Premier Leaving Specialty Pharmacy Behind, Sells Business to CVS Health
Premier Inc. announced on Tuesday it is selling its specialty pharmacy business to ProCare Pharmacy LLC, a subsidiary of CVS Health Corporation.
Due to challenges in the specialty pharmacy landscape, Premier Inc. announced on Tuesday it is selling its specialty pharmacy business to ProCare Pharmacy LLC, a subsidiary of CVS Health Corporation, according to a press release.
With this decision, Premier intends to focus on its core supply chain, enterprise analytics, and performance improvement capabilities. Premier will receive $22.5 million for certain assets related to its specialty pharmacy business, plus up to an additional $20 million for inventory, according to the release. Premier’s specialty pharmacy business currently serves 367 hospitals across 66 health systems, consisting of Acro Pharmaceutical Services and Commcare Pharmacy.
“Although specialty pharmacy continues to be an important component in health care, today’s market dynamics are challenging and have resulted in new pressures across the industry,” Michael Alkire, president of Premier said in a statement. “Exiting the business better positions Premier to capitalize on our strengths and enhance our focus on core, growing business lines encompassing our supply chain, enterprise analytics, and performance capabilities.”
The move comes amid growing challenges in the pharmacy space, particularly with pharmacy benefit managers (PBMs) and direct and indirect remuneration (DIR) fees. Critics of DIR fees have pointed fingers at PBMs, arguing that the fees impede patient access to high-cost medications and put pharmacy businesses in jeopardy by reducing profits.
From the transaction, Premier anticipates an increase in the company’s consolidated non-GAAP adjusted EBITDA margin to approximately 45% for the full 2019 fiscal year, while reducing annual consolidated net revenue by approximately $470 million and increasing annual pre-tax income by approximately $6 million, according to the press release.
“We will be available to our current specialty pharmacy customers to help assist a smooth transition,” Susan Devore, chief executive offier of Premier, said in a statement. “One of the reasons we selected CVS Health, one of the nation’s leading health innovation companies, is because of its strong track record of providing outstanding patient care, and commitment to helping people on their path to better health.”
Premier’s current customers will be transitioned to ProCare Pharmacy. The deal is expected to close by June 30, 2019.
Premier Inc. to Exit Specialty Pharmacy Business [news release]. Premier. https://www.premierinc.com/newsroom/press-releases/premier-inc-to-exit-specialty-pharmacy-business. Accessed May 9, 2019.