CVS Health Corp. will pay more than $10 billion for pharmaceutical distributor Omnicare in a deal primed to feed its fast-growing specialty drug business and tap a lucrative and growing market: care for the elderly.
The acquisition announced Thursday will give one of the nation’s biggest pharmacy benefits managers national reach in dispensing prescription drugs to assisted living and skilled nursing homes, long-term care facilities, hospitals and other care providers. Omnicare’s long-term care business operates in 47 states and the District of Columbia.
The deal also will bring in more business doling out specialty drugs. These complex and expensive medications for cancer, hepatitis C and other conditions can represent treatment breakthroughs but are raising growing concerns over cost. Insurers and other bill payers want help containing that expense.
Specialty drug revenue soared 46% for CVS Health in the first quarter, helping the company trump analyst expectations and make up for a sales hit from its decision to stop selling tobacco products last year in its drugstores. CVS Health also runs the nation’s second largest drugstore chain, trailing only Wagreens Boots Alliance.
Omnicare’s core business involves distributing drugs and providing pharmacy services to long-term care providers, a market CVS Health doesn’t currently serve.