McKesson shopping around health IT unit worth up to $5B

McKesson Corp. is considering a sale or a merger for its information technology unit in an effort to contain costs and refocus on its drug distribution business, reported the Wall Street Journal.

The company’s Technology Solutions subsidiary has generated more revenue than any other U.S. health IT vendor in recent years, racking up $2.9 billion in sales in the last fiscal year (a 6 percent decline from 2015), with an operating profit of $519 million. WSJ estimated it could be worth up to $5 billion, including any debt.

That’s only a fraction of the $188 billion in sales McKesson’s drug distribution business brought in last year. The company’s chief financial offer, James Beer, had previously hinted to analysts it may look to narrow their focus, saying last year McKesson is “prepared to re-look at the portfolio on a continuing basis to figure out what fits and what doesn’t fit.”

The company announced in March it was cutting 1,600 jobs.

Whether the deal would be for the entire IT business isn’t clear, according to WSJ, with McKesson having made earlier moves to sell off parts of some of its technology assets. In April, it finalized a sale of its product suites for small physician practice electronic records and practice management, reportedly used by 35,000 physicians, to e-MDs.

A spokesperson for McKesson refused to comment on the reports it was looking to spin off the IT business, saying the company doesn’t offer statements on “rumors and speculation.”

""
John Gregory, Senior Writer

John joined TriMed in 2016, focusing on healthcare policy and regulation. After graduating from Columbia College Chicago, he worked at FM News Chicago and Rivet News Radio, and worked on the state government and politics beat for the Illinois Radio Network. Outside of work, you may find him adding to his never-ending graphic novel collection.

Around the web

Cardiovascular devices are more likely to be in a Class I recall than any other device type. The FDA's approval process appears to be at least partially responsible, though the agency is working to make some serious changes. We spoke to a researcher who has been tracking these data for years to learn more. 

Updated compensation data includes good news for multiple subspecialties. The new report also examines private equity's impact on employment models and how much male cardiologists earn compared to females.

When drugs are on the FDA’s shortage list, outsourcing facilities can produce their own compounded versions. When the FDA removed tirzepatide from that list with no warning, it created a considerable amount of chaos both behind the scenes and in pharmacies all over the country. 

Trimed Popup
Trimed Popup