On Friday, McKesson sharply lowered its outlook for future profits. Its stock closed down 23%, erasing more than $8 billion of market capitalization. Ouch.

The wholesale industry’s problems have been building for some time. From McKesson’s earnings call, I have interpreted some of its most revealing statements, which illuminate the key challenges facing wholesalers:

• Why wholesalers want brand-name drug prices to go up—and the negative impact of slowing inflation

• A sell-side price war started by…AmerisourceBergen?

• The factors pressuring wholesalers’ profits from specialty pharmacies

McKesson has a plan to recapture its lost profits from customers and manufacturers. Don’t say you weren’t warned when McKesson and its peers come asking for more money.

WHAT HAPPENED

Here are direct links to the information about McKesson’s second fiscal quarter of 2017. As always, I encourage you to read the original source material for yourself.

• Press release

• Presentation slides

• 10-Q filing

• Earnings call transcript

BTW, I strongly encourage you to read the entire transcript. It provides one of the most complete public statements by a CEO about how wholesalers make money—and how that might change in the future.

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