In an effort to expand their prescription drug distribution business, CVS Health Corporation is acquiring Omnicare, a company that specializes in dispensing to nursing homes and assisted-living facilities.
Costing CVS about $12.7 billion, the deal should help the company grow in the specialty pharmacy arena.
According to the New York Times, about a quarter of Omnicare’s net sales in 2014 came from its speciality unit, which handles difficult-to-dispense medications that are typically expensive and require refrigeration when moving. Many of these drugs are specific to the older population, including medications for chronic conditions like diabetes and heart disease.
Omnicare’s specialty unit grew at a much more rapid pace than its long-term care business in 2014 and CVS hopes to use that to strengthen its position in that market. The deal could also strengthen the company’s negotiating power with drug makers.
CVS currently owns 26 percent of the specialty market, and is the largest stakeholder in the country. The company is also the largest based on both retail and mail-order sales, bringing in $72.5 billion between the two.