Repackaging of drugs is the practice of receiving containers of pills or tablets from drug makers and repackaging them in smaller-count packages. McKessonHBOCs Greg Yonko senior vice president investment purchasing explains how it works. The drugs we repackage are typically those a drug company would much rather sell in large quantities say 5 per container. So that drug company offers an incentive in the form of a price break to buy in large quantities. What that means to a pharmacy that wants say 100 pills in a bottle is one of two things. Either those pills arent available because the drug company simply wont provide a package with so few pills or buying the small package is terribly costly because the incentive that comes with a 5-count bottle is lost. Thats where repackaging comes in. If we can sell pharmacies the product they need in repackaged 100-count bottles for less than what theyd pay the drug manufacturer and if theres still room in the transaction for a profit for us and the drug maker we become a good source of supply. As long as we can repackage it make a profit and pass on a savings to our customers it works. As for liability if it revolves around drug efficacy the drug maker remains liable. If a problem arises thats packaging related RxPak assumes responsibility. Labels applied by RxPak carry the drug makers name and location as well as RxPaks. According to Yonko RxPak does nearly $1 billion annually in repackaged drugs. It distributes them through its parent company McKessonHBOC which distributes $28 billion worth of drugs annually including product repackaged by RxPak.