CVS Caremark, Cardinal Health form largest generic sourcing entity in U.S.
DUBLIN, Ohio and WOONSOCKET, R.I. — CVS Caremark and Cardinal Health announced on Tuesday the signing of an agreement to form the largest generic sourcing entity in the United States.
Both companies are contributing their sourcing and supply chain expertise to this 50/50 joint venture and are committing to source generic drugs through it. The companies separately announced a three-year extension through June 2019 of Cardinal Health’s existing pharmaceutical distribution agreements with CVS Caremark.
"Cardinal Health has been an outstanding strategic partner over many years, and we are excited to form this new venture with them," stated Larry Merlo, president and CEO of CVS Caremark. "This partnership will enable us to maintain our leadership role in navigating the dynamic U.S. generics market. With its combined volume and capabilities, the joint venture will develop innovative purchasing strategies with generic manufacturers and enhance supply chain efficiencies."
The U.S.-based joint venture, which is subject to customary closing conditions, is expected to be operational as soon as July 1, 2014, and will have an initial term of 10 years. Under the arrangement, the joint venture will source and negotiate generic supply contracts for both Cardinal Health and CVS Caremark. In order to reflect an equitable 50/50 joint venture, the agreement includes a quarterly payment of $25 million over the life of the agreement from Cardinal Health to CVS Caremark, the companies stated. The payments have an estimated after-tax present value of $435 million.
Last year, CVS Caremark filled more than a billion prescriptions through its retail and mail order pharmacies. Cardinal Health provides pharmaceuticals and medical products to more than 100,000 provider and pharmacy locations each day.
"We are excited to see our long-standing relationship with CVS Caremark expand to include this joint venture, which further enables both companies to focus on improving the cost-effectiveness of health care," said George Barrett, chairman and CEO of Cardinal Health. "This venture is an extremely compelling combination where volume and efficiency matter. All customers will benefit from the enhanced volume and sourcing capabilities created by this partnership."
Shopko Hometown Foundation to donate up to $2,000 per store to school districts
NEW YORK — A philanthropic arm of mass merchandiser Shopko is planning to donate up to $360,000 to school districts across the country.
The Shopko Hometown Foundation, part of the Shopko Hometown division, which runs 181 small-format stores across the country, said it would donate $1 for each signature it receives from customers, for up to $2,000 per store.
The campaign, called Help Us Give Back, lasts through Dec. 24. Customers can sign their names once per day, every day through the campaign.
Covidien to buy Given Imaging for $860 million
DUBLIN — Covidien will acquire a company that markets a swallowed capsule used in medical imaging for $860 million, the hospital equipment manufacturer said Sunday.
Covidien announced a deal to acquire all outstanding shares of Given Imaging for $30 a share. Given Imaging specializes in products for visualizing, diagnosing and monitoring the digestive system, including its flagship product, PillCam.
"We believe [gastrointestinal] is one of the most attractive specialty procedure areas," Covidien group president for medical devices and the United States Bryan Hanson said. "Adding Given’s portfolio of diagnostics to our portfolio accelerates Covidien’s strategy of providing physicians with products that support the patient along the care continuum from diagnosis to treatment. It also confirms our leadership in developing less-invasive screening, diagnosis and treatment solutions that can improve patient outcomes and lower healthcare costs."