McKesson monitoring UK pharmacy environment

McKesson monitoring UK pharmacy environment
The retail pharmacy industry has experienced “underfunding” by the National Health Service (NHS) in the UK, says McKesson’s chief executive officer Brian Tyler

5 February 2020 - Deborah Wilkes

Lloydspharmacy’s owner McKesson Corporation is keeping a close eye on developments in the retail pharmacy market in the UK.

Chief executive officer Brian Tyler said the US drug distributor was monitoring the market environment and National Health Service (NHS) funding as well as the impact of the UK’s departure from the European Union.

Noting the retail pharmacy industry had experienced “underfunding by the NHS” during 2019, Tyler said McKesson was engaged in “active dialogue” with the NHS about funding as well as the role pharmacy could play in managing cost, quality and access challenges.

In October 2017, McKesson announced that it intended to close or sell around 200 pharmacies in the UK. In May 2019, the company said it planned to close down more pharmacies in Europe (click here to read the News story).

Financial results released

Reporting its financial results for the three months ended 31 December 2019, McKesson said sales at its European Pharmaceutical Solutions Segment had risen by 3% on a currency-adjusted basis to USD6.93 billion. Sales as reported were flat.

McKesson said growth had been driven primarily by the pharmaceutical distribution business.

The segment’s adjusted operating profit increased by 16% to USD80 million, giving an adjusted operating margin of 1.15%. The company said the rise was in part due to “expense rationalisation”.

However, McKesson said the segment had recorded an actual operating loss of USD303 million, following a pre- and post-tax charge of USD282 million related to the formation of the new German wholesale joint venture with Walgreens Boots Alliance (WBA).

In December 2019, McKesson and WBA announced they had agreed to combine their pharmaceutical wholesale businesses in Germany. WBA will have a controlling 70% stake in the joint venture, with McKesson owning the remaining 30% (click here to reads the News story).

McKesson’s total worldwide sales were up by 5% to USD59.2 billion in the three months ended 31 December 2019, which is the third quarter of the company’s financial year.

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