August 5, 2016
By Alex Keown, BioSpace.com Breaking News Staff
CLEAR LAKE, Iowa – One hundred twenty employees at a recently opened 340,000 square foot McKesson distribution facility are about to get some help. Over the next couple of months, the company plans to hire an additional 100 employees.
The new employees were necessary due to the volume of business going through the site, company officials said.
The distribution center serves the Midwestern United States and the north central plains region, shipping medications to pharmacies such as Wal-Mart, Hy-Vee and CVS, the Globe Gazette of Iowa reported Thursday. The headcount increase will surely benefit Bay Area-based McKesson, which earlier this year signed a generic drug sourcing agreement with Wal-Mart that includes an expanded long-term distribution agreement.
The Clear Lake distribution center handles more than prescription medications. Chris Van Norman, the facility’s director of operations, told the Globe Gazette that the center can be used to stock stores in front of- and behind the pharmaceutical counter. That means generic medications as well as sundries like toothpaste, soap and health and beauty products.
The Iowa facility operates around the clock and the addition of 100 employees will allow the site to operate with 100 employees on the day and night shifts. The site has the potential to handle $5 billion in annual sales for McKesson, pushing that company into a Fortune 200 slot, Van Norman said.
That jump in sales will be good news for San Francisco-based McKesson, which earlier this year announced it will trim 1,600 jobs as part of an effort to reduce costs due to the loss of some key customers. The company was negatively impacted due to expiration of a contract with Optum, a division of UnitedHealth Group Inc., as well as changes in contracts with Omnicare Corp., a business that provides pharmaceuticals to assisted living facilities and nursing homes. Another factor in the company’s declining business was a slowdown of price increases on generic drugs, which hurt operating costs.
Although the company was slashing headcount earlier this year, it was still able to flex its M&A muscle. In February, the company snapped up Vantage Oncology, LLC, a national provider of radiation oncology, medical oncology and integrated cancer care. At the same time, McKesson acquired Biologics, Inc., an oncology pharmacy services company. Also in March, McKesson struck a $3 billion deal to acquire Rexall Health, a drugstore chain, to strengthen McKesson’s position in Canada’s pharmaceutical supply chain.
In addition to M&A activity, McKesson has also been developing technology to track drug purchase trends. McKesson’s Drug Spend Intelligence Web-based tool provides the information needed to identify purchase trends, evaluate the impact of price fluctuations, and implement and track clinical initiatives, the company said. McKesson said this tool will help pharmacies reduce “drug spend and administration time.”
That tool seems to be working at the Clear Lake facility, with computerized operations increasing efficiency, Van Norman told the Globe Gazette.
