McKesson is Omincare's provider of drugs
McKesson is Omincare’s provider of drugs
National providers continue their march toward consolidation and the strengthening of their national positions. McKesson Health Systems, in San Francisco, CA, and long-term care provider Omnicare, in Cincinnati, OH, recently signed an agreement under which McKesson will be the sole provider of wholesale pharmaceuticals and related services to Omnicare. Omnicare has had annual purchases of nearly $260 million through its previous contract with FoxMeyer Drug, which was recently purchased by McKesson.
McKesson is the nation’s largest distributor of pharmaceuticals and related health care products and services. Omnicare provides pharmacy services and related consulting services to more than 280,000 residents of over 3,500 long-term care facilities in 27 states.
Such an agreement, which strengthens Omnicare’s national position, is nothing new to the company. In 1995, it announced nine acquisitions, and through 11 months of 1996 had announced 14. The acquisitions added 53,000 new beds each year to Omnicare. And it doesn’t expect a slow down in the mergermania that has hit the health care industry.
"It’s a consolidating industry and you’re finding a lot of the smaller organizations don’t have the economies of scale or purchasing power to offer the cost-effective savings and other benefits that larger organizations do," says Gary Rhodes, Omnicare director of corporation communications. "That’s a large part of our growth strategy. As we get larger and expand geographically and in the number of beds, we can offer a certain economy of scale."
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