Rachel Rodriguez: Next question please?
Operator: And next will be Elizabeth Anderson with Evercore ISI. Please go ahead.
Elizabeth Anderson: Hi guys, thanks so much for the question and congrats on a nice guide. I was intrigued by your comments about the Med-Surg segment and sort of how you’re thinking about data and the use of assets with the new acquisition you just made. It seems like a little bit of a shift into more sort of additional value-added services in that segment. Could you give a little bit more color on that and sort of how you see that evolving over the next couple of years?
Brian Tyler: Sure. I mean, in many ways we thought of Compile as a foundational data investment for us, and we liked the business by itself. But we also thought given some of the other data sets, transaction sets that reside in the company, we could augment and add and accelerate that. We chose a first use case in the medical business where we have, extensive, hundreds of thousands of relationships with providers and data that complement their already strong provider data service offering. So we think we can both augment that and unlock unique value because of the footprint and reach in Med-Surg and so we’re making an investment into that thesis.
Rachel Rodriguez: Next question please?
Operator: And next will be Daniel Grosslight with Citi. Please go ahead.
Daniel Grosslight: Hey guys, thanks for taking the question. I want to go back to a question that Charles asked on RxTS, but really on the top line you’re seeing a material acceleration in growth next year, while as you mentioned, the adjusted operating income is kind of in line with where you’ve been historically. So it does imply a bit of a degradation in margin. So I was hoping you could find a finer point on the growth acceleration on the top line and margin compression you’re seeing, is that mix shift to lower margin businesses? Is that the increased investments you’re making? Any color there would be great. Thanks.
Brian Tyler: Thanks for that question. I can answer that. The growth that we’re seeing next year on the top line is more accelerated growth in our 3PL business. As we’ve talked about before, the 3PL business generally represents a little more than half of the revenue in the segment, but less than 10% of the adjusted operating profit. So as we expect to win some additional business next year and see some of our customers continue to grow, that revenue will be faster rate than we’ve seen in prior years. And given the mix that that represents in this segment is, driving faster top line again at a lower margin rate on the bottom line from that particular business, 3PL business. So the underlying technology businesses are continuing to grow in a consistent manner and we’re really pleased with the growth that we’re seeing there. What you’re seeing is a mix impact in FY 2025 from the 3PL business.
Rachel Rodriguez: Next question please?
Operator: And next will be Erin Wright with Morgan Stanley. Please go ahead.
Erin Wright: Great, thanks. I wanted to get a little bit of color on what you’re seeing and what’s embedded in your guidance in terms of the pricing environment on the U.S. pharma business and what assumptions you’re making in terms of generic pricing trends and environment that you’re seeing as well as kind of on the branded side? I know that’s less of a swing factor for you, but how is that playing out relative to your expectations here? Thanks.
Brian Tyler: Sure. Happy to answer that question. As we think about the pricing environment for branded products, it is going to be, our anticipation is to be very consistent with what we’ve seen in the past several years, so stable and competitive branded price environment. In the generic space, again, we look to drive value for our customers through our sourcing operations, looking to drive the lowest cost at the highest availability supply. And we believe that the, in our outlook for FY 2025, we expect to see a competitive and stable environment in the generic space as well. So we don’t see a lot of changes in the environment for both branded and generics pricing in our outlook versus FY 2024. And we anticipate that we can continue to drive good value in the generic space for our customers.
Rachel Rodriguez: I think we have time for probably one more question.
Operator: Certainly. That question will come from Stephen Baxter with Wells Fargo. Please go ahead.
Stephen Baxter: Hey, thanks for the question. A question of guidance, I wanted to ask one on the quarter, just on the pharma revenue growth rate. I was wondering if you could help us think about any impact you might have seen from insulin list price changes in the quarter. It sounds like that was probably a headwind to your revenue growth rate. And any contribution from commercial COVID vaccines in the quarter that we should be mindful of? Thanks.
Britt Vitalone: Yes, nothing really specific to call out there, Stephen. And as it relates to COVID vaccines, as I mentioned, we are lapping the COVID programs that we had last year and from the commercial vaccines perspective, lower contribution than we saw in the third quarter, really a non-material amount of contribution to our fourth quarter results.
Brian Tyler: Hey well, thanks again everyone for joining our call this evening. We appreciate your ongoing interest and support of McKesson. I want to thank you, operator for facilitating the call. McKesson reported solid performance in fiscal 2024. I’m really pleased with the momentum across the segments and the continued commitment to our company’s priorities. Looking ahead to 2025, I remain confident in our ability to consistently execute against our strategies which will support and sustain growth in the long term. We’re excited about the opportunity to grow with our customers, to drive innovation through our differentiated portfolio of services and solutions. But most importantly, it’s in service of our mission to advance, improve healthcare in every setting. I appreciate everyone’s time. I hope you have a terrific evening.
Operator: Thank you for joining today’s conference call. You may now disconnect and have a great day.
