Forecasts are now popping up regularly in the media predicting that the H1N1 virus (also known as “swine flu”) will flare up in North America when the flu season begins in just a few weeks.

There is still a wide difference of opinion on the subject, and it’s far from certain that H1N1 will pose a significant threat. Nonetheless, health authorities around the world are mostly erring on the side of caution. In the United States, the Centers for Disease Control and Prevention (CDC) is working with federal and state agencies on an H1N1 vaccine-distribution effort that will include as many as 90,000 sites across the country.

This massive H1N1 vaccination effort is benefitting McKesson Corp. (New York symbol MCK), one of the drug stocks we zero in on in the most recent issue of our Wall Street Stock Forecaster newsletter.

McKesson’s drug distribution network sets it apart from other drug stocks

McKesson is the largest wholesale distributor of pharmaceutical drugs in the U.S. and Canada. It also owns 49% of Mexico’s largest drug distributor. This drug stock’s customers include over 40,000 pharmacies, as well as doctor’s offices, hospitals and clinics.

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McKesson’s major asset is its vast distribution network. That’s why the CDC expanded an existing deal with McKesson to include the H1N1 vaccine earlier this month.

McKesson already distributes a large number of vaccines for the CDC. Under this expanded agreement, state health departments will identify where the H1N1 vaccine is most needed, and McKesson will deliver it to those areas.

One of the drug stocks that stands to profit whatever the outcome of ObamaCare and H1N1

H1N1 is not the only current event that could impact McKesson. It also distributes a number of generic drugs, and the Obama administration’s health-care proposals call for greater use of generics to control costs.

McKesson is also developing a second business that helps pharmacies and clinics better manage their drug inventories, patient records and other data. This is a small part of the drug stock’s business at the moment, but all current health-care proposals involve computerizing patient records, so McKesson stands to gain from this long-term trend regardless of the outcome of the health-care debate.

Growth by acquisition adds to this drug stock’s risks

McKesson likes to use acquisitions to expand. If not handled properly, acquisitions can significantly add to the buyer’s risk. We take a closer look at how McKesson is handling its acquisitions, and whether they pose a risk to its ongoing profit growth in the latest Wall Street Stock Forecaster.

You can get our updated buy/sell/hold advice on McKesson and other U.S. stocks in the most recent Wall Street Stock Forecaster newsletter. Click here to learn more about how you can subscribe for one full year with no risk and no commitment.