McKesson's rollout of enhanced solutions will benefit from strong Q1

Some new programs will support Health Mart franchise

SAN FRANCISCO — A little less than a month following the company's IdeaShare 2011 conference held here, McKesson reported a strong first-quarter headwind that will help support many of the initiatives announced at the show, particularly for its Health Mart independent pharmacy group.

"We unveiled a number of innovative and integrated solutions, including our mobile messaging solution and our physician outreach program, to help independents become more integrated with patients and providers in their communities," McKesson chairman, president and CEO John Hammergren told analysts in a late evening conference call Thursday.

"By using technology to become more efficient, pharmacists can free up their time to focus on delivering valuable clinical services that help their patients lead healthier lives," Hammergren continued. "Many of these solutions are integrated for members of our Health Mart franchise, which received recognition from Consumer Reports and J.D. Power and Associates for its outstanding customer service this year."

"We also previewed our new store-branded line of over-the-counter products for Health Mart, which we'll launch this fall," he added. "Our Health Mart franchise has approximately 2,800 stores and is growing. We believe Health Mart is a critical part of our solution set because it offers our independent pharmacy customers an effective way to successfully compete against larger national players."

Chuck Wilson, Health Mart VP pharmacy operations, recently shared some of the details of the new initiatives with Drug Store News. It wasn't too long ago that mobile messaging functionality was a strong point of differentiation, Wilson said, but it is quickly evolving into a mainstay capability without which independent pharmacists could find themselves at a competitive disadvantage.

"This allows us to message patients when their refills are ready," he said. Wilson envisioned mobile messaging solutions evolving from refill reminders to dosing reminders down the road. "That could be pretty powerful to keep people compliant on their medicine regimens," he said.

The physician outreach program could be a game-changer for Health Mart operators, as it opens a window into what prescriptions local prescribers are writing for their patients and where those patients are having those prescriptions filled. "It gives them a way to focus on physicians in their area [and] look at their prescribing habits," Wilson said. For independents focused on particular disease states — diabetes, for example — it's a tool that can help identify neighboring doctors with a similar focus.

The new private-label line will be launched in stages October through mid-2012, beginning with diabetes products. The new store brand will serve as a medicine cabinet "billboard" of sorts for independents — giving them the same kind of national pharmacy brand heft as some of their larger chain competitors. "It's because of the growth in Health Mart that we were finally able to do it," Wilson said. Because along with the Health Mart brand, McKesson will continue to carry its national-brand equivalent Sunmark line.

For its first quarter ended June 30, McKesson reported revenue gains of 9% to $30 billion. Distribution Solutions revenues were up 9% in the first quarter, mainly driven by strong growth in U.S. pharmaceutical direct distribution and services revenues, as well as the acquisition of U.S. Oncology.

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