McKesson Wins 5-Year Medical Supply Contract

McKesson Corp., the largest U.S. drug wholesaler, on Thursday said it won a new $5-billion supply contract with Columbia/HCA Healthcare Corp., taking business from its biggest rival, Cardinal Health Inc.

In the five-year agreement to provide drugs and medical supplies, along with pharmacy automation systems and consulting services, San Francisco-based McKesson also gets business once held by Bergen Brunswig Corp. and Owens & Minor Inc., said Jeff Prescott, spokesman for Columbia/HCA, the largest U.S. hospital operator.

It’s the latest in a series of victories for McKesson, which During the last two monthssigned agreements with retailers Rite Aid Corp. and CVS Corp. that it said will boost annual revenue by $2 billion. So far this year, McKesson shares have soared 41% as profits have grown under an aggressive expansion program masterminded by President and Chief Executive Mark Pulido, who was named to head the company in May 1996.

McKesson shares rose $6.06 to close at $80.25 on the New York Stock Exchange. Earlier, they set a 52-week high of $81. Dublin, Ohio-based Cardinal rose $1.94 to close at $89.13. Bergen Brunswig rose 38 cents to close at $41.38. Nashville-based Columbia/HCA rose $1.25 to close at $32.88.

Columbia/HCA said it signed the five-year contract because McKesson agreed to help streamline purchasing of medical supplies through development of just-in-time ordering systems and other tools that will reduce inventories and cut costs. The hospital chain will obtain automated technologies from McKesson, including its Robot-Rx system for drug dispensing. Owens & Minor said it was “extremely disappointed.”