In preparation for the newly combined company, or NewCo reporting, we have also provided slides in the appendix of the earnings presentation, which illustrate our new reportable segments and the way we will report our geographies going forward. To align the new segment structure to our go-to-market strategy, approximately $700 million in annual revenues related to several products, such as ChloraPrep and V. Mueller, have moved from the legacy BD medical segment to the new interventional segment. Also approximately $800 million in annual revenues related to several products, such as Pyxis and Medline, have moved from Bard into the BD medical segment.

Details of the key product families and brands and our new segment structure can be found in the appendix of today's slide presentation. We would also like to note that as the Gore royalty income stream is set to end in August of 2019, BD has concluded the income stream as nonrecurring in nature and not central to the ongoing operations of the company. Therefore, the historical amounts recorded by Bard as revenue have been reclassified to other income to reflect BD's future recording classification. We have provided pro forma historical revenue information consistent with our new reporting structure, which can be found in the schedules posted on the Investor Relations page of our website at bd.com, which has been updated to include the first quarter of fiscal 2018.

Furthermore, I would also point out that while BD and Bard operated on different fiscal years, the information you will see in our guidance slide is presented on the basis of BD's fiscal year, which ends on September 30. Our comparable-basis revenue guidance includes Bard's results for the full fiscal 2018 and fiscal 2017 period. For the purposes of today's call, we will provide revenue guidance for BD and Bard as stand-alone companies in addition to the combined BD plus Bard outlook. Going forward, all guidance will be on a combined BD and Bard basis.

Lastly, our combined company P&L guidance includes the reclassification of certain Bard items to be consistent with BD's legacy reporting structure. Bard's shipping costs have been reclassified from cost of goods sold to SSG&A, and quality and regulatory costs have been reclassified from R&D to cost of goods sold. In addition, our P&L guidance also reflects the reporting of four, of the Gore royalty as other income. Leading the call this morning is Vince Forlenza, the chairman and chief executive officer.

Also joining us are Chris Reidy, executive vice president, chief financial officer, and chief administration officer; Tom Polen, president; and Alberto Mas, executive vice president and president of the life sciences segment. It is now my pleasure to turn the call over to Vince.

Vince Forlenza -- Chairman and Chief Executive Officer

Thank you, Monique, and good morning to everyone. As most of you are already aware, we are delighted to have closed the acquisition of C.R. Bard on December 29, 2017. The combination of BD and Bard further accelerates our strategy of providing solutions for our customers.

We are committed to providing our customers with products and value-added services all the way through full solutions to enable better, safer care at a lower cost. Together with Bard, the new BD is uniquely positioned to improve both the treatment of disease for patients and the process of care for healthcare providers. Turning to Slide 5 and our first-quarter highlights. As we stated in our press release, we are proud of our final quarter as the legacy BD.

Our results this quarter highlight the continued strength in our core and our reliable, consistent results. We delivered strong underlying revenue growth in both the medical and life science segments, ahead of our initial expectations. And we continue to remain on track with our CareFusion costs and revenue-synergy commitments. We are also off to a terrific start with our Bard integration activities, which are progressing as planned.

In early January, we celebrated Day 1 activities around the globe to welcome Bard and their 1,600 associates. The energy of our associates globally around what we can do as a combined organization to advance the world of health is really incredible. As we come together as the new BD, we have strong momentum across both legacy companies. I'm pleased to report that the Bard's -- that Bard's performance in their final stand-alone quarter was in line with our expectations.

Chris will share some high-level details of Bard's results going his commentary this morning. Moving on to Slide 6, we are pleased to share our financial outlook today. On a combined basis we anticipate strong revenue and EPS growth consistent with the expectations we communicated upon announcement of the Bard transaction. On a comparable basis, we expect underlying currency-neutral revenue growth of 5% to 6% and mid-teens growth in adjusted earnings per share.

I will now turn things over to Chris for more detailed discussion of our fiscal quarter financial performance and our fiscal year 2018 guidance.

Chris Reidy -- Executive Vice President and Chief Financial Officer

Thanks, Vince, and good morning, everyone. Moving on to Slide 8. I'll review our first-quarter revenue and EPS results as well as the key financial highlights. Total first-quarter revenues of approximately $3.1 billion grew 3.7% on a currency-neutral basis.

As Vince mentioned, our underlying performance is strong. Our first-quarter results include the impact from the U.S. dispensing change, which lowered total company revenue growth by approximately 110 basis points. Excluding this impact, we drove revenue growth of approximately 4.8%.

Pricing declined about 20 basis points in the first quarter. In addition, as we communicated to you last quarter, we faced a tough comparison this quarter to strong 6.1% growth in the prior year. I'll provide more color on revenue growth in the quarter in a moment when I take you through the results by segment and geography. Adjusted EPS of $2.48 grew 6.4%, or 3.9% on a currency-neutral basis.

This reflects the tough comparison to the prior year and the U.S. dispensing change as expected. Adjusting for the U.S. dispensing change, EPS growth was in the high single digits.

At the end of December, upon closing of the Bard transaction, our gross debt leverage was 4.7 times. We expect to begin to delever in the latter half of fiscal 2018. This timing is in line with what we have previously communicated and our commitment to deleverage below 3 times leverage over three years. Moving on to Slide 9.

I'll review our revenue growth by segment on a currency-neutral basis. BD medical first-quarter revenues increased 1.9%, which includes a headwind of approximately 170 basis points from the U.S. dispensing change. In addition, the medical segment in particular faced a tough comparison to the strong revenue growth in the first quarter of the prior year.

Adjusting for the combined estimated impact of 340 basis points from the U.S. dispensing change and the tough comparison, the BD medical segment grew over 5% on an underlying basis. Medication and procedural solutions, or MPS, revenues grew 5% in the first quarter. Growth was driven by continued strength in our prefilled flush devices, infection prevention, and surgical products.

Revenues in medication management solutions, or MMS, declined 3.4%. Revenue growth was impacted by a headwind of approximately 540 basis points from the U.S. dispensing change. In addition, the timing of capital installations in both dispensing and infusion in the prior year resulted in tough comparison to the prior year, where MMS revenues grew 11%.

Adjusting for the combined estimated impact of 950 basis points from the U.S. dispensing change and the tough comparison, MMS grew approximately 6%. Diabetes care revenues grew 2.2%, driven by growth in pen needles. This reflects a tough comparison to the prior year, where growth in the U.S. of 7.2% was aided by the timing of customer orders. In pharmaceutical systems, revenues grew 3.7% in the first quarter despite a tough comparison to the prior year, where growth of 15.5% was aided by the timing of customer orders. Turning to Slide 10 and the BD life sciences segment. First-quarter revenues increased 7.3%.

Strength across the segment was aided by an early flu season in comparison to last year, which contributed an estimated 90 basis points to life sciences growth. As you're aware, the timing and severity of the flu season can impact our year-over-year comparisons. Revenues in diagnostic systems grew 12.5% in the quarter. Performance was driven by strength in core microbiology and continued strong growth in our BD MAX molecular platform as well as timing of Kiestra installations in the U.S., EMA, and Europe.

In addition, the earlier flu season contributed an estimated 260 basis points to diagnostic systems growth in the quarter. Preanalytical systems growth of 4% was driven by strength in core products. Biosciences revenues grew 5.3% in the quarter. The strong momentum from the second half of fiscal 2017 continued as expected.

This reflects growth in our newer research instruments such as the FACSMelody and FACSSymphony as well as continued strength in research reagents. Now moving to Slide 11. I'll walk you through our geographic revenues for the first quarter on a currency-neutral basis. U.S.

revenues grew 1.6% in the first quarter, which includes an estimated headwind of 200 basis points from the U.S. dispensing change. The previously mentioned tough comparisons to the prior year in MMS and diabetes care also impacted revenue growth in the U.S. Growth in the U.S.

was driven by strong performance in the MPS unit and the medical segment and the diagnostic systems and preanalytical systems units in the life sciences segment. Growth in MPS reflects strength in infusion-related disposables and infection prevention. Growth in diagnostic systems in the U.S. was driven by the earlier flu season in comparison to the prior year as well as continued growth in BD MAX driven by our newer women's health assays.

Preanalytical systems growth was driven by strength across core products. Now moving on to international. Revenues grew 6.3% in the first quarter. Growth was driven by Kiestra installations and strength in core microbiology within diagnostic systems and strong sales of our newer research and clinical instruments within our biosciences unit.

Strength in prefilled flush devices and MPS and strong growth in pharmaceutical systems, which was aided by geographic ordering patterns, also contributed to international growth. Developed markets revenues grew 2.5% in the first quarter, including an estimated headwind from the U.S. dispensing change of 130 basis points. Growth in developed markets was driven by strong performance in Europe and pharmaceutical systems and diagnostic systems.

First-quarter emerging markets revenues grew 10%, driven by growth of China of 9% and double-digit growth in EMA that was aided by the timing of tenders. Turning to Slide 12, which recaps the first-quarter income statement and highlights our currency-neutral results. As discussed, revenues grew 3.7% in the quarter, which includes approximately 110 basis points negative impact from the U.S. dispensing change.

Moving down the P&L, starting with gross profit. Despite the loss of gross profit related to the U.S. dispensing change, gross profit margin was a very strong 54.9%, which is an increase of 4.2% year over year. I'll provide additional details on gross profit in just a moment.

SSG&A as a percentage of revenues was 25.1%. As expected, in the first quarter, we incurred additional shipping costs related to our efforts to scale shipments in late September, as we discussed on our last earnings call. Our results also include the impact of the U.S. dispensing change as well as a tough comparison to the prior year.

On an underlying basis, we're very pleased with the leverage we're getting in SSG&A. R&D as a percentage of revenues was 6.2%, which reflects a 5% increase in R&D dollars year over year and our continued commitment to invest in innovation. Our tax rate declined to 16.4% in the quarter. Operating income grew 1.2% and adjusted earnings per share grew 3.9% compared to the prior year.

Both operating income and EPS include approximately 500 basis points of negative impact from the U.S. dispensing change. Now turning to Slide 13 and our gross profit and operating margins for the first quarter. As I mentioned, gross profit margin was a very strong 54.9% in the first quarter.

On a performance basis, gross profit margin improved by 30 basis points as continuous improvement initiatives, cost synergies, and favorable mix were partially offset by a headwind of 80 basis points from raw-materials pricing and the U.S. dispensing change. Currency had a positive impact of 30 basis points on gross profit margin. Operating margin declined 30 basis points in the quarter.

This was driven by the increase in SSG&A as previously discussed, partially offset by a positive impact of 30 basis points from currency. I'll take you through the combined company guidance inclusive of Bard over the next several slides, but while we're discussing margins, I'd like to point out that for the full year, we expect to deliver significant underlying margin expansion of 200 to 250 basis points. This reflects the inclusion of Bard beginning in the second quarter of fiscal 2018 and is an increase of approximately 100 basis points from our prior guidance of 100 to 150 basis points of margin expansion for legacy BD. Over the four-year period through fiscal year 2018, we expect to deliver approximately 700 basis points of margin expansion.

Moving on to Slide 15 and our full fiscal year 2018 revenue guidance. Prior to closing the Bard acquisition, on our November earnings call, we provided stand-alone revenue guidance for BD of 4% to 5% growth on a currency-neutral basis, which represented strong underlying growth of 4.5% to 5.5%, excluding an estimated 50-basis-point impact from the U.S. dispensing change. Now on a stand-alone basis, Bard's revenues are expected to grow 5% to 6%.

This represents strong growth of 6% to 7% on an underlying basis, which excludes an estimated 100-basis-point adverse impact from Hurricane Maria in Puerto Rico on Bard's results in the quarter that ended December 31 of 2017. Going forward, we do not expect an impact to Bard's revenues related to the hurricane. On the BD side, as you'll recall, the fiscal year 2018 revenue and EPS guidance we provided on our November earnings call did not reflect any potential adverse impact related to Hurricane Maria in Puerto Rico. However, at that time, we had estimated the impact could be up to $40 million in revenues, with a corresponding impact of up to 1% point of EPS growth.

Subsequent to our November call, thanks to the heroic efforts of many of our associates, we were able to get our plants back online quicker than previously anticipated. As a result, the impact to revenues and EPS has been minimized, and our current guidance for fiscal year 2018 now includes a nonmaterial impact related to the hurricane For the new BD plus Bard, we expect currency-neutral revenue growth of 4.5% to 5.5% on a comparable basis that includes BD and Bard in both the current and prior-year periods as if the acquisition had been completed at the beginning of our fiscal 2017 year. This represents strong underlying growth of 5% to 6% and is in line with the expectations we have been communicating since the deal announcement. Turning to Slide 16 and our segment revenue guidance.

You'll see guidance for our three segments. As a reminder, certain legacy BD medical and Bard products have been realigned with our go-to-market strategy. This has resulted in the movement of revenues between the BD medical and BD interventional segments. And as a result, the new BD interventional segment is not analogous with legacy Bard.

We expect BD medical to grow between 4% and 5%. We expect our life sciences segment to grow between 4.5% and 5.5%, which is an increase from our prior guidance, and we expect the new BD interventional segment to grow between 5.5% and 6.5%, excluding the impact from Hurricane Maria in Puerto Rico in the quarter that ended December 31, 2017. We expect revenue growth to be driven by recent product launches across all three segments and strength in both developed and emerging markets. The combination of BD and Bard accelerates our growth profile in both developed and emerging markets, and as a result, we now anticipate developed-market growth of around 4% in fiscal 2018 or around 4.5% excluding the estimated 50-basis-point impact from the U.S.

dispensing change and the hurricane in Puerto Rico. In emerging markets, we now expect low-double-digit growth, driven by a diversified base, with mid-teens growth in China and strength in EMA and Latin America. For transparency, we'd like to take a moment to provide some color on Bard's results for the quarter that ended December 31, which represented the fourth quarter of their fiscal 2017 year. While we do not plan to discuss the results at length, we wanted to share some of the key insights into the business performance in the quarter.

Bard's revenues and earnings performance in the December quarter were in line with our expectations and prior Bard guidance. Bard's revenue growth was 3.7% on a currency-neutral basis, which included an adverse impact of approximately 330 basis points from Hurricane Maria in Puerto Rico. Adjusting for the hurricane, Bard's fourth-quarter revenues grew 7%, in line with company's prior guidance. Revenue growth was driven by continued strength in China and Latin America and more broadly across emerging markets.

In addition, strong high-single-digit growth in peripheral vascular in the U.S. was aided by the launch of Lutonix AV. As a reminder, these businesses will be reported in BD's new reporting structure going forward. Now moving on to Slide 17 and our full fiscal year 2018 EPS guidance.

There are a number of moving parts that impact earnings per share in fiscal 2018. For modeling purposes and to ensure consistency, I'd like to provide more color on EPS guidance. Starting on the left side of the chart with the guidance we provided on our November earnings call for legacy BD. We expected adjusted EPS of $10.55 to $10.65.

This reflected currency-neutral growth of approximately 10%, driven by strong growth in operating income, partially offset by headwinds of 2% to 3% from the U.S. dispensing change and approximately 3% from an expected increase in our effective tax rate. Assuming foreign-currency rates in place at the time, we expect that currency would provide a 2% tailwind in fiscal 2018, resulting in expected EPS growth of approximately 12%. Now continuing to the right of the chart.

We expect underlying accretion from the Bard acquisition of 3% to 4%. This is expected to be offset by approximately 2% from a combination of the divestitures of our soft-tissue core needle biopsy product line and Bard's Aspira product line of tunneled home-drainage catheters and accessories as well as the timing of close of the Bard acquisition. The net result is low-single-digit accretion, which is in line with what we have been communicating. As you'll see when I take you through our detailed P&L guidance on the next slide, we expect an effective tax rate of 17% to 19% in fiscal 2018.

This is a decrease of approximately 1% from the combined effective tax rate of 18% to 20% that we had previously communicated and is driven primarily by U.S. tax reform and results in an increase of approximately 1% to our EPS guidance. From an investment standpoint, consistent with our initial thoughts, we plan to invest approximately $15 million toward Bard revenue synergies, and this is dilutive to earnings by approximately 50 basis points. In addition, while our guidance does anticipate an increase related to the flu, we're also seeing increased pressure related to resin pricing that is offsetting the expected flu benefit.

The net of these items results in approximately 12% currency-neutral adjusted EPS growth in fiscal 2018 or 14% to 15% on an underlying basis, adjusted for the impact from the U.S. dispensing change. This is in line with the mid-teens growth profile we have been communicating to you since the deal announcement. Lastly, we anticipate an incremental currency tailwind of about 150 basis points based on current rates.

This assumes a euro-to-dollar exchange rate of $1.22. All in, this results in strong NewCo earnings of $10.85 to $11, which represents 15% to 16% growth. Another important element to note that -- is while we expect to deliver low-single-digit accretion in fiscal year 2018, we are reaffirming our guidance of high-single-digit accretion in fiscal year 2019. From a phasing perspective, we expect to achieve $70 million to $80 million in cost synergies in fiscal year 2018, with the balance being fairly ratable over fiscal years 2019 and 2020.

We're committed to fully realizing $300 million in annualized cost synergies as we exit fiscal year 2020. Turning to Slide 18. I'd like to walk you through the balance of our guidance expectations for the full fiscal year 2018 for the new BD including Bard. This guidance includes the results of Bard as of January 1, 2018, which is the beginning of our second fiscal quarter.

We expect reported revenue growth for NewCo of 30% to 31%, which includes a currency tailwind of approximately 200 basis points. Adjusted gross profit as a percentage of revenue is expected to be approximately 56% to 57%. This is an increase of approximately 200 basis points from our prior stand-alone BD guidance and is due to the inclusion of Bard's robust gross margin profile. Adjusted SSG&A is expected to be 24.5% to 25.5% of sales.

This is an increase compared to our November guidance for stand-alone BD and is primarily due to Bard's higher SSG&A spend profile, which is driven by the direct-sales approach, partially offset by anticipated G&A-related cost synergies. We expect our R&D investments to be in line with fiscal year 2017 at 6% to 7% of revenues. As a new company, we will continue to invest in new products and platforms. As a result of the items I just detailed, operating margin is expected to be between 25% and 26% of revenues.

On a currency-neutral basis, we expect our underlying operating margin to improve by 200 to 250 basis points for the total fiscal year. As we discussed, we expect our tax rate to be between 17% and 19%. For fiscal year 2018, we anticipate our adjusted average fully diluted share count to be approximately 261 million shares. Cash flow is expected to be strong, with operating cash flow of about $3.5 billion in fiscal year 2018.

Capital expenditures are expected to be between $850 million and $900 million. So in summary, I'm excited about the strong momentum we have across the BD and Bard businesses, and I'm confident that we'll be able to deliver on our commitments in fiscal year 2018, which are consistent with what we've been communicating to you since the announcement of the transaction. Now I'd like to turn the call back over to Vince, who will provide you an update on our key initiatives and product portfolio.

Vince Forlenza -- Chairman and Chief Executive Officer

Thank you, Chris, and moving on to Slide 20. As we have been discussing with you, our integration of CareFusion is largely complete, and we are on track to achieve our cost- and revenue-synergy commitments. At the same time, we are making excellent progress with the integration of Bard. As I discussed in my opening remarks, we have hosted very successful Day 1 activities globally.

We are entering 2018 with great momentum across both companies. Our integration plans are well underway and, as Chris discussed earlier, we are committed to fully realizing $300 million in annualized cost synergies as we exit fiscal year 2020. In addition, as Chris mentioned, we have begun our initial investment in revenue synergies. We're continuing to build out our revenue-synergy plans at a very detailed level, and we look forward to sharing updates with you along the way.

Turning to Slide 21 and our planned product launches by segment. As we've been discussing with you, we have a very robust product pipeline across the company. I will not review all of the items on Slide 21 in detail, but we will share some comments on a few items. Within our medical segment, we have recently begun shipping IV solutions to our customers through our partnership with Fresenius.

As saline remains limited in supply, the addition of sodium chloride to our medication management portfolio will benefit our customers and their patients. Beyond sodium chloride and 5% dextrose, we expect to add additional compounds to our offering this fiscal year [Inaudible] on our partner's FDA approval. Before we move on to our life science segment, I would like to provide an update on a program we've been working on in our diabetes care business relating to enabling dose capture for insulin pens. We've made a decision to stop this program due to the reassessment of the near-term commercial opportunity.

We've redeployed these resources into our Smart Type 2 patch pump and are funding additional clinical trials in anticipation of launch, including our first in-human insulin-infusion trial running now. We're very excited about our progress on this transformative initiative, and we'll come back to the pen program later on. Moving on to our life science segment. We recently obtained the CE Mark for the BD MAX Check-Points CPO assay.

This next-generation molecular screening test for antibiotic-resistant CPOs provides detection of the five most common carbapenemase genes in less than 2 1/2 hours, as compared to traditional methods that can take up to 24 hours. Together with our plated media and the BD Phoenix CPO-detect panels, BD provides comprehensive solutions for screening and infection management to support clinical microbiology laboratories in their AMR programs. We also expect to continue targeted expansion of our BD MAX menu this fiscal year with the launch of our Enteric Viral Panel and our TB assay. In addition, we anticipate approval of our BD Onclarity HPV assay, which will further differentiate our women's health offering.

Moving on to the interventional segment. To help bridge the time from Bard's last public update in January 2017 to date, we have provided a list of Bard's product launches for fiscal 2017 in the appendix to today's slide presentation. Focusing now on the list on Slide 21, I will highlight a few of the fiscal 2018 items in the interventional segment. The AV access drug-coated balloon, which launched at the beginning of BD's first quarter, is changing the treatment pathway for the hemodialysis patients suffering from a stenotic fistula.

This launch makes a significant new treatment option for the highly vulnerable patient population and is the only DCB approved for this indication in the U.S. Also related to DCBs, as most of you are aware, in January, we announced the completed enrollment in our Lutonix below-the-knee trial, which is a significant milestone. This study has enrolled over 450 patients over 4 1/2 years -- four-plus years, I should say, and it is more important to note that there have been 14 safety monitoring reviews over this time with no safety issues. This speaks highly to the safety of the product.

The Lutonix BTK trial is the only ongoing DCB trial for BTK arteries in the U.S., and we anticipate completing six-month follow-up and submission of the PMA to the FDA by the end of calendar year 2018. We look forward to being the first company to have the below-the-knee indication in the U.S. Moving on to some fiscal 2018 anticipated launches with the interventional segment. Our new low-profile 5 French ProSeries LifeStent platform launched in the EU midyear 2017 and just received PMA approval.

We are building inventory and anticipate launching the product in the U.S. over the next few months. This new stent family built on the LifeStent platform will provide the lowest profile, longest lengths, and broadest indications of any peripheral arterial stent. This new launch also expands our 5 French ProSeries of chronic total occlusion for percutaneous transluminal angioplasty and drug-coated balloon products to a full suite of peripheral arterial-disease tools that are 5 French-compatible.

We're also anticipating PMA approval and preparing for the launch of our Covera family of next-generation AV access circuit stent grafts. We completed enrollment in IDE studies for both the treatment of AV fistulas and AV access grafts in 2017. Our graft study enrolled a little faster, with follow-up completed last fall and PMA submission in December. We currently anticipate a U.S.

launch of Covera with the AV access graft indication towards the end of fiscal year 2018, with PMA submission for the fistula indication anticipated about the same time. As you can see, we have a very rich pipeline of new products across our businesses, and we look forward to sharing updates with you along the way. Before I move on, I would like to point out that we have included a new slide in the appendix of today's presentation that provides an update on our sustainability initiatives. While we have always been focused on ESG and creating shared value, we have received feedback from the investor community about its increasing relevance to investment decisions.

We hope you find the information useful in understanding BD's commitment to this important topic. Moving on to Slide 21, I would like to reiterate the key messages from our presentation today. We delivered strong underlying revenue growth in both the medical and life science segments in our final quarter as the legacy BD. Our performance highlights the continued strength in our core and our reliable, consistent results.

Looking ahead, we are confident in our fiscal 2018 outlook, which is consistent with the expectations we communicated upon the announcement of the Bard transaction. I would like to thank all of the BD and Bard associates for their dedication and hard work that made this combination possible. We have great momentum across both companies as we welcome C.R. Bard to BD, and we are excited by the opportunity we have as a combined company to advance the world of health for our customers and their patients around the world.

Thank you. We will now open the call to questions.

Questions and Answers:

Operator

The floor is now open for your questions. At this time, if you have a question or comment, please press *1 on your touchtone phone. If at any point your question is answered you may remove yourself from the queue by pressing the # key. In order to allow for broad participation please limit your question to one and one follow-up.

We ask that while you [Inaudible] your question, please pick up your handset to provide optimal sound quality. Thank you. Our first question comes from the line of Bob Hopkins with Bank of America.

Bob Hopkins -- Bank of America -- Analyst

Oh, thanks very much for taking the question, I appreciate it.

Vince Forlenza -- Chairman and Chief Executive Officer

Good morning.

Bob Hopkins -- Bank of America -- Analyst

Good morning. So the first question I have is just really a clarification on the guidance and some of the information you provided yesterday. So for the 2018 pro forma guide of 5% to 6%, is ex dispensing and -- sorry, changes and the hurricanes? What number does that compare to for 2017? I saw that 5.2% yesterday, but is that also ex dispensing changes and hurricanes?

Vince Forlenza -- Chairman and Chief Executive Officer

No. I think the way to think about it is 5.6% ex dispensing.

Bob Hopkins -- Bank of America -- Analyst

OK. That's for 2017?

Chris Reidy -- Executive Vice President and Chief Financial Officer

Yes.

Bob Hopkins -- Bank of America -- Analyst

OK. So that compares to the 5% to 6% for '18?

Chris Reidy -- Executive Vice President and Chief Financial Officer

That's right, that's right.

Bob Hopkins -- Bank of America -- Analyst

And then just one other thing I wanted to ask about is just -- you mentioned resin costs going up. Could you just quantify that for 2018, a little more color?

Chris Reidy -- Executive Vice President and Chief Financial Officer

Yes. So we're looking at an incremental $15 million or so. Now you have more clarity around that in the upcoming quarter. It gets a little bit murkier in the second half of the year.

But our best guess right now, based on what we're seeing in that market, oil prices certainly have an impact, but the market itself is a difficult market in terms of supply and demand. And so we're estimating right now about $15 million impact. What we are saying, we're also assuming a benefit from the flu upside, and the two of those basically offset one another as we see it today.

Vince Forlenza -- Chairman and Chief Executive Officer

Bob, thanks for your questions.

Bob Hopkins -- Bank of America -- Analyst

Thank you.

Operator

Your next question comes lines David Lewis with Morgan Stanley.

Vince Forlenza -- Chairman and Chief Executive Officer

Good morning, Dave.

Dave Lewis -- Morgan Stanley -- Analyst

Good morning. A couple of quick ones for me. One, strategically for -- and then one actually more financially oriented. So Vince, just on the Gore royalty, this is sort of your first time having the pro forma Bard.

Bard had talked about their strategic plans for how they were going to offset the Gore royalty. You've obviously moved that to other income, which is the appropriate treatment. But how are you thinking about the opportunity to offset the Gore royalty, either through M&A, SG&A cuts, or balance sheet deployment? And then a quick follow-up for Chris.

Vince Forlenza -- Chairman and Chief Executive Officer

Well, first off, in terms of the Gore royalty, as we've been talking about, we expect to be delevering aggressively, and so we're going to see a decrease in interest expense. So that's No. 1 on the list. And the timing kind of works out very nicely from that standpoint, David.

The second thing is, yes, you will also see the roll-out of the cost synergies. And third, as we get to that time frame, we're going to expect the benefit of revenue synergies starting to impact. So when you put that all together, I think we're in good shape.

Chris Reidy -- Executive Vice President and Chief Financial Officer

Yes. The only thing I would add then as well is you've got the conversion of the mandatory preferred at that time frame, which helps to offset a little bit as well.

Vince Forlenza -- Chairman and Chief Executive Officer

Two factors.

Chris Reidy -- Executive Vice President and Chief Financial Officer

Two factors, yes. The interest goes down.

Dave Lewis -- Morgan Stanley -- Analyst

OK. So generally, you think you can offset the Gore royalty through a lot of operating and nonop dynamics without deploying material balance sheet?

Vince Forlenza -- Chairman and Chief Executive Officer

Yes.

Chris Reidy -- Executive Vice President and Chief Financial Officer

Yes. We think we're in good shape for that, David.

Dave Lewis -- Morgan Stanley -- Analyst

OK, very clear. And then, Chris, just a few dynamics of earnings here. Thinking about the earnings guidance. To us, currency, based on your euro-dollar assumptions, looks a little conservative.

Are there any currency headwinds that we're not thinking about in terms of the different pieces there? And your tax rate, another piece there where that number seems conservative based on this quarter's rate going forward. So does that reflect your full appreciation of all the tax dynamics? Or is that also a little conservative here as we start the beginning of the year? So your currency and tax and -- do these look conservative? Are there things we're missing? Thanks so much.

Chris Reidy -- Executive Vice President and Chief Financial Officer

Sure. Great. Well, as you know, we do the 30-day moving average on FX, and the quote we have today is at $1.22 to the euro. So there's no other basket of currency impact or whatever.

They're all moving consistent with the euro. And obviously, we're at $1.235, I think, today. So there is a little bit of upside there. We'll see how that goes.

We remain consistent with the 30-day average just to smooth out the bumps and the benefits along the way. But if we do see some currency upside, that will flow through in the future. We would also look though to see if there's more investments. We're making the initial investment of the $15 million to drive Bard synergies.

And if there's significant amount of FX upside going forward, we might invest some of that, but that's to come. And then on the tax rate, there's an awful lot of complexity around the tax rate. As you might imagine, they instituted the tax reform at the end of December, and it's right on top of a very large transaction with BD and Bard. So there's a lot of things going into that.

As we had previously mentioned, we see the benefit of tax reform to our tax rate as being a slight benefit. There's a lot of things that go into that, but that's what's manifested in the impact down -- from the 18% to 20% that we had announced upon the deal announcement down about a full percentage point down to the 17% to 19%. The -- there are some impacts in '19 that would be headwinds as some pieces of the tax reform act go into effect in '19 that don't affect us in '18. But we think that some of the combination with Bard and those kinds of things, we should be able to offset that going forward.

So we feel good about the 17% to 19% rate as we get that benefit from tax reform.

Dave Lewis -- Morgan Stanley -- Analyst

Great. Thanks so much.

Vince Forlenza -- Chairman and Chief Executive Officer

Thanks, David.

Operator

Your next question comes from the line of Mike Weinstein with JP Morgan.

Mike Weinstein -- JP Morgan -- Analyst

Thank you. My questions are primarily around the guidance as well. So the -- if I think about Bard, that kind of net 1% to 2% Year 1 accretion, that's before the benefit of the dollar's move since you announced the transaction and before the benefit of tax. You're separating those and putting them in the other column, is that right?

Chris Reidy -- Executive Vice President and Chief Financial Officer

Yes, that's the right way to think about it, Mike.

Mike Weinstein -- JP Morgan -- Analyst

So if we really thought about Bard as a stand-alone, Bard would be Year 1 much more accretive than that 1% to 2% because, again, of the move in the dollar since the time you announced the transaction and the benefit of tax reform.

Chris Reidy -- Executive Vice President and Chief Financial Officer

Yes, absolutely.

Mike Weinstein -- JP Morgan -- Analyst

OK. The $0.07 beat this quarter relative to at least Street expectations, you didn't let that flow through. Can you maybe just comment on why? And then I don't think you've given us what the incremental tax liability is going to be from reform. And is that in your 4.7 times gross debt number?

Sure. So let me take that last piece first. That's important in terms of the tax. We will -- as part of the press release, I think in the attachments, you'll see that we lay out the impact of the unremitted earnings.

So we took a charge on the BD side of $561 million related to that toll charge, and then that was offset, though, by a $290 million benefit that relates to the write-down of the net deferred-tax liability. But the right one to focus on from a cash standpoint is the $561 million. Now on the Bard side, in their opening balance sheet, they recorded a charge of $220 million related to the toll charge. So in total, it's $781 million.

Now, the good news is that we don't start paying that until next fiscal year. And the way it's allocated, it's back-end-loaded, so it's really only 8% a year in the first five years. The reason that's important is it really doesn't have a big impact on our three-year period where we're paying down the debt to the 3 times leverage. So really no material impact on that.

And then as we look forward, you see that our cash this year, we're generating $3.5 billion. That's with only three quarters of Bard included, so that will go up next year and the year after. So we generate a lot of cash. So while I'm not thrilled about paying this $781 million over the next eight years, we have more than enough cash generation going forward to cover that.

So those are the details around that. And then in terms of the first question, we beat the revenue that drove Q1 EPS earnings, and that's still within our 5% to 6% overall revenue guidance that will flow down. So the range -- I think we've captured within our range the benefit in the first quarter. And frankly, it's still early, so we'll see how it goes going forward.

OK. Thank you, guys.

Vince Forlenza -- Chairman and Chief Executive Officer

OK. Thanks, Mike.

Operator

Our next question comes from the line of Isaac Ro with Goldman Sachs.

Vince Forlenza -- Chairman and Chief Executive Officer

Good morning, Isaac.

Isaac Ro -- Goldman Sachs -- Analyst

Good morning, guys. Thanks. Hi, how are you?

Vince Forlenza -- Chairman and Chief Executive Officer

Good.

Isaac Ro -- Goldman Sachs -- Analyst

A question for you on the diagnostics business. There's some changes in reimbursement going through in the U.S. marketplace. Curious what you're seeing so far.

You said that labs are facing low reimbursement for some of the more commodity categories that you serve.

Vince Forlenza -- Chairman and Chief Executive Officer

So I'll turn it over to Alberto. Alberto, do you want to get that?

Alberto Mas -- Executive Vice President and President of Life Sciences

Yes. Hello, good morning. It's too early to see any impact at this point. We've always seen this as a relatively limited impact to us directly.

There will be some overall pressure on pricing, we anticipate, but it's not significant. First of all, it's U.S.-only. Secondly, it's capped every year at 10% maximum decrease. It's only for CMS, and a lot of our customers are obviously in private. And it only impacts the last schedule versus the hospital and the DRG, so we're not anticipating this to be a significant impact on us.

Vince Forlenza -- Chairman and Chief Executive Officer

OK. Thanks, Isaac -- yes, go ahead, Isaac.

Isaac Ro -- Goldman Sachs -- Analyst

And then maybe, Chris -- so Chris, maybe second item on just the expense side. If I think about the long term with regards to the Bard integration, could you maybe outline some of the longer-term projects that come into play if you think about back-end and operational stuff? Because you've done a couple of larger deals the last two years. I'm curious to see whether there was some longer-term projects in the works.

Chris Reidy -- Executive Vice President and Chief Financial Officer

Yes, absolutely. So what I've said is that there's -- really you think about this in three buckets. So the $300 million, the first year, you're really talking about public company costs as well as procurement kind of savings. So that's what you would expect the first third to be.

In the third year, you would expect the more long-term projects that you're referring to, which is looking at manufacturing facilities and distribution centers. And obviously, that takes a lot of planning. You want to get that right. And that's what you would see showing up in Year 3.

In Year 2, you would be looking at some of the functional systems and transformations, putting the two companies on the same kind of systems integrations, going to Workday, for example, those kinds of things, and that shows up in Year 2. So the only other thing I'd say is because it's not a perfect year, we are looking at about $70 million to $80 million of impact in the three quarters this year and then pretty much ratable over the next two years.

Isaac Ro -- Goldman Sachs -- Analyst

All right.

Vince Forlenza -- Chairman and Chief Executive Officer

Thanks very much.

Operator

Our next question comes from the line of Kristen Stewart with Deutsche Bank.

Kristen Stewart -- Deutsche Bank -- Analyst

Hi, good morning. Thanks for taking my question.

Vince Forlenza -- Chairman and Chief Executive Officer

Good morning.

Kristen Stewart -- Deutsche Bank -- Analyst

I was just wondering with, I guess, now having the acquisition closed for, I guess, a little over a month now, with operating and just seeing the revenue synergies, with having the ability now to spend, what sort of spending? Where are you targeting it? Is it more for U.S. spend, international spend? Can you maybe just give a little bit of detail? What gives you the confidence to spend on revenues? What sort of synergies are you looking at? And I have one follow-up.

Vince Forlenza -- Chairman and Chief Executive Officer

Sure. I'll ask Tom to talk to that, but it's very much in line with our original thinking on the deal. So Tom, do you want to just --

Tom Polen -- President

Sure. Kristen, this is Tom. So from a regional perspective, actually, the U.S. and Europe are the two areas that we're most heavily investing in, and about a little less than a third would be in emerging markets.

So two-thirds in the U.S. and Europe, and a little less than a third in emerging markets. From a business-unit perspective, those investments are also heavily concentrated within our MDS business unit and the surgery area, and that, as you can imagine, is expected. That's where we see synergies of portfolios coming together, so the PICCs coming in MDS from Bard, in with our catheter and other drug-delivery technologies.

So that's an epicenter of synergies we see. And then in surgery, where we're moving our ChloraPrep business and V. Mueller business in interventional specialties from BD into that area. Obviously, ChloraPrep now having channel access, for example, in Europe via the biosurgery team and opportunities for us to further accelerate growth, for example, even in biosurgery channel expansion ex U.S.

So those are the two businesses and two major regions that we're investing in. Thanks for the question.

Kristen Stewart -- Deutsche Bank -- Analyst

And what are you thinking in terms of the payback on these investments? Do you think that you will get those back in 2020? And then just to follow up on the patch pump, can you just remind us on the time line to market then? And do you think that taking the resources away from the insulin pen can help accelerate that?

Tom Polen -- President

Yes. So Kristen, we see -- from a payback period, actually, this first tranche of investments have a relatively short payback period. And so we won't see -- the revenue will start to ramp in the very -- really see it come through in '19, not necessarily notable or will be visible across the new $16 billion company. But we expect the payback relatively to break even within a year on the first $15 million of investment.

And then there's other tranches of investments that we'll be making in the future, as was alluded to earlier on the call. When it comes to the patch pump, again, it continues to go very well, and our targeted launch is at the very end of FY '19. And I wouldn't say we see an acceleration from the investments that we're making in a faster way there. It's more of we're adding in clinical trials, and that's some learnings that we've had particularly in the diabetes space, where we want to do more patient testing prelaunch.

And so we've added in a number of patient trials. You heard Vince mention actually an active patient trial that's underway right now. It's actually our first use of Swatch in patients with insulin underway. And all of that's been funded incrementally versus some of our original thinking and plan.

Vince Forlenza -- Chairman and Chief Executive Officer

Just get more customer data earlier on.

Tom Polen -- President

Absolutely.

Vince Forlenza -- Chairman and Chief Executive Officer

Kristen, thanks for the questions.

Kristen Stewart -- Deutsche Bank -- Analyst

Thank you.

Operator

Our next question comes from the line of Brian Weinstein with William Blair.

Brian Weinstein -- William Blair -- Analyst

Guys, good morning. Thanks for taking the questions. Moving away from Bard for a second, have you guys seen any improvements in business operations from the business model change in dispensing? And related to that, we keep getting questions on market share between you and your competitor there. So can you talk a little bit about what you see for growth in dispensing on a normalized accounting basis versus the market? And then I have a follow-up as well.

Thanks.

Vince Forlenza -- Chairman and Chief Executive Officer

Yes, we can do that. We have some good data on that that Tom can walk you through. We're feeling very good about that business.

Tom Polen -- President

Hi, Brian. This is Tom. This is Tom. So we actually continue to see fantastic customer feedback to the new model.

We see our Net Promoter Score actually approximately doubling. Since we've made that change, the feedback from customers has been very positive, particularly along with some of the investments that we've made in clinical consultants who are supporting wire use of the features of Pyxis ES. We've always said that folks only were using about 1/3 of the power of the platform, and now with some of the consultants that we've been able to fund through this -- the new approach, we're really seeing customers being able to adopt and get more value out of the platform. If you look at actually last year, the U.S.

dispensing, excluding trace, was about 10% growth for the year. So very, very strong underlying performance. And while we certainly don't make statements about peers or competition specifically, I would say that we continue to gain momentum in our customer base. As you know, we have a very significant market-leadership position, and we continue to expand that position through integration of our med management continuum, including our IV compounding platform, what we're now calling Pyxis IV Prep, or inventory management system, which we now call Pyxis Logistics, and the new BD HealthSight platform that we launched at ASHP this year.

So overall, really positive feedback from customers, and we're seeing very good momentum going forward.

Brian Weinsten -- William Blair -- Analyst

Great. And then a quick follow-up on flu. I would have thought the impact potentially could be bigger in Q2. Did I hear you right that you thought that that would potentially just be about $15 million? And are you still producing flu kits for Veritor? There were some rumor that you may have stopped production after you hit some target volumes for the year.

Thanks.

Chris Reidy -- Executive Vice President and Chief Financial Officer

I think what you have to remember, Brian, is that last year, the flu was fairly strong in the second quarter. So although we had a nice benefit in the first quarter compared to last year, it's not absolute that it'll be higher for the year. But in January, we really did see it clearly is a strong flu season. That's why as we look out now, you don't know what's going to happen.

It could drop off, so we'll see. But based on January, we're thinking that there is more flu upside in the remainder of the year. And roughly, it's offset by that $15 million increase in resin prices. So that's the way we currently see it.

Vince Forlenza -- Chairman and Chief Executive Officer

And Alberto, from a production standpoint?

Alberto Mas -- Executive Vice President and President of Life Sciences

Well, not only have we not stopped it, we have increased it. We are at full capacity, adding shifts, anything that we can do to try to increase production as we see the demand being very, very high. And as of today, we haven't seen any unusual back order, although it is continuing to be a very, very high level. So we are a little bit of hand-to-mouth, but we're doing everything possible to crank up production.

Brian Weinstein -- William Blair -- Analyst

Thank you.

Vince Forlenza -- Chairman and Chief Executive Officer

OK. Thanks, Brian. Great to hear from you

Operator

Our next question comes from the line of Larry Biegelsen with Wells Fargo.

Larry Biegelsen -- Wells Fargo -- Analyst

Good morning, guys. Thanks for taking the questions.

Vince Forlenza -- Chairman and Chief Executive Officer

Good morning.

Larry Biegelsen -- Wells Fargo -- Analyst

Two product-related questions for me. I'll ask them both up front. First, Vince, you've highlighted IV solutions. That was the first product you highlighted in the initiative for fiscal 2018.

Could you help quantify the benefit to BD in fiscal 2018 and beyond? And then second, Lutonix was obviously an important product for Bard, but there are a lot of moving parts or changes in that market from a reimbursement and competition standpoint. But you obviously have new indications and geographies. So can you talk about your high-level expectations for Lutonix over the next few years?

Vince Forlenza -- Chairman and Chief Executive Officer

Yes, sure. So I'm going to turn those over to Tom. In the quarter, the IV solutions was not meaningful, but we do expect to ramp up in the second part of the year. How far that goes is also going to depend on how much capacity our partner has and do we get new FDA approvals.

But Tom, do you want to add anything else to that and then just jump on the drug-coated balloons?

Tom Polen -- President

I would just say for IV solutions, think about it in tens of basis points for the MDS business specifically. And then obviously, that dilutes out further when you take it to the BDX level. Specifically on Lutonix, I would just say, obviously, that the change in reimbursement that you referenced, it's not something that we like, but it's also something that we expect will have only minimal impact on our growth trajectory this year and going forward. Now we didn't see fundamentally a change year on year in growth.

Think about '18 growth for Lutonix and DCBs overall being very much in line with growth that we've seen in prior years, and we expect that to go forward. And that's really driven by the very robust pipeline that the business has. Obviously, we've got the new AV indication. We have BTK coming that's going to help that whole category growth for us.

And we expect drug-coated balloons are going to continue to grow in line with prior year, in '18 and in the years ahead.

Larry Biegelsen -- Wells Fargo -- Analyst

Thank you.

Vince Forlenza -- Chairman and Chief Executive Officer

Next question.

Operator

Our next question comes from the line of Brandon Couillard with Jefferies.

Brandon Couillard -- Jefferies -- Analyst

Thanks. Just two quick one for Chris. Can you tell us what you're penciling in for ASPs for fiscal 2018? And then for NewCo, can you remind us how big resins are as a percent of COGS?

Chris Reidy -- Executive Vice President and Chief Financial Officer

I'm sorry. Can you ask the question again? There was some static there. Yes, go ahead, Brandon.

Brandon Couillard -- Jefferies -- Analyst

Just [Inaudible] ASPs.

Chris Reidy -- Executive Vice President and Chief Financial Officer

OK. On the ASPs, what we've said is that we expect pricing across the business to be slightly down. So think tens of basis points across the business. And then the percentage of resin, resin across BD is about $250 million.

I think that's just the BD side. So that gives you just something [Inaudible].

Vince Forlenza -- Chairman and Chief Executive Officer

Bard -- and he asked --

Chris Reidy -- Executive Vice President and Chief Financial Officer

It'd be a little bit more with --

Vince Forlenza -- Chairman and Chief Executive Officer

Yes, a little more with Bard.

Crhis Reidy -- Executive Vice President and Chief Financial Officer

With Bard. I guess $300 million or something.

Brandon Couillard -- Jefferies -- Analyst

Thanks.

Vince Forlenza -- Chairman and Chief Executive Officer

Great. Sure

Operator

Our next question comes from the line of Bill Quirk with Piper Jaffray.

Vince Forlenza -- Chairman and Chief Executive Officer

Great. Good morning, Bill

Bill Quirk -- Piper Jaffray -- Analyst

Good morning, eerybody. So recognizing it's a little more difficult to pull out, any way to help us think about the impact of the flu season on some of the ancillary medical products just given the higher rate of hospitalization? And so I guess what I'm asking about is kind of ex the actual direct flu products themselves.

Vince Forlenza -- Chairman and Chief Executive Officer

Yes. So there is a correlation, of course, with folks ending up in the hospital and having other conditions. Now how to quantify that, that's extremely difficult. But historically, if we look back, we do see a little bit of a positive impact across multiple product lines.

We see it on the diagnostics side with blood culture, and you may see it, of course, in catheters and those sorts of things. And there is an increase in cardiac events. As I said, it's not big enough that we can measure it, but it is certainly there.

Bill Quirk -- Piper Jaffray -- Analyst

OK, got it. And then, Tom, just a quick update on the OUS CareFusion revenue synergies from new product launches? And how should we think about that going forward? Thanks

Tom Polen -- President

Sure. So we're now over 250 active or in-process registrations when it comes to focusing on revenue synergies. So we're continuing to make very good progress there. And while we don't quantify those revenue synergies each quarter, we continue to expect to see growth contributions in the range of tens of basis points, as we've shared in the past.

We also expect to see those most visible in the intervention -- in the international MDS and MMS businesses. And if you notice, you'll see those if you look at the last couple quarters, those continuing to go very, very strongly, MDS and MMS international.

Bill Quirk -- Piper Jaffray -- Analyst

Got it. Thank you.

Vince Forlenza -- Chairman and Chief Executive Officer

Yeah. Thanks a lot

Operator

Our next question comes from the line of Doug Schenkel with Cowen.

Doug Schenkel -- Cowen and Company -- Analyst

Hey, good morning.

Vince Forlenza -- Chairman and Chief Executive Officer

Good morning.

Doug Schenkel -- Cowen and Company -- Analyst

First, starting on the product realignments, what's been the initial feedback from your sales force and customers? Could you help quantify how this might accelerate the revenue-growth outlook for the impacted segments? And should we be contemplating any initial dis-synergies related to the realignments? And then I guess the second thing I just wanted to quickly talk about is Bard's M&A history. As you guys know strategic tuck-ins have helped boost Bard core growth over time. This was arguably a pretty important part of their strategy. Could you just provide us an update on how much capacity you have to keep that going given where their growth leverage ratio is today? Thank you.

Vince Forlenza -- Chairman and Chief Executive Officer

Yes, OK. So we'll start -- I'll start on the M&A side. And it was always part of our modeling that we would leave room for strategic M&A. And of course, the way we think about that is more must-do.

And the conversation we're having with the interventional segment is, give us your pipeline so that we can plan that in. And as you said, that's tuck-in M&A, and we take that as kind of the base of what we have to do. The second thing that's going on in the other two segments, so we're creating that list right now. And as we have to do it, we will do it.

But we think we've got enough capacity planned that we can do that plus get down to the 3 times leverage debt that we're talking about. So we're in pretty good shape with that. And Tom, you want to pick up the other piece?

Tom Polen -- President

Yes. So on the realignment, the feedback from both the sales team and our customers have been very positive. Obviously, our customers really were excited by the opportunity, particularly on the vascular access side, where they saw the power of those two portfolios really helping to meet their need from one partner, right, the ability to provide short- and long-term vascular access, be it peripheral catheters, midlines, or PICCs. And so putting those in, in one business, we have a program, what we call optimal vascular access, where we help and where we're developing more tools and we'll be working on evidence generation around the power of our portfolio to help prevent bloodstream infections, to help optimize length of stay for the patient and for the caregivers.

They're inserting that and managing that. I think it can be quite costly from a side effect, obviously, bloodstream infections, but also just the longer you can keep that site active and dwelling is very important, particularly in some of the longer-care patients like those undergoing cancer treatment. Same thing holds true on the surgery side. Our teams are very excited about that realignment.

Of course, we had a surgery group come in from CareFusion who was put in our med management business. And so they felt a little bit out of home. They actually feel very much at home now, moving into a group that wakes up and think surgery every day of the week. And so there's efficiencies and effectiveness opportunities from that combination.

A good example of it would be the core prep team, who primarily goes into ORs and calls on surgeons, now in the surgery group. Great opportunity ex U.S. where Bard has had teams callings on surgeons in Europe. BD never had that in the past.

They're now, right -- as part of one of the first areas of revenue synergies that we're investing in is getting those products into more surgery reps in Europe now and starting to expand the use of those products to prevent surgical-site infection, as an example. So overall, we're hearing very positive feedback, but we're also being staged in the way that we do that integration, right. We're not looking to just suddenly push the portfolios together through one common sales team everywhere. We're being very staged in the way that we plan and think that through so that we prevent any dis-synergies.

Vince Forlenza -- Chairman and Chief Executive Officer

OK. Thanks, Tom.

Operator

Our next question comes from the line of Rick Wise with Stifel.

Rick Wise -- Stifel -- Analyst

Good morning, everybody. Two questions first for Chris and then a bigger-picture one for you, Vince. Chris, I just want to make sure that I'm not missing anything on gross margin or I'm understanding the guidance. On gross margin, just couple aspects.

You talked about the 80 bps of drag in the guidance from currency, a couple things. Included in that was dispensing. How much was the dispensing? And then just looking at it, I'm sure I'm not thinking about it correctly. I know there are a lot of moving pieces.

But if I just oversimplistically take the Bard gross margin and the BD gross margin and weight them annualized basis, that looks like 58%, 59% kind of gross margin range. You're guiding to 56%, 57%. OK, you only have nine months. That's not a full year.

But that feels extra conservative. Am I thinking about this correctly? Is it the Gore royalty? Just a little more color, if you would, on the right way to think about it.

Chris Reidy -- Executive Vice President and Chief Financial Officer

So your point there was the Gore royalty does have an impact. The impact of dispensing is about 40 basis points. The Gore royalty hits you by about 30 basis points on top of that. And don't forget, you only have Bard only for the three quarters, so that doesn't give you the full benefits.

So we won't get that. Initially, what we were saying is that the, Bard would impact us by 300 basis points or so for a full year. So you have to discount that back to three quarters. So when you have all those ins and outs, that's what you come up to with the guidance that we give -- we gave you.

Now the -- as we talk about that flowing down, that flows down to operating margin as well, and we're looking at 200 to 250 basis points in FY '18. And that will basically give us about 700 basis points over the last several years. And then going back to our initial guidance, we talked about 200 basis points a year in the next two years. So another 400 through 2020.

So when you add all that up, it's about 1,100 basis points from the period beginning back in, I guess, '15 through '20. So in five years, 1,100 basis points. So we feel good about that.

Rick Wise -- Stifel -- Analyst

Great. And Vince, I hate to ask you already where the upside drivers might come from. I mean, I think you've given us realistic, even perhaps conservative, guidance. But do the upside drivers, as you work hard to make all this happen over the next year or three, come from faster debt pay-down, more cost-cutting, pipeline upside? I know you're excited about the Bard pipeline, the benefits of the now even larger portfolio as you meet with customers.

But how are you thinking about it?

Vince Forlenza -- Chairman and Chief Executive Officer

Yes. And thanks, Rick. I'm going to start back with both cohorts on both businesses look strong. We finished -- we came into this year with a good pipeline, and we're making good progress on that pipeline on the BD side, and I just walked you through the Bard side.

So I see -- I feel very good about that. As Tom walked through the revenue synergies, I think we've got a good plan there. The second piece in terms of taking this into more geographies, I think, could be a further upside for us. That's not where we're starting.

That's not our primary focus, but there are geographies, Latin America and other parts of Asia, where we think it'll take a little longer to get it going. But we've seen nice upside there. And then we're looking to come back to some of those product launches that we have talked about, such as Barricor and whatnot, where we're actually starting to learn, we've got the product out in Europe. So I think there's some upsides there.

So those are the kind of things I'm comfortable with. The cost synergy piece, I think, is really well-planned at this point in time. So I don't think it comes to more rapid deleveraging. I think it comes from operational effectiveness and implementing what we're talking about here.

Rick Wise -- Stifel -- Analyst

Thanks so much.

Operator

Our next question comes from the line of Larry Keusch with Raymond James.

Larry Keusch -- Raymond James -- Analyst

Hey, good morning, everyone.

Vince Forlenza -- Chairman and Chief Executive Officer

Hey, Larry.

Larry Keusch -- Raymond James -- Analyst

Vince, could you just give some thoughts on sort of how you think about the backdrop for the U.S. market now that you've -- we've been through the end of the year in 2017 and looking into 2018?

Vince Forlenza -- Chairman and Chief Executive Officer

Sure, Larry. So I think it a really interesting question that you're asking. We started last year talking about this, and we had basically said that we see this as a stable marketplace, No. 1.

No. 2 is that maybe there's a little bit of cyclicality now built into the marketplace because of high-deductible plans. I think that's going on. But in addition, of course, we had the flu.

But when I look at the U.S. market, I don't see any big negative impacts from the changes that have been made in terms of healthcare reform and whatnot, the Affordable Care Act impacting a very small piece of the population. We'll have to see what they're doing in terms of going forward. But on the capital side, we're seeing a continued focus on spending the capital that has actually got a real return for them in terms of improving productivity in the hospitals, which is what we're doing.

So at the end of the day, I would say U.S., stable and for us strong from a capital standpoint. We don't see any real issues there. We've seen Europe come back and bounce back nicely, especially on the life science side of the business. In the diagnostic area, the focus on funding and automation and those sorts of things has been good.

The place -- two places that I would comment on. China was strongest quarter, and we expect it to continue to be strong. And that's of course, that's both sides of the business. The one big change from last year is EMA, where EMA has come back.

It's a little stronger than we normally would expect just from the timing of tenders this year, but it is once again growing for us. So all in all, good from a market standpoint; Latin America pretty stable, like it was last year.

Larry Keusch -- Raymond James -- Analyst

OK, terrific. And then perhaps just for Tom. I just want to come back to IV solutions. And really, the two parts of the question are -- is Fresenius continuing to expand its manufacturing capacity for IV solutions that can be imported into U.S.? And I guess the second part of the question is, if you had to sort of look at what capacity they have today and ability to supply you, is that sort of in line with where we were at the start of the fiscal year? Better? Worse? Just trying to calibrate that a little bit.

Tom Polen -- President

Yes. Thanks, Larry. So we obviously don't comment on Fresenius' specific capacity nor their capacity plans. But I would say that the -- we're very pleased with the relationship.

The capacity that -- and our supply as part of our partnership is very much in line with our expectations, and we continue to work with them very collaboratively on the long-term capacity planning in sort of the U.S. market.

Larry Keusch -- Raymond James -- Analyst

Terrific. Thanks, guys.

Vince Forlenza -- Chairman and Chief Executive Officer

OK. Great. Thanks.

Operator

Our next question comes from the line of Vijay Kumar with Evercore ISI

Vijay Kumar -- Evercore ISI -- Analyst

So maybe one on pipeline and one on clarification. So the pipeline question, I think I heard you say that the pen program on the diabetes side will stop and you're investing on the patch pump side. So maybe could you talk about sort of how the decision was made or what -- why stopping the pen. And I thought on the BTK side, the DCB below-the-knee trial, we were supposed to have an interim look.

Did we have an interim look? Or any thoughts on that would be helpful.

Vince Forlenza -- Chairman and Chief Executive Officer

All right. So Tom will take both of those.

Tom Polen -- President

OK. All right.

Vince Forlenza -- Chairman and Chief Executive Officer

I think we've got some pretty good rationale on the pen side of things.

Tom Polen --

OK. Yes, this is Tom. So on the pen side, as you know, we've been working on that program. And as we just routinely looked at all of our projects in our portfolio, we made the decision that due to the nearer-term commercial opportunity for that first-generation product, that we want to redeploy those resources to really double down on the smart Swatch.

And by the way, when we had originally shown Swatch, it was not necessarily smart at launch. We've been also accelerating work so the product that we're launching is smart. And we'll have -- we have well over 10,000 patient days now of Swatch worn by patients delivering insulin by the time of launch. So that's a significant acceleration in terms of real-world data that we'll have versus some of the original plans.

When it comes to BTK, so of course it is a blinded study. So we personally, of course, do not look at that data until the study is completed. I would say that just to give a little bit more insight there, so we've stopped the enrollment in the trial, but there still will be six-month follow-up as part of the trial that's planned. So think about by the end of August, the last patients would be completed for their follow-up, and then we would end up preparing for submission at the very end of the calendar year.

But because of it is a blinded, we do not -- management does not see the data. As you think about when we might be able to prevent -- or present some interim data, obviously because it's blinded, we're not going to see the data until the follow-up is completed. But we do anticipate the results will be presented after the PMA submission. But at this time, the study remains ongoing and in follow-up.

Vijay Kumar -- Evercore ISI -- Analyst

No, that's helpful, Tom. And Chris, maybe one quick one on the divestitures. Can you quantify what the magnitude was?

Vince Forlenza -- Chairman and Chief Executive Officer

Divestitures.

Chris Reidy -- Executive Vice President and Chief Financial Officer

In the divestitures?

Vince Forlenza -- Chairman and Chief Executive Officer

Yes.

Vijay Kumar -- Evercore ISI -- Analyst

Yes.

Chris Reidy -- Executive Vice President and Chief Financial Officer

Yes, the two are about $50 million in total...

Vijay Kumar -- Evercore ISI -- Analyst

Thank you.

Vince Forlenza -- Chairman and Chief Executive Officer

In revenue.

Vijay Kumar -- Evercore ISI -- Analyst

Thank you.

Chris Reidy -- Executive Vice President and Chief Financial Officer

In revenue -- in revenues. Thanks, Vijay.

Operator

Our next question comes from the line of Richard Newitter with Leerink Partners.

Richard Newitter -- Leerink Partners -- Analyst

Hi, thanks for taking the question. Just going back to China and in the context of your revenue-synergy discussion, you're guiding to, I think you said, 15% growth, which is above the 11% that you did for Becton stand-alone in the fiscal first quarter. Is that just the combination of the two companies and the strong momentum and, obviously, Bard a little bit faster? Or is there any early revenue synergy baked into that?

Vince Forlenza -- Chairman and Chief Executive Officer

No, that's pretty much straightforward.

Chris Reidy -- Executive Vice President and Chief Financial Officer

Yes, that's straight math. No revenue synergies on top of that to get to the mid-teens.

Richard Newitter -- Leerink Partners -- Analyst

OK. And then the second question that I had was on the AV access market opportunity. I think Bard had talked about, about a $250 million kind of market opportunity there. Is that how you see it now that you have a little bit of time with the launch commercial?

Tom Polen -- President

Yes, we still see it as that same view from Bard. Actually, the uptake in the first few quarters post-launch has been very much in line with expectations. It's off to a great start and no change in that perspective in terms of the long-term opportunity.

Richard Newitter -- Leerink Partners -- Analyst

OK. Thanks.

Operator

Our next question comes from the line of Matt Taylor with Barclays.

Matt Taylor -- Barclays -- Analyst

Hi, thanks for taking the question.

Vince Forlenza -- Chairman and Chief Executive Officer

Sure, Matt.

Matt Taylor -- Barclays -- Analyst

I was hoping to follow up on that kind of same line of thinking. With the combination with Bard in the past, you had talked about the potential for a lot of those revenue synergies to come from geographic expansion in the future. So I guess the core of my question is, I want to understand what you think the sustainability on that kind of emerging market growth is in the kind of the three-year plan of the Bard-Becton combo.

Vince Forlenza -- Chairman and Chief Executive Officer

Yes, we feel very good about it, is what I would say. I think what you heard us talk about is there are some immediate things that we can go after with fast payback, so we're starting there. And then Tom mentioned as he went through this some more money going into other geographies. And so we still see it that way.

In China, of course, it's -- Bard has been focused on, I'll call it, the leading hospitals, the top tier. We see the opportunity to accelerate, driving into Tier 2. We think we've got more work to do to plan that out, but we haven't changed our opinion on that. And so that would be one of the highest priorities.

Then the rest of Asia and then Latin America. That's the way we're thinking about it. So the answer to that question is absolutely yes.

Matt Taylor -- Barclays -- Analyst

OK. And then I want to ask about CareFusion versus Bard. It's struck me that the CareFusion deal has worked out really well for you guys. And now you're going to this $350 million in synergies, I mean, it's a similar size to Bard in terms of revenue.

But can you compare and contrast kind of the synergy opportunities between the two and then what you -- what we've learned from CareFusion that could apply to Bard?

Vince Forlenza -- Chairman and Chief Executive Officer

Yes, I think in many ways, they are similar synergy opportunities. As I talked about before, the public company costs and the procurement initiatives are very similar, and you could say that the manufacturing and the distribution would be the same kind of effort. What I would say, though, is we have the benefit of having the infrastructure in place that just is coming to the conclusion of integrating CareFusion. We know how to do this.

They -- we hit the ground running. And so it's -- we're not trying to build a team to go after it. It's already been done. And that second bucket that I talked about was -- is based upon a lot of the infrastructure we've put in as part of CareFusion and took the opportunity to do that.

So that's helpful as well.

Matt Taylor -- Barclays -- Analyst

Thank you.

Operator

Our next question comes from the line of Kristen Stewart with Deutsche Bank.

Kristen Stewart -- Deutsche Bank -- Analyst

Hi, thanks for taking the follow-up. Just on the guidance, last quarter I think you had mentioned that there could be a potential impact in Puerto Rico that could hit later in the year. I was just wondering if you were still anticipating any sort of impact from Puerto Rico from a cost perspective [Inaudible]?

Chris Reidy -- Executive Vice President and Chief Financial Officer

Sure. Sure, Kristen. So I said in my prepared remarks, we did just -- to remind everybody, last time, we didn't include it in our guidance, but we said it could be as much as $40 million of revenue and flow down to as much as 1% on EPS. If you remember the timing of when we did that, we were still running on generators, the plants weren't back up yet.

So because of the efforts of a lot of folks, particularly our associates in Puerto Rico and as well as a number of other associates around the world, we got those plants back up and running. They're off generator, although intermittent still, but we don't see the impact. Although on the BD side, we will see some impact. It's smaller and included in our guidance.

That's just one of the many puts and takes. So nowhere near the amounts that we had quantified. And then on the Bard side, a little bit different. They felt the impact immediately, and they felt it in their fourth quarter.

It was right in line with what they had guided to, which was about $30 million of revenue impact. And it came in just a tad higher than that but right in line with what they had expected, and now that's behind us. So as we combine as a -- the new company, there is no impact from Puerto Rico in the Bard side going forward.

Kristen Stewart -- Deutsche Bank -- Analyst

OK. And then they were also having some supply disruptions within their biosurgery business. Is that still ongoing? Or is that expected to be resolved in, I think, their latest [Inaudible]?

Chris Reidy -- Executive Vice President and Chief Financial Officer

Yes. So we still have some impact to the next couple of quarters this year. That's built into the guidance that we have, and then we lap that, I think, in the fourth quarter.

Tom Polen -- President

And Kristen, this is Tom. We expect to begin shipping -- that's ProGel that you're referring to -- at the end of 2018. Think about it as Q4 2018 where it is shipping out.

Vince Forlenza -- Chairman and Chief Executive Officer

BD's quarter.

Tom Polen -- President

Yes, yes.

Kristen Stewart -- Deutsche Bank -- Analyst

OK. And that 7% underlying growth rate that I assume was not [Inaudible] impact, correct?

Vince Forlenza -- Chairman and Chief Executive Officer

What was the last part of your question? You broke up.

Chris Reidy -- Executive Vice President and Chief Financial Officer

Yes. Yes.

Kristen Stewart -- Deutsche Bank -- Analyst

All right. The 7% underlying growth rate for Bard, that was only adjusted for the hurricane impact, correct?

Vince Forlenza -- Chairman and Chief Executive Officer

You got it. That's right.

Chris Reidy -- Executive Vice President and Chief Financial Officer

That's right, that's right.

Kristen Stewart -- Deutsche Bank -- Analyst

OK.

Vince Forlenza -- Chairman and Chief Executive Officer

OK. Thanks for clarifications. OK

Operator

At this time, there are no further questions. I will now turn the conference back to Mr. Forlenza for closing remarks.

Vince Forlenza --

Well, first off, thank you all for your participation and your questions. Let me just say we're really happy to have closed the deal and brought together two companies with an opportunity for a tremendous impact on improving healthcare around the world. We're off to a strong start, as you saw, and we're really excited about the prospects of the combined company going forward. So thank you very much.

We look forward to updating you next quarter.

Chris Reidy -- Executive Vice President and Chief Financial Officer

Thanks, everyone.

Vince Forlenza -- Chairman and Chief Executive Officer

Thanks a lot.

Operator

Thank you. And this does conclude today's teleconference. Please disonnect your lines at this time, and have a wonderful day.

Duration: 90 minutes

Call Participants:

Monique Dolecki -- Vice President of Investor Relations

Vince Forlenza -- Chairman and Chief Executive Officer

Chris Reidy -- Executive Vice President and Chief Financial Officer

Bob Hopkins -- Bank of America -- Analyst

Dave Lewis -- Morgan Stanley -- Analyst

Mike Weinstein -- JP Morgan -- Analyst

Isaac Ro -- Goldman Sachs -- Analyst

Alberto Mas -- Executive Vice President and President of Life Sciences

Kristen Stewart -- Deutsche Bank -- Analyst

Tom Polen -- President

Brian Weinstein -- William Blair -- Analyst

Larry Biegelsen -- Wells Fargo -- Analyst

Brandon Couillard -- Jefferies -- Analyst

Bill Quirk -- Piper Jaffray -- Analyst

Doug Schenkel -- Cowen and Company -- Analyst

Rick Wise -- Stifel -- Analyst

Larry Keusch -- Raymond James -- Analyst

Vijay Kumar -- Evercore ISI -- Analyst

Richard Newitter -- Leerink Partners -- Analyst

Matt Taylor -- Barclays -- Analyst

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