USA — McKesson Corporation has opened a new state-of-the-art pharmaceutical distribution center in Jeffersonville, Ohio, centrally located between Cincinnati and Columbus.

The new facility will distribute pharmaceutical, over-the-counter (OTC) and home healthcare (HHC) products as well as consumer packaged goods (CPG) to customers across Ohio, Indiana, Kentucky, Michigan, Pennsylvania, and West Virginia.

Set on approximately 40 acres, the 475,000-square-foot facility houses the most advanced automation in supply chain technology that will optimize efficiency and productivity to provide exceptional service to customers, McKesson said.

The Central Ohio distribution center can process double the amount of volume compared to McKesson’s current largest distribution center.

Strategically located to serve customers across the region, the facility is fitted with automated putaway, replenishment, and order-filling processes as well as a tote washer and robotic palletizer to handle volume increases and growth over time.

The global pharmaceutical logistics market size was valued at US$78.5 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 8.6% from 2022 to 2030.

The short-term impact of the COVID-19 pandemic on the market is a crucial factor for the fast-paced growth of pharmaceutical logistics.

Amid the pandemic, governments around the world are emphasizing healthcare facilities and ample medicinal supply for patients. As such, the trade of conventional medicines is increasing from country-to-country.

In separate news, McKesson Corp. has reached a tentative US$141 million settlement with shareholders who sued claiming the drug distributor hid that it profited from a price-fixing conspiracy among generic drugmakers, according to news agency Reuters.

The company said in a regulatory filing that it expects to pay US$141 million to settle the class action lawsuit accusing it of attributing price increases to nonexistent supply disruptions, rather than anticompetitive conduct by pharmaceutical companies.

McKesson did not admit wrongdoing as part of the settlement, which will be covered by insurance.

Regulatory probes into price fixing in the pharmaceutical industry have resulted in federal criminal charges against two companies, more than US$450 million in fines, and a wave of civil litigation by state and federal regulators.

Teva Pharmaceutical industries Ltd and Glenmark Pharmaceuticals USA, which were charged with price fixing in 2020, have pleaded not guilty.

In another development, McKesson Corp. has formally closed its acquisition of Overland Park-based Rx Savings Solutions (RxSS).

The agreement includes a US$600 million upfront payment that could increase to US$875 million based on RxSS’ financial performance through 2025.

McKesson confirmed the agreement was finalized in its fiscal year 2023 second-quarter earnings report.

RxSS, which was founded in 2012 helps health insurers and employers seek lower-cost prescription medicines, and also provides ongoing medication reminders to help improve adherence to prescriptions.

It now has 17 million members and over 270 employees. Its revenue for 2021 was US$40.16 million, and it was named to the Inc. 5000 list of the nation’s fastest-growing private companies this year. It was ranked No. 1,093, with a four-year revenue growth rate of 445%.

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