McKessonHBOC and Mercy Resource Management Sign New 5-Year Pharmacy Services and PARstock Analyzer System Agreements.

SAN FRANCISCO--(BW HealthWire)--Sept. 22, 1999--

McKesson HBOC, Inc. (NYSE: MCK) (McKessonHBOC), announced today that its MedManagement pharmacy management and consulting services business unit has signed a new 5-year exclusive pharmacy services agreement with Mercy Resource Management Inc., (MRMI) a nationwide organization of hospitals and healthcare facilities. The agreement, which took effect August 1, is designed to provide MRMI members with access to MedManagement's consulting and management support services to enhance pharmacy performance and reduce total medication use costs. The companies also announced the signing of a second, separate agreement, through which MRMI may utilize McKessonHBOC Health Systems' PARstock Analyzer.

Under the pharmacy services agreement, McKessonHBOC MedManagement will support the development and implementation of MRMI corporate pharmacy strategies and programs to assist MRMI members in improving pharmacy operations and clinical performance.

"Our agreement with McKessonHBOC MedManagement will enable Mercy Resource Management to expedite the development and rollout of pharmacy support programs and services customized to meet the unique needs of MRMI members," said Michael Gray, President, Mercy Resource Management, Inc. "We believe that MedManagement will have an immediate impact in assisting our members in addressing the challenges of increased drug utilization, rising pharmacy costs and pharmacy resource constraints."

"We are excited about expanding our relationship with Mercy Resource Management," said Lew Zeidner, president of McKessonHBOC's MedManagement business. "We are confident in our ability to leverage our significant pharmacy experience and resource infrastructure to assist MRMI members in achieving their pharmacy service objectives. We look forward to the opportunity to demonstrate the positive impact that our unique operational, clinical and decision support tools can have in reducing total medication-use costs and advancing the practice of MRMI pharmacy members."

In addition to the MedManagement agreement, McKessonHBOC also signed an agreement that will allow Mercy members to receive McKessonHBOC Health System's PARstock Analyzer. This decision support tool uses proprietary software to analyze product utilization within unit based cabinets (UBC), including providing recommendations on inventory par stock levels and item-adds and item-deletes. McKessonHBOC's Health Systems Division has demonstrated significant savings for customers who have deployed the PARstock Analyzer.

"Our membership has invested heavily in pharmacy automation over the last ten years and we believe that McKessonHBOC, with its PARstock program, is best positioned to help our members maximize the use of this technology," Gray said. "The combination of clinical and technological programs represented by these two new contracts will allow our members to address fundamentally important aspects of modern pharmacy practice."

"MRMI continues to partner with McKessonHBOC in new and exciting ways to bring greater value to our mutual customers," said Patrick Blake, president of McKessonHBOC Health Systems. "MRMI is providing leadership by helping its members better use new technologies whether it's a software-driven program like PARstock Analyzer or consulting services provided by MedManagement. The practice of pharmacy is becoming increasingly complex and our growing partnership is designed to help MRMI members make better decisions thus providing higher quality care to its patients," Blake added.

Mercy Resource Management, Inc. (formerly Mercy National Purchasing, Inc.), a member of Premier Purchasing Partners, provides its members with cost containment opportunities through management of group purchasing contracts for healthcare products and services. Over 240 hospitals, long-term care facilities, pharmacies, surgicenters and other healthcare facilities participate in MRMI's contract and service portfolio.

McKesson HBOC, Inc., a Fortune 100 corporation, is the world's largest supply management and healthcare information technology company. McKessonHBOC provides supply management and information technologies across the entire continuum of healthcare, including market-leading businesses in pharmaceutical and medical-surgical distribution, automation, information technology and outsourcing services for healthcare providers healthcare providers and payors. More information about McKessonHBOC is available on our World Wide Website at: http://www.mckhboc.com.

Except for the historical information contained herein, the matters discussed in this press release may constitute forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. These statements may be identified by their use of forward-looking terminology such as "believes," "expects," "may," "should," "intends," "plans," "estimates," "anticipates" and similar words. Risks and uncertainties include: the resolution or outcome of pending litigation and government investigations relating to the Company's previously announced financial restatement; the Company's ability to recognize revenues in subsequent periods that had initially been improperly recorded in prior periods; the Company's ability to successfully integrate and operate acquired businesses and the risks associated with such businesses, including the merger that created McKessonHBOC; the changing U.S. healthcare environment, including potential changes in private and governmental reimbursement for healthcare services, the method by which such services are delivered, legislation or regulations governing such services or mandated benefits, or changes in manufacturers' pricing or distribution policies; the ability of the Company's Healthcare Information Technology business to retain existing customers and to attract new customers in light of rapid technological advances, slowing of demand for software products because of Year 2000 concerns and challenges in integrating the Company's software products; the effect of the events relating to, or arising out of, the Company's restatement of financial results on the Company's ability to manage its businesses and to attract and retain employees and management; the Company's ability and the ability of the Company's vendors and customers to complete the necessary actions to achieve a Year 2000 conversion for computer systems and applications; and other factors discussed from time to time in reports filed by McKesson HBOC, Inc. with the Securities and Exchange Commission. The company assumes no obligation to update information contained in this release.

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