Adding to its clout in specialty care, McKesson wins bid for U.S. Oncology
SAN FRANCISCO In a big boost to its growing specialty pharmacy operation, drug-distribution and health services giant McKesson today revealed it has bought U.S. Oncology for $2.16 billion in cash and assumed debt.
Both companies said the deal should close by the end of McKesson’s third quarter on Dec. 31. When finalized, said company officials, it will merge McKesson’s strengths in healthcare services and information technology with U.S. Oncology’s expertise in clinical care, along with what it calls “the largest community-based cancer treatment and research network in America.” The combined organization, said McKesson, “will focus on providing a comprehensive offering of solutions for the oncology industry, one of the fastest-growing segments in healthcare.”
Following the merger, McKesson’s combined Specialty Care Solutions business will be led by U.S. Oncology CEO Bruce Broussard, who will report to McKesson executive VP and group president Paul Julian. The new operation will be based in The Woodlands, Texas, with additional offices in McKesson’s home city of San Francisco and other locations throughout the country.
It will deliver, in McKesson’s words, “a best-in-class oncology program, clinical tools, guidelines and care pathways that will create a leader in evidence-based medicine backed by a deep team of clinical experts.”
The new organization will initially serve a base of some 3,000 oncologists, spurring what the company said will be accelerated investments in integrated systems and clinical programs to boost productivity, efficient delivery of care and improved patient outcomes.
“For U.S. Oncology customers, they’re going to get a world-class distributor,” said McKesson chairman and CEO John Hammergren. “And for McKesson customers, they’re going to get a world-class oncology operations company.”
Hammergren called the acquisition “the next step in our involvement in oncology.”
“Clearly U.S. Oncology has a significant amount of technology, and has the world’s leading physicians using the world’s state-of-the-art thinking around clinical care,” he added. “They’ve driven efficiency in their practices, but perhaps more importantly, they’ve been leading the practice of health care from an oncology perspective.”
McKesson’s acquisition of the cancer-care giant will accelerate the consolidation of the specialty pharmacy market, predicted Adam Fein, PhD, founder and president of Pembroke Consulting. “After the U.S. Oncology acquisition, McKesson and AmerisourceBergen will now represent almost 80% of all specialty pharmaceutical distribution, which is the primary channel to market for office or clinic-based physicians,” Fein noted today.
FDA approves Latuda
SILVER SPRING , Md. (Oct. 29) The Food and Drug Administration has approved a new drug for treating schizophrenia, the agency said Thursday.
The FDA announced the approval of Latuda (lurasidone hydrochloride), made by Fort Lee, N.J.-based Sunovion Pharmaceuticals. The drug is approved to treat adults with the disease, a mental illness that causes hallucinations, delusions, paranoia and disordered thinking and behavior.
“Schizophrenia can be a devastating illness requiring lifelong treatment,” said Thomas Laughren, director of the FDA division of psychiatry products. “Some patients do not respond well to certain types of drug therapy, so it is important to have multiple treatment options available."
The drug includes a boxed warning, the highest-level warning that can appear on a drug label, to warn prescribers of the risk of death associated with off-label prescribing of the drug for behavioral problems in elderly people with dementia-related psychosis.
Shift away from PBM could make room for more broad-service, integrated approach to health care
WHAT IT MEANS AND WHY IT’S IMPORTANT “We don’t have to be the PBM.” That’s what Greg Wasson, Walgreens president and CEO, told Drug Store News in one interview last year, and it neatly encapsulates the dynamic that may be unfolding behind the scenes at the nation’s top pharmacy retailer.
(THE NEWS: Walgreens said to consider sale of PBM. For the full story, click here)
Walgreens reportedly is shopping out its pharmacy benefit management subsidiary, Walgreens Health Initiatives. Thus far, the company is mum about the possible sale of WHI, but divesting its PBM would make some strategic sense for a company whose mission has crystallized over the past two years around a new set of priorities: to become the nation’s go-to resource for retail and workplace health and pharmacy services.
Quite deliberately, Walgreens has pursued a different business model than that of its top drug store rival, CVS Caremark. Instead of building a combined pharmacy/PBM powerhouse to move market share and prescription business to its own stores, Walgreens has spent billions and devoted enormous human capital to remake itself as a fully integrated, full-service retail health-and-wellness solutions provider. Its message to employers and other health plan sponsors — and to other PBMs and managed care organizations, for that matter — is designed to appeal to their bottom lines as they grapple with ever-rising health costs for employees and plan members.
Walgreens’ message to the healthcare marketplace, boiled down to its essence, has a powerful appeal to cash-strapped benefits providers. It says, “We’re capable of delivering not only pharmacy and medication therapy management services to employers and other health plan sponsors in dire need of solutions, but also a wide range of other health services like on-site employer clinics, retail-based clinics, specialty pharmacy services, home infusion and home health care.” That’s why Walgreens markets itself not only as a chain of more than 7,560 drug store pharmacies, but also as a patient-focused national network of more than 8,000 accessible “points of care.”
With that kind of broad-service, integrated approach to health care, it would be no great surprise to see Walgreens’ focus shift away from operating a standard PBM model.