SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549 
  
                           ______________________ 
  
                                   FORM 8-K 
                                 CURRENT REPORT
  
                     Pursuant to Section 13 or 15(d) of  
                    the Securities Exchange Act of 1934 
  
                               December 4, 1998 
                               (Date of Report) 
  
                               October 17, 1998 
                      (Date of earliest event reported) 
  
  
                              McKESSON CORPORATION
              (Exact name of registrant as specified in charter) 
  
  
      Delaware                        1-13252                94-3207296 
 (State or other jurisdiction   (Commission File Number)    (IRS Employer 
 of incorporation)                                        Identification  No.)
  
  
 McKesson Plaza 
 One Post Street 
 San Francisco, CA                                       94104 
 (Address of principal executive offices)              (Zip Code) 
  
  
     Registrant's telephone number, including area code (415) 983-8300 



 Item 5 - Other Events. 
  
      We are filing this Current Report on Form 8-K to make generally
 available certain information regarding the Company. 
  
      Some of the information contained herein may include forward-looking
 statements within the meaning of Section 27A of the Securities Act of 1933,
 as amended, and Section 21E of the Securities Exchange Act of 1934, as
 amended (the "Exchange Act").  Some of the forward-looking statements can
 be identified by the use of forward-looking words such as "believes,"
 "expects," "may," "will," "should," "seeks," "approximately," "intends,"
 "plans," "estimates," or "anticipates" or the negative of those words or
 other comparable terminology.  The discussion of financial trends,
 strategy, plans or intentions may also include forward-looking statements. 
 Forward-looking statements involve risks and uncertainties that could cause
 actual results to differ materially from those projected.  These include
 the speed of the integration of businesses we acquire, the impact of
 continued competition in our industry, the success of strategic
 initiatives, the implementation of new technologies, continued industry
 consolidation, changes in customer mix, changes in pharmaceutical
 manufacturers' pricing and distribution policies, the changing United
 States health care environment and other factors discussed in this Current
 Report. 
  
      On October 17, 1998, McKesson Corporation ("McKesson") and HBO &
 Company ("HBOC"), a leading healthcare information company, signed a
 definitive merger agreement for McKesson to acquire HBOC. Under the terms
 of the merger agreement, as amended, stockholders of HBOC would receive
 0.37 shares of McKesson common stock for each share of HBOC common stock
 in a tax-free exchange. The merger of the two companies, which is subject
 to the approval of the stockholders of McKesson and HBOC at meetings
 scheduled to occur on January 12, 1999, and other customary conditions,
 would be accounted for as a pooling of interests and is anticipated to
 close in the first quarter of 1999. The new company would be named
 McKesson HBOC, and the corporate headquarters of McKesson HBOC would be
 located in San Francisco, California.
  
      Upon completion of the merger, Charles W. McCall, currently president
 and chief executive officer of HBOC, would become chairman of McKesson
 HBOC's board of directors, and Mark A. Pulido, currently president and
 chief executive officer of McKesson, would become president and chief
 executive officer of McKesson HBOC.  Also upon completion of the merger,
 McKesson HBOC's board of directors would consist of ten members, which
 would include five members from the current McKesson board and five members
 from the current HBOC board.  
  
      HBOC provides integrated patient care, clinical, financial, managed
 care and strategic management software solutions for the healthcare
 industry.  These open systems applications facilitate the integration of
 clinical, financial and administrative data from a wide range of customer
 systems and software.  HBOC's broad product portfolio can be implemented in
 a variety of combinations from stand-alone to enterprise wide, enabling
 healthcare organizations to add incremental capabilities to their existing
 information systems without making prior capital investments obsolete. 
 HBOC also provides a full complement of network communications
 technologies, including wireless capabilities, as well as outsourcing
 services that are offered under contract management agreements whereby its
 staff manages and operates data centers, information systems, medical call
 centers, organizations and business offices of healthcare institutions of
 various sizes and structures.  In addition, HBOC offers a wide range of
 electronic commerce services, including electronic medical claims and
 remittance advice services as well as statement processing. 
  
      HBOC markets its products and services to integrated health delivery
 networks, hospitals, physicians' offices, home health providers,
 pharmacies, reference laboratories, managed care providers and payors. 
 HBOC also sells its products and services internationally through
 subsidiaries and/or distribution agreements in the United Kingdom, Canada,
 Ireland, Saudi Arabia, Kuwait, Australia, Puerto Rico and New Zealand. 
  
      HBOC experiences substantial competition from many firms, including
 other computer services firms, consulting firms, shared service vendors,
 certain hospitals and hospital groups, and hardware vendors.  Competition
 varies in size from small to large companies, in geographical coverage, and
 in scope and breadth of products and services offered. 
  
      Although some of HBOC's competitors are comparable in size to HBOC,
 HBOC believes that few, if any, competitors offer a comparable range of
 healthcare information systems and services that compare favorably with
 respect to all of the competitive criteria, mainly price and service. 
  
      HBOC recently completed its acquisition of IMNET Systems, Inc., a
 company which provides electronic information and document management
 solutions for the healthcare industry.  In addition, HBOC, HBO & Company of
 Georgia and Access Health, Inc. ("Access") entered into an Agreement of
 Merger dated as of September 28, 1998, as amended.  Access provides care
 management products and services to the healthcare industry.  The merger is
 subject to certain conditions, including the approval by Access
 stockholders at a meeting schedule to occur on December 10, 1998.  If the
 merger is completed, HBOC will issue up to approximately 38,932,001 shares
 of HBOC common stock to Access stockholders and optionholders.   
  
      For further information about HBOC, see its reports filed with the
 Securities and Exchange Commission under the Exchange Act. 
  


                                  RISK FACTORS
  
 RISKS GENERALLY ASSOCIATED WITH ACQUISITIONS 
  
      An element of McKesson's growth strategy is to pursue strategic
 acquisitions that either expand or complement its business.  McKesson
 routinely reviews such potential acquisition opportunities.  Acquisitions
 involve a number of special risks.  Such risks include: 
  
      *    the diversion of management's attention to the assimilation of
           the operations of businesses McKesson has acquired and away from
           other business concerns; 
  
      *    difficulties in the integration of operations and systems and the
           realization of potential operating synergies;  
  
      *    difficulties in the integration of any acquired companies
           operating in a different sector of the healthcare industry; 
  
      *    delays or difficulties in opening and operating larger
           distribution centers in a larger and more complex distribution
           network; 
  
      *    the assimilation and retention of the personnel of the acquired
           companies; 
  
      *    challenges in retaining the customers of the combined businesses;
           and 
  
      *    potential adverse short-term effects on operating results and the
           ratings assigned to McKesson's debt. 
  
      McKesson and HBOC have historically engaged in numerous acquisitions. 
 Integration of acquisitions involve a number of special risks, as discussed
 above.  In addition, McKesson may incur debt to finance future
 acquisitions.  Alternatively, McKesson may issue securities in connection
 with future acquisitions which would dilute the ownership of then current
 stockholders.  To the extent McKesson and HBOC are unable to successfully
 complete and integrate strategic acquisitions in a timely manner, their
 growth strategies and rates of growth could be adversely affected. 
  
      McKesson has agreed to acquire HBOC subject to the approval of
 McKesson's stockholders and the stockholders of HBOC at meetings scheduled
 to occur on January 12, 1999, and other customary conditions. It is
 anticipated that the merger will close in the first quarter of 1999.
 However, there can be no assurance that the merger will be completed or
 that it will be completed as contemplated or what the results of the
 merger will be. Also, HBOC has agreed to acquire Access subject to
 approval by Access stockholders at a meeting scheduled to occur on
 December 10, 1998, and other conditions. There can be no assurance that
 this transaction will be completed, or, if completed, that the operations
 of Access will be successfully integrated.
  
 CHANGING UNITED STATES HEALTHCARE ENVIRONMENT 
  
      In recent years, the healthcare industry has changed significantly in
 an effort to reduce costs.  These changes include increased use of managed
 care, cuts in Medicare, consolidation of pharmaceutical and
 medical/surgical supply distributors and the development of large,
 sophisticated purchasing groups.  McKesson expects the healthcare industry
 to continue to change significantly in the future.  Some of these changes
 may have a material adverse effect on McKesson's and HBOC's results of
 operations, such as a reduction in governmental support of healthcare
 services or adverse changes in legislation or regulations governing the
 delivery or pricing of healthcare services or mandated benefits.  Changes
 in pharmaceutical manufacturers' pricing or distribution policies may also
 have a material adverse effect on McKesson's results of operations. 
  
 FIXED EXCHANGE RATIO DESPITE CHANGE IN RELATIVE STOCK PRICES IN THE HBOC
 MERGER 
  
      In connection with McKesson's merger with HBOC, stockholders of HBOC
 will receive 0.37 shares of McKesson common stock for each share of HBOC
 common stock regardless of any increase or decease in the price of the
 common stock of either McKesson or HBOC.  The price of McKesson common
 stock at the time of the merger may be higher or lower than its price as of
 today's date or at the date of the special meetings of stockholders of
 McKesson and HBOC.  The price of McKesson common stock could change due to
 changes in the business, operations or prospects of McKesson or HBOC,
 market assessments of the merger, regulatory considerations, general market
 and economic conditions or other factors.  As a result, there can be no
 assurance that such fractional share of McKesson common stock will equal or
 be less than the market value of a share of HBOC common stock. 
  
 COMPUTER TECHNOLOGIES 
  
      Software applications that use only two digits to identify a year in
 the date field may fail or create errors in the year 2000.  This potential
 problem is known as the "Year 2000 Issue."  McKesson relies heavily on
 computer technologies to operate its business and, accordingly, in response
 to the Year 2000 Issue,  McKesson has undertaken an enterprise wide Year
 2000 project which is expected to complete most of its mission critical
 projects by December 31, 1998 and all phases of its identified Year 2000
 projects by June 30, 1999.  As McKesson's business relies in part on the
 computer-based systems of its customers, suppliers and other third parties
 and on technology or data purchased from third parties, McKesson is
 reviewing the Year 2000 readiness of all of these third parties and is
 developing contingency plans for Year 2000 problems.  McKesson also plans
 to conduct systems testing with third parties during calendar year 1999. 
 McKesson believes that the most reasonably likely worse case Year 2000
 scenario would be a business disruption resulting from an extended and/or
 extensive communications failure.  McKesson believes that such a disruption
 is likely to be localized and of short duration and would therefore not be
 likely to have a material adverse effect on McKesson.  However, given the
 range of possible issues and large number of variables involved in Year
 2000 preparations (including any acquisitions which McKesson may make),
 McKesson cannot quantify the potential cost of problems should its
 remediation efforts or the efforts of those which whom McKesson does
 business not be successful.  Such costs and any failure of such remediation
 efforts could result in a loss of business, damage to McKesson's reputation
 and legal liability.  Consequently, such costs or failures could have a
 material adverse effect on McKesson. 
  
      Similarly, HBOC has established an internal task force to address the
 Year 2000 Issue. HBOC's internal assessment indicates that its products
 are, as of September 30, 1998, without material deviation, Year 2000
 compliant.  However, since there is no uniform definition of "Year 2000
 compliant," HBOC may experience an increase in warranty claims.  Although
 such claims are not expected to create a material impact on HBOC, there can
 be no assurances in that regard. HBOC expects that its internal systems
 will be substantially Year 2000 compliant on or before February 28, 1999
 and continues to make inquiries regarding the Year 2000 readiness of its
 third party vendors.  However, due to uncertainties associated with the
 Year 2000 preparation efforts of third parties, HBOC is unable to predict
 whether a material adverse effect on its business, results of operations or
 financial condition may occur as a result of disruptions associated with
 the Year 2000 Issue. 
  


                                 SIGNATURE 
  
           Pursuant to the requirements of the Securities Exchange Act of
 1934, the registrant has duly caused this report to be signed on its behalf
 by the undersigned hereunto duly authorized. 
  
  
                                    McKESSON  CORPORATION 
                                    (Registrant) 
  
  
  
 Date: December 3, 1998             By: /s/ Nancy A. Miller 
                                       --------------------------  
                                    Name:   Nancy A. Miller 
                                    Title:  Vice President and  
                                            Corporate Secretary