McKesson Re-Organizes Business Segments to Sharpen Focus on Customer Needs and Accelerate Growth.

Business Editors/Health/Medical Writers

SAN FRANCISCO--(BUSINESS WIRE)--April 26, 2004

McKesson Corporation (NYSE:MCK) announced today that it will continue to report in three segments, but has made organizational changes to each. The three segments are: Pharmaceutical Solutions, Medical-Surgical Solutions and Provider Technologies. McKesson Provider Technologies combines the operations of McKesson Information Solutions, McKesson Inpatient Automation and the company's Corporate Solutions Group, to more strongly focus on the needs of the provider marketplace for integrated technology solutions.

The McKesson Inpatient Automation business, which provides automation and robotics for the hospital market, was previously in the Pharmaceutical Solutions segment. The McKesson APS business, which provides automation and robotics to retail and mail order pharmacies, will remain in the Pharmaceutical Solutions segment. The Corporate Solutions Group will continue to be responsible for the sales and coordination of complex provider engagements that include strategic product and service solutions from multiple McKesson business units.

The Clinical Auditing and Compliance Division, which sells software to payors for auditing professional claims, has moved from McKesson Information Solutions to an expanded Payor Group that provides products and services to the payor segment of the healthcare market. The new organization should enable McKesson to accelerate its innovation and growth for this market.

The Payor Group provides medical guidelines and criteria, software, analytics, patient call services and disease management to more than 600 commercial and government Payors nationwide. This expanded Payor Group will remain in the Pharmaceutical Solutions segment, which also provides specialty pharmaceutical services and pharmaceutical distribution to the mail order operations of payors.

Zee Medical, which provides first aid and safety products and training services to corporate customers, has moved to the Medical-Surgical segment from the Pharmaceutical Solutions segment. The new organization, which also includes the recently acquired Moore Medical, should enhance McKesson's position in the rapidly growing alternate site sector.

The organizational changes became effective at the beginning of Fiscal 2005. McKesson will report its fourth-quarter and Fiscal 2004 year-end financial results on April 29, 2004, following the close of market. These results will be reported in the segment format in existence prior to the re-organization being announced today: Pharmaceutical Solutions, Medical-Surgical Solutions and Information Solutions. At the same time, the company will provide historical revenue and operating profit information for the newly reconstituted segments.

Effective immediately, Paul C. Julian has been named Executive Vice President, Group President. Julian is responsible for McKesson's U.S. and Canadian pharmaceutical distribution operations and related product and service offerings, and McKesson Medical-Surgical, a distributor of medical-surgical supplies to acute care, extended care and primary care customers, and now the company's consolidated payor organization. Julian was formerly President, McKesson Supply Solutions.

Also effective immediately, Pamela Pure has been named Executive Vice President, President of McKesson Provider Technologies. Pure was formerly Chief Operating Officer of McKesson Information Solutions, and recently had been named President of that business.

McKesson Provider Technologies is a leader in software, hardware, automation, services and consulting to hospitals, physician offices and home healthcare. Its solutions are designed to improve patient safety, reduce the cost and variability of care, improve healthcare efficiency and better manage revenue streams and resources. The new organization will enhance McKesson's focus on the delivery of its Closed Loop Medication Management offering, a unique, highly differentiated solution that combines software, robotics and consulting services to automate the medication management process and reduce medication errors. With the recent FDA mandate for bar-coding of drugs in hospitals and the growing focus on patient safety issues, the new organization also will enhance McKesson's market position in this area.

"McKesson has been the leader in developing unique solutions that reduce costs and improve quality for our many and varied healthcare customers," said John H. Hammergren, Chairman and Chief Executive Officer. "As these solutions have been embraced by the market, we have continued to refine our organization so that we can both sell and deliver our products and services more effectively while continuing to anticipate our customers' evolving needs. These changes will also provide increased internal efficiencies."

"At the same time, I am delighted to recognize the larger roles that Paul Julian and Pam Pure are playing at McKesson. Paul has managed our U.S. and Canadian pharmaceutical distribution businesses to deliver market-leading performances over the past five years. Under his leadership, we have made significant improvements in our quality of service and cost structure. He also led the turnaround of our medical-surgical business, and helped develop key strategies for future growth, not only in the healthcare supply chain but starting today, through an increased presence in the payor market."

"Pam has done an outstanding job leading McKesson Information Solutions through its return to leadership in the healthcare IT market. She has driven the introduction of innovative new products in medical and document imaging, physician order entry and portals to deliver information to physicians and patients. In addition, Pam has chaired our Medication Management Strategy group and will be aggressively focused on accelerating the growth of our medication safety solutions."

McKesson Corporation (NYSE:MCK) is a Fortune 16 healthcare services and information technology company dedicated to helping its customers deliver high-quality healthcare by reducing costs, streamlining processes and improving the quality and safety of patient care. Over the course of its 170-year history, McKesson has grown by providing pharmaceutical and medical-surgical supply management across the spectrum of care; healthcare information technology for hospitals, physicians, homecare and payors; hospital and retail pharmacy automation; and services for manufacturers and payors designed to improve outcomes for patients. For more information, visit us at www.mckesson.com.

Except for historical information contained in this press release, matters discussed may constitute "forward-looking statements", within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that involve risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These statements may be identified by their use of forward-looking terminology such as "believes", "expects", "anticipates", "may", "will", "should", "seeks", "approximates", "intends", "plans", "estimates" or the negative of these words or other comparable terminology. The most significant of these risks and uncertainties are described in the company's Form 10-K, Form 10-Q and Form 8-K reports filed with the Securities and Exchange Commission and include, but are not limited to: the resolution or outcome of pending shareholder litigation regarding the 1999 restatement of our historical financial statements; the changing U.S. healthcare environment, including the impact of potential mandated benefits, changes in private and governmental reimbursement or in the delivery systems for healthcare products and services; changes in pharmaceutical and medical-surgical manufacturers' pricing, selling, inventory or distribution policies or practices; substantial defaults in payment or a material reduction in purchases by large customers; challenges in integrating and implementing the company's software products, or the slowing or deferral of demand for these products; the company's ability to successfully identify, consummate and integrate strategic acquisitions; changes in generally accepted accounting principles (GAAP); and general economic conditions. The reader should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The company assumes no obligation to update or revise any such statements, whether as a result of new information or otherwise.