Cencora Inc at Bank of America Global Healthcare Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Allen Lutz - Bank of America - Analyst : <_ALACRA_META_ABSTRACT>You've gotten a lot of questions, as I'm sure you have, over the past 48 hours around this MFN executive order that came out. I know details are limited. Would love to get, Bob, a sense of your initial thoughts on it because the business model at Cencora has evolved a lot over the past 10 or so years as it relates to how you're compensated specifically for brand medications. Would love to get a

Question: Allen Lutz - Bank of America - Analyst : Got it. That's really helpful. I guess taking a step back, as it relates to list prices and branded drugs. I think over the past 10 years, your contracts have evolved where inflation was a bigger component 10 years ago, and now it's more fixed fee I look at things like insulin, for example, and some of the repricings that went through a few years ago there as indicative of Cencora's ability to navigate changes to drug pricing. Can you talk about either insulin or are there any other proxies that could be a reasonable comparable or just any color on sort of how the brand contracting has evolved over the past few years?

Question: Allen Lutz - Bank of America - Analyst : I want to talk about some of the recent trends in your business because earnings growth has been really, really strong. Momentum and utilization has been very robust for a long period of time, and you've outperformed your guidance for a long period of time. As we think about some of the drivers of growth in 2025, strength in specialty less of a headwind from COVID than you expected in the initial guidance. Can you talk about anything that you're seeing in 2025 that is different than 2024? Are there any new areas of growth that you're seeing? I think one of the questions we get is around changes to benefit design? Is that driving less script abandonment. Just curious Bob or Jim, if there's anything that you're seeing that's new in 2025? Or is it just a continuation of the strength that you've seen from the business that you've been building for a period of many years? Is there anything new to fall in 2025?

Question: Allen Lutz - Bank of America - Analyst : And then that kind of brings me to my next question, Jim, around what you're seeing so far in April. Now we're through mid-May. As we think about this quarter, we think about the trends in April, is there anything you can speak to about how growth looks like relative to the first calendar quarter of the year? Just any insights you can share there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2025 / 6:20PM, COR.N - Cencora Inc at Bank of America Global Healthcare Conference

Question: Allen Lutz - Bank of America - Analyst : And then on the call last week, you also brought up hospitals and health systems as a customer where we're seeing really robust growth. One trend that we've observed looking at other companies in our coverage is that health systems are more likely to be setting up pharmacies. That's been a big trend for a long period of time, seems to be continuing. Does Cencora play a role in that space? And then more broadly, are hospitals gaining share in specialty? Is there any way to talk about the relative growth rates you're seeing in hospital drug distribution? I called out specialty, but really all types of drugs. Can you talk about the relative growth in that specific part of your business?

Question: Allen Lutz - Bank of America - Analyst : I want to switch gears a little bit to generics. There's been -- there was a really interesting Financial Times article this morning that talked about stakeholders looking to buy inventory of drugs ahead of what could be tariffs on pharmaceuticals. Obviously, no one knows, but your quarter ended 3/31, Liberation day was, I believe, 42. As you think about inventory buying, specifically around generics. Is there a way that we should think about how Cencora is thinking about buying generics today? Curious if there's any change to thinking about maybe buying a little bit more than you need given potential risk around pricing? Is there -- as we look back a quarter from now, should we expect the inventory levels within your generic book to be higher than where they were at the end of 3/31. Curious if that's any part of the conversation that you're having internally.

Question: Allen Lutz - Bank of America - Analyst : Got it. That's great. And then, Jim, I'll stick with you here. the operating leverage in the Cencora business has been incredibly strong for the past few quarters. You kind of back out RCA and OpEx growth was pretty modest year-over-year on really strong gross profit dollar growth. As we think about Cencora's ability to grow gross profit dollars on an organic basis, and we think about the operating expenses, whether it's in technology or labor, how should we think about the growth algorithm there or the incremental OpEx expenditures that you expect to spend --Not necessarily just from this year, but how much incremental OpEx is required to fund this type of business? And because the growth that we've seen over the past couple of years has been really, really strong. Trying to get a sense of whether or not that type of OpEx management is sustainable moving forward. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2025 / 6:20PM, COR.N - Cencora Inc at Bank of America Global Healthcare Conference

Question: Allen Lutz - Bank of America - Analyst : And then changing gears a little bit, talking about the provider landscape, the opportunity and really the competitive landscape around more MSO deals. You've talked in the past about focusing on oncology and retina because they're the most, I think, drug-centric allergies. As we think about -- because a lot of your competitors are doing similar things, I guess a couple of questions here. How many good assets are still out there? And do you think that oncology and retina, how big is the road map from here to continue to build out your provider exposure within those specific classes?

Question: Allen Lutz - Bank of America - Analyst : And around that, I want to ask about biosimilar adoption in the provider channel. Clearly, you're gaining more scale in the provider channel. But I'm curious, are there any ways for you to incentivize these affiliated providers to switch to biosimilars? And I guess, can you talk about the adoption of biosimilars within this channel maybe versus in the pharmacy channel? Is it different? Obviously, the way that the drugs reach the patient is different. Curious if you could talk about some of the differences there and whether or not there's any opportunity for Cencora to drive biosimilar adoption?

Question: Allen Lutz - Bank of America - Analyst : Really helpful. And then, Jim, one for you. So you mentioned the one oncology put earlier. As we think about Cencora's capital deployment here, with the potential to put out capital to exercise that, does that have any impact on your capital deployment strategy today? I would think that maybe it would be -- I guess, I don't want to lead the witness. How does that, if at all, impact your capital deployment strategy today?

Question: Allen Lutz - Bank of America - Analyst : That's great. And then we have 2 minutes left here. I guess I'll just ask a question to each of you. What do you think is the most exciting thing about Cencora over the next year that maybe you think is not fully understood? Or maybe you don't talk about it relative to other things? What are you most excited about over the next calendar year?

Question: Allen Lutz - Bank of America - Analyst : That's great. It looks like we just ran out of time. I appreciate all three of you for joining us. Thank you again for joining us.