 700 sites nationwide. The Network also
represented more than 65% of national participation in the Enhancing Oncology Model,
ƑĘǞĘĉƥľŠı̗ ľƥƙ̗ ƙĉíŕĘ̗ íŠĐ̗ ŕĘíĐĘƑƙĹľƎ̗ ľŠ̗ DŽíŕƭĘ̰
ĈíƙĘĐ̗ ĉíŠĉĘƑ̗ ĉíƑĘ̠
We grew multispecialty capabilities through the addition and integration of PRISM Vision
and partnerships such as Florida Cancer Specialists, increasing geographic reach and
reinforcing our support for physician-led practices. Across oncology and biopharma, we
advanced data, research and access capabilities, supporting a growing portfolio of clinical
trials and expanding technology-enabled access for providers and patients.
We also strengthened our position in cell and gene therapy through InspiroGene and the
InspiroCare hub, advancing readiness for highly specialized treatments and reinforcing
McKesson’s role as a long-term partner. A record 3.4 million patients were supported
through our biopharma services platform on their journey to access the medicines
they need. This reach is enabled by a digitally connected network of more than 1 million
providers and 50,000 pharmacies, backed by continued investment in technology,
íƭƥūŞíƥľūŠ̗ íŠĐ̗ íĉĉĘƙƙ̗ íŠĐ̗ íǚūƑĐíĈľŕľƥNj̗ ƙūŕƭƥľūŠƙ̠
4 | Modernize and Accelerate the Portfolio
In FY26, we advanced modernization across the enterprise by embedding data,
technology and AI into core operations, enhancing execution and supporting
ĐĘĉľƙľūŠ̰
ŞíŒľŠı̠̗
Nj̗ íƎƎŕNjľŠı̗ íŠíŕNjƥľĉƙ̗ íŠĐ̗ íƭƥūŞíƥľūŠ̗ ƥū̗ ƎƑľūƑľƥNj̗ DžūƑŒǞūDžƙ̡̗
DžĘ̗ ľŠĉƑĘíƙĘĐ̗
productivity, consistency and responsiveness in key areas of the business, including
planning and inventory management, where AI-driven capabilities are enabling a shift
toward real-time, end-to-end coordination and supporting responsiveness and scalability
across customer and support functions.
At the same time, we continued to sharpen our portfolio. We completed our exit from
Europe and advanced actions to support the separation readiness of Medical-Surgical
Solutions, further focusing McKesson on core growth platforms. We also enhanced
multispecialty capabilities through targeted acquisitions and platform improvements that
simplify onboarding, accelerate access to complex therapies and strengthen engagement
İūƑ̗ ƎƑūDŽľĐĘƑƙ̗ íŠĐ̗ ƎíƥľĘŠƥƙ̠̗
¹ūıĘƥĹĘƑ̡̗
ƥĹĘƙĘ̗ ĘǚūƑƥƙ̗ íƑĘ̗ ŞūĐĘƑŠľǕľŠı̗ ĹūDž̗ rĉfĘƙƙūŠ̗
operates and improving how we deliver value.
Advancing Health Outcomes for All®
As we look ahead, McKesson’s strong foundation — grounded in disciplined execution,
focused investment and committed leadership — positions us well to navigate an increasingly
complex healthcare landscape and deliver meaningful impact. As digital and AI-enabled
ĉíƎíĈľŕľƥľĘƙ̗ ĉūŠƥľŠƭĘ̗ ƥū̗ ƙĹíƎĘ̗ ĹūDž̗ DžĘ̗ ūƎĘƑíƥĘ̡̗
ƥĹĘNj̗ ƑĘǞĘĉƥ̗ ūƭƑ̗ ƙĹíƑĘĐ̗ ƙĘŠƙĘ̗ ūİ̗ ƎƭƑƎūƙĘ̗ íŠĐ̗
our commitment to supporting all those who rely on us.
I am grateful to all of the members of Team McKesson for their dedication and the role
they play in bringing our strategy to life every day. Thank you to our shareholders for your
continued trust and to our Board of Directors for their leadership and guidance. Together,
we look forward to building on this momentum and creating long-term value while making a
ƎūƙľƥľDŽĘ̗ ĐľǚĘƑĘŠĉĘ̗ İūƑ̗ ƎíƥľĘŠƥƙ̡̗
ƎƑūDŽľĐĘƑƙ̗ íŠĐ̗ ĉūŞŞƭŠľƥľĘƙ̗ íĉƑūƙƙ̗ ĹĘíŕƥĹĉíƑĘ̠
Brian Tyler
ĹľĘİ̗ .NJĘĉƭƥľDŽĘ̗ ǛĉĘƑ̗ íŠĐ̗ ĹíľƑ
McKesson
[THIS PAGE INTENTIONALLY LEFT BLANK]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2026
OR
☐
TRANS
R
ITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission File Number: 1-13252
McKESSON CORPORAT
R
ION
(Exact name of registrant as specified in its charter)
Delaware
94-3207296
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
6555 State Hwy 161,
Irving, TX 75039
(Address of principal executive offi
f
ces, including zip code)
(972) 446-4800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
(Title
T
of each clas
l
s)
(Tra
T
ding
i
Symbol)
(
l
Na
(
me of each exchange on which regi
e
st
i
er
t
ed)
d
Common stock, $0.01 par value
MCK
New York Stock Exchange
1.625% Notes due 2026
MCK26
New York Stock Exchange
3.125% Notes due 2029
MCK29
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes
☒
No
☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
Yes
☐
No
☒
Indicate
by
check
mark
whether
the
registrant
(1)
has
filed
all
reports
required
to
be
filed
by
Section
13
or
15(d)
of
the
Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subj
u
ect to such filing requirements for the past 90 days.
Yes
☒
No
☐
Indicate
by
check
mark
whether
the
registrant
has
subm
u
itted
electronically
every
r
Interactive
Data
File
required
to
be
subm
u
itted
pursuant
to
Rule
405
of
Regulation
S-T
(§232.405
of
this
chapter)
during
the
preceding
12
months
(or
for
such
shorter
period
that
the
registrant was required to subm
u
it such files).
Yes
☒
No
☐
Indicate
by
check
mark
whether
the
registrant
is
a
large
accelerated
filer,
an
accelerated
filer,
a
non-accelerated
filer,
a
smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If
an
emerging
growth
company,
indicate
by
check
mark
if
the
registrant
has
elected
not
to
use
the
extended
transition
period
for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effe
f
ctiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report.
☒
If
securities
are
registered
pursuant
to
Section
12(b)
of
the
Act,
indicate
by
check
mark
whether
the
financial
statements
of
the
registrant included in the filing reflect the correction of an error to previously issued financial statements.
☐
Indicate
by
check
mark
whether
any
of
those
error
corrections
are
restatements
that
required
a
recovery
analysis
of
incentive-based
compensation received by any of the registrant’s executive offi
f
cers during the relevant recovery period pursuant to §240.10D-1(b).
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes
☐
No
☒
The
aggregate
market
value
of
the
voting
and
non-voting
common
equity
held
by
non-affi
f
liates
of
the
registrant,
computed
by
reference
to
the
closing
price
as
of
the
last
business
day
of
the
registrant’s
most
recently
completed
second
fiscal
quarter,
September
30,
2025, was approximately $95.3 billion.
Number of shares of common stock outstanding on April 30, 2026: 120,204,051
DOCUMENTS INCORPORAT
R
ED BY REFERENCE
Portions of the registrant’s Proxy Statement for its calendar year 2026 Annual Meeting of Shareholders are incorporated by reference
into Part III of this Annual Report on Form 10-K.
TABLE OF CONTENTS
Item
Page
g
PART I
1.
Business
...............................................................................................................................................................
3
1A.
Risk Factors
.........................................................................................................................................................
14
1B.
Unresolved Staff Comments
...............................................................................................................................
26
1C.
Cybersecurity
......................................................................................................................................................
27
2.
Properties
.............................................................................................................................................................
28
3.
Legal Proceedings
...............................................................................................................................................
28
4.
Mine Safety Disclosures
......................................................................................................................................
28
Information about our Executive Officers
...........................................................................................................
29
PART II
5.
Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity
Securities
.............................................................................................................................................................
30
6.
Reserved
..............................................................................................................................................................
32
7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
.............................
33
.
Quantitative and Qualitative Disclosures About Market Risk
............................................................................
57
8.
Financial Statements and Supplementary Data
...................................................................................................
58
9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
.............................
119
9A.
Controls and Procedures
......................................................................................................................................
119
9B.
Other Information
................................................................................................................................................
119
9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
................................................................
119
PART III
10.
Directors, Executive Officers, and Corporate Governance
.................................................................................
119
11.
Executive Compensation
.....................................................................................................................................
120
12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
...........
121
13.
Certain Relationships and Related Transactions, and Director Independence
....................................................
121
14.
Principal Accountant Fees and Services
.............................................................................................................
121
PART IV
15.
Exhibits and Financial Statement Schedule
........................................................................................................
122
16.
Form 10-K Summary
..........................................................................................................................................
128
Signatures
............................................................................................................................................................
129
McKESSON CORPORAT
R
ION
PART I
Item 1.
Business.
INDEX TO BUSINESS
Section
Page
g
General
..........................................................................................................................................................................
3
Business Segments
........................................................................................................................................................
4
North American Pharmaceutical
............................................................................................................................
4
Oncology & Multispecialty
....................................................................................................................................
7
Prescription Technology Solutions
........................................................................................................................
8
Medical-Surgical Solutions
....................................................................................................................................
8
Investments, Restructuring, Business Combinations, and Divestitures
.......................................................................
8
Competition
...................................................................................................................................................................
8
Patents, Trademarks, Copyrights, and Licenses
............................................................................................................
9
Human Capital
...............................................................................................................................................................
9
Government Regulation
.................................................................................................................................................
10
Other Information about the Business
...........................................................................................................................
13
Forward-Looking Statements
........................................................................................................................................
14
General
McKesson Corporation together with its subs
u
idiaries (collectively, the “Company,” “McKesson,” “we,” “our,” or “us” and
other
similar
pronouns),
which
traces
its
business
roots
to
1833,
is
a
diversifie
f
d
healthcare
services
leader
dedicated
to
advancing health outcomes for patients everyw
r
here. Our teams partner with biopharma companies, care providers, pharmacies,
manufact
f
ur
t
ers,
governments,
and
others
to
deliver
insights,
products,
and
services
to
help
make
quality
care
more
accessible
and affo
f
rdable.
The
Company’s
fiscal
year
begins
on
April
1
and
ends
on
March
31.
Unless
otherwise
noted,
all
references
in
this
document to a particular year refer to the Company’s fiscal year. The Company was incorporated on July 7, 1994 in the State of
Delaware.
Our
Annual
Reports
on
Form
10-K,
Quarterly
Reports
on
Form
10-Q,
Current
Reports
on
Form
8-K,
and
amendments
to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”),
are
availabl
a
e
free
of
charge
on
the
Company’s
website
(www.mckesson.com
under
the
“Investors
—
Financials
—
SEC
Filings” capt
a
ion) as soon as reasonabl
a
y practicable afte
f
r such material is electronically filed with, or furnished to, the Securities
and
Exchange
Commission
(“SEC”).
The
content
on
any
website
referred
to
in
this
Annual
Report
on
Form
10-K
(“Annual
Report”)
is
not
incorporated
by
reference
into
this
report,
unless
expressly
noted
otherwise.
The
SEC
maintains
a
website
that
contains
reports,
proxy
and
information
statements,
and
other
information
regarding
issuers,
including
the
Company,
that
file
electronically with the SEC. The address of the website is www.sec.gov.
McKESSON CORPORAT
R
ION
3
Business Segments
Commencing
in
the
second
quarter
of
fiscal
2026,
we
implemented
a
new
segment
reporting
structur
t
e
which
resulted
in
four reportabl
a
e segments: North American Pharmaceutical, Oncology & Multispecialty, Prescription Technology Solutions, and
Medical-Surgical Solutions. Our former Norwegian operations were in
lcl
d
uded in Other. All prior segment information has been
recast to reflect the Company’s new segment structur
t
e and current period presentation.
Our
North
American
Pharmaceutical
segment
distributes
branded,
generic,
specialty,
biosimilar
and
over-the-counter
(“OTC”) pharmaceutical drugs
r
, and other healthcare-related products to customers in the United States (“U.S.”) and Canada. In
addition,
the
segment
sells
financial,
operational,
and
clinical
solutions
to
pharmacies
(retail,
hospital,
alternate
sites)
and
provides
consulting,
outsourcing,
technological,
and
other
services.
The
U.S.
distribution
operations
were
previously
included
in
the
former
U.S.
Pharmaceutical
reportabl
a
e
segment,
and
the
Canadian
operations
were
previously
included
in
the
former
International reportabl
a
e segment.
Our
Oncology
&
Multispecialty
segment
in
lcl
d
udes
pr
p
ovider
solutions
that
encompass
specialty
drug
r
distribution,
group
purchasing
organizations,
infusion
services,
direct
to
patient
pharmacy
capabilities,
InspiroGene™cell
and
gene
therapy
services, technology solutions, practice consulting services, and vaccine distribution. In
d
addidi ition,
hthe segment suppor
u
ts
hthe U.S.
Oncology
gy Network, one of
hthe la
g
rgest networks of phys
physician-led, integrat
d
ed, commu
ini yty
b
-bas
d
ed onc
lol
gy
ogy practices dedidicat
d
ed to
d
advancing
hihigh-
gh-qualili yty,
evididence-based
cancer
care
in
hthe
U.S.
h
The
segment
lalso
in
lcl
d
udes
PRISM
Vision
Holdings,
LLC
(“PRISM
i
Vi
ision”);
h
which
drives
pa itient
outcomes
in
a
re itina
and
h
ophthalm
lol
gy
ogy
setting.
Co
b
mbin
d
ed
i
wi hth
Sarah
Cannon
Resear
h
ch
Institut
t
e
(“SCRI
)”)
a
d
nd
our
te
h
ch
l
nol
gy
ogy
business,
Ontada,
hthis
segment
pr
i
ovides
resear
h
ch,
in
isight
ghts,
te
h
ch
l
nologi
ogies,
and
services
hthat
d
address
and
improve
cancer
and
sp
i
eci
lal yty
care.
This
segment
was
previously
reflected
in
the
former
U.S.
Pharmaceutical reportabl
a
e segment.
Our Prescription Technology Solutions segment helps solve medication access, affo
f
rdability, and adherence challenges for
patients by working across healthcare to connect patients, pharmacies, providers, pharmacy benefit managers, health plans, and
biopharma
companies.
Prescription
Technology
Solutions
serves
our
biopharma
and
lifef
sciences
partners,
delivering
innovative solutions that help people get the medicine they need to live healthier lives. Prescription Technology Solutions offe
f
rs
technology
services,
which
includes
electronic
prior
authorization,
prescription
price
transparency,
benefit
insight,
dispensing
suppor
u
t
services,
and
patient
enrollment,
in
addition
to
third-party
logistics
and
wholesale
distribution
suppor
u
t
designed
to
benefit stakeholders.
Our
Medical-Surgical
Solutions
segment
is
a
leading
provider
of
medical-surgical
suppl
u
ies,
labor
a
atory
r
equipment,
and
pharmaceutical
distribution,
logistics,
and
other
services
to
non-acute
settings
in
the
U.S.
These
include
healthcare
providers
operating
in
ambulatory
r
care
environments,
such
as
physician
offi
f
ces,
surgery
r
centers,
and
hospital
reference
labs
a
,
as
well
as
extended
care
settings,
including
nursing
homes,
hospice
and
home
health
care
agencies,
government
markets,
and
online
marketpl
t
aces and retailers. This segment offe
f
rs more than 270,000 national brand medical-surgical products as well as its own
line
of
more
than
4,000
high-quality
products
through
a
network
of
distribution
centers
in
the
U.S.
During
fiscal
2026,
we
announced
our
intention
to
separate
this
segment
into
an
independent
company.
As
a
part
of
the
separation
strategy,
on
April
20,
2026,
we
announced
a
definitive
agreement
under
which
funds
managed
by
affi
f
liates
of
Apollo
Global
Management,
Inc.
(“Apollo
Funds”)
will
acquire
approximately
13%
minority
ownership
interest
in
our
Medical
-
Surgical
Solutions
segment
through an investment of
approximately $1.25
billion in the segment’s convertible prefer
f
red
equity.
This transaction is subj
u
ect
to regulatory
r
approvals and customary
r
closing conditions.
Our
former
Norwegian
operations,
which
provided
distribution
and
services
to
wholesale
and
retail
customers
in
Norway
where we owned, partnered, or franchised with retail pharmacies, were included in Other. During fiscal 2026, we completed the
sale
of
our
businesses
in
Norway.
Refer
to
Financial
Note
2,
“Business
Acquisitions
and
Divestitures,”
to
the
consolidated
financial statements included in this Annual Report for more information.
North American Pharmaceutical Segment:
Our
North
American
Pharmaceutical
segment
provides
distribution
and
logistics
services
for
branded,
generic,
specialty,
biosimilar,
and
OTC
pharmaceutical
drugs
r
along
with
other
healthcare-related
products
to
customers
in
the
U.S.
and
Canada.
This
business
provides
solutions
and
services
to
pharmacies,
hospitals,
pharmaceutical
manufact
f
ur
t
ers,
physicians,
payors,
and
patients.
We
also
source
generic
pharmaceutical
drug
r
s
through
our
Clarus
r
ONE
Sourcing
Services
LLP
joint
ventur
t
e
with
Walmart Inc. (“Clarus
r
ONE”).
McKESSON CORPORAT
R
ION
4
U.S. Pharmaceutical
Our
U.S.
Pharmaceutical
business
operates
and
serves
customers
through
a
network
of
27
distribution
centers
in
the
U.S.,
including
two
strategic
redistribution
centers.
We
invest
in
technology
and
other
systems
at
all
of
our
distribution
centers
to
enhance
safety,
reliabi
a
lity,
and
product
availabi
a
lity.
For
example,
we
offe
f
r
McKesson
Connect
SM
,
an
internet-based
ordering
system
that
provides
item
look-up
and
real-time
inventory
r
availabi
a
lity
as
well
as
ordering,
purchasing,
third-party
reconciliation, and account management functionality. We make extensive use of technology as an enabler to ensure customers
have the right products at the right time in the right place.
To
maximize
distribution
effi
f
ciency
and
effe
f
ctiveness,
we
follow
the
Six
Sigma
methodology,
which
is
an
analytical
approach
that
emphasizes
setting
high-quality
objectives,
collecting
data,
and
analyzing
results
to
a
fine
degree
in
order
to
improve
processes,
reduce
costs,
and
enhance
service
accuracy
and
safety.
We
provide
solutions
to
our
customers
including
suppl
u
y management technology, world-class marketing programs, managed care, and services to help them meet their business
and
quality
goals.
We
continue
to
implement
information
systems
to
help
achieve
greater
consistency
and
accuracy
both
internally and for our customers, as well as make investments to increase capacity and automation.
Within
U.S.
Pharmaceutical,
we
have
three
primary
pharmaceutical
distribution
customer
channels:
(i)
retail
national
accounts,
which
include
national
and
regional
retail
chains,
food
and
drug
r
combinations,
mail
order
pharmacies,
and
mass
merchandisers,
(ii)
community
pharmacy
and
health,
and
(iii)
institutional
healthcare
providers
such
as
hospitals,
health
systems, integrated delivery networks, and long-term care providers.
Retail National Accounts:
t
We provide business solutions that help our retail national account customers increase revenues
and profita
f
bi
a
lity. Solutions include:
•
Central
Fill
SM
–
Prescription
refill
service
that
enables
pharmacies
to
more
quickly
refill
prescriptions
remotely,
more
accurately, and at a lower cost, while reducing inventory
r
levels and improving customer service.
•
Strategic
Redistribution
Centers
–
Two
facilities
totaling
over
740,000
square
feet
that
offe
f
r
access
to
inventory
r
for
single
source
warehouse
purchasing,
including
pharmaceuticals
and
biologics.
These
distribution
centers
also
provide
the foundation for a two-tiered distribution network that suppor
u
ts best-in-class direct store delivery.
r
•
McKesson SynerGx
®
– Generic pharmaceutical purchasing program and inventory
r
management that helps pharmacies
maximize their cost savings with a broad selection of generic drugs
r
, competitive pricing, and one-stop shopping.
•
Inventory
r
Management
–
An
integrated
solution
comprised
of
forecasting
software
and
automated
replenishment
technologies that reduce inventory-
r
carrying costs.
•
ExpressRx
Track
™
–
Pharmacy
automation
solution
featur
t
ing
state-of-t
f
he-art
robotics,
upgraded
imaging,
and
expanded vial capabilities, and industry-
r
leading speed and accuracy in a small footpr
t
int.
Community
Pharmacy
and
Health:
We
strengthen
the
overall
health
of
community
pharmacies
and
elevate
the
role
they
play
in
people’s
lives.
We
accomplish
this
by
providing
suppl
u
y
chain
excellence,
pharmacy
and
patient
solutions,
as
well
as
suppor
u
ting independent pharmacies through industry
r
and legislative advocacy. Our pharmacy and patient solutions include:
•
Health Mart
®
– A national network of approximately 3,900 independently-owned pharmacies and one of the industry’
r
s
most
comprehensive
pharmacy
franchise
programs.
Health
Mart
provides
solutions
for
franchisees
to
promote
excellence
in
business
operations,
team
development,
patient
health,
marketing
and
merchandising,
and
protects
financial health through proactive audit suppor
u
t.
•
Health Mart Atlas
®
and Atlas Specialty – Comprehensive managed care services that connect the continuum of care to
help
community
pharmacies,
health
systems,
and
physician
practices
save
time,
access
competitive
reimbursement
rates, and improve cash flow.
•
McKesson
Reimbursement
Advantage
SM
(“MRA”
R
)
–
MRA
R
is
one
of
the
industry’
r
s
most
comprehensive
reimbursement
optimization
packages,
comprising
financial
services
(automated
claim
resubm
u
ission),
analytic
services, and customer care.
McKESSON CORPORAT
R
ION
5
•
McKesson
Provider
Pay
®
–
An
automated
reconciliation
and
payment
management
solution
designed
to
maximize
third-party cash flow and pursue unpaid claims.
•
McKesson
Amplify
f
–
Provides
resources
for
state
pharmacy
associations
in
all
50
states,
including
dedicated
suppor
u
t
funding,
resources,
and
opportunities
to
participate
in
best
practice
sharing
consortia.
The
funding
helps
to
suppor
u
t
advocacy
initiatives
that
address
the
unique
challenges
faced
by
independent
pharmacies
and
promote
their
sustainabi
a
lity and growth.
•
McKesson
OneStop
Generics
®
–
Generic
pharmaceutical
purchasing
program
that
helps
pharmacies
maximize
their
cost savings with a broad selection of generic drugs
r
, competitive pricing, and one-stop shopping.
•
Pinpoint
Community
Solutions
–
McKesson’s
perpetua
t
l
inventory
r
management
system
targeted
to
independent
pharmacy owners with five or fewer stores. The solution provides customers the opportunity to improve cash flow and
increase efficiency with inventory
r
visibility to help maximize operational performance.
•
FrontEdge™–
Strategic
planning,
merchandising,
and
price
maintenance
program
that
helps
community
pharmacies
maximize store profita
f
bi
a
lity.
•
McKesson
RxOwnership
Program
–
A
confid
f
ential,
no-fee
resource
for
pharmacists
and
pharmacy
owners
interested
in buying, starting, or selling an independent pharmacy, regardless of their pharmacy affi
f
liation.
Institutional Healthcare Provider
d
s:
r
At McKesson, we aim to achieve operational effi
f
ciency, reduce waste, and improve the
financial performance of our customers so they can achieve more of their goals today and into the future. Solutions include:
•
Professional
and
Advisory
Services
–
Comprehensive
suite
of
advisory
and
consulting
services
designed
to
suppor
u
t
pharmacy
initiatives
across
health
systems,
including
patient
care,
business
operations,
ambulatory
r
services,
inpatient
operations,
data
and
digitization,
pharmacy
workforce
management,
leadership,
and
compliance
with
safety,
quality,
and
regulatory
r
standards.
Specialized
consulting
areas
include
340B
optimization,
orpha
r
n
drug
r
suppor
u
t,
and
retail
pharmacy payer solutions.
•
McKesson
Plasma
and
Biologics
–
Specialty
and
plasma
drug
r
distributor
that
leads
in
market
exclusive
drug
r
access;
partner
to
health
systems
customers
in
navigating
the
complexities
of
limited
distribution
drug;
r
and
optimization
of
McKesson Distribution benefits.
•
Outpa
t
tient,
Retail,
and
Specialty
Pharmacy
–
A
portfol
f
io
of
services
and
solutions
customized
to
each
customer’s
business and clinical strategy.
•
Contracting
and
Contract/P
t
urchasing
Optimization
–
Solutions
across
generics,
specialty,
branded
products,
biosimilars, and 340B products, for inpatient and outpa
t
tient settings.
•
Supply
Assurance
–
Solutions
and
strategies
to
enhance
product
availabi
a
lity
and
proactively
manage
inventory
r
of
critical items.
Our U.S. Pharmaceutical business also offe
f
rs solutions which enable its customers to drive greater effi
f
ciencies in their day-
to-day
operations,
effe
f
ctively
managing
their
inventories
and
complying
with
complex
government
regulations.
Solutions
include
McKesson
Pharmacy
Systems,
MacroHelix,
and
Suppl
u
y
Logix,
all
of
which
provide
innovative
software
technology
and services that suppor
u
t retail pharmacies and hospitals.
McKe
c
sson Canada
Our Canadian pharmaceutical business is one of the largest pharmaceutical wholesale and retail distributors in Canada. The
wholesale
business
delivers
products
to
retail
pharmacies,
hospitals,
long-term
care
centers,
clinics,
and
institutions
in
Canada
through a national network of distribution centers and provides logistics and distribution services for manufact
f
ur
t
ers.
McKESSON CORPORAT
R
ION
6
Beyond
wholesale
pharmaceutical
logistics
and
distribution,
our
Canadian
Pharmaceutical
business
provides
automation
and
technology
solutions
to
its
retail
and
hospital
customers.
We
also
provide
specialty
health
services
in
Canada
and
biopharma
services
to
pharmaceutical
manufact
f
ur
t
ers,
including
a
national
network
of
specialized
pharmacies
and
patient
suppor
u
t and care programs. These services include INVIVA, which operates Canada’s first nationally accredited and one of the
largest networks of private infusion clinics.
Through our Specialty Health platform, McKesson Canada provides data
-
driven insights and real
-
world evidence offe
f
rings,
leveraging
de
-
identified,
privacy
-
compliant
data
to
suppor
u
t
manufact
f
ur
t
ers
with
commercialization,
market
access,
and
patient
journey
optimization.
Additionally,
McKesson
Canada
owns
and
operates
PDCI
Market
Access,
a
leading
Canadian
market
access
and
reimbursement
consultancy
that
suppor
u
ts
manufact
f
ur
t
ers
in
the
launch
and
commercialization
of
new
products
in
Canada.
Our
Canadian
retail
business
operates
approximately
2,600
independent
pharmacies
under
five
nationally
recognized
banners: IDA®, Guardian®, Remedy’sRx®, Proxim®, and Uniprix®.
Oncology & Multispecialty:
The Oncology & Multispecialty segment provides a range of solutions to oncology and other specialty practices and offe
f
rs
community physician specialists (oncologists, rheumatologists, ophthalmologists, urologists, neurologists, and other specialists)
an
extensive
set
of
customizable
solutions
and
services
designed
to
strengthen
core
practice
operations,
enhance
value-based
care delivery,
r
and expand their service offe
f
ring to patients. Community-based physicians suppor
u
ted by this business have broad
flexibility and discretion to select the products and commitment levels that best meet their practice needs. Services in provider
solutions
include
specialty
drug
r
distribution,
group
purchasing
organizations
(“GPOs”)
like
Onmark
®
,
technology
solutions,
practice consulting services, and vaccine distribution.
This
segment
provides
a
variety
of
solutions,
including
practice
operations,
healthcare
information
technology,
revenue
cycle
management
and
managed
care
contracting
solutions,
evidence-based
guidelines,
and
quality
measurements
to
suppor
u
t
our
practice
management
platforms.
These
include
the
U.S.
Oncology
Network,
one
of
the
nation’s
largest
networks
of
physician-led,
integrated,
community-based
oncology
practices
dedicated
to
advancing
high-quality,
evidence-based
cancer
care. The segment also includes an 80% controlling interest in PRISM Vision, a leading provider of general ophthalmology and
retina
management
services.
In
addition,
the
segment
includes
a
51%
controlling
interest
in
SCRI,
an
oncology
research
business
that
is
one
of
the
nation’s
largest
research
networks
and
specializes
in
enhancing
clinical
trial
access
and
availabi
a
lity
across the country.
This segment also includes Ontada
®
, McKesson’s oncology technology and insights business providing software to suppor
u
t
the clinical, financial, and operational needs of our oncology practice customers. Ontada also partners with oncology providers
and
biopharma
partners
to
perform
real-world
evidence
studi
t
es,
retrospective
research,
and
to
provide
clinical
data
insights,
electronic health record to electronic data capture capa
a
bi
a
lities, advisory solutions, and educ
d
ation opportunities.
When
we
use
the
terms
specialty
products
or
specialty
services,
we
consider
the
following
factors:
diseases
requiring
complex
treatment
regimens
such
as
cancer
and
rheumatoid
arthritis,
plasma
and
biologics
products,
ongoing
clinical
monitoring
requirements,
high-cost,
special
handling,
storage,
and
delivery
r
requirements
and,
in
some
cases,
exclusive
distribution
arrangements.
Our
use
of
the
term
“specialty”
may
not
be
comparable
to
that
used
by
other
industry
r
participants,
including our competitors.
McKESSON CORPORAT
R
ION
7
Prescription Technology Solutions Segment:
Our
Prescription
Technology
Solutions
segment
works
across
healthcare
to
connect
patients,
pharmacies,
providers,
pharmacy benefit managers, health plans, and biopharma to deliver medication access solutions that suppor
u
t patients from first
prescription fill to ongoing therapy, regardless of their insurance coverage. Prescription Technology Solutions has connections
with
most
electronic
health
record
systems,
over
50,000
pharmacies,
more
than
1,000,000
providers,
most
pharmacy
benefit
managers
and
health
plans,
and
has
suppor
u
ted
over
650
biopharma
brands
representing
most
therapeutic
areas.
Through
its
industry
r
connections
and
ability
to
navigate
the
healthcare
ecosystem,
Prescription
Technology
Solutions
offe
f
rs
innovative
solutions
created
to
benefit
healthcare
stakeholders.
Its
comprehensive
solution
suites
and
technology
services
span
across
the
entire
patient
journey,
including
medication
access
and
affo
f
rdability,
prescription
decision
suppor
u
t,
prescription
price
transparency,
benefit
insight
and
dispensing
suppor
u
t
services,
patient
enrollment,
as
well
as
third-party
logistics
and
wholesale
distribution suppor
u
t, to help increase speed to therapy, reduce prescription abandonment, and suppor
u
t improved health outcomes
for the patient. In the past year, Prescription Technology Solutions helped patients save approximately $10 billion on brand and
specialty
medications,
helped
to
prevent
an
estimated
12
million
prescriptions
from
being
abandoned
due
to
affo
f
rdability
challenges, and helped patients access their medicine more than 135 million times.
Medical-Surgical Solutions Segment:
Our
Medical-Surgical
Solutions
segment
is
a
leading
provider
of
medical-surgical
suppl
u
ies,
labor
a
atory
r
equipment,
and
pharmaceutical
distribution,
logistics,
biomedical
maintenance,
and
other
services
to
U.S.
healthcare
providers
across
the
non-
acute and alternate-site spectrum
r
. Our more than 336,000 customers include physician offi
f
ces, surgery
r
centers, post-acute care
facilities, hospital reference labs
a
, and home health agencies. We partner with manufact
f
ur
t
ers and channel partners to suppor
u
t our
key markets, including ambulatory
r
care, extended care, government, and other online marketpl
t
aces, and retailers. We distribute
medical-surgical
suppl
u
ies
(such
as
gloves,
needles,
syringes,
and
wound
care
products),
infusion
pumps,
labor
a
atory
r
equipment
and suppl
u
ies, and pharmaceuticals. Through a network of distribution centers in the U.S., we offe
f
r more than 270,000 products
from
national
brand
manufac
f
turers
and
our
own
brand
of
more
than
4,000
high-quality
products.
Through
the
right
mix
of
products
and
services,
we
help
improve
effi
f
ciencies,
profit
f
ability,
and
compliance.
Our
focus
is
to
help
customers
improve
patient and business outcomes. We develop customized plans to address the product, operational, and clinical suppor
u
t needs of
our customers, including inventory
r
management, reducing administrative burdens, and training and educ
d
ating clinical staff.
f
We
deliver
for
our
customers,
so
they
can
deliver
and
care
for
their
patients.
During
fiscal
2026,
we
announced
our
intention
to
separate this segment into an independent company.
As
a part of
the separation strategy, on April 20, 2026,
we announced we
had entered into a definitive agreement under which Apollo Funds will acquire approximately 13% minority ownership interest
in
our
Medical
-
Surgical
Solutions
segment
through
an
investment
of
approximately
$1.25
billion
in
the
segment’s
convertible
prefer
f
red equity. This transaction closing is subj
u
ect to regulatory
r
approvals and customary
r
closing conditions.
Investments, Restructuring, Business Combinations, and Divestitures
We
invest
in
new
and
existing
distribution
centers
to
increase
scale
and
capacity,
improve
effi
f
ciency
through
automation
and
technology,
and
enhance
regulatory
r
compliance
capa
a
bi
a
lities.
Additionally,
we
invest
in
data
and
analytics
to
suppor
u
t
our
growth
priorities,
including
artificial
intelligence
(“AI”).
We
are
in
the
early
stages
of
exploring
potential
AI
capabilities
and
related
data
and
analytics
across
our
enterprise
to
improve
produc
d
tivity
and
effi
f
ciency,
as
well
as
enhance
our
produc
d
ts
and
services to better suppor
u
t patients, employees, and customers.
We
have
undertaken
additional
strategic
initiatives
in
recent
years
designed
to
increase
operational
effi
f
ciencies,
focus
on
our
core
healthcare
businesses,
execute
our
business
strategy,
and
enhance
our
competitive
position.
These
initiatives
are
detailed
in
Financial
Note
2,
“Business
Acquisitions
and
Divestitures,”
and
Financial
Note
3,
“Restructuring,
Impairment,
and
Related Charges, Net,” to the consolidated financial statements included in this Annual Report.
Competition
We
operate
in
highly
competitive
markets
across
North
America,
and
the
healthcare
industry
r
has
experienced
significant
consolidation
in
recent
years.
Within
the
pharmaceutical
distribution
landscape
in
which
our
North
American
Pharmaceutical
segment operates, we face strong competition from international, national, regional, and local full-line, short-line, and specialty
distributors; service merchandisers; self-w
f
arehousing chain drugs
r
tores; manufact
f
ur
t
ers engaged in direct distribution; third-party
logistics
companies;
and
large
payer
organizations.
Our
primary
r
competitors
in
distribution,
wholesaling,
and
logistics
are
Cencora, Inc. and Cardinal Health, Inc.
McKESSON CORPORAT
R
ION
8
In
our
Oncology
&
Multispecialty
segment,
we
compete
with
other
specialty
distributors;
GPOs;
specialty
pharmacies;
oncology
networks
and
platforms;
ophthalmology
and
retina
management
services
providers;
and
healthcare
information
technology
and
data
and
analytics
companies.
Certain
competitors
also
offe
f
r
combinations
of
distribution,
GPO,
and
provider
services capabilities, including Cencora, Inc. and Cardinal Health, Inc. In addition, our clinical research offe
f
rings compete with
contract
research
organizations,
site
management
organizations,
academic
medical
centers,
and
health
systems
that
suppor
u
t
clinical trials.
Our
Prescription
Technology
Solutions
business
experiences
subs
u
tantial
competition
from
variety
of
organizations,
including other biopharma services providers, software and technology service firms, consulting firms, shared services vendors,
and internet-based companies offe
f
ring healthcare-focused technology solutions. Competition in this space ranges widely in size,
geographic reach, and the scope and depth of products and services offe
f
red.
Our
Medical-Surgical
Solutions
segment
competes
with
numerous
national
and
regional
distributors
of
medical
suppl
u
ies
and equipment throughout the U.S.
Additionally,
we
compete
with
other
service
providers
and
healthcare
manufact
f
ur
t
ers,
as
well
as
potential
customers
who
may
choose
to
build
internal
suppl
u
y
management
capa
a
bi
a
lities
rather
than
rely
on
external
partners
like
us.
We
believe
that
our
scale
and
the
breadth
of
our
product
and
service
portfol
f
io
are
key
competitive
advantages.
In
all
areas,
primary
competitive
factors include price, quality of service, product assortment, innovation, adoption of emerging technologies, and, in some cases,
customer convenience.
Patents, Trademarks, Copyrights, and Licenses
McKesson
and
its
subs
u
idiaries
hold
patents,
copyrights,
trademarks,
and
trade
secrets
related
to
McKesson
products
and
services.
We
pursue
patent
protection
for
our
innovations
and
obtain
copyright
protection
for
our
original
works
of
authorship
when
such
protection
is
advantageous.
Through
these
effo
f
rts,
we
have
developed
a
portfol
f
io
of
patents
and
copyrights
in
the
U.S. and worldwide. In addition, we have registered or applied to register certain trademarks and service marks in the U.S. and
in foreign countries.
We
believe
that,
in
the
aggregate,
McKesson’s
confid
f
ential
information,
patents,
copyrights,
trademarks,
and
intellectua
t
l
property
licenses
are
important
to
its
operations
and
market
position,
but
we
do
not
consider
any
of
our
businesses
to
be
dependent
upon
any
one
patent,
copyright,
trademark,
or
trade
secret,
or
any
family
or
families
of
the
same.
We
cannot
guarantee that our intellectual property portfol
f
io will be sufficient to deter misappropriation, theft,
f
or misuse of our technology,
nor that we can successful
f
ly enjo
n
in infringers. We periodically receive notices alleging that our products or services infringe on
third-party patents and other intellectua
t
l property rights. These claims may result in McKesson entering settlement agreements,
paying damages, discontinuing use or sale of accused products, or ceasing other activities. While the outcome of any litigation
or
dispute
is
inherently
uncertain,
we
do
not
believe
that
the
resolution
of
any
of
these
infringement
notices
would
have
a
material adverse impact on our results of operations.
We hold inbound licenses for certain intellectua
t
l property that is used internally, and in some cases, utilized in McKesson’s
products
or
services.
While
in
the
future
it
may
be
necessary
to
seek
or
renew
licenses
relating
to
various
aspects
of
our
products and services, we believe, based upon past experience and industry
r
practice, such licenses generally can be obtained on
commercially
reasonabl
a
e
terms.
We
believe
our
operations,
as
well
as
our
products
and
services,
are
not
materially
dependent
on any single license or other agreement with any third party.
Human Capital
Everyt
r
hing
we
do
at
McKesson
begins
with
our
employees,
who
bring
our
mission
and
purpos
r
e
to
lifef
every
r
day.
As
of
March
31,
2026,
we
had
more
than
43,000
employees
worldwide,
which
includes
1,400
part-time
employees.
We
had
approximately
38,000
employees
in
the
U.S.,
5,000
employees
in
Canada,
and
400
employees
in
the
rest
of
the
world.
We
suppl
u
ement our workforce with contractors and/or consultants for certain business projects, processes, and operations.
McKESSON CORPORAT
R
ION
9
We
take
pride
in
our
strong
culture
and
fostering
a
sense
of
belonging,
finding
meaning
in
our
work,
and
caring
for
each
other,
our
customers,
and
all
those
who
depend
on
us.
We
seek
to
attract
and
retain
the
best
talent
through
regular
training,
financial
assistance
programs
for
higher
educ
d
ation
opportunities
and
competitive
benefits,
compensation
and
pay
for
performance, while prioritizing recognition of merit and compliance with laws. Our compensation philosophy is rooted in a fair
and
transparent
program
that
regularly
conducts
benchmarking
to
assess
market
rates
for
talent,
based
on
geography
and
other
factors.
We solicit employee feedba
d
ck through annual and mid-year employee opinion surveys that assess our employees’ levels of
engagement,
commitment
and
overall
satisfaction
using
industry
r
benchmarks,
and
then
design
action
plans
to
improve
those
metrics.
We
have
procedur
d
es
and
invest
in
equipment
for
both
physical
and
electronic
safety
and
security.
Our
employees
receive
specialized training related to their role, work setting, and equipment used in their work environment.
Government Regulation
We
operate
in
many
highly
regulated
environments
and
are
subj
u
ect
to
oversight
by
various
federal,
state,
and
local
governmental
entities
in
the
U.S.
and
elsewhere.
We
incur
significant
expense
and
make
large
capital
expenditures
and
investments to enable us to comply with laws and guidance promulgated by governmental entities.
h
The regul
gulatory
r
framewo
k
rk affe
f
cting our business and industry
r
is continually
lly ev
lol
ivi
g
ng and inflfluenc
d
ed by
by co
di
ndi itions su
h
ch as
publ
public
l
policy
developments;
h
shififts
f
in
government
lal
prio
iri ities,
ini i
itia itives,
and
focus
areas,
in
lcl
di
udi
g
ng
due
to
h
changes
in
federal,
state,
and
lo
l
cal
representa ition;
and
va
iri
d
ed
interpreta itions
of
laws
and
g
agen
y
cy
rulemakiki
g
ng
conventions.
h
These
co
di
ndi itions
create
uncertain ities
for
our
business,
and
we
are
unablbl
a
e
to
pr
d
edict
hthe
impact
of
future
h
changes
to
hthe
regul
gulatory
r
framewo
k
rk,
or
any
pr
lol
g
onged uncertain yty, on our opera itions and compliliance costs.
See
“Risk
Factors”
in
Item
1A
of
Part
I
below
for
d
addidi itional
information
rega
d
rding
mate
iri
lal
iri
k
sks
asso
iciated
i
wi hth
our
compliliance
i
wi hth government
lal regul
gulations.
Operational
Licenses
and
Permits;
Contro
t
lled
Substances:
We
are
subj
u
ect
to
the
operating
and
security
standards
of
the
U.S.
Drug
r
Enforcement
Administration
(“DEA”),
the
U.S.
Food
and
Drug
r
Administration
(“FDA”),
the
U.S.
Department
of
Health
and
Human
Services
(“HHS”),
the
Centers
for
Medicare
&
Medicaid
Services
(“CMS”),
various
state
boards
of
pharmacy, state health departments, and comparable agencies in the U.S. and other countries. Certain of our businesses may be
required to register for permits and/or licenses with governmental agencies, depending upon the type of operations and location
of
product
development,
manufact
f
ur
t
e,
distribution,
and
sale.
For
example,
we
are
required
to
hold
valid
DEA
and
state-level
registrations
and
licenses,
meet
various
security
and
operating
standards,
and
comply
with
the
Controlled
Subs
u
tances
Act
and
its
accompanying
regulations
governing
the
sale,
marketing,
packaging,
holding,
distribution,
and
disposal
of
controlled
subs
u
tances. We maintain extensive controlled subs
u
tance monitoring and reporting programs at considerable expense in order to
help us meet those standards.
Government
Contra
t
cts:
t
Our
contracts
with
governmental
entities
typically
are
subj
u
ect
to
procurement
laws
that
include
socio-economic,
employment
practices,
environmental
protection,
recordkeeping
and
accounting,
and
other
requirements.
These
statut
t
ory
r
and
regulatory
r
requirements
complicate
our
business
and
increase
our
compliance
burden.
We
are
subj
u
ect
to
audits, investigations, and oversight proceedings about our compliance with contractua
t
l and legal requirements.
Healthcare
Program
Regul
e
ation
:
Federal,
state,
and
local
governmental
entities
in
the
U.S.
and
elsewhere
continue
to
strengthen
their
position
on,
and
scrutiny
of,f
practices
that
they
believe
may
indicate
fraud,
waste,
and
abuse
affe
f
cting
government
healthcare
programs
such
as
Medicare
and
Medicaid.
Our
relationships
with
pharmaceutical
and
medical-surgical
product
manufact
f
ur
t
ers,
healthcare
providers,
and
other
companies
and
individuals,
as
well
as
our
provision
of
produc
d
ts
and
services
to
governmental
entities,
subj
u
ect
our
business
to
statut
t
es,
regulations,
and
government
guidance
that
are
intended
to
prevent fraud and abuse. Among other things, those laws: (1) prohibit persons from soliciting, offe
f
ring, receiving, or paying any
remuneration
in
order
to
induce
the
referral
of
an
individual
for,
or
to
induce
the
ordering
or
purchasing
of,f
items
or
services
that
are
in
any
way
paid
for
by
Medicare,
Medicaid,
or
other
government
healthcare
programs;
(2)
prohibit
physicians
from
referring
certain
“designated
health
services”
to
an
entity
with
which
they
have
a
financial
relationship,
unless
an
exception
applies;
(3)
prohibit
knowingly
subm
u
itting,
or
causing
to
be
subm
u
itted,
a
false
or
fraudulent
claim
for
payment
to
the
McKESSON CORPORAT
R
ION
10
government;
and
(4)
require
certain
entities
to
report
and
return
an
overpayment
by
Medicare
or
Medicaid
within
60
days
of
identifyi
f
ng the overpayment.
Many
of
these
healthcare
fraud
and
abuse
laws
are
vague
or
indefinite,
and
are
ofte
f
n
subj
u
ect
to
varied
and
evolving
interpretations
by
courts,
regulators,
and
enforcing
agencies
and,
as
such,
may
be
interpreted
or
applied
by
a
prosecutorial,
regulatory,
r
or judicial authority in a manner that could require us to make changes in our operations at added expense.
The
healthcare
industry
r
continues
to
be
impacted
by
reform
effo
f
rts
aimed
at
reducing
costs
and
government
spending,
as
well
as
by
challenges
to
those
effo
f
rts.
In
the
U.S.,
the
Patient
Protection
and
Affo
f
rdable
Care
Act
(“ACA”)
significantly
expanded health insurance coverage to uninsured Americans and changed the way healthcare is financed by both governmental
and private payors. The ACA has faced scrutiny since its adoption, and we cannot predict the impact of any initiatives to change
or repeal its provisions. Further, the ACA’s enhanced premium subs
u
idies expired on December 31, 2025, and remain subj
u
ect to
ongoing
Congressional
review.
The
nonrenewal
of,f
or
any
modifications
to,
these
subs
u
idies
may
reduce
the
availabi
a
lity
of
insurance
coverage
for
certain
patients
and,
in
turn,
impact
our
customers
and
our
business.
The
Inflation
Reduction
Act
of
2022
(“IRA”
R
)
made
meaningful
f
changes
affe
f
cting
benefit
design
and
how
Medicare
pays
for
drugs
r
,
which
are
all
intended
to
reduce the price of drugs
r
. Three central featur
t
es of the IRA
R
have authorized the government to negotiate drug
r
prices for certain
Medicare Part B and Medicare Part D drugs
r
over time, establ
a
ish an inflation rebate program, and cap patient cost sharing under
Medicare
Part
D.
The
ongoing
implementation
of
the
IRA
R
may
significantly
affe
f
ct
the
pharmaceutical
value
chain
as
manufact
f
ur
t
ers,
pharmacy
benefit
managers,
managed
care
organizations,
and
other
stakeholders
adapt
their
business
models.
Considerable uncertainty remains, including due to any future regulations and guidance.
The One Big Beautiful Bill (“OBBBA”), enacted in July 2025, includes provisions expected to reduce Medicaid enrollment
and federal funding to state Medicaid programs, which may limit coverage or payment for products and services and impact the
financial
stability
of
our
customers.
Executive
Order
14297,
“Delivering
Most-Favored-Nation
Prescription
Drug
r
Pricing
to
American Patients,” issued in May 2025, seeks to facilitate manufact
f
ur
t
ers’ sale of certain drugs
r
in the U.S. at no higher than the
lowest
prices
paid
in
other
developed
countries.
It
also
directs
HHS
to
enable
direct-to-consumer
purchasing
programs
for
prescription
drugs
r
at
most-favored-nation
prices,
which
may
bypass
suppl
u
y
chain
intermediaries.
Separately,
CMS
adopted
a
rule,
effe
f
ctive
January
1,
2026,
on
bona
fide
service
fees
(“BFSFs”)
paid
by
drug
r
manufact
f
ur
t
ers,
including
wholesaler
distribution
fees.
The
rule requires
manufact
f
ur
t
ers
to
obtain
certific
f
ations
from wholesalers
and
other
fee
recipients
that
the
fee
recipient
does
not
pass
on
the
fee
to
a
client
or
customer.
Manufact
f
ur
t
ers
are
required
to
subm
u
it
these
certific
f
ations
to
CMS
as
part
of
their
quarterly
average
sales
price
reporting.
This
rule
creates
a
risk
that
certific
f
ations,
when
and
if
given,
could
be
challenged,
and
that
manufac
f
turers
may
seek
modifications
to
their
service
agreements.
CMS
waived
the
initial
Q1
2026
reporting
deadline
that
had
been
set
for
April
30,
2026.
As
of
the
date
of
this
report,
the
form
and
scope
of
the
certific
f
ation
requirements
remain
subj
u
ect
to
change.
CMS
may
also
pursue
additional
changes
to
BFSF
requirements
in
future
rulemaking
cycles that may impact fee recipients, including wholesalers.
CMS
also
proposed
two
rules
in
December
2025
that,
if
finalized,
would
implement
mandatory
manufac
f
turer
rebate
models for certain Medicare Part B and Medicare Part D drug
r
s based on international pricing benchmarks. These models would
be tested in select geographic areas over a multi-year trial period.
There are ongoing developments with respect to the 340B Drug
r
Pricing Program (the “340B program”) administered by the
Health
Resources
and
Services
Administration
(“HRSA”).
The
340B
program
requires
manufact
f
ur
t
ers
to
offe
f
r
discounts
on
certain
drugs
r
purchased
by
“covered
entities”
such
as
safety-net
providers,
and
some
of
our
customers
are
covered
entities
or
contract
pharmacies
for
covered
entities.
Various
manufact
f
ur
t
ers
have
unilaterally
restricted
sales
under
the
340B
program
to
a
limited
number
of
contract
pharmacies,
and
these
practices
are
the
subj
u
ect
of
ongoing
litigation.
Further,
HRSA
continues
to
evaluate the potential implementation of a retrospective rebate model to effe
f
ctua
t
te 340B pricing in lieu of upfro
f
nt discounts. A
coalition of covered entities successful
f
ly challenged HRSA’s previously proposed rebate model pilot program, which had been
scheduled
to
take
effe
f
ct
on
January
1,
2026.
HRSA
announced
that
pilot
program
amid
separate
litigation
over
its
refusal
to
approve
alternative
rebate
models
proposed
by
manufact
f
ur
t
ers,
and
this
litigation
continues.
These
developments
could,
for
example, limit the availabi
a
lity of 340B pricing or discounts for our customers. It is uncertain whether other changes to the 340B
program
may
be
effe
f
cted
through
legislation,
regulation,
or
judicial
decision,
or
whether
manufact
f
ur
t
ers
will
reduce
their
participation
in
or
take
other
approaches
to
the
340B
program.
The
cumulative
impact
of
the
foregoing
on
our
customers
and
our business is difficult to predict.
Additionally,
some
states
have
enacted
or
are
considering
laws
imposing
caps
or
limits
on
the
price
of
certain
drug
r
s
distributed
by
wholesalers
in
those
states.
If
upheld
or
enacted,
these
laws
could
encourage
similar
measures
in
other
jurisdictions and could, directly or indirectly, affe
f
ct wholesaler distribution economics. We continue to monitor these and other
state reform initiatives and their potential impact on our business.
McKESSON CORPORAT
R
ION
11
Outside
the
U.S.,
provincial
governments
in
Canada
that
provide
partial
funding
for
the
purchase
of
pharmaceuticals
and
independently regulate the sale and reimbursement of drugs
r
have sought to reduce the costs of publicly funded health programs.
For
example,
these
governments
have
taken
steps
to
reduce
consumer
prices
for
generic
pharmaceuticals
and,
in
some
provinces, change profes
f
sional allowances paid to pharmacists by generic drug
r
manufact
f
ur
t
ers.
FDA
D
Regul
e
ation
and
Supplyl
Chain
Integr
e
ity:
In
the
U.S.,
the
FDA
is
the
principal
federal
authority
that
regulates
the
safety,
effi
f
cacy,
quality,
testing,
premarket
approval,
manufac
f
ture,
labe
a
ling,
storage,
distribution,
and
post-market
surveillance
of healthcare products, such as drugs
r
and medical devices, foods, and cosmetics.
Federal
and
state
laws
regulate
the
pharmaceutical
drug
r
suppl
u
y
chain
in
order
to
prevent
the
distribution
of
counterfeit,
stolen,
contaminated,
or
otherwise
harmful
prescription
drugs
r
in
interstate
commerce.
At
the
federal
level,
the
Drug
r
Suppl
u
y
Chain
Security
Act
(“DSCSA”),
among
other
things,
requires
standardized,
unit-level
traceability
of
pharmaceutical
products
along the entire drug
r
suppl
u
y chain and requires all trading partners to cooperate in an electronic, interoperabl
a
e prescription drug
r
traceability
system.
The
DSCSA
also
sets
forth
national
standards
for
the
licensure
of
wholesale
drug
r
distributors
and
third-
party logistic providers and other requirements applicable to these entities and the FDA has issued a proposed rule with respect
to these requirements. These federal and state regulatory
r
requirements have increased, and may further increase, our compliance
burden and distribution costs.
Additionally, federal and state governments may adopt other laws intended to protect the integrity of the suppl
u
y chain, and
those
laws
could
affe
f
ct
our
distribution
business.
For
example,
the
Federal
Trade
Commission
(“FTC”)
and
HHS
issued
a
request
for
public
comment
in
2024
on
how
the
practices
of
pharmaceutical
wholesalers
and
group
purchasing
organizations
impact generic drug
r
shortages. Various industry
r
stakeholders responded to this request, but no further action has been taken by
the FTC or HHS.
Cybersecurity,y
Data
Security,y
Privacy,
c
and
AI:I
We
are
subj
u
ect
to
many
cybersecurity,
privacy,
and
data
protection
laws
that change frequently and have requirements that vary from jurisdiction to jurisdiction. Our effo
f
rts to comply with these laws
complicate our operations and add to our costs. We are subj
u
ect to significant compliance obligations under privacy laws such as
the
Health
Insurance
Portability
and
Accountability
Act
of
1996,
the
General
Data
Protection
Regulation
in
the
European
Union, the Personal Information Protection
and
Electronic Documents Act in Canada, and an expanding list of
comprehensive
state privacy laws in the U.S. Some privacy laws may prohibit the transfer
f
of personal information to certain other jurisdictions
or
otherwise
limit
our
use
and
disclosure
of
data.
Many
of
these
laws
also
require
us
to
provide
access
or
other
data
rights
(modification,
deletion,
portabi
a
lity,
etc.)
to
consumers’
and
patients’
individual
personal
data
records
within
specified
periods
of
time.
Cybersecurity
laws
such
as
the
federal
Cyber
Incident
Reporting
for
Critical
Infrastructur
t
e
Act
of
2022,
proposed
changes
to
the
Federal
Acquisition
Regulation,
and
SEC
reporting
requirements
may
require
us
to
provide
notific
f
ations
of
certain
cybersecurity
incidents
within
short
timeframes.
Regulations
and
guidance
targeting
critical
infrastructur
t
e
entities,
including
McKesson,
continue
to
be
a
focus
of
regulators.
We
are
subj
u
ect
to
privacy
and
data
protection
compliance
audits
or
investigations by various governmental agencies. Additionally, AI laws and guidance are rapi
a
dly expanding and changing, with
potential
differences
or
confli
f
cts
across
jurisdictions.
This
creates
uncertainty
and
regulatory
r
risk,
including
for
healthcare-
related
uses
of
AI.
If
we
or
our
third-party
providers
are
restricted
from
using
AI
as
a
result
of
any
laws,
regulatory
r
views,
or
other
measures,
it
could
impact
our
operations
and
competitiveness,
increase
our
compliance
expense
and
burden
(including
related
to
any
documentation,
risk
management,
or
transparency
measures),
and
cause
us
to
modify
our
use,
development,
or
deployment
of
AI
and
incur
subs
u
tantial
costs.
We
also
could
be
subj
u
ect
to
increased
litigation
and
enforcement
risks.
The
cumulative impact of these evolving requirements on our business is difficult to predict.
Environmental
Regul
e
ation:
We
are
subj
u
ect
to
requirements
in
various
jurisdictions
concerning
the
environment,
including
laws
addressing
discharges
into
the
air
and
water,
the
management
and
disposal
of
hazardous
subs
u
tances
and
wastes,
and
the
remediation
of
contaminated
sites,
as
well
as
laws
governing
the
operation
of
radiation-emitting
equipment
at
the
U.S.
Oncology Network practices.
We
sold
our
chemical
distribution
operations
in
1987
and
retained
responsibility
for
certain
environmental
obligations.
Agreements
with
the
U.S.
Environmental
Protection
Agency
and
certain
states
have
required
and
may
require
environmental
assessments
and
remediation
at
several
sites.
These
matters
are
described
further
in
Financial
Note
17,
“Commitments
and
Contingent Liabilities,” to the consolidated financial statements included in this Annual Report.
McKESSON CORPORAT
R
ION
12
Climate
Change
Regul
e
ation:
Governments
in
the
U.S.
and
abroad
have
adopted
or
are
considering
new
or
expanded
policies
and
laws
to
address
climate
change.
Such
policies
and
laws
may
necessitate
reductions
in
greenhouse
gas
(“GHG”)
emissions;
mandate
that
companies
implement
processes
and
controls
to
monitor
and
disclose
climate-related
matters;
and
impose
additional
taxes
or
offs
f
et
charges
on
specified
energy
sources,
among
other
requirements.
Compliance
with
climate-
related
policies
and
laws
may
be
further
complicated
by
disparate
regulatory
r
approaches
in
various
jurisdictions.
New
or
expanded climate-related policies and laws could impose costs on us, including capital expenditures to develop or modify data
gathering and reporting systems, third-party attestations, and additional GHG reduction measures. Until the timing and extent of
climate-related policies and laws are clarifie
f
d, including due to legal challenges, we cannot predict their potential effe
f
ct on our
capital expenditures, results of operations, or competitive position.
Competition
and
Related
Laws
:
Antitrus
r
t
and
competition
laws
(“competition
laws”)
in
the
U.S.
and
elsewhere
prohibit
types of conduct, practices, or arrangements deemed to be anti-competitive. Enforcement of competition laws in the healthcare
industry
r
remains a focus of the FTC and the U.S. Department of Justice. Some of our strategic transactions may require review
by
competition
regulators,
with
potential
delays
or
other
unfav
f
orable
outcomes.
Violations
of
competition
laws
can
result
in
sanctions
and
other
adverse
actions,
including
criminal
and
civil
penalties.
Private
plaintiffs
f
also
may
bring
civil
lawsuits
for
alleged
violations
of
competition
laws,
including
claims
for
treble
damages.
Additionally,
laws
may
be
proposed
to
restrict
certain healthcare ownership structur
t
es or arrangements, such as vertical integration involving physician practice administrative
or management services and pharmaceutical distribution services, where traditional antitrus
r
t standards might not be implicated.
Competition and related laws contribute to our compliance effo
f
rts and expense, and the enforcement, enactment, expansion, or
application of any of the foregoing types of laws might materially adversely affe
f
ct our operations and growth strategy.
Other Information about the Business
Customers:
r
During
fiscal
2026,
sales
to
our
ten
largest
customers,
including
group
purchasing
organizations
(“GPOs”)
accounted
for
approximately
73%
of
our
total
consolidated
revenues.
Sales
to
our
largest
customer,
CVS
Health
Corporation
(“CVS”),
accounted
for
approximately
24%
of
our
total
consolidated
revenues
in
fiscal
2026.
In
fiscal
2023,
we
extended
our
pharmaceutical distribution partnership with CVS to June 2027. Sales to our next two largest customers accounted for 11% and
10%
of
total
consolidated
revenues
in
fiscal
2026.
Our
ten
largest
customers
comprised
approximately
43%
of
total
trade
accounts receivabl
a
e at March 31, 2026. CVS was approximately 21% of our total trade accounts receivable at March 31, 2026.
We
also
have
agreements
with
GPOs,
each
of
which
functions
as
a
purchasing
agent
on
behalf
of
member
hospitals,
pharmacies, and other healthcare providers, as well as with government entities and agencies. The accounts receivabl
a
e balances
are
with
individual
members
of
the
GPOs,
and
therefor
f
e
no
significant
concentration
of
credit
risk
exists.
Subs
u
tantially
all
of
these revenues and accounts receivable are included in our North American Pharmaceutical segment.
Suppliers:
We obtain pharmaceutical and other products from manufac
f
turers and our largest suppl
u
ier accounted for 11% of
our
total
purchases
in
fiscal
2026.
The
loss
of
a
suppl
u
ier
could
adversely
affe
f
ct
our
business
if
alternate
sources
of
suppl
u
y
are
unavailabl
a
e.
We
believe
that
our
relationships
with
our
suppl
u
iers
are
generally
sound.
The
ten
largest
suppl
u
iers
in
fiscal
2026
accounted for approximately 71% of our total purchases.
Some
of
our
distribution
arrangements
with
manufact
f
ur
t
ers
provide
us
consideration
based
on
a
percentage
of
our
purchases.
In
addition,
we
have
certain
distribution
arrangements
with
pharmaceutical
manufact
f
ur
t
ers
that
include
an
inflation-
based
consideration
component
whereby
we
benefit
when
the
manufact
f
ur
t
ers
increase
their
prices
as
we
sell
our
existing
inventory
r
at
the
new
higher
prices.
For
these
manufact
f
ur
t
ers,
a
reduction
in
the
frequency
and
magnitude
of
price
increases,
as
well as restrictions in the amount of inventory
r
availabl
a
e to us, could have an adverse impact on our gross profit
f
margin.
Research
and
Developm
o
ent:
Research
and
development
expenses
were
$103
million,
$91
million,
and
$77
million
for
the
years ended March 31, 2026, 2025, and 2024, respectively.
Financial
Info
n
rmation
About
Foreign
g
and
Domestic
Operations:
Certain
financial
information
relating
to
foreign
and
domestic
operations
is
discussed
in
Financial
Note
20,
“Segments
of
Business,”
the
consolidated
financial
statements
included in this Annual Report as well as in “Foreign Operations” in Item 7 of Part II of this Annual Report.
McKESSON CORPORAT
R
ION
13
Forward-Looking Statements
This Annual Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
in Item 7 of Part II of this report and the “Risk Factors” in Item 1A of Part I of this report, contains forward-looking statements
within
the
meaning
of
Section
27A
of
the
Securities
Act
of
1933
(“Securities
Act”)
and
Section
21E
of
the
Exchange
Act.
Forward-looking statements may be identifie
f
d by their use of terminology such as “believes,” “expects,” “anticipates,” “may,”
“will,” “should,” “seeks,” “approximately,” “intends,” “proje
o
cts,” “plans,” “estimates,” “targets,” or the negative of these words
or
other
comparable
terminology.
The
discussion
of
trends,
strategy,
plans,
prospects,
assumptions,
expectations,
or
intentions
may
also
include
forward-looking
statements.
Forward-looking
statements
are
not
representations
of
historical
or
current
facts
or
circumstances
and
they
involve
known
and
unknown
risks
and
uncertainties
that
could
cause
actua
t
l
results
to
differ
f
materially
from
those
projected,
anticipated,
or
implied.
Although
it
is
not
possible
to
predict
or
identify
f
all
such
risks
and
uncertainties, they include, but are not limited to, the factors discussed in Item 1A of Part I of this report under “Risk Factors”
and
in
our
publicly
availabl
a
e
SEC
filings
and
press
releases.
Readers
are
cautioned
not
to
place
undue
reliance
on
forward-
looking
statements,
which
speak
only
as
of
the
date
such
statements
were
first
made.
Except
to
the
extent
required
by
federal
securities laws, we undertake no obligation to publicly release the result of any revisions to any forward-looking statements to
reflect events or circumstances afte
f
r the date the statements are made, or to reflect the occurrence of unanticipated events.
Available Information
We
routinely
post
on
our
company
website,
and
via
our
social
media
channels,
information
that
may
be
material
to
investors,
including
details
and
updates
to
information
disclosed
elsewhere,
which
may
include
business
developments,
earnings and financial performance, sustainabi
a
lity matters, details regarding upcoming events, and materials for presentations to
investors
and
financial
analysts.
Investors
are
encouraged
to
monitor
our
website,
www.mckesson.com.
Interested
parties
can
sign
up
on
our
website,
including
our
Investor
Relations
site,
to
receive
automated
e-mail
alerts,
such
as
via
RSS
newsfeed,
when
we
post
certain
information.
Interested
parties
can
also
follow
our
social
media
feed
@McKesson
on
X.
The
content
on
any website or social media channel is not incorporated by reference into this report, unless expressly noted otherwise.
Item 1A.
Risk Factors.
INDEX TO RISK FACTORS
Section
Page
g
Litigation and Regulatory Risks
...........................................................................................................................................
15
Company and Operational Risks
.........................................................................................................................................
17
Industry and Economic Risks
...............................................................................................................................................
23
General Risks
.......................................................................................................................................................................
25
The discussion below identifies certain representative risks that might cause our actua
t
l business results to materially differ
f
from
our
forward
looking
statements.
It
is
not
practical
to
identify
f
or
describe
all
risks
and
uncertainties
that
might
materially
impact our business operations, reputation, financial position, or results of operations. Our business could be materially affe
f
cted
by
risks
that
we
have
not
identifie
f
d
or
that
we
currently
consider
to
be
immaterial.
This
is
not
a
complete
discussion
of
all
potential
risks
and
uncertainties.
The
characterization
of
a
risk
as
potential
does
not
mean
the
risk
has
not
occurred,
is
not
currently occurring, or is unlikely to occur.
McKESSON CORPORAT
R
ION
14
Litigation and Regulatory Risks
We expe
x
rience costly
t
and disru
i
pt
u
iv
t
e legal
e
disp
i
utes
t
.
We are routinely named as a defendant in litigation or regulatory
r
proceedings and other legal disputes, which may include
asserted class action litigation, such as those described in Financial Note 17, “Commitments and Contingent Liabilities,” to the
consolidated
financial
statements
included
in
this
Annual
Report.
Regulatory
r
proceedings
involve
allegations
such
as
false
claims,
healthcare
fraud
and
abuse,
and
violations
of
competition
laws.
Civil
litigation
proceedings
involve
commercial,
employment,
environmental,
intellectua
t
l
property,
tort,
and
other
claims.
Despite
valid
defenses
that
we
assert,
legal
disputes
are ofte
f
n costly, time-consuming, distracting to management, and disrupt
r
ive to normal business operations. The uncertainty and
expense
associated
with
unresolved
legal
disputes
might
harm
our
business
and
reputation
even
if
the
matter
ultimately
is
favorably
resolved.
The
outcome
of
legal
disputes
is
difficult
to
predict,
and
outcomes
may
occur
that
we
believe
are
not
justifie
f
d
by
the
evidence
or
existing
law.
Outcomes
include
monetary
damages,
penalties
and
fines,
and
inju
n
nctive
or
other
relief that requires us to change our business operations, practices, or arrangements and incur significant expense. Accordingly,
legal
disputes
might
have
a
materially
adverse
impact
on
our
reputation,
our
business
operations,
and
our
financial
position
or
results of operations.
We expe
x
rience losses not covered by insurance or indemnific
f
atio
t
n.
Our
business
exposes
us
to
risks
that
are
inherent
in
the
distribution,
manufact
f
ur
t
ing,
dispensing,
and
administration
of
pharmaceuticals and medical-surgical suppl
u
ies, the provision of ancillary services, the conduct of our payer businesses, practice
suppor
u
t
services,
and
the
provision
of
products
that
assist
clinical
decision-making
and
relate
to
patient
medical
histories
and
treatment plans. For example, pharmacy operations are exposed to risks such as improper filling of prescriptions, mislabe
a
ling of
prescriptions,
inadequacy
of
warnings,
unintentional
distribution
of
counterfeit
drugs
r
,
and
expiration
of
drugs
r
.
Although
we
seek
to
maintain
adequate
insurance
coverage,
such
as
property
insurance
for
inventory
r
and
profes
f
sional
and
general
liabi
a
lity
insurance, coverages on acceptable terms might be unavailable, or coverages might not cover our losses. We generally seek to
limit
our
contractua
t
l
exposure,
but
limitations
of
liability
or
indemnity
provisions
in
our
contracts
may
not
be
enforceabl
a
e
or
adequately
protect
us
from
liability.
Uninsured
or
non-indemnifie
f
d
losses
might
have
a
materially
adverse
impact
on
our
business operations and our financial position or results of operations.
We expe
x
rience costly
t
legal
e
disp
i
utes
t
,s
governm
r
ent actions, and adverse
r
public
l
ity regar
e
ding
i
our role in dist
i
ri
t
buting
i
contro
t
lled
substances such as opioids.
The
Company
is
a
defendant
in
many
litigation
matters
alleging
claims
related
to
the
distribution
of
controlled
subs
u
tances
(opioids),
as
described
in
Financial
Note
17,
“Commitments
and
Contingent
Liabilities,”
to
the
consolidated
financial
statements
in
this
Annual
Report.
We
are
sometimes
named
as
a
defendant
in
similar,
new
cases.
The
plaintiffs
f
in
those
cases
include
governmental
entities
(such
as
states,
provinces,
counties,
and
municipalities)
as
well
as
businesses,
groups
u
,
and
individuals. The cases allege violations of controlled subs
u
tance laws and other laws, and they make common law claims such as
negligence and public nuisance. Many of these cases raise novel theories of liabi
a
lity and can have unexpected outcomes that we
believe
are
not
justifie
f
d
by
evidence
or
existing
law.
Legal
proceedings
such
as
these
ofte
f
n
involve
significant
expense,
management time and distraction, and risk of loss that can be difficult to predict or quantify.
f
It is not uncommon for claims to
be
resolved
over
many
years.
Outcomes
include
monetary
damages,
penalties
and
fines,
and
inju
n
nctive
or
other
relief
that
requires
us
to
change
our
business
operations
and
incur
significant
expense.
Although
the
Company
has
valid
defenses
and
is
vigorously defending itself,f
some proceedings have been, and others may be, resolved by negotiated outcome. For example, we
are
subj
u
ect
to
consent
decrees
issued
by
state
courts
that
govern
our
distribution
of
controlled
subs
u
tances.
Not
all
proceedings,
however,
are
resolved
by
settlement.
Our
reputation
has
been
and
may
continue
to
be
impacted
by
publicity
regarding
opioids
litigation and related allegations. An adverse outcome of any such legal proceedings might have a materially adverse impact on
our business operations and our financial position or results of operations.
McKESSON CORPORAT
R
ION
15
We are subject to extensive, complex,
e
challe
l
nging, and frequently
t
changing
i
health
l
care,e
enviro
i
nmental, and othe
t
r laws,s
and
may
a
expe
x
rience increased costst
to dist
i
ri
t
bute contro
t
lled
l
substances such as opioids.
We are subj
u
ect to extensive, complex, challenging, and frequently changing healthcare, environmental, and other laws. As
described
in
“Government
Regulation”
in
Item
1
of
Part
I
above,
our
industry
r
is
highly
regulated
and
subj
u
ect
to
a
regulatory
r
framework
that
is
continually
evolving.
Legislative,
regulatory,
r
or
industry
r
measures
related
to
the
distribution
of
pharmaceuticals
and
controlled
subs
u
tances
could
affe
f
ct
our
business
in
ways
that
we
may
not
be
able
to
predict.
Further
regulation
of
our
distribution
operations,
technology,
products,
or
services,
or
other
aspects
of
our
business,
could
impose
increased
costs,
negatively
impact
our
profit
f
margins
and
the
profit
f
margins
of
our
customers,
delay
the
introduction
or
implementation
of
our
new
produc
d
ts,
place
restrictions
on
or
require
modifications
to
our
practices
or
arrangements,
limit
our
strategic
options,
or
expose
us
to
litigation
and
regulatory
r
investigations,
reviews,
or
other
proceedings.
We
are
subj
u
ect
to
routine
and
ad
hoc
inspections
and
requests
for
information
by
governmental
agencies
to
determine
compliance
with
various
statut
t
es
and
regulations.
We
also
incur
remediation
costs,
and
may
incur
additional
costs,
under
environmental
laws.
Any
noncompliance
by
us
with
applicable
laws,
or
any
failure
to
maintain,
renew,
or
obtain
necessary
permits
and
licenses,
could
result in enforcement actions, fines, penalties, or other sanctions. In addition, certain states have enacted, and others continue to
consider,
legislation
that
would
impose
taxes,
assessments,
or
similar
charges
on
the
distribution
of
controlled
subs
u
tances,
including
prescription
opioids.
Any
such
taxes,
assessments,
or
other
related
compliance
obligations
could
increase
our
costs,
require changes to our distribution practices, or lead to adverse publicity. The scope, application, and financial impact of these
measures vary by jurisdiction and may be difficult to predict. Any of the foregoing risks might have a materially adverse impact
on our reputation, our business operations and our financial position or results of operations.
We are subject to extensive and frequently
t
changing
i
laws relating to health
l
care fraud, waste,
t
and abuse.e
As
described
in
“Government
Regulation”
in
Item
1
of
Part
I
above,
federal,
state,
and
local
governmental
entities
in
the
U.S. and elsewhere continue to strengthen their position on, and scrutiny of,f
practices that may indicate fraud, waste, and abuse
affe
f
cting
government
healthcare
programs
such
as
Medicare
and
Medicaid.
Those
laws
may
be
interpreted
or
applied
in
a
manner that could require us to make changes in our operations at added expense. Alleged failures to comply with those laws,
including
the
federal
Anti-Kickba
k
ck
Statut
t
e,
expose
us
to
federal
or
state
government
investigations
or
qui
tam
actions,
and
to
liabi
a
lity
for
damages
and
civil
and
criminal
penalties.
Such
failures
might
result
in
the
loss
of
licenses
or
our
ability
to
participate
in
Medicare,
Medicaid,
or
other
federal
and
state
healthcare
programs,
or
pursue
government
contracts.
These
sanctions might have a materially adverse impact on our reputation, our business operations and our financial position or results
of operations.
We
might
g
lose
our
abili
i
ty
i
to
purchase,e
stor
t
e,
or
dist
i
ri
t
bute
pharma
r
ceuticals,
l
includin
d
g
contro
t
lled
substances,s
and
medical
products.
t
As
described
in
“Government
Regulation”
in
Item
1
of
Part
I
above,
we
are
subj
u
ect
to
the
operating,
quality,
regulatory,
r
and
security
requirements
of
the
DEA,
the
FDA,
various
state
boards
of
pharmacy,
state
health
departments,
CMS,
and
other
agencies.
Noncompliance
with
these
requirements
can
result
in
inspectional
observations,
warning
letters,
product
recalls,
withdrawals
or
other
market
action,
fines,
seizures,
inju
n
nctions,
and
other
administrative,
civil,
and
criminal
enforcement
actions.
Noncompliance,
enforcement
actions
or
adverse
decisions
by
regulators,
or
the
inability
to
obtain,
maintain,
or
renew
permits,
licenses,
or
other
regulatory
r
approvals
needed
for
the
operation
of
our
businesses
might
have
a
materially
adverse
impact on our reputation, our business operations and our financial position or results of operations.
Privacy,
c
cybersecurity
i
,y
datat
protect
t
io
t
n, and AI laws and guidan
d
ce increase our compliance burden
d
and expos
x
e us to risk
i
s.
k
As
described
in
“Government
Regulation”
in
Item
1
of
Part
I
above,
we
are
subj
u
ect
to
a
variety
of
privacy,
cybersecurity,
and
data
protection
laws
that
change
frequently
and
have
requirements
that
vary
from
jurisdiction
to
jurisdiction,
as
well
as
to
rapi
a
dly
developing
and
potentially
divergent
AI
laws
and
guidance.
Some
of
our
contractua
t
l
obligations
might
be
breached
if
we
fail
to
comply
with
privacy
and
data security
laws.
The
use
of
AI
solutions
by
our
employees
or
third
parties
on
which
we
rely could also lead to the misuse of data or public disclosure of confid
f
ential information (including personal data or proprietary
information)
in
contravention
of
our
internal
policies
and
safeguards,
applicable
laws,
contractua
t
l
requirements,
or
third-party
intellectua
t
l
property
rights.
Our
effo
f
rts
to
comply
with
privacy,
data
security,
and
AI
laws
and
guidance
complicate
our
operations
and
add
to
our
costs.
Any
failure
or
perceived
failure
by
us
or
any
third-party
providers
to
comply
with
these
laws
and
guidance
could
subj
u
ect
us
to
regulatory
r
enforcement
activity,
fines,
investigations,
legal
proceedings
(including
private
litigation
such
as
class
actions),
liabi
a
lity,
reputational
impacts,
and
costs.
Any
of
the
foregoing
risks
might
have
a
materially
adverse impact on our reputation, our business operations, and our financial position or results of operations.
McKESSON CORPORAT
R
ION
16
Anti-bribery
r
and anti-c
i
orrupt
u
io
t
n laws increase our compliance burden
d
and expos
x
e us to risk
i
s.
k
We
are
subj
u
ect
to
laws
prohibiting
improper
payments
and
bribery,
r
including
the
U.S.
Foreign
Corrupt
u
Practices
Act,
the
U.K. Bribery
r
Act, and similar regulations in other jurisdictions. Our failure to comply with these laws might subj
u
ect us to civil
and criminal penalties that might have a materially adverse impact on our reputation, our business operations, and our financial
position or results of operations.
Company and Operational Risks
We might
g
record sign
i
ific
f
ant charge
r
s from impairm
i
ent to goodwill, intangibles, and othe
t
r long-l
g
iv
l
ed assets.
We
are
required
under
U.S.
Generally
Accepted
Accounting
Principles
(“GAAP”)
to
test
our
goodwill
for
impairment
annually,
or
more
frequently
if
indicators
for
potential
impairment
exist.
Indicators
that
are
considered
include
significant
changes
in
perfor
f
mance
relative
to
expected
operating
results,
significant
changes
in
the
use
of
the
assets,
significant
negative
industry
r
or
economic
trends,
or
a
significant
decline
in
the
Company’s
stock
price
and/or
market
capitalization
for
a
sustained
period
of
time.
In
addition,
we
periodically
review
our
intangible
and
other
long-lived
assets
for
impairment
when
events
or
changes
in
circumstances
indicate
the
carrying
value
may
not
be
recoverabl
a
e.
Factors
that
may
be
considered
a
change
in
circumstances
indicating
that
the
carrying
value
of
our
intangible
and
other
long-lived
assets
may
not
be
recoverabl
a
e
include
slower
growth
rates,
the
loss
of
a
significant
customer,
burdensome
new
laws
or
other
adverse
legal
developments,
or
divestiture
of
a
business
or
asset
for
less
than
its
carryi
r
ng
value.
There
are
inherent
uncertainties
in
management’s
estimates,
judgments, and assumptions used in assessing recoverabi
a
lity of goodwill, intangibles, and other long-lived assets. Any material
changes
in
key
assumptions,
including
failure
to
meet
business
plans,
negative
changes
in
government
reimbursement
rates,
a
deterioration in the U.S. and global financial markets, an increase in interest rates, an increase in inflation, or an increase in the
cost
of
equity
financing
by
market
participants
within
the
industry,
r
or
other
unanticipated
events
and
circumstances,
may
decrease the projected cash flows or increase the discount rates and could potentially result in an impairment charge. We have
in
the
past
recorded,
and
may
be
required
to
record,
a
significant
charge
to
earnings
in
our
consolidated
financial
statements
during the period in which any impairment of our goodwill or intangible and other long-lived assets is determined, which might
have
a
materially
adverse
impact
on
our
business
operations
and
our
financial
position
or
results
of
operations.
See
Financial
Note 10, “Goodwill and Intangible Assets,” for descriptions of impairments of goodwill or intangible or other long-lived assets
in recent periods.
McKESSON CORPORAT
R
ION
17
We
expe
x
rience
cybersecurity
i
incidentst
that
might
g
sign
i
ific
f
antlyl
compromise
our
technology
o
system
t
s
or
migh
i
t
result
in
material datat
breaches.
We, our external service providers, vendors, and other third parties with which we do business, use technology and systems
to
perform
our
business
operations,
such
as
the
secure
electronic
transmission,
processing,
storage,
and
hosting
of
sensitive
information, including protected health information and other types of personal information, confid
f
ential financial information,
proprietary
information,
and
other
sensitive
information
relating
to
our
customers,
company,
and
workforce.
Despite
our
physical,
technical,
and
administrative
security
measures
as
well
as
third
party
risk
management
processes
as
discussed
in
“Cybersecurity” in Item 1C of Part I below, technology systems and operations of the Company and third parties, including our
external service providers and vendors, with which we do business, have experienced cybersecurity incidents and are subj
u
ect to
future cyberattacks and cybersecurity incidents. Companies in the healthcare industry
r
are increasingly targeted for cyberattacks.
Cybersecurity
incidents
include
unauthorized
occurrences
on
or
conducted
through
our
or
our
third
parties’
information
systems,
such
as
tampering,
malware
insertion,
ransomware
attacks,
or
other
system
integrity
events.
The
risk
and
effi
f
cacy
of
cyberattacks
increases
from
time
to
time
due
to
a
variety
of
internal
and
external
factors,
including,
but
not
limited
to,
the
use
by threat actors of sophisticated and rapi
a
dly evolving techniques, such as adversarial AI (which makes cyberattacks more likely
and
may
make
them
more
difficult
to
detect,
contain,
or
mitigate),
and
the
existence
of
political
or
military
unrest.
Our
own
adoption and use of AI also may create new attack surfac
f
es or methods and generally increase cybersecurity and data protection
risks
and
costs.
A
cybersecurity
incident
might
involve
a
material
data
breach
or
other
material
impact
to
the
confid
f
entiality,
integrity,
availabi
a
lity,
or
operations
of
our
technology
systems
or
data
(including
the
misuse,
loss,
disclosure,
or
corrupt
u
ion
of
proprietary
or
personal
information),
which
might
result
in
harm
to
patients,
consumers,
or
employees;
litigation
or
regulatory
r
action;
disrupt
r
ion
of
our
business
operations;
loss
of
customers
or
revenue;
cash
flow
impacts;
and
increased
expense.
Additionally,
it
may
take
considerable
time
for
us
to
investigate
and
evaluate
the
full
impact
of
incidents,
particularly
for
sophisticated attacks. These factors may inhibit our ability to provide prompt, full, and reliabl
a
e information about the incident to
our
customers,
regulators,
and
the
public.
Any
cybersecurity
incident
might
have
a
materially
adverse
impact
on
our
business,
our operations, our reputation, and our financial position or results of operations.
We expe
x
rience sign
i
ific
f
ant problem
l
s with
i
info
n
rmatio
t
n system
t
s or networks
r
.
We
rely
on
sophisticated
information
systems
and
networks
to
perform
our
business
operations,
such
as
to
obtain,
rapi
a
dly
process, analyze, and manage data that facilitate the purchase and distribution of thousands of inventory
r
items from distribution
centers.
We
provide
remote
services
that
involve
hosting
customer
data
and
operating
software
on
our
own
or
third-party
systems.
Our
customers
rely
on
their
ability
to
access
and
use
these
systems,
and
their
data,
as
needed,
and
our
ability
to
compete effe
f
ctively is increasingly dependent on access to, and interpretation of,f
data. Data quality impacts customer ordering,
order
fulfillm
f
ent
and
higher
order
processing.
If
we
fail
to
effe
f
ctively
implement
and
maintain
data
governance
structur
t
es
across
our
businesses,
to
effe
f
ctively
interpret
and
utilize
such
data,
or
protect
the
integrity
of
such
data,
including
systems
powered
by
or
incorporating
AI
and
machine
learning,
our
operations
could
be
impacted,
and
we
may
be
at
a
competitive
disadvantage. Our networks and hosting systems are also vulnerabl
a
e to interrupt
u
ion or damage from sources beyond our control.
When those information systems or networks are disrupt
r
ed, or if the timely delivery
r
of medical care or other customer business
requirements
are
impaired,
we
experience
inju
n
ry
to
patients
or
consumers,
litigation
or
regulatory
r
action,
disrupt
r
ion
of
our
business
operations,
loss
of
customers
or
revenue,
cash
flow
impacts,
and
increased
expense.
In
addition,
hardware,
software,
and other applications and updates procured from third parties may contain defects that have, or may in the future, unexpectedly
restrict
access
to
or
interfere
with
the
proper
operations
of
our
information
systems
and
hardware.
Any
such
problems
might
have a materially adverse impact on our business, our reputation, and our financial position or results of operations.
Our technology
o
productst
or services might
g
not confor
f
m
r
to specifi
i
cations or perfor
f
m
r
as we intend.d
We
sell
and
provide
services
involving
complex
software
and
technology
that
may
contain
errors,
especially
when
first
introduced to market. Healthcare profes
f
sionals delivering patient care have heightened sensitivity to system and software errors
due,
among
other
reasons,
to
the
critical
nature
of
healthcare
decisions.
If
our
software
and
technology
services
are
alleged
to
have contributed to faulty clinical decisions, compromised continuity of patient care, or inju
n
ry to patients, we might be subj
u
ect
to
regulatory
r
scrutiny
or
claims
by
users
of
our
software
or
services
and/or
their
patients.
Errors
or
failures
might
damage
our
reputation
and
negatively
affe
f
ct
future
sales.
A
failure
of
a
system
or
software
to
confor
f
m
to
specifications
might
constitut
t
e
a
breach of warranty that could result in repair costs, contract termination, refunds, or claims for damages. The adoption and use
of new technologies, including AI, may introduce new or enhanced risks, such as data inaccuracy, unreliabi
a
lity, or bias, as well
as
ethical
or
privacy
concerns.
Any
of
these
types
of
errors,
failures,
or
risks
might
have
a
materially
adverse
impact
on
our
reputation, our business operations, and our financial position or results of operations.
McKESSON CORPORAT
R
ION
18
The adoptio
t
n and use of AI in our busine
i
ss operations expos
x
es us to risk
i
s
k
and uncertainties
.
We
increasingly
rely
on
technologies
powered
by
or
incorporating
AI
in
our
internal
operations
and
business
processes.
The
use
of
AI
technologies
introduces
risks
and
uncertainties.
AI
can
generate
output
t
s
that
are
false,
misleading,
incomplete,
biased, or inconsistent. AI performance may degrade over time, or earlier than we planned, due to changes in inputs, data drift,
f
updates by vendors, adversarial manipulations, and other causes. Our investments in AI may not yield anticipated benefits, and
we
might
expend
significant
resources
to
maintain
responsible
and
effe
f
ctive
AI
capabilities.
Reliance
on
third-party
AI
tools
and solutions may expose us to risks that are outside of our control, including compliance gaps
a
. Our AI policies and safeguards
may
not
be
sufficient
to
protect
us
against
negative
outcomes,
such
as
the
misuse
or
loss
of
data
or
the
compromise
of
our
intellectua
t
l
property.
Any
of
the
foregoing
risks
could
adversely
impact
our
reputation,
our
business
operations,
and
our
financial position or results of operations.
Pharma
r
ceutical and medical productst
that we dist
i
ri
t
bute migh
i
t not confor
f
m
r
to specifi
i
cations or perfor
f
m
r
as intended
d
.d
We distribute pharmaceutical, medical, and other FDA-regulated products manufact
f
ur
t
ed by third parties and by our private
labe
a
l
businesses,
including
medications
that
may
be
temperatur
t
e
sensitive
or
have
limited
shelf
lives.
Our
systems
and
procedur
d
es
are
designed
to
maintain
the
safety
and
effi
f
cacy
of
the
products
throughout
the
sourcing
and
distribution
process.
Issues
affe
f
cting
product
safety
or
effi
f
cacy
can
arise
from
manufactur
t
ing,
storing,
distributing,
dispensing,
or
using
products,
and
can
result
in
adverse
consequences
such
as
safety
alerts,
seizures,
bans,
recalls,
withdrawals
or
other
market
action,
suspensions,
and
other
regulatory
r
actions
and
sanctions,
civil
lawsuits,
increased
costs,
disrupt
r
ions,
delays,
and
reputational
damage.
Any
of
these
types
of
issues
or
results
might
have
a
materially
adverse
impact
on
our
reputation,
our
business
operations, and our financial position or results of operations.
We might
g
not realiz
l
e expe
x
cted
t
benefi
e
ts
i
from busine
i
ss process initiatives.
From time to time, we implement restructur
t
ing, cost reduction, or other business process initiatives that result in significant
charges
and
expenses.
These
initiatives
might
fail
to
achieve
our
desired
objectives
or
have
unintended
consequences
such
as
distraction
of
our
management
and
employees,
business
disrupt
r
ion,
attrition
beyond
any
planned
reduction
in
workforce,
inability
to
attract
or
retain
key
personnel
and
reduced
employee
productivity.
Any
of
these
risks
might
have
a
materially
adverse impact on our business operations and our financial position or results of operations.
We might
g
be unablel
to successful
f
ly
l
complete or integr
e
atet
acquisitions or othe
t
r stra
t
tegi
e
c transactio
t
ns,s
and our investme
t
ntst
in
busine
i
sses may
a
not perfor
f
m
r
as we expe
x
ct.t
Our growth strategy includes consummating acquisitions, investments, or other strategic transactions that either expand or
complement
our
business.
To
fund
these
strategic
transactions,
we
may
require
financing
that
may
not
be
availabl
a
e
on
acceptabl
a
e
terms.
We
may
not
receive
governmental
approvals
needed
to
complete
proposed
transactions,
or
such
approvals
may
be
subj
u
ect
to
delays
or
conditions
that
reduce
transaction
benefits.
Achieving
the
desired
outcomes
of
these
strategic
transactions involves significant risks including: diverting management’s attention from other business operations or priorities;
challenges
with
assimilating
the
acquired
businesses,
such
as
integration
of
operations,
systems,
and
technologies;
failure
or
delay
in
realizing
operating
synergies;
difficulty
retaining
key
acquired
company
personnel;
unanticipated
accounting
or
financial
systems
issues
with
the
acquired
business,
which
might
affe
f
ct
our
internal
controls
over
financial
reporting;
disputes
with
the
sellers
of
acquired
businesses;
unanticipated
compliance
issues
in
the
acquired
business;
unknown
or
unanticipated
cybersecurity
issues,
as
well
as
heightened
vulnerabi
a
lities
during
integration;
challenges
retaining
customers
of
the
acquired
business;
unanticipated
expenses
or
charges
to
earnings,
including
depreciation
and
amortization
or
potential
impairment
charges; risks of known and unknown assumed liabi
a
lities in the acquired business; failure of an acquired business or investment
to
perform
as
projected
in
the
near
or
long
term;
and
changes
in
laws
or
their
interpretation
or
application
with
respect
to
an
acquired
business
or
investment,
such
as
potential
restrictions
on
certain
healthcare
ownership
structur
t
es
or
arrangements
(see
“Government Regulation” in Item 1 of Part I above). Certain of these factors at times have negatively affe
f
cted, and any of these
factors could in the future negatively affe
f
ct, our ability to achieve the anticipated benefits of an acquisition, investment, or other
strategic
transaction.
Any
of
the
foregoing
risks
might
have
a
materially
adverse
impact
on
our
business
operations
and
our
financial position or results of operations.
McKESSON CORPORAT
R
ION
19
From time to time we are adverse
r
ly impacted by delays
a
or othe
t
r diffi
i
culties with
i
divestitures.
When
we
decide
to
sell
or
otherwise
divest
assets
or
a
business,
we
may
encounter
difficulty
in
finding
buyers
or
exit
strategies
on
acceptabl
a
e
terms
or
in
a
timely
manner,
which
could
delay
the
achievement
of
our
strategic
objectives.
Afte
f
r
the
disposition, we might experience greater dissynergies than expected, and the impact of
the divestiture on our revenue or
profit
f
might
be
larger
than
we
expected.
We
might
have
difficulties
with
pre-closing
conditions
such
as
governmental
approvals,
which could delay or prevent the divestiture. We might have financial exposure in a divested business, such as through minority
equity
ownership,
financial
or
performance
guarantees,
indemnities,
or
other
obligations,
such
that
conditions
outside
of
our
control might negate the expected benefits of the disposition. Any of these risks could adversely affe
f
ct our ability to achieve the
anticipated
benefits
of
a
divestitur
t
e
and
might
have
a
materially
adverse
impact
on
our
business
operations
and
our
financial
position or results of operations.
Our plan
l
ned separ
e
atio
t
n of Medical-Su
-
rgical Solutions is contin
t
gent upon the satisfa
s
ctio
t
n of certain conditio
d
ns, may
a
not be
completed
on
the
currently
contem
t
pl
m
at
l
ed
t
terms
or
time
i
line
i
,e
or
at
all,
l
and,
if
completed,
may
a
not
achieve
the
intended
d
fina
i
ncial and stra
t
tegi
e
c benefi
e
ts
i
.
The
Company
intends
to
separate
the
Medical-Surgical
Solutions
segment
into
an
independent
company
(“NewCo”).
The
separation is expected to be effe
f
cted, ultimately, through a split-off or spin-off, or a combination of both (the “Exit”), intended
to qualify
f
as a tax-free transaction to the Company and its stockholders for U.S. federal income tax purpos
r
es. Completion of the
planned
separation
will
be
subj
u
ect
to
the
satisfaction
of
various
conditions,
including,
among
others:
the
receipt
of
a
favorable
opinion
from
outside
legal
counsel
as
to
the
tax-free
nature
of
the
Exit;
the
effe
f
ctiveness
of
a
registration
statement
to
be
filed
with the SEC; the receipt of other governmental approvals; the finalization of the NewCo capital structur
t
e; and the approval of
our
Board
of
Directors.
The
planned
separation
is
complex
in
nature,
and
unanticipated
business,
market,
governmental,
or
other
developments
could
delay
or
prevent
completion
of
the
separation
or
cause
the
separation
to
occur
on
less
favorable
terms.
We
face
certain
risks
in
connection
with
the
separation,
including,
among
others:
the
diversion
of
management’s
attention
from
other
business
operations
and
priorities;
a
determination
by
the
Internal
Revenue
Service
(the
“IRS”)
or
any
court
that
the
Exit
(or
any
aspect
thereof)
is
taxabl
a
e
for
U.S.
federal
income
tax
purpos
r
es;
and
challenges
in
maintaining
transitional
services
and
operational
continuity
between
the
Company
and
NewCo,
in
establ
a
ishing
or
maintaining
standalone
functions
and
infrastructur
t
e
at
NewCo,
or
in
retaining
existing
or
attracting
new
business
and
operational
relationships,
including
with
customers,
suppl
u
iers,
and
employees.
There
can
be
no
assurance
that
the
separation,
if
completed,
will
achieve
the
intended
financial
and
strategic
benefits
(which
are
based
on
a
number
of
assumptions,
some
or
all
of
which
may
prove
incorrect) or provide greater value to our stockholders than is currently reflected in our stock price, or that the dissynergies from
the separation will not be greater than expected. Any of these factors could negatively affe
f
ct our stock price or have a materially
adverse impact on our business operations and on our financial condition or results of operations.
We might
g
not realiz
l
e the expe
x
cted
t
tax
a
treatment from our split-
i
offf
of Change Health
l
care.e
On
March
10,
2020,
the
Company
completed
a
separation
of
its
interest
in
Change
Healthcare
LLC
(“Change
Healthcare
JV”).
The
divestiture
was
effe
f
cted
through
the
split-off
of
PF2
SpinCo,
Inc.
(“SpinCo”),
a
wholly
owned
subs
u
idiary
of
the
Company
that
held
all
of
the
Company’s
interest
in
the
Change
Healthcare
JV,
to
certain
of
the
Company’s
stockholders
through
an
exchange
offe
f
r
(the
“Exchange
Offe
f
r”),
followed
by
a
merger
of
SpinCo
with
and
into
Change
Healthcare
Inc.
(“Change”), with Change surviving the merger (the “Merger” and, together with the Exchange Offe
f
r, the “Transactions”). The
Company
received
an
opinion
from
outside
legal
counsel
to
the
effe
f
ct
that
the
Transactions
qualifie
f
d
as
generally
tax-free
transactions
to
the
Company
and
its
stockholders
for
U.S.
federal
income
tax
purpos
r
es.
An
opinion
of
legal
counsel
is
not
binding
on
the
IRS
or
the
courts,
and
the
IRS
or
the
courts
may
not
agree
with
the
intended
tax-free
treatment
of
the
Transactions.
In
addition,
the
opinion
could
not
be
relied
upon
if
certain
assumptions,
representations,
and
undertakings
upon
which the opinion was based are materially inaccurate or incomplete, or are violated in any material respect. If the intended tax-
free treatment of the Transactions is not sustained, the Company and its stockholders who participated in the Transactions may
be
required
to
pay
subs
u
tantial
U.S.
federal
income
taxes.
In
connection
with
the
Transactions,
the
Company,
SpinCo,
Change,
and
the
Change
Healthcare
JV
entered
into
the
Tax
Matters
Agreement,
which
governs
their
respective
rights,
responsibilities,
and
obligations
with
respect
to
tax
liabi
a
lities
and
benefits,
tax
attributes,
tax
contests,
and
other
tax
sharing
regarding
U.S.
federal,
state,
and
local,
and
non-U.S.
taxes,
other
tax
matters,
and
related
tax
returns.
Under
the
Tax
Matters
Agreement,
Change
is
required
to
indemnify
f
the
Company
if
the
Transactions
become
taxabl
a
e
as
a
result
of
certain
actions
by
Change
or
SpinCo,
or
as
a
result
of
certain
changes
in
ownership
of
the
stock
of
Change
afte
f
r
the
Merger.
If
Change
does
not
honor
its
obligations
to
indemnify
f
the
Company,
or
if
the
Transactions
fail
to
qualify
f
for
the
intended
tax-free
treatment
for
reasons
not
related to a disqualifyi
f
ng action by Change or SpinCo, the resulting tax to the Company could have a significant adverse effe
f
ct
on our financial position or results of operations.
McKESSON CORPORAT
R
ION
20
We might
g
be adverse
r
ly impacted by outsourcing or simi
i
la
i
r third-par
-
ty relationships
i
.
We rely on third parties to perform certain business and administrative functions for us. We might not adequately develop,
implement,
and
monitor
these
outsourced
service
providers,
and
we
might
not
realize
expected
cost
savings
or
other
benefits.
Third-party service providers experience cybersecurity incidents and other disrupt
r
ions and can fail to perform their obligations
due
to
various
causes,
which
might
cause
us
to
incur
operational
difficulties,
additional
compliance
requirements,
or
increased
costs
related
to
outsourced
services.
For
example,
our
ability
to
use
outsourcing
resources
in
certain
jurisdictions
might
be
limited
by
legislative
action
or
customer
contracts,
with
the
result
that
the
work
must
be
performed
at
greater
expense
or
we
may
be
subj
u
ect
to
sanctions
for
non-compliance.
Any
of
these
risks
might
have
a
materially
adverse
impact
on
our
reputation,
our business operations, and our financial position or results of operations.
We may
a
be unsuccessful
f
in achieving
i
our stra
t
tegi
e
c growth objectiv
t
es.
Our
business
strategy
as
a
diversifie
f
d
healthcare
services
company
includes
investing,
organically
and
inorganically,
to
further build an integrated oncology and multispecialty care platform and expand our biopharma services business. Our ability
to
grow
those
businesses
will
depend,
among
other
things,
on
our:
hiring
and
retaining
talented
individuals
with
necessary
knowledge
and
skills;
acquiring,
developing,
and
implementing
new
technologies
and
capabilities,
including
AI;
establ
a
ishing
new
offe
f
rings
and
pivoting
or
enhancing
existing
ones;
successful
f
ly
identifyi
f
ng,
completing,
and
realizing
the
anticipated
benefits
of
strategic
transactions;
forming
and
expanding
business
relationships;
anticipating
the
needs
of
our
customers;
and
successful
f
ly
competing
against
providers
of
similar
services.
New
technologies,
such
as
AI,
may
not
result
in
the
benefits
we
anticipate,
may
not
enable
us
to
keep
pace
with
our
competitors
and
the
rapi
a
dly
evolving
technological
landscape,
and
may
require us to expend significant resources, including to maintain our capabilities. We have increased, and expect to continue to
increase,
our
use
of
AI
technology,
which
could
heighten
these
risks.
Additionally,
some
of
our
historical
competitors
and
a
growing number of new competitive entrants have more experience than we do in enabling technologies such as data analytics,
machine
learning,
or
AI.
As
described
in
“Government
Regulation”
in
Item
1
of
Part
I
above,
we
also
face
certain
regulatory
r
risks in executing our growth strategy, including potential laws that place restrictions on certain healthcare ownership structures
or
arrangements.
We
may
not
achieve
our
desired
return
on
our
investments
through
our
growth
strategy,
or
acceptabl
a
e
sales
and
profit
f
ability
in
our
strategic
growth
areas.
Any
of
the
foregoing
risks
might
have
a
materially
adverse
impact
on
our
business prospects and our financial position or results of operations.
We are impacted by custom
t
er purchase reductio
t
ns,s
contra
t
ct non-renewals,s
payment defa
e
ults
l
,s
and bankruptcies.
Some of our customers from time to time reduce the amounts they purchase from us, do not renew their purchase contracts
with us, renew their purchase contracts at less favorable terms, delay or default on their payments to us, or avoid payments to us
through bankrupt
r
cy proceedings. At March 31, 2026, sales to our largest customer represented approximately 24% of our total
consolidated
revenues
and
approximately
21%
of
our
total
trade
receivabl
a
es,
and
those
of
our
ten
largest
customers
combined
accounted
for
approximately
73%
of
our
consolidated
revenues
and
approximately
43%
of
our
trade
receivables.
Refer
to
“Other Information about the Business” in Item 1 of Part I above for additional details on our customers. One or more customer
purchase
reductions,
contract
non-renewals,
renewals
at
less
favorable
terms,
payment
defaults,
or
bankrupt
r
cies
might
have
a
materially adverse impact on our business operations and our financial position or results of operations.
McKESSON CORPORAT
R
ION
21
Our contra
t
ctst
with
i
governmental entities involve future fundin
d
g and compliance risk
i
s.
k
Our
contracts
with
governmental
entities
are
subj
u
ect
to
risks
such
as
lack
of
funding
and
compliance
with
unique
requirements. For example, government contract purchase obligations are typically subj
u
ect to the availabi
a
lity of funding, which
may
be
eliminated
or
reduced.
In
addition,
the
future
volume
of
products
or
services
purchased
by
a
government
customer
is
ofte
f
n uncertain. Our government contracts might not be renewed or might be terminated for convenience with little prior notice.
They
might
be
modified
with
less
favorable
terms.
Government
contracts
typically
expose
us
to
higher
potential
liability
than
do
other
types
of
contracts.
In
addition,
government
contracts
typically
are
subj
u
ect
to
procurement
laws
that
include
socio-
economic,
employment
practices,
environmental
protection,
recordkeeping
and
accounting,
and
other
requirements.
For
example,
our
contracts
with
the
U.S.
government
generally
require
us
to
comply
with
the
Federal
Acquisition
Regulation,
Procurement Integrity Act, Buy American Act, Trade Agreements Act, and other laws and requirements. New or revised laws,
requirements,
and
policies,
or
changes
in
the
interpretation
of
existing
laws,
requirements,
and
policies,
could
adversely
affe
f
ct
our
business
and
competitiveness
and
increase
our
compliance
costs.
We
are
subj
u
ect
to
government
audits,
investigations,
and
oversight
proceedings.
Governmental
agencies
routinely
review
and
audit
government
contractors
to
determine
whether
they
are
complying
with
contractua
t
l
and
legal
requirements.
If
we
fail
to
comply
with
these
requirements,
or
we
fail
an
audit,
we
may be subj
u
ect to various sanctions such as monetary damages, criminal and civil penalties, contract delays or terminations, and
suspension
or
debarment
from
government
contract
work.
These
requirements
complicate
our
business
and
increase
our
compliance burden. The occurrence of any of these risks could harm our reputation and might have a materially adverse impact
on our business operations and our financial position or results of operations.
We might
g
be harmed by changes in our relationships
i
or contra
t
ctst
with
i
suppl
u
ie
l
rs.
We attempt to structur
t
e our distribution agreements with manufac
f
turers to ensure that we are appropriately and predictabl
a
y
compensated for the services we provide. Certain distribution agreements with manufact
f
ur
t
ers include product price inflation as
a
component
of
our
consideration,
and
we
cannot
control
the
frequency
or
magnitude
of
price
changes.
Laws
limiting
or
reducing
product
prices,
and
changes
to
manufact
f
ur
t
ers’
pricing
policies
or
practices
as
a
result
of
changing
laws,
impact
our
distribution
agreements
or
arrangements.
We
might
be
unabl
a
e
to
renew
or
modify
distribution
agreements
with
manufac
f
turers
in a timely and favorable manner. Any of these risks might have a materially adverse impact on our business operations and our
financial position or results of operations.
We might
g
infr
n
inge intellectual propertyt
righ
i
ts or our intellec
l
tual propertyt
protect
t
io
t
ns might
g
be inadequate.
t
We
believe
that
our
products
and
services
do
not
infringe
the
proprietary
rights
of
third
parties,
but
third
parties
have
asserted infringement claims against us and may do so in the future. If a court were to hold that we infringed other’s rights, we
might
be
required
to
pay
subs
u
tantial
damages,
develop
non-infringing
products
or
services,
obtain
a
license,
stop
selling
or
using
the
infringing
products
or
services,
or
incur
other
sanctions.
We
rely
on
trade
secret,
patent,
copyright,
and
trademark
laws, nondisclosure obligations, and other contractua
t
l provisions and technical measures to protect our proprietary rights in our
products
and
solutions.
We
might
initiate
costly
and
time-consuming
litigation
to
protect
our
trade
secrets,
to
enforce
our
patent,
copyright,
and
trademark
rights,
and
to
determine
the
scope
and
validity
of
the
proprietary
rights
of
others.
Our
intellectua
t
l property protection effo
f
rts might be inadequate to protect our rights. Our competitors might develop non-infringing
products or services equivalent or supe
u
rior to ours. Our development and use of AI technologies may result in new or enhanced
risks,
including
the
misappr
a
opriation
of
proprietary
and
confid
f
ential
inputs
or
infringement
of
third-party
rights
as
well
as
uncertainties
over
the
ownership
of
AI-generated
output
t
s.
Any
of
these
risks
might
have
a
materially
adverse
impact
on
our
business operations and our financial position or results of operations.
Our use of third-par
-
ty datat
is subject to risk
i
s
k
and limit
i
at
t
io
t
ns that couldl
impede
d
the growth of our datat
services busine
i
ss.
We attempt to structur
t
e our processes to satisfy contractua
t
l and other operative data usage rights and limitations associated
with
customers,
industry
r
partners,
and
other
third-party
data
flowing
through
our
businesses.
These
rights
and
limitations
can
apply to confid
f
ential commercial data and personal data provided to us. Failure to satisfy these data usage rights and limitations
can lead to legal claims such as contractua
t
l breaches or data protection and privacy law violations. If a court were to hold that
our
use
of
data
is
not
consistent
with
our
rights
and
limitations,
we
might
be
required
to
pay
subs
u
tantial
damages;
we
might
need
to
stop
using,
sharing,
and/or
selling
certain
products
and
services;
or
we
might
incur
other
financial,
legal,
and/or
reputational consequences. In addition, we might be unabl
a
e to negotiate and/or obtain at an acceptabl
a
e cost the data usage rights
needed
to
advance
our
data
strategy
growth
and
AI-related
objectives.
Any
of
these
risks
might
have
a
materially
adverse
impact on our business operations and our financial position or results of operations.
McKESSON CORPORAT
R
ION
22
We might
g
be unablel
to successful
f
ly
l
recruiti
and retain qualif
l
ie
f
d empl
m
oy
l
ees.
Our ability to attract, engage, develop, and retain qualifie
f
d and experienced employees, including key executives and other
talent,
is
essential
for
us
to
meet
our
objectives.
We
compete
with
many
other
businesses
to
attract
and
retain
employees.
Competition among potential employers results in increased salaries, benefits, or other employee-related costs, or in our failure
to
recrui
r
t
and
retain
employees.
We
may
experience
loss
of
key
personnel,
including
unexpectedly.
Although
we
must
adequately
plan
for
timely
succession
of
key
management
roles,
our
succession
plans
might
not
be
effe
f
ctive,
and
employees
might
not
successful
f
ly
transition
into
new
roles.
Any
of
these
risks
might
have
a
materially
adverse
impact
on
our
business
operations and our financial position or results of operations.
Industry and Economic Risks
We might
g
be adverse
r
ly impacted by health
l
care refo
e
rm such as changes in pricing and reimburse
r
ment models.
Many
of
our
products
and
services
are
designed
to
function
within
the
structur
t
e
of
current
healthcare
financing
and
reimbursement
systems.
The
healthcare
industry
r
and
related
government
programs
continue
to
change.
Some
of
these
changes
increase our risks and create uncertainties for our business.
For
example,
certain
changes
in
reimbursement
methodologies
(including
government
rates)
for
pharmaceuticals,
medical
treatments,
and
related
services
reduce
profit
f
margins
for
us
and
our
customers
and
impose
new
legal
requirements
on
healthcare
providers.
Those
changes
have
included
cuts
in
Medicare
and
Medicaid
reimbursement
levels,
changes
in
the
bases
for
payments,
shifts
f
from
fee-for-service
pricing
towards
value-based
payments
and
risk-sharing
models,
and
increases
in
the
use of managed care.
As described under “Healthcare Program Regulation” in Item 1 of Part I above, our business is subj
u
ect to a broad range of
recent
and
ongoing
reform
effo
f
rts,
and
challenges
to
those
effo
f
rts,
that
could
affe
f
ct
healthcare
program
access
and
spending,
pharmaceutical pricing and reimbursement, and distribution economics. These include: the IRA;
R
the OBBBA; Executive Order
14297;
CMS
rulemaking
on
BFSFs
and
proposed
rebate
models;
340B
program
litigation
and
developments;
and
state
drug
r
pricing
legislation.
Additionally,
the
pace
and
volume
of
healthcare
reform
initiatives
and
changes
heighten
the
risks
for
our
business.
There
is
subs
u
tantial
uncertainty
about
the
likelihood,
timing,
and
results
of
these
healthcare
reform
effo
f
rts
and
challenges,
and
their
implementation
or
outcome
might
have
a
materially
adverse
impact
on
our
business
operations
and
our
financial
position or results of operations.
We are adverse
r
ly impacted by competitio
t
n and industry
t
consolid
l
at
d
io
t
n.
Our businesses face a highly competitive global environment with strong competition from international, national, regional,
and
local
full-line,
short-line,
and
specialty
distributors,
service
merchandisers,
self-w
f
arehousing
chain
drug
r
stores,
manufact
f
ur
t
ers
engaged
in
direct
distribution,
third-party
logistics
companies,
and
large
payer
organizations.
In
addition,
our
businesses
face
competition
from
various
other
service
providers
and
from
pharmaceutical
and
other
healthcare
manufac
f
turers
as
well
as
other
potential
customers,
which
may
from
time
to
time
decide
to
develop,
for
their
own
internal
needs,
suppl
u
y
management
capa
a
bi
a
lities
that
might
otherwise
be
provided
by
our
businesses.
We
also
may
face
competition
from
companies
that
move
faster
to
adopt
emerging
technologies.
Due
to
consolidation,
a
few
large
suppl
u
iers
control
a
significant
share
of
the
pharmaceuticals
market.
This
concentration
reduces
our
ability
to
negotiate
favorable
terms
with
suppl
u
iers
and
causes
us
to
depend
on
a
smaller
number
of
suppl
u
iers.
Many
of
our
customers,
including
healthcare
organizations,
have
consolidated
or
joined
group
purchasing
organizations
and
have
greater
power
to
negotiate
favorable
prices.
Consolidation
by
our
customers,
suppl
u
iers,
and
competitors
might
reduce
the
number
of
market
participants
and
give
the
remaining
enterprises
greater
bargaining
power,
which
might
lead
to
erosion
in
our
profit
f
margin.
Consolidation
might
increase
counterpa
r
rty
credit
risk
because
credit
purchases
increase
for
fewer
market
participants.
Consolidation
also
might
affe
f
ct
our
ability
to
achieve
our
growth objectives through acquisitions and other strategic transactions. These competitive pressures and industry
r
consolidation
might have a materially adverse impact on our business operations and our financial position or results of operations.
McKESSON CORPORAT
R
ION
23
From time to time
i
we have diffi
i
culties in sourcing
i
or sellin
l
g productst
due to a varietyt
of causes and are adverse
r
ly impacted
by disru
i
pt
u
io
t
ns or changes in product supp
u
ly.y
We
rely
on
third
parties
for
the
suppl
u
y
of
pharmaceutical
and
other
products,
and
our
operations
are
subj
u
ect
to
our
suppl
u
iers’ continued ability to suppl
u
y the products that we require. From time to time, we experience difficulties and delays in
sourcing
and
selling
products
due
to
a
variety
of
causes
that
result
in
suppl
u
iers’
failure
to
satisfy
production
demand.
Among
these
causes
are
suppl
u
iers’
challenges
in
complying
with
legal
requirements
(including
product
and
production
quality
standards),
access
to
raw
materials,
inputs,
and
finished
goods,
manufact
f
ur
t
ing
shutdowns,
and
operational
and
systems
difficulties.
Suppl
u
y
disrupt
r
ions
also
arise
from
other
factors
beyond
our
control,
such
as
product
rationalization;
government
actions
or
policies
(including
trade
sanctions,
tariffs
and
other
trade
restrictions,
as
well
as
the
requisition,
diversion,
or
allocation of inventory)
r
; shifts
f
in customer or societal demand for products; labor
a
disputes or shortages; ethical sourcing issues;
suppl
u
ier
financial
distress;
natural
disasters
and
weather-related
events;
civil
unrest;
military
conflic
f
ts;
and
epidemics
or
pandemics.
In
these
types
of
situations,
our
alternative
sourcing
effo
f
rts
are
not
always
fully
successful
f
.
We
might
experience
extended
delays
or
incur
higher
sourcing
costs
or
suffer
f
harm
to
our
customer
relationships
and
reputation.
Furthermore,
changes
in
the
healthcare
industry’
r
s
or
our
suppl
u
iers’
pricing,
selling,
inventory,
r
distribution,
or
suppl
u
y
policies
or
practices
could
significantly
reduce
our
revenues
and
net
income.
Any
of
these
disrupt
r
ions
or
changes
might
have
a
materially
adverse
impact on our business operations and our financial position or results of operations.
We are adverse
r
ly impacted as a result of our dist
i
ri
t
bution of generic pharma
r
ceuticals.
l
Our
generic
pharmaceuticals
distribution
business
is
subj
u
ect
to
both
product
availabi
a
lity
and
pricing
risks.
We
might
experience
disrupt
r
ions
in
our
suppl
u
y
of
generic
pharmaceuticals.
We
have
been
impacted
when,
due
to
regulatory
r
and
suppl
u
y
chain challenges, our suppl
u
ier partners are not able to deliver products that we have committed to source from them. Input cost
increases, product discontinuations, and market shortages could result in Clarus
r
ONE being unsuccessful
f
in sourcing product to
meet the needs of our customers, or could negatively impact our margin. Generic drug
r
manufact
f
ur
t
ers offe
f
r a generic version of
branded
pharmaceuticals
and
routinely
challenge
the
validity
or
enforceability
of
branded
pharmaceutical
patents
in
order
to
launch
the
drug
r
pre-
or
post-loss
of
exclusivity.
Patent
holders
have
asserted
infringement
claims
against
us
for
distributing
those generic versions they believed to have infringed a patent, and the generic drug
r
manufact
f
ur
t
ers may not fully indemnify
f
us
against
such
claims.
These
risks
and
outcomes,
as
well
as
changes
in
the
nature,
frequency,
or
magnitude
of
generic
pharmaceutical
launches,
might
have
a
materially
adverse
impact
on
our
business
operations
and
our
financial
position
or
results of operations.
We
are
adverse
r
ly
impacted
by
changes
in
the
economic
enviro
i
nments
in
which
we
operate,e
includin
d
g
from
infl
n
at
l
io
t
n,
an
economic slow
l
down, a recession, or fluctuatio
t
ns in foreign
g
currency
c
exchange rates.
Inflationary
conditions
result
in
increased
costs
associated
with
our
normal
business
operations
and
decreased
levels
of
consumer commercial spending and, to the extent we are not able to offs
f
et such cost increases from our suppl
u
iers, increase the
costs
which
we
incur
to
purchase
inventories
and
services.
Inflationary
pressure
is
increased
by
factors
such
as
suppl
u
y
chain
disrupt
r
ions,
labor
a
market
tightness,
actua
t
l
or
announced
tariffs,
government
policies,
interest
rate
changes,
and
foreign
exchange rate changes. An economic slowdown or a recession could also reduce the prices our customers are able or willing to
pay for our products and services and reduce the volume of their purchases. In addition to rising inflation, rising interest rates,
the impact of banking failures or perceived failures and related contagion, consumer sentiment, political circumstances, military
conflic
f
ts, and civil unrest may contribute to recessionary pressure. Our non-U.S. operations, import and export of produc
d
ts sold
in
currencies
other
than
U.S.
dollar
(non-USD),
non-USD
intercompany
loans,
and
our
subs
u
tantial
international
net
assets
also
expose
us
to
foreign
currency
exchange
rate
risk.
Changes
in
the
economic
environments
in
which
we
operate
might
have
a
materially adverse impact on our business operations and our financial position or results of operations.
Changes
affe
f
ctin
t
g
capi
a
ta
i
l
and
credit
d
marketst
might
g
impe
m
de
access
to
credit,
d
increase
borrowing
i
costs,
t
and
disru
i
pt
u
banking
i
services for us and our custom
t
ersr
and supp
u
liers and might
g
impai
m
ri
the fina
i
ncial soundne
d
ss of our custom
t
ersr
and suppl
u
ie
l
rs.
Volatility and disrupt
r
ion in global capital and credit markets, including the bankrupt
r
cy or restructur
t
ing of certain financial
institutions,
reduced
lending
activity
by
financial
institut
t
ions,
reduced
creditworthiness
of
our
customers
or
suppl
u
iers,
or
decreased liquidity and increased costs in the commercial pape
a
r market, might adversely affe
f
ct the borrowing ability and cost of
borrowing
for
us
and
our
customers
and
suppl
u
iers.
Credit
rating
agencies
regularly
review
our
credit
and
rate
our
outstanding
debt;
and
any
downgrades
in
our
credit
ratings
might
limit
our
access
to
public
debt
markets,
decrease
the
willingness
of
financial
institutions
to
lend
to
us,
lead
to
more
restrictive
debt
covenants,
increase
our
borrowing
costs,
and
adversely
affe
f
ct
our
earnings.
We
generally
sell
our
products
and
services
under
short-term
unsecured
credit
arrangements.
An
adverse
change
in general or entity-specific
f
economic conditions or access to capital might cause our customers to reduce their purchases from
McKESSON CORPORAT
R
ION
24
us, or delay payments, or fail to pay amounts, owed to us. Suppl
u
iers might increase their prices, reduce their output
t
, or change
their terms of sale due to limited availabi
a
lity of credit. Suppl
u
iers might be unabl
a
e to make payments due to us for fees, returned
products,
or
incentives.
Interest
rate
increases
or
changes
in
capi
a
tal
market
conditions,
including
as
a
result
of
macroeconomic
events,
might
impede
our
or
our
customers’
or
suppl
u
iers’
ability
or
cost
to
obtain
credit.
Any
of
these
risks
might
have
a
materially adverse impact on our business operations and our financial position or results of operations.
We might
g
be adverse
r
ly impacted by tax
a
legi
e
sl
i
at
l
io
t
n or challe
l
nges to our tax
a
positions.
We
are
subj
u
ect
to
the
tax
laws
in
the
U.S.
at
the
federal,
state,
and
local
government
levels
and
to
the
tax
laws
of
other
jurisdictions
in
which
we
operate
or
sell
products
or
services.
Tax
laws
might
change
in
ways
that
adversely
affe
f
ct
our
tax
positions,
effe
f
ctive
tax
rate,
and
cash
flow.
The
tax
laws
are
extremely
complex
and
subj
u
ect
to
varying
interpretations.
For
example,
the
European
Union
and
other
countries
(including
countries
in
which
we
operate)
have
committed
to
enacting
changes
to
numerous
long-standing
tax
principles
impacting
how
large
multinational
enterprises
are
taxed.
In
particular,
the
Organization
for
Economic
Co-operation
and
Development’s
Pillar
Two
initiative
introduces
a
15%
global
minimum
tax
applied on a country-by-country basis which many jurisdictions have enacted or committed to enact. Additionally, the OBBBA
introduced
modifications
to
various
U.S.
federal
tax
provisions.
While
we
evaluated
the
implications
of
these
measures
and
concluded
that
they
are
not
expected
to
have
a
material
impact
on
our
consolidated
financial
position,
results
of
operations,
or
cash flows, their ultimate impact may differ from our estimates. We are subj
u
ect to tax examinations in various jurisdictions that
might
assess
additional
tax
liabi
a
lities
against
us.
Our
tax
reporting
positions
are
sometimes
challenged
by
relevant
tax
authorities, we might incur significant expense in our effo
f
rts to defend those challenges, and we might be unsuccessful
f
in those
effo
f
rts.
Developments
in
examinations
and
challenges
might
materially
change
our
provision
for
taxes
in
the
affe
f
cted
periods
and
might
differ
materially
from
our
historical
tax
accrua
r
ls.
Any
of
these
risks
might
have
a
materially
adverse
impact
on
our
business operations, our cash flows, and our financial position or results of operations.
General Risks
Conditio
d
ns
and
eventst
outside
d
of
our
contro
t
l,
such
as
widespread
public
l
health
l
issues,s
natural
disa
i
ster
t
s,
r
and
geopoliti
l
cal
factor
t
sr
adverse
r
ly impact our busine
i
ss operations and our fina
i
ncial position or results of operations.
From time to time we are adversely affe
f
cted by conditions and events outside of our control, including: widespread public
health
issues
such
as
epidemic
or
pandemic
infectious
diseases;
natural
disasters
and
other
catastrophic
events
such
as
earthquakes,
floods,
or
severe
weather;
and
geopolitical
factors
such
as
terrorism,
military
conflic
f
ts,
civil
unrest,
political
circumstances
(including
changes
in
international
relations),
changes
or
uncertainty
in
government
policies
(including
with
respect to U.S. or international trade), actua
t
l or announced tariffsf
or other trade restrictions, government shutdowns, or changes
in
laws
or
their
interpretation.
These
conditions
and
events
can
disrupt
r
operations
for
us,
our
suppl
u
iers,
our
vendors,
and
our
customers,
as
well
as
impair
product
manufact
f
ur
t
ing,
suppl
u
y,
and
transport
availabi
a
lity
and
cost
in
unpredictabl
a
e
ways
that
depend on highly uncertain future developments. They might affe
f
ct consumer confid
f
ence levels and spending or the availabi
a
lity
of
certain
goods,
commodities,
raw
materials,
and
other
inputs.
In
response
to
these
types
of
conditions
and
events,
we
might
seek
alternate
sources
for
product
suppl
u
y,
incur
additional
sourcing
or
distribution
costs,
suspend
operations,
implement
extraordinary
r
procedur
d
es,
or
suffer
consequences
that
are
unexpected
and
difficult
to
mitigate.
For
example,
the
trade
environment
remains
highly
dynamic
and
uncertain,
and
trade
policies
may
be
interrelated
with
other
government
initiatives.
Imposed
or
threatened
tariffs
or
other
trade
restrictions
might
require
us
to
incur
subs
u
tantial
additional
sourcing
costs,
raise
prices on certain products, or seek alternate suppl
u
y sources. If we are unabl
a
e to effe
f
ctively manage or offs
f
et the impact of tariffs
or
other
trade
restrictions,
or
find
alternate
sources
of
suppl
u
y,
we
might
be
competitively
disadvantaged
or
experience
reduced
profit
f
margins
or
suppl
u
y
disrupt
r
ions.
Further,
we
might
suffer
f
harm
to
our
customer
relationships.
Any
of
the
foregoing
risks
might have a materially adverse impact on our business operations and our financial position or results of operations.
We may
a
be adverse
r
ly affe
f
cted
t
by global
l
clima
l
te change or by regu
e
latory or market responses to such change.e
The long-term effe
f
cts of climate change are diffic
f
ult to predict and may be widespread. The impacts may include physical
risks
(such
as
rising
sea
levels
or
frequency
and
severity
of
extreme
weather
conditions),
social
and
human
effe
f
cts
(such
as
population
dislocations
or
harm
to
health
and
well-being),
compliance
costs
and
transition
risks
(such
as
regulatory
r
or
technology
changes),
costs
for
critical
services
(such
as
transportation
costs),
and
other
adverse
effe
f
cts.
The
effe
f
cts
could
impair,
for
example,
the
availabi
a
lity
and
cost
of
certain
products,
commodities,
transportation,
and
energy
(including
utilities),
which in turn may impact our ability to procure goods or services, and transport those goods, required for the operation of our
business
at
the
quantities
and
levels
we
require.
We
bear
losses
incurred
as
a
result
of,f
for
example,
physical
damage
to
or
destruction
of
our
facilities
(such
as
distribution
or
fulfil
f
lment
centers),
loss
or
spoilage
of
inventory
r
due
to
unusual
ambient
McKESSON CORPORAT
R
ION
25
temperatur
t
es,
and
business
interrupt
u
ion
due
to
weather
events
that
may
be
attributable
to
climate
change.
These
risks
might
have a materially adverse impact on our business operations and our financial position or results of operation.
Evolvi
l
ng
i
expe
x
ctat
t
io
t
ns
and
regu
e
latory
requirements
related
to
governance
and
sustai
t
na
i
bility
i
matters
may
a
damage
our
repu
e
tation and have an adverse
r
effe
f
ct on our busine
i
ss, fina
i
ncial conditio
d
n, and results of operations.
Investors,
regulators,
employees,
customers,
and
other
stakeholders
continue
to
focus
on
companies’
governance
and
sustainabi
a
lity
(“G&S”)
practices
and
policies,
including
those
related
to
human
capital
management,
climate
change,
environmental responsibility, and social impact. Given the varied and at times divergent views of different stakeholder groups,
any action or inaction by us with respect to G&S matters may be perceived negatively by some stakeholders. Furthermore, the
G&S
regulatory
r
landscape
a
is
evolving
and
uncertain.
New
or
revised
laws
and
policies,
or
changes
in
the
interpretation
of
existing
laws
and
policies,
could
increase
our
compliance
costs
and
expose
us
to
legal
risks.
From
time
to
time,
we
make
statements regarding our sustainabi
a
lity goals. Although we intend to meet these goals, we may be required to expend significant
resources to do so, which could impose costs on us. In addition, we could be criticized for the scope or nature of these goals, or
for any revisions to our goals. Moreover, we may determine that it is in the best interests of the Company and our stockholders
to
prioritize
other
business
investments
over
the
achievement
of
our
sustainabi
a
lity
goals
based
on
various
factors
such
as
our
business
strategy,
technological
and
regulatory
r
developments,
industry
r
standards,
and
input
or
pressure
from
stakeholders.
If
our G&S practices or outcomes do not align with stakeholder expectations or evolving regulatory
r
requirements, our reputation,
stock
price,
ability
to
access
capital
markets,
and
employee
recrui
r
tment
and
retention
effo
f
rts
might
be
negatively
affe
f
cted.
We
also
could
face
litigation
or
government
action.
Any
of
the
foregoing
risks
might
have
a
materially
adverse
impact
on
our
business, financial condition, and results of operations.
Exclusive
forum
provisions
in
our
bylaws
couldl
limi
i
ti
our
stoc
t
kholde
l
rs’
ability
i
to
choose
theiri
prefer
f
red
judicial
forum
for
disp
i
utes
t
with
i
us or our dire
i
ctor
t
s,
r
offi
f
cers,
r
or empl
m
oy
l
ees.
Our amended and restated bylaws provide that, unless the Corporation consents in writing to the selection of an alternative
forum, the sole and exclusive forum for specified legal actions is the Court of Chancery
r
of the State of Delaware or the United
States
District
Court
for
the
District
of
Delaware
if
the
Court
of
Chancery
r
does
not
have
or
declines
to
accept
jurisdiction
(collectively, “Delaware Courts”). Current and former stockholders are deemed to have consented to the personal jurisdiction of
the
Delaware
Courts
in
connection
with
any
action
to
enforce
that
exclusive
forum
provision
and
to
service
of
process
in
any
such
action.
These
provisions
of
the
bylaws
are
not
a
waiver
of,f
and
do
not
relieve
anyone
of
duties
to
comply
with,
federal
securities
laws
including
those
specifying
the
exclusive
jurisdiction
of
federal
courts
under
the
Exchange
Act
and
concurrent
jurisdiction of federal and state courts under the Securities Act. To the extent that these provisions of the bylaws limit a current
or
former
stockholder’s
ability
to
select
a
judicial
forum
other
than
the
Delaware
Courts,
they
might
discourage
the
specifie
f
d
legal
actions,
might
cause
current
or
former
stockholders
to
incur
additional
litigation-related
expenses,
and
might
result
in
outcomes
unfav
f
orable
to
current
or
former
stockholders.
A
court
might
determine
that
these
provisions
of
the
bylaws
are
inapplicable or unenfor
f
ceabl
a
e in any particular action, in which case we may incur additional litigation related expenses in such
action,
and
the
action
may
result
in
outcomes
unfav
f
orable
to
us,
which
could
have
a
materially
adverse
impact
on
our
reputation, our business operations, and our financial position or results of operations.
Item 1B.
Unresolved Stafff
Comments.
None.
McKESSON CORPORAT
R
ION
26
Item 1C.
Cybersecurity.
Ri
Ri
k
sk
i
Manage
a
ment and Secu
iri yty
i
As
a
didiversififie
f
d
he
lal hthcare
services
le
d
ad
rer
hthat
is
dedidicat
d
ed
to
d
advancing
he
lal hth
outcomes
for
pa
p
tients
everyw
r
here,
y
cybersecu
iri yty
iri
k
sk management is integral to our enterp
irise
iri
k
sk management strategy
gy. Our management,
i
wi hth in
l
volvement and
input
from
external
consultants
and
oversight
from
our
Board
of
i
Directors
(“Board”),
performs
an
annual
enterp
irise-widide
iri
k
sk
assessment (“ERA”
R
) to ididen iti
y
fy key exis iti
g
ng and emergigi
g
ng
iri
k
sks. One of
hthe prin
icipal
iri
k
sks ididen itififi
d
ed and assessed
hthrough
gh
hthis
process is
y
cybersecurity,
h
which remains a key focus for the Company, management, and our Board.
Our
Cybersecurity
Program
is
aligned
with
the
National
Institut
t
e
of
Standards
and
Technology
Cybersecurity
Framework
(“NIST
CSF”)
and
other
industry
r
best
practices.
The
Cybersecurity
Program
is
designed
to
identify,
f
assess
and
mitigate
material cybersecurity risks.
We
have
implemented
cybersecurity
controls
designed
to
protect
our
systems,
data,
and
operations
from
cybersecurity
risks. Enterprise-wide cybersecurity and privacy training continues to serve an important role in risk reduction and protection of
the Company and our stakeholders. We require periodic access-based and role-based privacy and cybersecurity training, which
is
updated
to
reflect
changes
in
the
threat
environment,
audit
findings,
laws,
and
regulations.
We
also
engage
and
educ
d
ate
employees through cybersecurity and privacy awareness programs and communication campaigns. In addition, as cybersecurity
attacks
become
increasingly
complex
in
part
due
to
the
emergence
of
new
AI
enabled
technologies
that
allow
threat
actors
to
target particular entities and IT systems, we are taking measures to manage these risks by deploying new tools and capabilities,
including AI.
Our
y
Cybersecurity
In
icident
Response
l
Plan
(“CIRP
)”)
pr
i
ovides
a
framewo
k
rk
for
resp
di
ondi
g
ng
to
y
cybersecurity
in
icident
.s
The
CIRP is based on the NIST CSF framework and governs activities such as preparation, detection, coordination, eradication and
recovery.
It
also
provides
processes
for
appropriate
escalations
to
hthe
Company’s
se
inior
management,
didisclosure
co
i
mmittee,
Board, and relevant Board co
i
mmittees.
h
The CIRP is routinely tested, re
iview
d
ed, and
d
updated as appropriate
d
under
hthe le
d
ader
h
ship
of
our
Chief
Information
Offi
f
cer
and
Chief
Technology
Offi
f
cer
(“CIO/CTO”)
with
the
assistance
of
the
Company’s
Chief
Infor
f
mation Security Offi
f
cer (“CISO”).
We
also
engage
internal
and
external
assessors,
consultants,
auditors,
and
other
third-parties,
to
assess
our
Cybersecurity
Program’s
maturity.
We
manage
cybersecurity
risks
associated
with
third
parties,
including
vendors,
service
providers,
and
external
users
of
our
systems.
This
includes
conducting
due
diligence
on
the
third
parties
we
use
along
with
using
third
party
cybersecurity monitoring and alerting tools.
Although
we
believe
that
we
maintain
reasonabl
a
e
cybersecurity
measures,
we
recognize
that
cyber
threats
continue
to
evolve, and no system is immune to risk.
As
of
March
31,
2026,
we
are
not
aware
of
any
cybersecurity
incidents
that
have
materially
affe
f
cted,
or
are
reasonabl
a
y
likely
to
materially
affe
f
ct,
our
business
strategy,
results
of
operations,
or
financial
condition.
For
a
discussion
of
whether
and
how
any
risks
from
cybersecurity
threats
have
affe
f
cted
or,
if
realized,
are
reasonabl
a
y
likely
to
materially
affe
f
ct
the
Company,
see “Risk Factors” in Item 1A of Part I
b
above for
d
addidi itional information on
iri
k
sks related to our business, in
lcl
di
udi
g
ng for exam
lple,
iri
k
sks related to priv
y
acy and data protection, cybersecurity incidents, third-party relationships, and continuity of our information
systems and networks, operational technology, and technology products or services.
McKESSON CORPORAT
R
ION
27
Governance
Our
CIO/CTO
leads
management’s
assessment
and
management
of
cybersecurity
risk
with
the
assistance
of
the
Company’s
CISO
who
reports
to
the
CIO/CTO.
The
CIO/CTO
reports
to
our
CEO,
is
a
member
of
the
Executive
Operating
Team,
and
provides
updates
to
the
Board
about
cybersecurity
matters.
Our
CIO/CTO
has
more
than
30
years
of
experience
managing
technology
and
risks,
and
advising
on
cybersecurity
issues
and
our
CISO
has
more
than
22
years
of
relevant
experience,
is
a
Certifie
f
d
Information
System
Security
Profes
f
sional
(CISSP),
and
a
Certifie
f
d
Information
Systems
Auditor
(CISA).
Cybe
ybersecu
iri yty is am
g
ong
hthe
iri
k
sks ididen if
tifie
f
d by
b
our ERA
R
for Board-level oversigight.
h
The Audidit Co
i
mmittee of
hthe Board has
oversigight
of
information
technology
controls
related
to
financial
reporting,
while
the
Compliance
Committee
of
the
Board
has
oversight
of
te
h
ch
l
nol
gy
ogy-related
risk,
including
privacy
and
cybersecurity.
The
Audit
Committee
and
Compliliance
Co
i
mmittee
meet
jojoin ltly
at
least
annualllly
to
re
iview
y
cybersecurity
ity
iri
k
sks
and
pr
g
ograms,
and
they
are
d
updated
as
ne
d
ed
d
ed
on
y
cybersecurity
ity
hthreats,
in
icidents,
or
new
developments
in
our
cybersecurity
iri
k
sk
profilil
f
e.
h
The
h
ch
iairs
of
hthe
Audidit
Committee
and
Compliliance
Co
i
mmittee pr
p
ovide
d
updates to
hthe Board afte
f
r each committee meeting. The CIO/CTO and CISO provide regular updates to
hthe
Board,
Audidit
Committee,
or
Compliliance
Committee
about
material
risks
from
cybersecurity
threats.
The
CIO/CTO
or
CISO
also
provides
regular
updates
to
the
Board,
Audit
Committee,
or
Compliance
Committee
about
y
cybersecurity
trends
and
regul
gulatory
r
d
updates, data governance and usage, technology infrastructur
t
e, our training and compliance effo
f
rts, and im
lplications
for
our
business
strategy
gy.
In
d
addidi ition
to
hthe
information
pr
i
ovided
in
hthese
meetings,
me
b
mbers
of
our
Board
have
access
to
contin
iui
g
ng
d
educ
d
ation,
h
which in
lcl
d
udes to
ipics rela iting to
y
cybersecurity
ity
iri
k
sks.
Item 2.
Properties.
Because of the nature of our principal businesses, our plant, warehousing, retail pharmacies, offi
f
ces, and other facilities for
all
of
our
reportabl
a
e
segments
are
operated
in
widely
dispersed
locations,
primarily
throughout
North
America.
Retail
pharmacies and most warehouses are typically owned or leased on a long-term basis. We consider our operating properties to be
in
satisfactory
r
condition
and
adequate
to
meet
our
needs
for
the
next
several
years
without
making
capital
expenditures
materially higher than historical levels. Information as to material lease commitments is included in Financial Note 9, “Leases,”
to the consolidated financial statements included in this Annual Report.
Item 3.
Legal Proceedings.
Certain
legal
proceedings
in
which
we
are
involved
are
discussed
in
Financial
Note
17,
“Commitments
and
Contingent
Liabilities,” to the consolidated financial statements included in this Annual Report. Disclosure of an environmental proceeding
with a governmental agency is generally included only if we expect monetary sanctions in the proceeding to exceed $1 million,
unless otherwise material.
Item 4.
Mine Safet
f
y Disclosures.
Not applicable.
McKESSON CORPORAT
R
ION
28
Information about our Executive Offi
f
cers
The following tabl
a
e sets forth information regarding the executive offi
f
cers of the Company, including their principal
occupa
u
tions during the past five years. The Board of Directors elects executive offi
f
cers annually. Our executive offi
f
cers serve
until their successors are duly elected and qualifie
f
d, or until their earlier death, resignation, or removal.
Name
Age
g
Position with Registrant and Business Experience
g
p
Brian S. Tyler
....................
59
Chief Executive Offi
f
cer and a director since April 2019; President
and
Chief
Operating
Offi
f
cer
from
August
2018
to
March
2019;
Chairman
of
the
Management
Board
of
McKesson
Europe
AG
from
2017
to
2018;
President
and
Chief
Operating
Offi
f
cer,
McKesson Europe from 2016 to 2017; President of North America
Distribution
and
Services
from
2015
to
2016;
and
Executive
Vice
President,
Corporate
Strategy
and
Business
Development
from
2012 to 2015.
Britt J. Vitalone
.................
57
Executive
Vice
President
and
Chief
Financial
Offi
f
cer
since
January
2018;
Senior
Vice
President
and
Chief
Financial
Offi
f
cer,
U.S.
Pharmaceutical
from
July
2014
to
December
2017;
Senior
Vice
President
and
Chief
Financial
Offi
f
cer,
U.S.
Pharmaceutical
and
Specialty
Health
from
October
2017
to
December
2017;
Senior
Vice
President
of
Corporate
Finance
and
M&A
Finance
from March 2012 to June 2014.
Francisco J. Fraga
..............
52
Executive
Vice
President,
Chief
Information
Offi
f
cer
and
Chief
Technology
Offi
f
cer
since
September
2023;
Senior
Vice
President
and
Chief
Information
Offi
f
cer,
U.S.
Pharmaceutical
from
2021
to
2023.
Previously,
Chief
Technology
and
Information
Offi
f
cer
for
Campbell
Soup
Company,
Inc.
(branded
food
manufac
f
turer)
from
2017 to 2021.
Michele Lau
......................
50
Executive
Vice
President
and
Chief
Legal
Offi
f
cer
since
January
2024. Previously, Chief Legal Offi
f
cer and Corporate Secretary
r
for
GoDaddy
(technology
services)
from
July
2021
to
November
2023.
Senior
Vice
President,
Corporate
Secretary
r
and
Associate
General Counsel at McKesson from March 2018 to June 2021 and
various other legal roles at McKesson from 2008 to 2018.
Thomas L. Rodgers
...........
55
Executive
Vice
President,
Chief
Strategy
and
Business
Development
Offi
f
cer
since
June
2020.
Previously,
Senior
Vice
President
and
Managing
Director
of
McKesson
Ventur
t
es
from
2014 to 2020.
LeAnn B. Smith
................
51
Executive
Vice
President
and
Chief
Human
Resources
Offi
f
cer
since
December
2022.
Previously,
Senior
Vice
President,
Talent
Management
and
Development
from
2021
to
2022.
Chief
People
Leader, Global Corporate Functions for Walmart Inc. (retail) from
2018 to 2021.
McKESSON CORPORAT
R
ION
29
PART II
Item
5.
Market
for
Registrant’s
Common
Equity,
Related
Stockholder
Matters,
and
Issuer
Purchases
of
Equity
Securities.
Market
k
Info
n
rmation:
The
principal
market
on
which
our
common
stock
is
traded
is
the
New
York
Stock
Exchange
(“NYSE”) under the trading symbol “MCK.”
Holder
d
s:
r
At March 31, 2026, there were 3,667 holders of record of our common stock.
Dividends:
In
July
2025,
our
quarterly
dividend
was
raised
from
$0.71
to
$0.82
per
share
of
common
stock.
We
declared
regular cash dividends of $3.17, $2.75, and $2.40 per share for the years ended March 31, 2026, 2025, and 2024, respectively.
We anticipate that we will continue to pay quarterly cash dividends in the future. However, the declaration and amount of
future dividends remain within the discretion of the Board and will depend upon our future earnings, financial condition, capital
requirements, legal requirements, and other factors.
Securities
Authorized
for
Issuance
under
Equity
Compensation
Plans:
Information
relating
to
this
item
is
provided
under
Item 12 of Part III included in this Annual Report.
Share
Repur
e
chase
Plans:
The
Board
has
authorized
the
repurchase
of
common
stock.
We
may
affe
f
ct
stock
repurchases
from
time-to-time
through
open
market
transactions,
privately
negotiated
transactions,
accelerated
share
repurchase
(“ASR”)
programs, or by combinations of such methods, any of which may use pre-arranged trading plans that are designed to meet the
requirements
of
Rule
10b5-1(c)
of
the
Exchange
Act.
The
timing
of
any
repurchases
and
the
actua
t
l
number
of
shares
repurchased
will
depend
on
a
variety
of
factors,
including
our
stock
price,
corporate
and
regulatory
r
requirements,
tax
implications,
restrictions
under
our
debt
obligations,
other
uses
for
capital,
impacts
on
the
value
of
remaining
shares,
cash
generated from operations, and market and economic conditions. During the last three fiscal years, our share repurchases were
transacted through both open market transactions and ASR programs with third-party financial institutions.
Excise taxes incurred on share repurchases of an entity’s own common stock are direct and incremental costs to purchase
treasury
r
stock, and accordingly are included in the total cost basis of the common stock acquired and reflected as a reduction of
stockholders’
equity
within
“Treasury
r
shares”
in
our
Consolidated
Balance
Sheets
and
Consolidated
Statements
of
Stockholders’ Deficit. Excise taxes do not reduce our remaining authorization for the repurchase of common stock. Excise taxes
of
$40
million
and
$26
million
were
accrued
within
“Other
accrue
r
d
liabi
a
lities”
in
our
Consolidated
Balance
Sheets,
for
shares
repurchased
during
the
years
ended
March
31,
2026
and
2025,
respectively.
On
October
30,
2024,
we
made
a payment of
$25
million
for
fiscal
2024
excise
taxes
previously
accrue
r
d.
On
July
30,
2025,
we
made
a
payment
of
$26
million
for
fiscal
2025
excise taxes previously accrued.
Refer to Financial Note 18, “Stockholders' Deficit,” to the accompanying consolidated financial statements included in this
Annual
Report
on
Form
10-K
for
a
full
discussion
of
our
share
repurchases
for
the
years
ended
March
31,
2026,
2025,
and
2024.
McKESSON CORPORAT
R
ION
30
The following tabl
a
e provides information on our share repurchases during the fourth quarter of fiscal 2026:
Share Repurchases
(1)
(In millions, except price per share)
Total
Number of
Shares
Purchased
Average Price
Paid per Share
(2)
Total Number of
Shares Purchased
as Part of Publicly
Announced
Programs
(3)
Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under the
Programs
(2)
January 1, 2026 - January 31, 2026
0.2
$
826.61
0.2
$
5,192
Februa
r
ry 1, 2026 - Februa
r
ry 28, 2026
0.1
920.95
0.1
5,104
March 1, 2026 - March 31, 2026
(4)
2.2
940.94
2.2
2,719
Total
2.5
2.5
(1)
This tabl
a
e does not include the value of equity awards surrendered to satisfy tax withholding obligations or forfeitures of equity awards.
(2)
The
average
price
paid
per
share
excludes $23
million
of
excise
taxes
incurred
on
share
repurchases
for
the three
months
ended
March
31,
2026.
The
remaining
authorization
outstanding
for
repurchases
of
common
stock
excludes
$40
million
of
excise
taxes
incurred
on
share repurchases for the year ended March 31, 2026.
(3)
In
July
2024,
the
Board
authorized
the
Company
to
repurchase
up
to
an
additional
$4.0
billion
shares
of
common
stock
which
have
no
expiration date. On April 29, 2026, the Board of Directors approved the Company to repurchase up to an additional $5.0 billion shares of
common stock to a total authorization of $7.7 billion as of April 2026.
(4)
In
March
2026,
the
Company
entered
into
an
ASR
program
with
a
third-party
financial
institution
to
repurchase
$2.3
billion
of
the
Company’s
common
stock.
The
average
price
paid
per
share
and
total
number
of
shares
purchased
under
this
program
are
estimates
based
on
the
initial
share
purchase
price
and
initial
delivery
r
of
shares
under
an
ASR
agreement
and
may
differ
from
the
average
price
paid per share and total number of shares purchased under the ASR program upon its final settlement in the first quarter of Fiscal 2027.
McKESSON CORPORAT
R
ION
31
Stock
Price
Perfor
f
mance
Graph*
:
The
following
graph
compares
the
cumulative
total
stockholder
return
on
our
common
stock
for
the
periods
indicated
with
the
Standard
&
Poor’s
(“S&P”)
500
Index
and
the
S&P
500
Health
Care
Index.
The
S&P
500
Health
Care
Index
was
selected
as
a
comparator
because
it
is
generally
availabl
a
e
to
investors
and
broadly
used
by
other
companies in the same industry.
r
McKesson Corporation
S&P 500 Index
S&P 500 Health Care Index
2021
2022
2023
2024
2025
2026
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
March 31,
2021
2022
2023
2024
2025
2026
McKesson Corporation
$
100.00
$
158.27
$
185.15
$
280.69
$
353.49
$
456.33
S&P 500 Index
$
100.00
$
115.65
$
106.71
$
138.59
$
150.03
$
176.74
S&P 500 Health Care Index
$
100.00
$
119.10
$
114.69
$
133.15
$
133.68
$
136.77
*
Assumes
$100
invested
in
McKesson
Common
Stock
and
in
each
index
on
March
31,
2021
and
that
all
dividends
are
reinvested.
Item 6.
Reserved.
McKESSON CORPORAT
R
ION
32
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
INDEX TO MANAGEMENT’S DISCUSSION AND ANALYSIS
Section
Page
g
General
.................................................................................................................................................................................
33
Overview of Our Business
...................................................................................................................................................
33
Executive Summary
.............................................................................................................................................................
35
Trends and Uncertainties
......................................................................................................................................................
36
Overview of Consolidated Results
.......................................................................................................................................
37
Overview of Segment Results
..............................................................................................................................................
42
Foreign Operations
...............................................................................................................................................................
45
Business Combinations
........................................................................................................................................................
45
Fiscal 2027 Outlook
.............................................................................................................................................................
45
Critical Accounting Estimates
..............................................................................................................................................
46
Financial Condition, Liquidity, and Capital Resources
.......................................................................................................
51
Related Party Balances and Transactions
............................................................................................................................
56
New Accounting Pronouncements
.......................................................................................................................................
56
GENERAL
Management’s
discussion
and
analysis
of
financial
condition
and
results
of
operations,
referred
to
as
the
“Financial
Review,”
is
intended
to
assist
the
reader
in
the
understanding
and
assessment
of
significant
changes
and
trends
related
to
the
results
of
operations
and
financial
position
of
McKesson
Corporation
together
with
its
subs
u
idiaries
(collectively,
the
“Company,”
“McKesson,”
“we,”
“our,”
or
“us”
and
other
similar
pronouns).
This
discussion
and
analysis
should
be
read
in
conjunction
with
the
consolidated
financial
statements
and
accompanying
financial
notes
in
Item
8
of
Part
II
of
this
Annual
Report on Form 10-K (“Annual Report”).
Our fiscal year begins on April 1 and ends on March 31. Unless otherwise noted, all references to a particular year refer to
our fiscal year.
Our Financial Review within this Annual Report generally discusses fiscal 2026 and fiscal 2025 results and year-over-year
comparisons between fiscal 2026 and fiscal 2025. For a discussion of our year-over-year comparisons between fiscal 2025 and
fiscal 2024, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of Part II
of
our
Annual
Report
on
Form
10-K
for
the
year
ended
March
31,
2025,
previously
filed
with
the
Securities
and
Exchange
Commission on May 9, 2025.
Certain statements in this Annual Report constitut
t
e forward-looking statements. See Item 1 - Business - Forward-Looking
Statements in Part I of this Annual Report for additional factors relating to these statements and Item 1A - Risk Factors in Part I
of this Annual Report for a list of certain risk factors applicable to our business, financial condition and liquidity, and results of
operations.
Overview of Our Busine
i
ss:
We are a diversifie
f
d healthcare services leader dedicated to advancing health outcomes for patients everyw
r
here. Our teams
partner
with
biopharma
companies,
care
providers,
pharmacies,
manufact
f
ur
t
ers,
governments,
and
others
to
deliver
insights,
products, and services to help make quality care more accessible and affo
f
rdable.
We
implemented
a
new
segment
reporting
structur
t
e
commencing
in
the
second
quarter
of
fiscal
2026,
which
resulted
in
four reportabl
a
e segments: North American Pharmaceutical, Oncology & Multispecialty, Prescription Technology Solutions, and
McKESSON CORPORAT
R
ION
FINANCIAL REVIEW
33
Medical-Surgical Solutions. Our former Norw
g
egian opera itions were in
lcl
d
uded in Other. All prior segment information has been
recast
to
reflect
our
new
segment
structur
t
e
and
current
period
presentation.
Our
organizational
structur
t
e
also
includes
Corporate,
which
consists
of
income
and
expenses
associated
with
administrative
functions
and
projects,
as
well
as
the
results
of certain investments. The factors for determining the reportabl
a
e segments include the manner in which management evaluates
the
performance
of
the
Company
combined
with
the
nature
of
individual
business
activities.
We
evaluate
the
perform
f
ance
of
our
operating
segments
on
a
number
of
measures,
including
revenues
and
operating
profit
f
before
interest
expense
and
income
taxes.
The
following
summarizes
our
four
reportabl
a
e
segments.
Refer
to
Financial
Note
20,
“Segments
of
Business,”
the
consolidated financial statements included in this Annual Report for further information regarding our reportabl
a
e segments.
•
North American Pharmaceutical
segment provides distribution and logistics services for branded, generic, specialty,
biosimilar, and over-the-counter pharmaceutical drug
r
s along with other healthcare-related products to customers in the
United
States
(“U.S.”)
and
Canada.
In
addition,
the
segment
sells
financial,
operational,
and
clinical
solutions
to
pharmacies
(retail,
hospital,
alternate
sites)
and
provides
consulting,
outsourcing,
technological,
and
other
services.
The
U.S.
distribution
operations
were
previously
included
in
the
former
U.S.
Pharmaceutical
reportabl
a
e
segment
and
the Canadian operations were previously included in the former International reportabl
a
e segment.
•
Oncology
&
Multispecialty
segment
includes
provider
solutions
that
encompass
specialty
drug
r
distribution,
group
purchasing organizations, infusion services, direct to patient pharmacy capabilities, cell and gene therapy services with
InspiroGene,
technology
solutions,
practice
consulting
services,
and
vaccine
distribution.
In
d
addidi ition,
hthe
segment
suppor
u
ts
hthe
U.S.
Oncology
gy
Network,
one
of
hthe
la
g
rgest
networks
of
phys
physician-led,
integrat
d
ed,
comm
i
uni yty
b
-based
onc
lol
gy
ogy
pr
p
actices
dedicated
to
advancing
high-quality,
evidence-based
cancer
care
in
the
U.S.,
and
includes
PRISM
Vision
Holdings,
LLC
(“PRISM
Vision”),
which
drives
pa itient
outcomes
in
a
re itina
and
h
ophthalmology
gy
se
i
tti
g
ng.
Co
b
mbin
d
ed
i
wi hth Sarah Cannon Resear
h
ch Institute and our te
h
ch
l
nol
gy
ogy business, Ontada,
hthis segment pr
i
ovides resear
h
ch,
in
isight
ghts,
te
h
ch
l
nologi
ogies,
and
services
hthat
d
address
and
improve
cancer
and
sp
i
eci
lal yty
care.
This
segment
was
previously
reflected in the former U.S. Pharmaceutical reportabl
a
e segment.
•
Prescription
Technology
Solutions
segment
combines
automation
and
our
ability
to
navigate
the
healthcare
ecosystem
to
connect
patients,
pharmacies,
providers,
pharmacy
benefit
managers,
health
plans,
and
biopharma
companies
to
address
patients’
medication
access,
affo
f
rdability,
and
adherence
challenges.
Prescription
Technology
Solutions
offe
f
rs
technology
services,
which
includes
electronic
prior
authorization,
prescription
price
transparency,
benefit
insight,
dispensing
supp
u
ort
services,
and
patient
enrollment,
in
addition
to
third-party
logistics,
and
wholesale
distribution
suppor
u
t
across
various
therapeutic
categories
and
temperatur
t
e
ranges
to
biopharma
customers
throughout
the product lifecy
f
cle.
•
Medical-Surgical Solutions
segment provides medical-surgical, labor
a
atory,
r
and pharmaceutical distribution, logistics,
and
other
services
to
U.S.
healthcare
providers
operating
in
the
non-acute
settings.
These
include
ambulatory
r
care
environments, such as physician offi
f
ces, surgery
r
centers, and hospital reference labs
a
, as well as extended care settings,
including
nursing
homes,
hospice
and
home
health
care
agencies,
government
facilities,
and
online
marketpl
t
aces
and
retailers.
This
segment
offe
f
rs
national
brand
medical-surgical
products
as
well
as
our
own
line
of
more
than
4,000
high-quality products through a network of distribution centers within the U.S. During fiscal 2026, we announced our
intention
to
separate
this
segment
into
an
independent
company.
As
a
part
of
the
separation
strategy,
on
April
20,
2026,
we
announced
a
definitive
agreement
under
which
funds
managed
by
affi
f
liates
of
Apollo
Global
Management,
Inc.
(“Apollo
Funds”)
will
acquire
approximately
13%
minority
ownership
interest
in
our
Medical
-
Surgical
Solutions
segment
through
an
investment
of
approximately
$1.25
billion
in
the
segment’s
convertible
prefer
f
red
equity.
The
transaction is subj
u
ect to regulatory
r
approvals and customary
r
closing conditions.
Our
former
Norwegian
operations,
which
provided
distribution
and
services
to
wholesale
and
retail
customers
in
Norway
where we owned, partnered, or franchised with retail pharmacies, were included in Other. During fiscal 2026, we completed the
transaction
to
sell
our
businesses
in
Norway
(“Norway
disposal
group”).
This
divestiture
is
further
described
in
the
“Business
Acquisitions and Divestitures” section below.
McKESSON CORPORAT
R
ION
FINANCIAL REVIEW (Continued)
34
Busine
i
ss Acquisitio
t
ns and Divestitu
t
res
Nor
N
wegi
e
an Divestiture Activities
On January 30, 2026, we completed the sale of our Norway disposal group for an adju
d
sted purchase price of $821 million.
We
recorded
a
net
gain
of
$480
million
for
the
year
ended
March
31,
2026
in
total
operating
expenses.
The
gain
includes
a
$164 million loss related to the accumulated other comprehensive loss balances associated with the disposal group.
PRISM
I
Visi
i
on Holdings, LLC
On
April
1,
2025,
we
completed
the
acquisition
of
a
controlling
interest
in
PRISM
Vision,
a
leading
provider
of
general
ophthalmology and retina administrative services. We acquired an 80% interest in PRISM Vision for $875 million in cash, and
prior
owners,
including
management
and
physicians
in
PRISM
Vision
practices,
retained
a
20%
ownership
interest.
As
of
the
acquisition date, the financial results of PRISM Vision are reported within our Oncology & Multispecialty segment.
Community Oncology Revitalization Enterprise
i
Ventures, LLC
On June 2, 2025, we completed the acquisition of a controlling interest in Community Oncology Revitalization Enterprise
Ventur
t
es, LLC (“Core Ventur
t
es”), a business and administrative services organization establ
a
ished by Florida Cancer Specialists
& Research Institute, LLC, (“FCS”). We acquired a 70% controlling interest in Core Ventur
t
es for $2.5 billion in cash and FCS
physicians retained a 30% ownership interest. As of the acquisition date, Core Ventur
t
es is a part of the Oncology platform and
financial results are reported within our Oncology & Multispecialty segment.
Refer
to
Financial
Note
2,
“Business
Acquisitions
and
Divestitures,”
to
the
consolidated
financial
statements
included
in
this Annual Report for additional information regarding these transactions.
Executive Summary:
The
following
summary
r
provides
highlights
and
key
factors
that
impacted
our
business,
operating
results,
financial
condition, and liquidity for the year ended March 31, 2026:
•
For
the
year
ended
March
31,
2026
compared
to
the
prior
year,
revenues
increased
by
12%,
gross
profit
f
increased
by
9%,
total
operating
expenses
decreased
by
6%,
and
other
income,
net
increased
by
17%.
Refer
to
the
“Overview
of
Consolidated Results” section below for an analysis of these changes;
•
Diluted
earnings
per
common
share
attributable
to
McKesson
Corporation
increased
to
$38.38
in
fiscal
2026
from
$25.72 in the prior year;
•
For
the
year
ended
March
31,
2026,
we
recorded
restructur
t
ing
charges
of
$170
million
related
to
an
enterprise-wide
initiative
to
drive
operational
effi
f
ciencies
as
further
described
in
the
“Restruc
r
turing
Initiatives”
section
of
“Overview
of Consolidated Results” below;
•
On April 1, 2025, we completed the acquisition of a controlling interest in PRISM Vision for $875 million in cash, as
discussed in further detail in the “
Business Acquisi
i
tions and Divestitures”
section above;
•
On
May
8,
2025,
we
entered
into
a
syndicated
$1.0
billion
364-Day
senior
unsecured
credit
facility
(the
“364-Day
Credit
Facility”)
that
was
scheduled
to
mature
in
May
2026
but
was
terminated
on
April
24,
2026
and
replaced
with
the
2026
5-Year
Facility
described
in
the
“
Recent
Developm
o
ents”
section
below.
Refer
to
Financial
Note
11,
“Debt
and
Financing
Activities,”
to
the
consolidated
financial
statements
included
in
this
Annual
Report
for
additional
information;
•
On
May
30,
2025,
we
completed
a
public
debt
offe
f
ring
of
4.65%
Notes
due
May
30,
2030
in
a
principal
amount
of
$650
million,
4.95%
Notes
due
May
30,
2032
in
a
principal
amount
of
$650
million,
and
5.25%
Notes
due
May
30,
2035 in a principal amount of $700 million, for total proceeds received, net of discounts and debt offe
f
ring expenses, of
2.0
billion.
The
net
proceeds
from
these
notes
in
addition
to
cash
on
hand
were
utilized
to
fund
the
purchase
of
our
interest
in
Core
Ventur
t
es.
Refer
to
Financial
Note
11,
“Debt
and
Financing
Activities,”
to
the
consolidated
financial
statements included in this Annual Report for additional information;
•
On
June
2,
2025,
we
completed
the
acquisition
of
a
controlling
interest
in
Core
Ventur
t
es
for
$2.5
billion
in
cash,
as
discussed in further detail in the “
Business Acquisi
i
tions and Divestitures”
section above;
McKESSON CORPORAT
R
ION
FINANCIAL REVIEW (Continued)
35
•
On November 14, 2025, our €600 million outstanding principal amount of 1.50% Notes matured and were repaid using
cash on hand;
•
On December 3, 2025, our $500 million outstanding principal amount of 0.90% Notes matured and were repaid using
cash on hand;
•
On
January
30,
2026,
we
completed
the
sale
of
our
Norway
disposal
group,
u
as
discussed
in
further
detail
in
the
“
Business Acquisi
i
tions and Divestitures”
section above;
•
During fiscal 2026, we returned $5.1 billion of cash to shareholders through $4.8 billion of common stock repurchases
and
$381
million
of
dividend
payments.
The
total
remaining
authorization
outstanding
for
repurchases
of
the
Company’s common stock at March 31, 2026 was $2.7 billion; and
•
On July 29, 2025, our Board of Directors (the “Board”) raised our quarterly dividend to $0.82 from $0.71 per share of
common stock.
Recent Developm
l
ents:
The following highlights events that impacted our business subs
u
equent to March 31, 2026:
•
On April 1, 2026, certain of our subs
u
idiaries within the Medical-Surgical Solutions segment entered into a syndicated
credit agreement for: a $750 million principal senior secured term loan due in 2031 and a $250 million principal senior
secured
term
loan
due
in
2028,
for
total
proceeds
received,
net
of
discounts
and
debt
offe
f
ring
expenses,
of
$993
million;
and
a
$1.0
billion
senior
secured
revolving
credit
facility
scheduled
to
mature
in
April
2031.
Refer
to
Financial
Note
11,
“Debt
and
Financing
Activities,”
to
the
consolidated
financial
statements
included
in
this
Annual
Report for additional information;
•
During
fiscal
2026,
we
announced
our
intention
to
separate
our
Medical-Surgical
Solutions
segment
into
an
independent
company.
As
a
part
of
the
separation
strategy,
on
April
20,
2026,
we
announced
a
definitive
agreement
under
which
Apollo
Funds
will
acquire
approximately
13%
minority
ownership
interest
in
our
Medical
-
Surgical
Solutions segment through an investment of approximately $1.25 billion in the segment’s convertible prefer
f
red equity.
This transaction is subj
u
ect to regulatory
r
approvals and customary
r
closing conditions;
•
On April 24, 2026, we terminated our 2022 revolving credit facility and our 364-Day credit facility and entered into a
new
Credit
Agreement
(the
“2026
Credit
Facility”)
that
provides
a
syndicated
$5.0
billion
senior
unsecured
credit
facility with a $4.5 billion aggregate subl
u
imit of availabi
a
lity in Canadian dollars, British pound sterling, and Euro. The
2026 Credit Facility is scheduled to mature in April 2031. Refer to Financial Note 11, “Debt and Financing Activities,”
to the consolidated financial statements included in this Annual Report for additional information; and
•
On April 29, 2026, the Board approved the Company to repurchase up to an additional $5.0 billion shares of common
stock to a total authorization of $7.7 billion as of April 2026.
Trends and Uncertainties:
Government Policies
As
described
in
“Item
1.
Government
Regulation”
and
“Item
1A
-
Risk
Factors”
in
Part
I
of
this
Annual
Report,
our
industry
r
is
highly
regulated
and
is
subj
u
ect
to
risks
and
uncertainty
caused
by
the
volume
and
speed
of
changes
to
regulatory
r
policies.
Changes
in
regulatory
r
posture
and
law
may
result
in
significant
changes
in
healthcare
policy,
government
funding
of
healthcare costs, and other laws affe
f
cting our operations, but the ultimate outcomes are difficult to predict.
McKESSON CORPORAT
R
ION
FINANCIAL REVIEW (Continued)
36
RESULTS OF OPERATIONS
Overview of Consolid
l
at
d
ed
t
Results:
(In millions, except per share data)
Years Ended March 31,
2026
2025
Change
Revenues
$
403,430
$
359,051
12
%
Gross profit
f
14,550
13,323
9
Gross profit
f
margin
3.61
%
3.71
%
(10)
(
bp
Total operating expenses
$
(8,338)
$
(8,901)
(6)
%
Total operating expe
x
nses as a percentage of revenues
2.07
%
2.48
%
(41)
(
bp
Other income, net
$
236
$
202
17
%
Interest expense
(247)
(265)
(7)
Income before income taxes
6,201
4,359
42
Income tax expense
(1,102)
(878)
26
Repor
e
ted income tax
a
rate
17.8
%
20.1
%
(230)
(
bp
Net income
5,099
3,481
46
Net income attributable to noncontrolling interests
(337)
(186)
81
Net income attributable to McKesson Corporation
$
4,762
$
3,295
45
%
Diluted earnings per common share attributable to McKesson Corporation
$
38.38
$
25.72
49
%
Weighted-average diluted common shares outstanding
124.1
128.1
(3)
%
Any percentage changes displayed above which are not meaningful
f
are displayed as zero percent.
bp - basis point
Revenues
Revenues
increased
for
the
year
ended
March
31,
2026
compared
to
the
prior
year
largely
due
to
market
growth
in
our
North
American
Pharmaceutical
segment,
including
higher
volumes
primarily
from
retail
national
account
customers.
Market
growth
includes
growing
drug
r
utilization
and
newly
launched
products,
partially
offs
f
et
by
branded
to
generic
drug
r
conversion
and
branded
pharmaceutical
price
decreases.
Revenue
growth
was
also
favorably
impacted
by
growth
in
our
Oncology
&
Multispecialty segment primarily due to higher specialty pharmaceutical sales.
Gross Profit
f
Gross
profit
f
increased
for
the
year
ended
March
31,
2026
compared
to
the
prior
year
primarily
due
to
growth
in
our
Oncology
&
Multispecialty
segment,
driven
by
the
addition
of
providers
in
practice
management
and
growth
of
specialty
pharmaceuticals, and in our Prescription Technology Solutions segment driven by higher volumes.
Gross
profit
f
for
the
years
ended
March
31,
2026
and
2025
included
gains
of
$23
million
and
$444
million,
respectively,
representing
our
share
of
antitrust
legal
settlements.
We
recognized
these
amounts
within
"Cost
of
sales"
in
the
Consolidated
Statements of Operations within our North American Pharmaceutical segment.
Gross profit
f
for the years ended March 31, 2026 and 2025 also included a last-in, first-out (“LIFO”) credit of $210 million
and
charge
of
$82
million,
respectively.
The
LIFO
credit
in
fiscal
2026
was
primarily
due
to
brand
deflation
compared
to
the
prior
year
charge
which
was
primarily
due
to
brand
inflation.
Refer
to
the
“Critical
Accounting
Estimates” section
included
in
this
Financial
Review
for
further
information
regarding
the
use
of
the
LIFO
method
of
accounting
within
our
North
American
Pharmaceutical business.
McKESSON CORPORAT
R
ION
FINANCIAL REVIEW (Continued)
37
Gross profit
f
for the year ended March 31, 2025 was impacted by an inventory
r
impairment charge of $58 million related to
restructur
t
ing initiatives to drive operational effi
f
ciencies and increase cost optimization effo
f
rts as discussed in Financial Note 3,
“Restructuring,
Impairment,
and
Related
Charges,
Net,”
to
the
consolidated
financial
statements
in
this
Annual
Report.
We
recorded
this
amount
within
"Cost
of
sales"
in
the
Consolidated
Statements
of
Operations
within
our
North
American
Pharmaceutical segment.
Total Operatin
t
g Expe
x
nses
A
summary
and
description
of
the
components
of
our
total
operating
expenses
for
the
years
ended
March
31,
2026
and
2025 is as follows:
•
Selling,
distribution,
general,
and
administrative
expenses
(“SDG&A”):
g,
,
g
,
p
(
)
consists
of
personnel
costs,
transportation
costs, depreciation and amortization, lease costs, profes
f
sional fee expenses, administrative expenses, provision for bad
debts
and
related
recoveries,
gains
and
losses
on
the
sale
of
certain
businesses,
remeasurement
charges
to
fair
value
less costs to sell, and other general charges.
•
Claims and litigation charges, net:
g
g
,
These charges include adju
d
stments for estimated probabl
a
e settlements related to our
controlled
subs
u
tance
monitoring
and
reporting,
and
opioid-related
claims,
as
well
as
any
applicable
income
items
or
credit
adju
d
stments
due
to
subs
u
equent
changes
in
estimates.
Legal
fees
to
defend
claims,
which
are
expensed
as
incurred, are included within SDG&A.
•
Restruc
r
turing, impairment, and related charges, net:
g,
p
,
g
,
Charges recorded under this component include those incurred for
programs in which we change our operations, the scope of a business undertaken by our business units, or the manner
in which that business is conducted, as well as long-lived asset impairments.
Years Ended March 31,
(Dollars in millions)s
2026
2025
Change
Selling, distribution, general, and administrative expenses
$
8,096
$
8,507
(5)
%
Claims and litigation charges, net
(3)
108
(103)
Restructur
t
ing, impairment, and related charges, net
245
286
(14)
Total operating expenses
$
8,338
$
8,901
(6)
%
Percent of revenues
2.07
%
2.48
%
(41)
(
bp
Any percentage changes displayed above which are not meaningful
f
are displayed as zero percent.
bp - basis point
Total operating expenses and total operating expenses as a percentage of revenues decreased for the year ended March 31,
2026
compared
to
the
prior
year.
Total
operating
expenses
for
the
years
ended
March
31,
2026
and
2025
were
affe
f
cted
by
the
following significant items:
Fiscal 2026
•
SDG&A includes a net gain of $480 million related to the sale of our Norway disposal group.
u
The net gain includes a
$164
million
loss
related
to
the
accumulated
other
comprehensive
loss
balances
associated
with
this
disposal.
Of
the
total
net
gain
recorded
during
the
period,
a
gain
of
$503
million
is
included
within
Other
and
a
net
charge
of
$23
million is included within Corporate expenses, net;
•
SDG&A
includes
net
charges
of
$77
million
related
to
our
planned
separation
of
the
Medical
-
Surgical
Solutions
segment;
•
SDG&A
was
impacted
by
lower
operating
expenses
from
the
completed
divestiture
of
our
Canadian
retail
disposal
group in fiscal 2025, as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures,” to the
consolidated financial statements included in this Annual Report;
•
SDG&A
was
impacted
by
higher
operating
expenses
related
to
the
acquisitions
completed
during
fiscal
2026,
as
discussed
in
more
detail
in
Financial
Note
2,
“Business
Acquisitions
and
Divestitures,”
to
the
consolidated
financial
statements included in this Annual Report; and
McKESSON CORPORAT
R
ION
FINANCIAL REVIEW (Continued)
38
•
Restruc
r
turing,
impairment,
and
related
charges,
net
of
$245
million,
are
discussed
below
under
“Restruc
r
turing
Initiatives”
as
well
as
Financial
Note
3,
“Restructuring,
Impairment,
and
Related
Charges,
Net,”
to
the
consolidated
financial statements included in this Annual Report.
Fiscal 2025
•
SDG&A
includes
charges
of
$667
million
to
remeasure
the
sale
of
our
Rexall
and
Well.ca
businesses
in
Canada
(“Canadian retail disposal group”) to fair value less costs to sell. The remeasurement adju
d
stment includes a $48 million
loss
related
to
the
accumulated
other
comprehensive
loss
balances
associated
with
this
disposal.
Of
the
total
charges
recorded
during
the
period,
$605
million
were
included
within
our
North
American
Pharmaceutical
segment
and
$62 million were included within Corporate expenses, net;
•
SDG&A
includes
a
credit
of
$206
million
related
to
the
bankrupt
r
cy
of
our
customer
Rite
Aid
Corporation
(including
certain of its subs
u
idiaries, “Rite Aid”);
•
Claims
and
litigation
charges,
net
primarily
consists
of
a
charge
of
$108
million
related
to
our
estimated
liability
for
opioid-related
claims
as
discussed
in
Financial
Note
17,
“Commitments
and
Contingent
Liabilities,”
to
the
consolidated financial statements included in this Annual Report; and
•
Restruc
r
turing,
impairment,
and
related
charges,
net
of
$286
million,
are
discussed
below
under
“Restruc
r
turing
Initiatives”
as
well
as
Financial
Note
3,
“Restructuring,
Impairment,
and
Related
Charges,
Net,”
to
the
consolidated
financial statements included in this Annual Report.
Goodwill Impai
m
rment
We
evaluate
goodwill
for
impairment
on
an
annual
basis
in
the
first
fiscal
quarter,
and
at
an
interim
date
if
indicators
of
potential
impairment
exist.
The
annual
impairment
testing
performed
in
fiscal
2026
and
fiscal
2025
did
not
indicate
any
impairment
of
goodwill,
and
no
goodwill
impairment
charges
were
recorded
in
fiscal
2026
and
fiscal
2025.
However,
other
risks, expenses, and future developments, such as government actions, increased regulatory
r
uncertainty, and material changes in
key market assumptions limit our ability to estimate projected cash flows, which could adversely affe
f
ct the fair value of various
reporting
units
in
future
periods.
Refer
to
“Critical
Accounting
Estimates”
included
in
this
financial
review
for
further
information.
Restru
t
cturing Initiatives
We
recorded
restructur
t
ing,
impairment,
and
related
charges
of
$245
million
and
$286
million
for
the
years
ended
March
31,
2026
and
2025,
respectively.
These
charges
were
included
in
“Restruc
r
turing,
impairment,
and
related
charges,
net”
in
the
Consolidated Statements of Operations.
During
the
fourth
quarter
of
fiscal
2026,
we
approved
an
initiative
within
our
Prescription
Technology
Solutions
segment
to
increase
operational
effi
f
ciencies
and
cost
optimization
effo
f
rts,
with
the
intent
of
aligning
with
our
long-term
strategy.
This
initiative includes headcount reductions, the exit or downsizing of certain facilities, and other costs. We anticipate total charges
between
$200
million
and
$250
million,
consisting
primarily
of
employee
severance
and
other
employee-related
costs,
and
facility
and
other
exit-related
costs,
including
long-lived
asset
impairments.
We
recorded
immaterial
charges
in
fourth
quarter
of fiscal 2026 associated with this initiative. This program is anticipated to be subs
u
tantially complete by the end of fiscal 2029.
During
the
second
quarter
of
fiscal
2025,
we
approved
enterprise-wide
initiatives
to
modernize
and
accelerate
our
technology service operating model, which were intended to improve business continuity, compliance, operating effi
f
ciency, and
advance
investments
to
streamline
the
organization.
These
initiatives
include
cost
reduction
effo
f
rts
and
suppor
u
t
other
rationalization
effo
f
rts
within
Corporate,
and
the
Medical-Surgical
Solutions
and
North
American
Pharmaceutical
segments
to
help
realize
long-term
sustainabl
a
e
growth.
We
anticipate
total
charges
related
to
these
initiatives
of
$650
million
to
$700
million,
consisting
primarily
of
employee
severance
and
other
employee-related
costs
as
well
as
facility,
exit
and
other
related
costs,
including
long-lived
asset
impairments.
These
programs
are
anticipated
to
be
subs
u
tantially
complete
in
fiscal
2028.
For
the
year
ended
March
31,
2026,
we
recorded
charges
of
$170
million
related
to
the
initiatives,
which
primarily
includes
facility,
exit
and
other
related
costs
as
well
as
severance
and
other
employee-related
costs
recorded
within
“Restruc
r
turing,
impairment,
and
related
charges,
net”
in
the
Consolidated
Statement
of
Operations.
For
the
year
ended
March
31,
2025,
we
recorded
charges
of
$240
million
related
to
the
initiatives,
which
primarily
included
severance
and
other
employee-related
costs
as
well
as
facility,
exit
and
other
related
costs,
including
long-lived
asset
impairments
recorded
within
“Restruc
r
turing, impairment, and related charges, net” in the Consolidated Statement of Operations, and $58 million for the year
McKESSON CORPORAT
R
ION
FINANCIAL REVIEW (Continued)
39
ended
March
31,
2025
related
to
inventory
r
impairments
recorded
within
“Cost
of
sales”
in
the
Consolidated
Statements
of
Operations.
Refer
to
Financial
Note
3,
“Restructuring,
Impairment,
and
Related
Charges,
Net,”
to
the
consolidated
financial
statements
included in this Annual Report for more information.
Othe
t
r Income,e
Net
Other
income,
net
increased
for
the
year
ended
March
31,
2026
compared
to
the
prior
year
primarily
due
to
prior
year
charges of $87 million related to the termination of the U.K. pension plan, a prior year loss of
$43
million
related to one of our
equity method investments, and a favorable year-over-year impact from interest income, partially offs
f
et by a prior year net gain
of $101 million related to our investments in equity securities of certain U.S. growth stage companies in the healthcare industry.
r
Interest Expe
x
nse
Interest
expense
decreased
for
the
year
ended
March
31,
2026
compared
to
the
prior
year
primarily
due
to
changes
in
our
derivative
portfol
f
io
in
fiscal
2026
and
increased
capitalized
interest
from
higher
capital
spending,
partially
offs
f
et
by
interest
from
increased
average
balances
of
the
Company’s
loan
portfol
f
io
in
fiscal
2026.
Interest
expense
may
fluctuate
based
on
timing,
amounts,
and
interest
rates
of
term
debt
repaid
and
new
term
debt
issued,
amounts
and
interest
rates
of
commercial
pape
a
r borrowings, as well as amounts incurred associated with financing fees. Refer to Financial Note 11, “Debt and Financing
Activities,” to the consolidated financial statements included in this Annual Report for more information.
Income Tax
a
Expe
x
nse
We
recorded
income
tax
expense
of
$1.1
billion
and
$878
million
for
the
years
ended
March
31,
2026
and
2025,
respectively. Our income tax rates were 17.8% and 20.1% in 2026 and 2025, respectively.
Fluctuations in our reported income tax rates are primarily due to changes in our business mix of earnings between various
taxing jurisdictions and recognized discrete tax items. Refer to Financial Note 6, “Income Taxes,” to the consolidated financial
statements included in this Annual Report for more information.
Net Income Attr
t
ibutabl
t
el
to Noncontrollin
l
g Interestst
Net
income
attributable
to
noncontrolling
interests
for
the
years
ended
March
31,
2026
and
2025
primarily
represents
the
proportionate
results
of
third-party
equity
interests
in
Clarus
r
ONE
Sourcing
Services
LLP,
Vantage
Oncology
Holdings,
LLC,
and SCRI Oncology, LLC.
Noncontrolling
interests
with
redemption
featur
t
es,
such
as
put
rights,
that
are
not
solely
within
our
control
are
considered
redeemable
noncontrolling
interests,
and
are
presented
outside
of
stockholders’
deficit
in
our
Consolidated
Balance
Sheet. During the year ended March 31, 2026, we initially recognized redeemable noncontrolling interests of $700 million and
$25
million
related
to
our
acquisitions
of
Core
Ventur
t
es
and
PRISM
Vision,
respectively.
On
a
quarterly
basis,
we
determine
the
fair
value
and
redemption
value
of