McKesson Corporation (MCK) Earnings Call Transcript & Summary

Okay. Good morning, everybody. Welcome to the McKesson session. I'm Bob Jones, and I cover health care services here at Goldman. Really excited from McKesson to have with us Britt Vitalone, EVP and CFO. Thanks, Britt, for joining us this morning.

Well, good morning, Bob. Thanks for having me.

Yes. And also from my team, we have Kevin Hartman on the presentation.

So Britt, obviously, it's been a wild year plus now, but I thought maybe just as we hopefully start to exit this pandemic, we could just start off with the vaccine and the rollout. Obviously, McKesson played a very important role as the centralized distribution partner to the U.S. government. I thought maybe just to kick it off, it would be great to get your latest perspectives on how the COVID vaccine has been progressing. Obviously, we've made a lot of progress across the country. And how that maybe compared to your latest views that you shared, I believe it was in fiscal 4Q.

Yes. Well, first of all, again, thanks for having me. Really excited to be here today, share with you all the great things that McKesson is doing and how we've come through this really dynamic time period. As you mentioned, we've been the centralized distributor for the U.S. government for vaccine distribution as well as kitting supplies to support that vaccine distribution. We've distributed now over roughly 170 million vaccines as of June 6 or 7, right around that time period. We're really pleased with the execution. We're really pleased to have the opportunity to share that execution, that distribution excellence that we have. We've done this before with H1N1. We are pleased to be able to share our distribution excellence for this as well. As it relates to the progress of the program itself, we continue to be a centralized distributor for this. We'll continue to do that as long as the U.S. government wants us to perform that role. Clearly, as the program continues to evolve, the government will make choices in terms of the administration and what products get administrated where and in what quantities. And McKesson is prepared to continue that role going forward. As we talked about on our earnings call, we expect in our FY 2022 about $0.40 to $0.50 of EPS contribution from vaccine distribution and about $0.10 to $0.20 of adjusted EPS contribution in FY '22 related to kitting distribution. So we'll continue that role as long as the U.S. government wants us to be the centralized distributor. We're certainly prepared if it goes back to a more normal distribution pattern, which we would expect will happen at some time. But we're really pleased with the execution. And certainly, we're proud of what we've been able to do on behalf of the government and on behalf of patients.

No, thanks for that, Britt. And you kind of touched on this, but I was curious if there was any line of sight into the government's plan and McKesson's role as we move forward. Obviously, unfortunately, I don't think will be beyond dealing with COVID and vaccinations for years to come. Any initial conversations or thoughts about when the vaccine in upcoming seasons or years could become more readily available through more traditional channels?

Yes. Well, we have regular contact with the U.S. government in terms of what their plans are, what their direction is in terms of the administration and where these are going to be -- what sites these are going to be administered to. So I don't have any further information to share with you now. The program, obviously, will continue to develop over time. And we're certainly going to stay in contact with the government, take the direction from them on what they're expecting from us, and we're prepared to continue our role here going forward. So I'm sure this will continue to develop over time, but we're prepared to continue our role as a centralized distributor.

Got it. Got it. Yes, I guess, another topic that has been in focus recently has been generic deflation. If we heard you guys correctly, on this past quarter, it sounded like there hadn't been a material change in your view to the overall environment, seem to be some slightly differing opinions and updates from your competitors. It would be great to maybe just get your latest, most updated thoughts on how pricing has trended, obviously, both on the buy and the sell side. And then maybe within that, any specific pockets or therapeutic areas where maybe you have seen some disruption as it relates to pricing?

Yes. Thanks for that question. It's an important question. It's obviously an important part of our business. I'm not going to really comment on what others have said as it relates to this and really just speak to the data and speak to what we see in our business. And I think it's really important to separate the fundamentals of the business, the pricing environment itself from volumes. And I think that's where we're seeing a little bit of dispersion in terms of the volumes are lower, the fundamentals of the business, the pricing fundamentals, the pricing environment remain competitive but stable. So as we talk about the pricing environment and the fundamentals itself, we look at this on 2 aspects. We look at the buy side, where we have a very strong sourcing program and a very strong sourcing engine with ClarusONE. We focus on maintaining stability of supply for our customers at a very low and competitive cost. We're confident that we source product as competitively as anybody else in the marketplace. And that provides us the opportunity then to continue to approach the sell side of the market in a disciplined approach to pricing. And again, the sell side as well as the buy side remain competitive, yet stable. So the fundamentals around pricing, the fundamentals around the environment itself remain competitive, stable, not a lot of change. What we've really been focused on is volumes. And so we've got 2 aspects to volumes. First of all, with COVID, we've seen transaction volumes in prescriptions, brand specialty, generics overall have been down from previous years. And then secondly, as we came through what was a much softer cold, cough and flu season, that also had an impact on generics. So there's a big difference between the pricing and the fundamentals of the business, which are solid and stable, from the volumes, which are down related to COVID and a softer cold, cough and flu season. As we talked about on our earnings call, we expect that volumes will continue to improve off of the March levels that we closed our FY '21, and that by the second half of the year, we would be back to more pre-pandemic levels of prescription transaction volumes. So I think that's the key component here. In terms of specific therapeutic classes, there's really nothing that I would call out that would be distinct. We obviously work very closely with all of our manufacturing partners and really try to understand what's going on with supply and demand dynamics and how that's tracking. But there's nothing that I would call out here that would be distinct or important.

So really, just to maybe summarize that, it sounds like that if there is some volume shortages or lower-than-expected levels, it really is traceable to COVID, whether that's people not getting back to the doctor to get prescriptions or even specific classes like cold, cough and flu that were obviously affected by COVID. Is that fair?

That's what we've seen, Bob. And as we've talked about on our May call, we've begun to see some encouraging signs around volume levels. And again, we would expect that as we go through the first half of the year, as case volumes continue to decline, as vaccinations continue to increase, that by the second half of the year, we'll return to pre-pandemic levels of volumes.

Got it. Got it. Obviously, the pandemic and COVID is affecting different geographies in different ways and different time lines. One area, obviously, that's been hit particularly hard more recently has been India. Just given their importance to the global supply of generic drugs, any disruptions you've seen there from both a volume or pricing perspective, just given some of the challenges I'd imagine are going on within that country?

Yes, certainly, a tough situation. It's one that we monitor on a regular basis. We have conversations with our manufacturing partners, not only in India, but in all parts of the world on a regular basis, many times in many of the geographies on a daily basis. We have a task force on our sourcing side that works with all of our manufacturers, evaluates the environment, helps us understand what the supply chain is going through. We're not seeing anything specifically that gives us any concern. We -- as we talk to our manufacturing partners, we feel that the supply levels are adequate. Certainly, we've been able to maintain adequate supply levels for all of our customers. So there's nothing that I would call out that concerns us. Obviously, we'll continue to monitor that situation. It's an unfortunate situation, important to our supply channels, but nothing today that gives us any concern about any disruptions in the supply chain. We've seen the supply chain continue to operate in a normal fashion.

Got it. Okay. No, that's helpful. Maybe taking a step back and looking at the U.S. Pharma segment as a whole. You obviously recently guided fiscal '22, EBIT growth, a very solid 5% to 8%. I know there's several moving pieces that make this year upcoming more unique than a normal year, obviously, with COVID. Could you maybe just walk us through the building blocks that get you to that EBIT growth level? And maybe within those building blocks, how should we think about the sustainability of them as we get back, hopefully, to a more normal environment?

Yes. Well, again, thank you for that question. We're pleased that we've been able to return to growth in our largest segment, U.S. Pharma. And now we've had a couple of years of consistent growth within that segment. And obviously, we guided to some very strong 5% to 8% core growth within that segment for FY '22. I think it's important to just reflect on the fact that our markets have not fully recovered. We talked about that just a minute ago that we do expect that our markets will continue to improve off of our March levels and be back to more pre-pandemic levels in the second half, and that will certainly support the continued improvement and momentum that we're seeing in that business. As you think about the components of separating the 4% to 7% from the 5% to 8% core growth, within the segment, we have the vaccine distribution program that we're supporting on behalf of the U.S. government, and we've talked about $0.40 to $0.50 of adjusted EPS contribution for the full year. That is largely going to be in the first half of the year, with the majority of that coming in the first quarter of this year. And we've got some investments that we're continuing to make in one of our key strategic pillars, the build-out of our oncology ecosystem. We talked about a $0.20 headwind year-over-year to continue to build out that oncology ecosystem, primarily in Ontada, which is our technology arm for our oncology ecosystem. So we expect that we'll continue to see continued momentum within the segment. We expect that volumes will continue to improve through the first half of the year, then we'll get back to pre-pandemic levels in the second half of the year. And we'll continue to see the stable fundamentals that we've been building now for the last couple of years that have led us to growth in each of the last 2 years that we expect to lead to that 5% to 8% core growth in FY '22.

Got it. Got it. Britt, you mentioned specialty within that. And I know there's several pieces within it. But maybe if we think about legacy specialty, could you maybe give us somewhat of a sense on how much contribution you're expecting not to go lower from the legacy specialty business? And then maybe we'd want to ask a separate question on Ontada because I know it's an area you guys seem to be more excited about recently.

Yes. Well, this -- when you think about specialty, there's really 2 components to that, that I would talk to you about. First of all, there is the distribution of specialty products, which are distributed through our traditional wholesale channel to retail pharmacy as well as to health systems. And then there's the specialty provider business where we have relationships with many different specialties, whether it be oncology or nephrology, urology, all the different types of specialty providers that we provide services, whether that be distribution or GPO services to. It's been a very resilient part of our business. Certainly, as you think about oncology, it's where most of the innovation and drug therapy is taking place. And that's one of the key reasons why oncology is such an important part of our strategy going forward, why that is one of our 2 key strategic pillars. So we continue to believe that specialty is going to be an important part of our business, both not only on the distribution of product, which we expect to continue to grow in that 9% to 12% range as we go forward through 2025, but also the key relationships that we have with specialty providers and the continued build-out of our oncology ecosystem where we're leveraging a number of really key differentiated assets, USON really being at the hub of that.

Yes. And that's actually where I wanted to go next. I mean, obviously, US Oncology and the entire specialty franchise has obviously grown tremendously over the years and now sitting on a lot of patient data, a lot of patients in general. Could you maybe just talk us through a little bit of how you are envisioning leveraging all these assets a little bit more? I know Ontada is something that's come up on the last few earnings calls. It's an area specifically within specialty that, again, the company seems pretty excited about.

Yes, we're very excited about it. And again, I think if you step back a few years, we have been putting some building blocks in place as we built out this oncology ecosystem, and it started really with USON. So if you think about U.S. oncology, it's 1,400-plus physicians within the US Oncology Network. That grew by over 100 physicians in FY '21, even during the pandemic. So you've got tremendous scale within the US Oncology Network. You think about us as beyond the US Oncology Network, we're the #1 distributor to community oncology. So we have a really scaled footprint to start with. We collect an important amount of data within our proprietary technology in our EMR, which is iKnowMed. And Ontada really is the technology component of our oncology ecosystem. We also have a life sciences team that's part of Ontada where we collect, we analyze and we enrich data and we combine it with clinical data, where we can provide this information back to biopharma. We can provide this back to our physician partners where they can use this for practice. And certainly, there is information that's available to payers and patients as well. And so we think that this is an important component of the oncology ecosystem. It leverages the scale of USON. It leverages the data that we're collecting within our proprietary technology. And again, there are a number of things that we're doing, whether that be clinical trials. So the US Oncology Network has done over 1,600 clinical trials. Over 85,000 patients have been involved in these trials, and there's over 300 active trials at any one point in time. So there's just a number of different services that really build out a broader oncology business. And we think Ontada is the next building block to help accelerate that momentum.

No, that's really helpful. I mean I guess maybe just to stick with this, and I wanted to get into capital deployment a little bit later as well. But as you think about the evolution of specialty and leveraging these assets, as you just mentioned, is there more to go? Are there things that you feel like you can kind of get there and just continuing to invest internally? Or is this an area that you put kind of on the top of the list as far as assets that you might want to add in and around the specialty business as you start to think about whether it's the life science side of it or more of the clinical trial side of it? Just curious, your thoughts on kind of where the, holistically, business is today versus maybe where you could look to add other components to it?

Yes. So there's 2 key components to our strategic pillars: the first pillar being oncology ecosystem, the second being biopharma. As we talk about oncology, what we're really trying to do here is to leverage a set of differentiated assets, the scale of the US Oncology Network, the capabilities that are performed within the US Oncology Network, within U.S. oncology research, the clinical trials, capabilities and, of course, the data that we're -- we've been investing in internally. If there's opportunities for us to accelerate those capabilities, whether that be on accelerating clinical trial capabilities, accelerating data and analytics, accelerating some of the already really great life sciences data enrichment analysis that we're doing, we can accelerate that through M&A. We're certainly interested in that. We're going to continue to invest internally, and that gets back to that $0.20 headwind that I talked about, this continued -- FY 2022 being a continued investment year to continue to differentiate this oncology ecosystem. So I think that we're going to -- our priority for us is to continue to grow the company and to grow the cash flows of the company. We have great differentiated assets, and we have scale in oncology. And so we're looking to continue to accelerate that.

Got it. No, that's super helpful. Maybe just one really specific question within specialty. Obviously, big news this week in the Alzheimer's community with the approval of Biogen's amab drug earlier this week. I know it's just one drug, and there's a lot of questions still out there, probably far more questions and answers at this point. But any initial thoughts on the potential implications for the supply chain, obviously, specifically specialty distribution? Just curious if there's any way to think about whether this could have a material impact or not.

Sure. Well, first of all, obviously, this is big news, and this is new information just approved here this week. There's still some hurdles for it to get over in terms of providing -- doing some trials and providing some efficacy data. And so we'll continue to monitor that. We are a partner, an approved partner with Biogen for distribution so we're prepared to handle the distribution when that actually begins to occur. We expect that, that could occur late June, first part of July. So it's too early to say how impactful this will be. Obviously, from a news information and the therapy that it is addressing, it's big news. But we're an approved partner. We'll certainly distribute that when and if it gets over these remaining hurdles.

Got it. Got it. One last area for me on specialty was around biosimilars, something that's been in discussion for several years. I feel like it's become a little bit more topical again as of late with some products gaining traction in the market. Could you maybe just give us like your latest thoughts on why you think maybe we're finally starting to see traction with biosimilars relative to several years ago when it seemed like it was a lot more talk than actual evidence of it actually having uptake? And then just as we look into the future around biosimilars, how do you think about the opportunity over the next several years in this category?

Sure. Well, biosimilars are an important component of our oncology business as well. And again, it will leverage the scale of oncology for those drugs that are launched with oncology therapeutics. So what we've seen, I think, over the last few years is the promise of biosimilars has now translated into a pipeline. We still have only a couple dozen biosimilars in the marketplace, but the pipeline is beginning to build. So I think as you look out over the horizon of the next few years, we would expect that the pipeline continues to build. And there's certainly a large drug, HUMIRA, that we would expect to launch sometime in calendar year '23. That could be the next big milestone for biosimilars. That being said, biosimilars are an important part of our business. They're beginning to contribute to profitability. In the last year, in FY '21, in particular, there were more oncology biosimilars that were launched, and so that was contributing to the oncology profitability. I think you need to understand where these biosimilars are or actually what channels they're going through. Early biosimilars were primarily going through health systems channels, which are a little more fragmented in terms of decision-making, in terms of the leverage that providers and certainly the services that distributors could provide for biosimilars. As they -- as biosimilars started to go more through the oncology channel, there's more scale in an organization like US Oncology. And there are services that a McKesson can provide, such as GPO services, that provide some additional leverage, obviously, decision-making by a group of over 1,400 oncologists. So where there's more leverage and scale, where there's more services that can be provided for the biosimilar, there's going to be greater levels of profitability. And so channel makes a big difference. We would expect that as the channel -- as the pipeline continues to mature, as drugs like HUMIRA get through the pipeline, that it will continue to be a profit contributor for McKesson. And so while it's not material to the enterprise now, it is contributing to profitability. We look at this as a win-win-win. This is certainly a win for patients from a cost perspective. It's a win for providers from it's giving more choice, and there is better profitability for the distributors.

Got it. Got it.

Yes. I guess maybe moving over to the MedSurg side. So I know we had talked about generics utilization and how you're kind of thinking about that over the course of the year. On the MedSurg side, specifically, just curious what you're seeing kind of real time as it relates to utilization, how you kind of think that tracks over the course of the year and what's built into guidance as it relates to that.

Sure. Well, Kevin, thanks for that question. Our Medical-Surgical business is a broad-based business that serves the entire alternate site market. We have developed a number of services and capabilities over the year that we're really proud of, very diverse set of capabilities. This was the hardest-hit component of our business when COVID hit. We talked about that last year when we gave FY '21 guidance, and we certainly saw that in the first quarter of the year. We're beginning to see some positive signs where in-person visits are beginning to improve. I think I saw a number from IQVIA that in April, in-person visits hit 86%. So we're starting to see that improvement that we continue to expect will happen over the first half of our year. And again, as we get into the back half of the year, our second half, we do expect that we'll be back to pre-pandemic level. So that's what's really built into our guidance. We have seen parts of our business be very resilient. And again, I think this speaks to the capabilities we have. If you think about the lab capabilities that we've built over the years, some key acquisitions that we made, that proved to be very timely and very beneficial for our Medical business and for our customers. And we were able to leverage that as you think about COVID testing as an example. So we're seeing positive signs. We expect that volumes will continue to improve over the first half of the year from the March levels. And very similar to Rx transaction levels, by the second half of the year, we expect to be back to pre-pandemic levels.

Got it. That's definitely helpful. And I know it's similar to the pharma business, there's obviously a lot of moving pieces, maybe even more in this segment. But you guys did give that 10% to 16% core growth guidance for the year. That, in particular, I thought was relatively strong. And so I'm curious if you could, similar to the pharma segment, just maybe give the building blocks of how you get to that 10% to 16% and if there's any reason to think that might not be something you could sustain over the next few years.

Yes, I'm happy to do that. So there are actually a few more moving parts in our Medical business, and I think this speaks to the dynamic that we saw around supply and demand. So if you think about our Medical business, we saw a significant increase in the demand for PPE and then, as the year progressed, COVID test kits. And so both of those had very elevated volumes, certainly, in the first half of the year, and those volumes remained elevated through the third quarter of the year. As vaccinations continue to increase, as COVID cases continue to decrease, we saw those elevated levels of demand begin to moderate. And we expect, as we guided this year, that those levels will continue to moderate really in correlation with increasing vaccinations and with decreasing case counts. So that was one key component. The other piece is the kitting distribution that we did on behalf of the U.S. government. Last year, we had adjusted EPS contribution from kitting of $0.35. We've guided this year that it would be $0.10 to $0.20. So a slight headwind within the Medical segment from just the kitting component of the business. And related to really managing through this dynamic volume levels around PPE last year, we also talked about an inventory impairment charge that we took throughout the year, mostly in our fourth quarter. So we're still moving through in these moderating levels of PPE, these moderating levels of COVID test kits. We expect that they'll still be higher than they have been in the past, even at a moderate level higher, but will continue to moderate as we go forward. And just maybe to answer your last question, the 10% to 16%, I think that speaks to the broad base of capabilities that we have that cover the entire alternate site market, whether that be pharmaceutical prescriptions for physicians within their practices, whether that be lab capabilities, continued build-out of our McKesson brand and some of the home care capabilities that we have around HME, patient home delivering, continue to build this out. If you go back pre-pandemic, our business was growing around 12%. And I think FY '20 was in that low single -- low double-digit range of growth. So 10% to 16% is really getting back to the level of growth that we were exhibiting before the pandemic.

Got you. No, that's definitely helpful. I know you talked about on the PPE side one of those inventory charges that you've taken earlier. I think some of your peers definitely saw that specifically as it relates to gloves. Just curious if you could give any more detail on that market specifically, what you're seeing, if you feel like your inventory is now appropriately priced or if you'd expect that we could still see some volatility from that just over the course of the year.

Yes. So gloves, obviously, an important part not only of our Primary Care business, but also our Extended Care business for assisted living, long-term care and so forth. And it's been an important part of our business for many, many years. Gloves have shown dynamic levels of supply and demand over many years historically. Certainly, as we come through COVID, we have seen some continued dynamics around supply and demand, have been able to really manage that very effectively over the years, have been able to manage that effectively in the current environment. We have a number of suppliers that we work with on our -- within our sourcing business, and we continue to have those conversations on a regular basis. So we expect that there will be dynamic -- the dynamics of the elevated levels of pricing and demand within gloves, but we've been able to manage that very effectively. And there's nothing that I would call out today that would be significant or outside of normal supply chain dynamics around gloves. But again, obviously, it's an important part of both the Primary Care and Extended Care business. We'll continue to monitor it.

Got you. And then, yes, maybe one last one just on the PPE side. So there's been some debate just generally in the market as to where ultimately demand levels kind of shake out for this. I think some of your peers have talked about protocols changing providers as it relates to the use of PPE. Just curious kind of -- I know you've talked about it settling somewhere higher than where it was pre-pandemic. I was just wondering if there's any more detail you could give on where you think this ultimately shakes out looking a year or 2 out.

Yes. Well, PPE has been an important category within the business for many, many years. We expect that, that will continue. There's a lot of different products that our physician practices and some of our extended care providers will use. We expect that these levels that we saw last year will continue to moderate, but we expect that they'll moderate to a level in FY '22. They're still slightly elevated from what we saw in FY '20, not anything material, but we expect that, as the environment continues to get back to normal, that we'll continue to see some moderately higher levels of PPE, but nothing that would be really significant to the segment from a volume perspective.

That's helpful.

Hey, Britt, maybe one other topic, just to jump around a little bit, that we get, obviously, as we come out of the pandemic would be around other channels and online pharmacies. Just curious your views on maybe how permanent some of these dynamics may have changed. I mean everybody tracks mail order, obviously, saw a spike relative to traditional channels during COVID, even news out this morning about Amazon launching a 6-month prescription plan for home delivery. Any thoughts you have on just how meaningful you think, at this point, the online pharmacies are or could become as we kind of get back to a more normal environment?

Yes. Look, we certainly monitor this. Many of these online pharmacies, if you will, we've had discussions with about how we could potentially partner with over time. I think it's just a continued evolution of the business model. We participate in digital. If you think about our U.K. business as an example, we made an investment in a company called Echo, which furthered our digital capabilities in that marketplace. So I think it's a natural evolution. It's not material today. In fact, I think that our independent pharmacies continue to evolve their business. They are certainly not going to just sit still and not do anything. They're continuing to evolve their business models, whether that be inventory tracking or med sync or patient home delivery, quite honestly. So we'll continue to watch it. It's nothing that's really material right now to the business, but it's part of the evolution of pharmacy, and we see our customers continue to evolve their business models at the same time.

Got it. Got it. I guess another topic that I would be remiss not to ask is opioids. I know you're limited in what you can say. But I think certainly, a few quarters ago, it felt like to investors that a settlement was getting very close. Then it's obviously been relatively quiet since then as far as the global settlement is concerned. Any updated or latest thoughts you can share with us around just where the case stands and kind of what your latest thinking is?

Yes. There's probably not a lot new information that I'll be able to share here with you. But I would just harken back to some comments that we've made previously, and I'd harken back to when we actually took the charge in the third quarter. And what we've talked about is we've been in some advanced discussions with the other side. We're still hopeful that a broad resolution can be reached here. We're optimistic that, that is going to be the case. We think it's the right thing for all the participants. And so we're working towards that end. Beyond that, there's not a lot of new information that I can provide.

Understood. Yes, I think that makes sense. Well, we just have a handful of minutes left. I just want to come back to capital deployment. It seems like it's obviously a big focus. Always is, but I think for current thinking, it seems like we get an increased amount of questions on just kind of what's next for you and your peers. Quite frankly, obviously, balance sheets are in a good position. It's not unheard of every few years for McKesson and others to do larger-sized deals. So I know you touched a little bit about how you're thinking about the world of oncology, but maybe if you could just give us the categories that you're most interested in, where do you think the company could be best served by adding capabilities through acquisition versus internal investment. And then the other side of it that I'd be curious to get your thoughts on is just, as you look at the portfolio today, obviously, McKesson has, every few years, taken the time to go through and rationalize where maybe things don't make as much sense as they maybe once did when assets were added or built out. Any latest thoughts on just the company's portfolio and kind of how you think about what maybe does or doesn't still best fit in?

Yes, great question. Let me see if I can unpack that for you. If I miss anything, just let me know. As we think about capital deployment, capital deployment starts with strong, stable cash flow, which we've been able to generate and deliver for many, many years. And we expect, again, in FY '22 that we'll have strong and consistent cash flow. Our priority is to grow the business. And we grow the business either through internal investments, and there's a couple I would point out. Obviously, Ontada is one that we've already talked about. But in our biopharma services, building out capabilities around access, affordability and inherent solutions, AMP, or Access for More Patients, is a great example of that. We have 2 strategic pillars: oncology -- the build-out of the oncology ecosystem and the build-out of our biopharma services ecosystem. We have differentiated assets in both of those areas. And so we're looking to continue to accelerate the leverage that we have, the gains that we have in both of those areas to continue to build those out and take advantage of the differentiated assets and capabilities that we have. We'll do that either through internal investment or we'll look to do it through M&A as long as M&A is on the strategy and as long as it meets our financial profiles, which is for accretive acquisitions and acquisitions that are going to increase our return on invested capital. We have lots of opportunities in terms of how we deploy our capital. Growth opportunities is one, but we remain committed to returning capital to our shareholders through a modest but growing dividend and through share repurchases. I would just step back and point out that we have 2 strategic pillars: oncology and biopharma services. We are not looking to grow a third pillar. That is not in our plans. We are looking to advance oncology and biopharma services. Again, in oncology, a broad set of assets that are really centered around US Oncology and community oncology distribution. And there's capabilities and assets there that we would look to acquire or continue to build out. And then the last component for us is the maintenance of our current investment-grade credit rating. We've been very disciplined over the last 3-plus years in how we deploy capital, and we're going to continue to remain disciplined as we go forward.

Great. And then any final thoughts on looking at the portfolio today and maybe assets that don't necessarily make as much sense or even just areas that maybe don't make -- without getting too specific, obviously, maybe areas that don't make as much sense today as maybe they once did? Is that something in discussion?

Yes. Thanks for bringing that back to me. So we always are looking at our assets and our capabilities. We're continually looking at our portfolio to make sure that assets fit within the 2 pillars that I talked about or within capabilities and leadership that we have, MedSurg being a good example of the leadership that we have. We don't feel like there's any holes within our current set of assets in the portfolio, but we go through a regular review of our portfolio. And certainly, if there's something that doesn't fit, we'll look to take action on that. And if there's opportunities for us to accelerate those differentiated capabilities in our 2 strategic pillars, we're going to do that. So it's a regular review process that is ongoing.

Got it. Got it. Well, I appreciate that, Britt, and we're just up on time here. So I think that's a good place to leave it. Wanted to thank you again for taking the time today. I really appreciate your participation. And thanks for everybody who listened in.

Thanks. Appreciate it.