Competition Hits McKesson's Bottom Line, but the Future Looks a Bit Brighter

The pharmaceutical industry has been under political attack since before the 2016 elections, as lawmakers want to rein in the amount that drug companies charge for key prescription drugs. Drug distribution companies like McKesson (NYSE: MCK) have gotten caught in the middle, and the result has been increased pressure to reduce margins in favor of more affordable drugs for the general public. The threat of competition from e-commerce in drug distribution has also reared its ugly head, posing strategic challenges for McKesson and its peers.

Coming into Thursday's fiscal first-quarter financial report, McKesson investors were prepared for another hit to adjusted earnings, and they got an even bigger decline than they had expected. The company nevertheless boosted its guidance slightly for the full year, anticipating that it will be able to navigate the turbulent political waters and find a long-term solution to its competitive challenges. Let's take a closer look at McKesson and what it said about its latest quarter.

Image source: McKesson.

Source: Fool.com