McKesson Supports FDA Report on Pharmaceutical Distribution Safety; New FDA Counterfeit Measures Add Security and Technology Protections While Defining Best Practices

SAN FRANCISCO--(BUSINESS WIRE)--Feb. 18, 2004--Based on a preliminary review, McKesson Corporation (NYSE: MCK) today voiced support for the newly issued U.S. Food and Drug Administration Final Report on protecting the integrity of the pharmaceutical distribution network. McKesson is the largest healthcare services firm in the world and a leading distributor of pharmaceuticals in North America. McKesson purchases products from more than 450 pharmaceutical manufacturers and supplies more than 75,000 customer sites.

"As the FDA's interim report last October indicated, no single effort will halt all counterfeit practices," said Paul Julian, president, McKesson Supply Solutions. "But McKesson believes that the combination of more stringent licensing standards, stronger penalties for those who counterfeit or knowingly distribute counterfeit products, adoption of electronic tracking technology and adherence to secure business practices will significantly enhance the security of the pharmaceutical distribution network."

“We commend the FDA's efforts to enhance medication safety and protect the integrity of our nation's drug supply”

In Washington, D.C. today, Ronald Bone, senior vice president, McKesson Supply Solutions, represented McKesson at the FDA press conference announcing the report conclusions and recommendations. "We commend the FDA's efforts to enhance medication safety and protect the integrity of our nation's drug supply," said Bone. "We are especially pleased to see the FDA support for technology-based solutions."

The newly announced FDA recommendations are aligned with practices and positions previously adopted by McKesson and shared with the FDA during its study of this pressing issue.

For example, McKesson supports uniform national licensing standards and more thorough screening procedures prior to state issuance of licenses to wholesale drug distributors. This practice will limit the opportunity for rogue distributors to introduce counterfeit pharmaceutical products into the system.

McKesson also supports the institution and enforcement of stronger criminal penalties that match the potential illicit financial gain for those who counterfeit or knowingly distribute adulterated or counterfeit product. McKesson believes stiffer criminal penalties, coupled with tougher licensing requirements, will remove many of the opportunities and incentives for counterfeit drugs to be introduced into the system.

In addition, McKesson supports the use of electronic tracking technology for all drugs and biologics to authenticate product from case level to unit-of-sale level. McKesson believes electronic tracking capabilities will significantly enhance counterfeit prevention efforts and negate the need for an ineffective and potentially fraudulent paper pedigree trail.

Finally, McKesson has implemented stringent processes and procedures with its suppliers and throughout its distribution network to ensure that its customers receive uncompromised, safe pharmaceutical products. McKesson believes that secure business practices are a critical deterrent to the proliferation of counterfeit pharmaceutical products.

McKesson has already begun implementing radio frequency identification (RFID) technology into its distribution operations. Currently in testing, McKesson anticipates that its RFID system will add an important level of safety to the pharmaceutical supply chain, while also improving its operational efficiencies. McKesson is also participating in an RFID industry group managed by Accenture that is evaluating ways to best use RFID technology within the pharmaceutical industry.

About McKesson

McKesson Corporation is a Fortune 20 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 to provide pharmaceutical and medical-surgical supply management across the spectrum of care; healthcare information technology for hospitals, 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.