McKesson Corporation (NYSE:MCK) Q3 2019 Earnings Conference Call - Final Transcript

Jan 31, 2019 • 05:00 pm ET


McKesson Corporation (NYSE:MCK) Q3 2019 Earnings Conference Call - Final Transcript


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Q & A

Thank you, sir. (Operator Instruction) And first from Evercore ISI,, we have Ross Muken.

Ross Muken

Good afternoon guys. And again John congrats. It's been a pleasure working with you over the years. So I know you probably haven't had a ton of time to kind of digest and prepare but you know there positively was a number of days that came out after hours from HHS around rebates and and hence I kick back and though it looks like they're trying to push forward with some of the proposals we heard earlier in the year, I guess at a high level. I know this is something you feel strong or you can sort of recoup the economics of it goes into place. But I guess how are you thinking about that in the context of just a disruptive force potentially at least in the short term to the business and how hard the government's going to push at least on this one piece.

Brian Tyler

Hey Rob, its Brain. Thanks for the question. I didn't see that flash across my email screen as I walked even in the conference room here and I thought we might get a question. First, let me say that we support programs that enhance access quality and cost. And we think about the wholesaler model and how our economics and the supply chain were, we're not directly predicated on the safe harbor in question. Our economics really come from the demand manufacturer and revolve around the fair value of the services that we provide to them.

We continue to believe that we run a highly efficient distribution and supply chain service and that they over the years have reinforced that view and through various evolutions in our market and in our industry. We continue to be paid fair value for the services that we provide and that's based on the conversations that we have been engaged in today. We continue to believe that, that will be the case. So you know, I might -- I might also just comment that, we are not just a supply chain company in terms of logistics but a pretty sophisticated financial operation as well and on behalf of our manufacturers today we administer lots of contract prices between manufacturers and hospitals or manufacturers and pharmacies and millions of -- literally millions of price item customer combinations today we do, but add scale and we do it with great accuracy.

And in our pharmacy technology businesses that you heard Britt talk about in terms of their strong current performance we have very sophisticated add scale pharmaceutical related transactions over 17 billion a year connecting directly at the pharmacy counter. So, clearly we will continue to engage in conversations with our manufacturer and other partners as people shift through the implications of what is just come out, but you know, I focus you back on we continue to believe that we deliver a very important service in the pharmaceutical supply chain. We continue to be