Steven H. Collis
Chairman, President and Chief Executive Officer at Cencora
Thank you, Bennett. Good morning and good afternoon to everyone on the call. Before we discuss our results for the quarter, I want to provide a brief update on opioid-related litigation. As previously disclosed, we have reached an agreement for a settlement with the state of Oklahoma that is consistent with the state's allocations under the comprehensive settlement agreement. That brings the total number of states settling opioid-related claims to 48 of 49 eligible states.
In July, we were pleased to receive a ruling from a federal judge that held that our distribution of FDA-approved medications to licensed and registered healthcare providers in Cabell County and the City of Huntington was not a public nuisance, and we are optimistic the ruling will hold up upon appeal. Additionally, we reached an agreement with the remaining counties and municipalities of the state of West Virginia to resolve opioid-related claims. We are encouraged by this continued progress, and we will not comment deeply at this time.
AmerisourceBergen continues to work diligently with our partners to combat drug diversion while supporting real solutions that help address the crisis in the communities where we live, work and serve. Turning now to our third quarter of fiscal '22. AmerisourceBergen delivered another quarter of strong results, driven by continued high levels of execution across our company and the strength and resilience of our businesses. During the quarter, revenue was up 12.5% over the prior-year period to $60 billion. Adjusted operating income increased by 20% and adjusted EPS grew by 21%.
These strong results and the increase in our full-year outlook, which Jim will discuss in greater detail, are driven by our team members' continued strong execution, the resilience of our businesses and our differentiated solutions. Our business is further enhanced by the strength of our foundational Pharmaceutical Distribution business, our position in the market and our strategic focus on the four areas of specialty medicine and services, community providers, long-term customer partnerships and providing global access and opportunity.
In our first focus area of specialty medicine and services, we continue to benefit from our market leadership and ability to capture growth opportunities as pharmaceutical innovation continues to advance. In the U.S., we are benefiting from demographic trends, increasing biosimilar utilization and the downstream services we are able to provide to support specialty physician practices as they continue to grow along with the market. We continue to support the growth of biosimilars with services both upstream from helping biopharma manufacturers with clinical development, commercialization and launch to downstream, supporting provider education and patient access.
We also continue to see good growth across specialties from oncology to ophthalmology and rheumatology, driven by our GPO data and analytics and additional value-added capabilities. Looking to the future, the specialty market is driven by exciting scientific developments that enable increasingly precise and personalized treatments for diseases that were once thought of as untreatable. And we are positioning ourselves to support this innovation and capture these global growth opportunities.
In our specialty physician services business, we are well positioned to continue to support successful product access and utilization. In the quarter, we continue to benefit from our scale, creating value for our downstream physician customers, both around the innovative products in the market and also on the biosimilar front in oncology, and see early-stage positive signs in the ophthalmology side. On the logistics side, World Courier remains the market-leading solution for its expertise in specialty logistics and have stepped up to help our customers navigate global complexities.
World Courier's capabilities, including expert execution, next-generation thermal packaging and advanced tracking technology enable safe and secure deliveries to their most remote communities and extreme climates. We continue to enhance our global logistics capabilities through World Courier, Alloga, Innomar and our other specialty-focused businesses to offer robust clinical and commercial support, such as direct-to-patient logistics and temperature-controlled transport and storage solutions.
Recent investments include opening or expanding our facilities in strategic markets worldwide to add more cold chain capabilities and especially cryogenic storage to meet increasing demand. With enhanced capabilities and expertise, we strive to further strengthen our market leadership to capture the opportunities ahead and facilitate pharmaceutical innovation. Our second focus area is community providers. Globally, community providers are integral to supporting the health of their local communities with key healthcare services and our critical providers in underserved areas.
Community pharmacies, for example, play a key role in helping healthcare systems, both in the U.S. and abroad, to reach communities of all types, reinforcing the value of independent pharmacies. two weeks ago, we hosted our annual Thoughtspot Conference for our Good Neighbor Pharmacy network, which coincided with the network's 40th anniversary. After hosting ThoughtSpot remotely during recent years, it was energizing to once again spend time with local community pharmacists in person to collaborate and to celebrate their impact in their communities.
This conference was even more special as we were joined by Alliance Healthcare team members that serve its Alphega independent pharmacy network in Europe as part of the best practice sharing we are conducting across our business. Coming out of ThoughtSpot, I remain amazed and inspired by the resilience, passion, connection and ability of independent pharmacies to tailor their services to match patient needs, and patients are responding with high praise.
Our own Good Neighbor Pharmacy network was ranked highest in customer satisfaction with chain drugstore pharmacies in J.D. Power's 2022 U.S. Pharmacy Study. Incredibly, this is the 11th time that GNP has earned this recognition in the last 13 years and the network's sixth consecutive win. AmerisourceBergen is focused on assisting the professional pharmacy to increase its role in patient care in ways where the pharmacists have proved they can assist in providing expert patient care in an accessible setting. We are pleased to see that the pharmacist role continues to be more elevated.
And importantly, we were pleased to see the U.S. FDA's revision to the Paxlovid-EUA, authorizing state-licensed pharmacists to prescribe the COVID-19 antiviral to eligible patients. This action by the FDA reflects the value that can be gained by the U.S. healthcare system if the role of pharmacists can be expanded. Americans rate pharmacies as the most accessible amongst healthcare destinations, including emergency departments and primary care physicians' offices.
And many now have a pharmacy-first mentality when looking to improve their well-being. Pharmacies are providing two out of every three COVID-19 vaccine doses administered in America and 45% of pharmacy COVID-19 vaccination sites are reported to be in areas with moderate to severe social vulnerability. Clearly, community pharmacies are a critical extension of our public healthcare system and an essential access point for those who need care the most. AmerisourceBergen is proud of our work to support independent pharmacies, including by advocating on their behalf for health equity policies that ensure access to their critical services.
The third focus area for AmerisourceBergen is our long-term customer relationships. From upstream biopharma manufacturers to downstream pharmacies, veterinarians, physicians, health systems and government agencies, we leverage our strong core pharmaceutical distribution capabilities to support patient access wherever a prescription is needed. The strength and reach of our distribution capabilities have helped us continue to enhance our relationship with healthcare providers, big and small.
And our relationship with stakeholders worldwide have been further reinforced throughout the pandemic. We continue to see strong prescription utilization trends across our core distribution business and benefit from our broad portfolio of anchor customers. These long-term partnerships position us well to continue to benefit from the well-documented resiliency of the pharmaceutical supply chain. As partners, we also support our customers by making next moderate investments to help them stay ahead of an ever-evolving healthcare landscape.
Digital therapeutics, for example, is an area of opportunity for future growth. And to help innovators commercialize treatments and reach patients, we are preparing to launch DTx Connect, a platform that will integrate with EMR and simplify the prescription and nonprescription digital therapeutics process. Similarly, we are partnering to provide digital and e-commerce solutions so that veterinary practices can communicate more effectively with the increasingly digital-savvy clients and operate more efficiently.
With our knowledge base across all sites of care geographies, AmerisourceBergen is creating increasingly more opportunities with our customers by problem solving and focusing on building enduring long-term relationships. Our fourth focus area is providing global access and opportunity. Earlier, I mentioned the key role that World Courier plays in the global pharmaceutical supply chain with its expertise in specialty logistics. This quarter, we also celebrated the one year anniversary of our Alliance Healthcare acquisition.
And as I reflect on the past year, the word that comes to mind is unity. Our teams have made great progress on integration, and we are more aligned than ever to our shared purpose of being united in our responsibility to create healthier futures. We are already beginning to realize the benefits of operating in a shared environment that allow teams to glean knowledge and best practices from colleagues in other areas of the business and in other markets.
One example is a recent exchange of visits between our distribution center leaders, in which our European team members visited our U.S. human and animal health distribution centers and our U.S. team members subsequently visited distribution centers in the U.K. Through these visits, the team has been able to share best practices around supply management, automation, performance tracking and productivity management and operational planning and design.
While we recognize the differences that exist between international markets, we are ready to identify, adapt and invest in proven best-in-class technology, supply chain, commercialization and services solutions. We've also had the chance to unite around our manufacture partners. Recently, teams from both the U.S. and Europe met with one of our global partners to hold joint workshops, looking at how we can work together to achieve shared successes.
That manufacturer shared with me at our Thoughtspot Conference their desire to be our first truly global partner. There's no doubt in my mind that we are establishing the right culture and methodologies to capitalize on AmerisourceBergen's assets in ways that will differentiate us by taking advantage of our global reach and unique knowledge, scale and expertise in all the markets where we operate. The progress we've made so far to integrate our business and teams is as a result of the tireless effort of all of our global team members.
I've mentioned in the past the strength of the Alliance Healthcare team, and they continue to impress with their resilience and their ability to execute and deliver strong operational performance. We look forward to finding more opportunities to further strengthen our operations and to partner with our customers to offer truly global solutions that help them stay ahead of a continuously evolving environment. Our team members are a fundamental driver of our long-term sustainable growth.
At AmerisourceBergen, we firmly believe that our people are our most important asset, and our benefits and talent development programs are data-driven and based on employee input. During the quarter, we conducted our 2022 employee experience survey, which showed that our team members feel connected to our purpose, their managers and each other in making a positive impact on our customers and the healthcare supply chain. The valuable insights we have gained through the survey around cultural inclusion, team member satisfaction and engagement will help guide us as we build the united culture.
Our Board and executive management team are committed to being a company that is transparent, ethical and a fair employer. We take our responsibilities to our 42,000 team members very seriously, and our goal is for them to always not only respect the company but also to be inspired by the work we do in fulfilling our purpose. In addition to unity, we value a diverse, equal and inclusive culture. Our goal is to foster a global workplace that values all cultural, experiential and philosophical perspectives, creates pathways for every team member to thrive, make a positive impact on our communities through equitable access to healthcare and is transparent and accountable for progress.
To further our goals, we published our first DEI summary report, which shows where we stand today and how we're going to hold ourselves accountable for making progress as we move forward. An important part of AmerisourceBergen's DE&I strategy as well as our broader ESG strategy is having a positive impact on our communities through equitable access to healthcare. One of the key channels through which we support healthy communities worldwide is our AmerisourceBergen Foundation, which recently committed funds to the United Nations Foundation's Shot@Life campaign.
The campaign is instrumental in supporting global vaccine equity and protecting the world's most vulnerable children from devastating diseases. The funding will be used towards vaccine interventions in marginalized populations, such as refugee communities, and will specifically support vaccine delivery, transportation, logistics and community engagement. We are proud to support such important work that truly reflects the global impact we have when we live our purpose of being united in our responsibility to create healthier futures.
Today's strong results reflect the value of our core global pharmaceutical-centric businesses and the value created by the execution and intellectual confidence of our team members. Driven by our purpose and supported by our proven resilience, we remain confident in AmerisourceBergen's ability to deliver long-term sustainable growth by maintaining a leading share of pharmaceutical distribution and best-in-class efficiency while growing our higher-margin, higher-growth businesses. Our strong position enables us to achieve this vision as we deliver on our strategic imperatives and focus on specialty medications and services, community providers, customer partnerships and ensuring access and opportunity for patients around the world.
Now, I will turn the call over to Jim for a more in-depth review of our third quarter 2022 results and to discuss our updated financial guidance. Jim?