We do think that from a clinical perspective, these are products that are interesting at the pharmacy counter, and we’re encouraging our independent pharmacists, for example, to stay involved in the dispensing of these products. So it’s certainly something that we are very mindful of. And we would expect that over time, you — as these sell side contracts come up, that you’ll see them become more typical brand economics than the headwind, which we’ve experienced in the early days. Hopefully, that’s the aspiration. That’s what we would hope to get to. Jim?
Jim Cleary: Sure. Erin, with regard to your question on Animal Health, our Animal Health business had a particularly strong growth in the quarter and it had very good performance. And it also benefited from an easier comparison, given the industry-wide pressures in the prior year December that we called out last year. And so particularly strong operating income growth and also very good performance from a revenue growth standpoint. It had low-double digit revenue growth in the quarter, with growth in both the companion animal business and the production animal business with growth being stronger in the companion animal business. And then one just final thing I’ll say is that we’ve seen just very strong execution by our Animal Health team, just as we have by all of our teams across Cencora. So thank you for that Animal Health question.
Operator: We now turn to Charles Rhyee with TD Cowen. Your line is open. Please go ahead.
Charles Rhyee: Yes. Thanks for taking the questions. Steve, obviously a lot of discussion recently around potential changes on how pharmacies are reimbursed by payers and moving to a cost plus model. And I think the argument here is that that industry is at a tipping point where maybe there’s less potential for generic substitutions to offset sort of the reimbursement pressures pharmacies face by payers. From where you sit as a key partner to both chains and particularly independent pharmacies, could you comment maybe on what you see in the market in terms of the health of your retail customers? Do you think we are reaching sort of a limit to what pharmacies particularly independents can bear? And if the industry does move to a cost plus model, how might that impact the way you interact, or how might that impact your business and how you interact with the retail customers? Thanks.
Steve Collis: Yes. So I think we always one of the things that I learned early on in my career is that we always have to be very mindful of reimbursement for our provider customers. Of course, we do a lot of work with independents, in particular with Elevate, PSAO, and we’ve been saying for a while that some of the rates are not manageable. So to see an industry leader step up and really talk about changing the model, I think is very important. We would like to see a fair and transparent reimbursement system for all categories in pharmacy, include — especially community pharmacy, and especially including independent pharmacists who we feel a special need to advocate on behalf of. So it’s early days. It’s encouraging that there is some talk about adoption of the cost plus model across the industry, and we’ll see how the industry responds and payers respond, et cetera.
But we believe that this is a sign that there does need to be an improvement in the base profitability of community pharmacists, which is encouraging.
Operator: Our next question comes from Eric Coldwell with Baird. Your line is open. Please go ahead.
Eric Coldwell: Thanks very much. A number of mine have been hit, but I might have two small separate ones. First on international, very strong underlying performance. AOI up over 20%. FX foreign currency, I’m curious if you could parse out the impact of Egypt from both a revenue and AOI standpoint, because I believe your AOI would have been up even more X the year-over-year headwind in Egypt. And then secondarily, just a quick one on GLP-1s. I know you don’t guide to specific revenue or revenue contribution growth rate, but when we look at your raised revenue target for the year, could you give us a sense on how much of that was or was not related to GLP-1 outlook, i.e., has your GLP-1 growth expectation changed since the last update? Thanks so much.
Jim Cleary: Okay. So let me start out with Egypt, Eric, and we haven’t specifically disclosed the size of that business, but let me say, yes, you’re absolutely right. Our operating income growth would have been higher in the quarter if we had backed out Egypt, for instance, from the first quarter of last year. But let me kind of give you some data that I think would be helpful, as you do your models over the course of the year. The Egyptian business was profitable in the first fiscal quarter of last year, as we just referenced, and then was essentially flat in Q2 and Q3. And then it had a loss in Q4. And so for the full year, it was a slight — a slightly profitable business in fiscal year 2023. And so it really doesn’t have, if you look at on a full year basis, it doesn’t have much of an impact on kind of full year growth rates in the International segment.
But as I said, during the first quarter, the growth would have been a little bit higher if we included or if we backed out Egypt from last year. And then with regard to kind of U.S. Healthcare segment and GLP-1. So the U.S. Healthcare Solutions segment in revenue growth, we now expect 11% to 13% growth, up from our previous expectations of 7% to 10% growth. And the new guidance range reflects the strong revenue growth we saw in the first quarter, including the year-over-year growth of GLP-1s and continued good growth for the remainder of the year, driven by expected broad based prescription utilization trends. And so GLP-1 essentially contributed 3 percentage points of growth in the first quarter. And we expect just kind of continued good growth throughout our business during the balance of the year and feel really good about the business overall and really good about our guidance.
