CVS Health Corp. said Thursday it will pay $10.4 billion to buy prescription-drug fulfillment company Omnicare Inc.
Omnicare has a specialty-pharmacy business filling rare and often very expensive prescriptions for drug companies that aren’t usually filled in drugstores but are shipped directly to patients.
Omnicare is also the largest company to provide prescription drug services to nursing homes and other long-term care facilities for the elderly and disabled.
This is a big acquisition for CVS Health, which has moved assertively to rebrand itself well beyond a retail drugstore. While other drugstore retailers have also moved to provide more clinical health services, CVS Health has ended tobacco sales and relinquished those profits — a sign of how strong its pivot is.
This deal, valued at $12.7 billion (CVS's acquisition cost of $10.4 billion plus Omnicare's $2.3 billion debt), greatly expands CVS Health’s pharmacy services and could give it greater clout in its dealings with pharmaceutical companies.
In fact, that could become a worry for the Federal Trade Commission, which has to approve the deal for it to go through. In many cases, specialty pharmacy companies like Omnicare already dramatically mark up the drugs they fulfill. This merger could draw scrutiny if regulators think that it could drive up the cost of medications for patients.