Outlook good for McKesson

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Business outlook for McKesson continues to look bright as the company has been rated a “strong buy” by Standard & Poors’ Equity Research.

A couple of factors are going McKesson’s way. First, there’s the overall increase in demand for pharmaceuticals which is propelled by the new Medicare drug benefit which went into effect the first of the year. This change will likely send more business the company’s way. Another trend is the expected loss of patents by big branded drugs which will force a shift to generics. This will occur mid-2006 and is expected to, again, send more business towards McKesson.
McKesson also will likely see a rise in demand for its Provider Technologies segment IT products being caused by the government’s priority of shifting to electronic health records, according to Standard & Poors.
McKesson also has been actively integrating its various business arms, such as IT systems with pharmaceuticals and other areas.