McKesson Enhances Closed-Loop Supply Chain Strategy and Showcases Offering at AHRMM.

Business Editors/Health/Medical Writers

ATLANTA--(BUSINESS WIRE)--Aug. 14, 2003

Agreements with Global Healthcare Exchange and Neoforma strengthen

supplier connectivity and reduce supply chain management costs for

shared customers

McKesson Information

Solutions announced today that it plans to incorporate solutions from Global Healthcare Exchange, LLC (GHX), and Neoforma, Inc. (Nasdaq: NEOF), into the company's closed-loop supply chain strategy. In doing so, McKesson will provide its customers with greater connectivity to suppliers and certified integration to complementary supply chain management technologies. The agreements reflect McKesson's commitment to continually add supply chain capabilities that empower organizations to reduce costs, improve efficiency and achieve operational excellence.

McKesson's alliance agreement with GHX provides direct connectivity between McKesson's Horizon Supply Source(TM) Web-based procurement tool and GHX's electronic trading exchange, including its AllSource(TM) catalog. The agreement with Neoforma enables organizations to decrease supply management costs while taking advantage of Neoforma's Order Management Solution(TM) (OMS) and McKesson's supply chain information technology solutions.

McKesson will showcase its broad range of closed-loop supply solutions next week with customer-led tours in its booth (No. 1027) at the Association for Healthcare Resource and Materials Management 41st Annual Conference and Exhibition in San Diego on August 18-19.

McKesson's closed-loop supply chain strategy takes a clinically driven approach to providing organizations with an effective combination of automation, technology and services to improve quality of patient care and reduce costs of care delivery. A core component of McKesson's strategy is its ability to provide operational and consulting services to help customers standardize, automate and re-engineer processes, which is key to achieving operational excellence. The McKesson team also works hand-in-hand with care teams to uncover standardization opportunities and to help identify less expensive therapeutic equivalents. McKesson's approach to supply chain management has resulted in a comprehensive, performance-based suite of solutions that helps to streamline workflow processes, improve contract compliance, maximize rebate attainment, lower inventories and reduce write-offs throughout the healthcare organization. "Our closed-loop supply solution allows healthcare providers to bring together patient, revenue and supply processes with corresponding information along the entire supply chain continuum to improve financial performance and enhance patient care," said John Nunnelly, McKesson Information Solutions group president for resource management and home health. "McKesson is the only provider with the people, processes and technology to address all the needs of the closed-loop supply chain: materials management, medical-surgical supplies, pharmaceutical supplies, automation and distribution technology."

Achieving Operational Excellence

Cookeville Regional Medical Center, a 247-bed acute care facility in Cookeville, Tenn., experienced firsthand the benefits of a closed-loop, enterprisewide supply chain solution. Cookeville Regional and McKesson partnered to help reduce supply expense, improve inventory management and improve materials management decision support.

Utilizing a combination of McKesson technology and personnel from both organizations, the medical center reduced inventory by $600,000 and decreased supply expense as a percentage of operating revenue by 3.4 percent. "McKesson helped us to increase cash flow, improve supply chain efficiency and strengthen our decision-making and reporting capabilities," said Dave Riddell, vice president, support services, Cookeville Regional Medical Center. "One of the greatest benefits was the McKesson team itself - their experts were invaluable in helping us to evaluate and re-engineer our processes so we could achieve the full benefit of the technology implementation."

About McKesson

McKesson Information Solutions is part of McKesson Corporation, a Fortune 20 healthcare services and information technology company. McKesson is 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.