The two, which have worked together for years, have announced their plan to buy generic drugs jointly and the continuation of a long-term distribution agreement but provided no details about what that might mean in terms of dollars invested or savings that might be expected.

“Expanding our relationship to include a sourcing partnership for generics makes economic and strategic sense for both of us,” Mark Walchirk, president of McKesson U.S. Pharmaceutical, said in a statement.

While Walmart does not break out its pharmacy business separately, CNBC says that the Wal-Mart stores are estimated to do about $19bn a year in pharmacy sales. The network says that in August Walmart reported the margins on drug sales had been shaved by lower reimbursement rates from drug plan administers and by fewer customers paying cash for their meds.

The deal comes at a key time for McKesson, which is whacking jobs to cut costs.

Read Full Article