Omnicare on its own had revenues of over $6 billion and Pharmericas is just under 2 billion so this would be big financially as well. We all know what lack of competition does in the pharma world and this probably would be no exception. Just a few months ago we had Walgreens swap businesses with Omnicare so they got out of the long term care business, so Omnicare picked up business there as well and Walgreens picked up the home infusion business.
Walgreens and Omnicare Swap Businesses–Giving Long Term Pharmacy Care to Omni and They Get Omni’s Home Infusion Business
This is not the first time the eyes of the government have been watching Omnicare as they agreed to pay fine for kickbacks from the pharmaceutical business a couple years ago. Kickbacks in nursing homes are watched a little closer due to the fact that patients can be subjected to over prescribing drugs for patients with Alzheimer's and other aging or mental issues.
Omnicare Agrees to Pay Close to $100 Million To Settle Case with Justice Department – Paying and Receiving Kickbacks From Ivax and Johnson and Johnson
So in view of the past history with drugs, it’s not a big surprise that such mergers and acquisitions are monitored as along with monitoring for kickbacks, the prices would go higher too. BD
Jan. 28 (Bloomberg) -- U.S. regulators sued Omnicare Inc. to block its $440.8 million takeover of rival drug-supply company PharMerica Corp., a deal they said would increase prices for elderly nursing-home residents covered by Medicare. Omnicare’s acquisition of Louisville, Kentucky-based PharMerica would give it the bargaining leverage to raise medicine prices for those covered by Medicare prescription drug plans, passing those costs on to U.S. taxpayers, the Federal Trade Commission said yesterday in a statement.
Omnicare offered $15 a share in August in an unsolicited bid for PharMerica, which the Covington, Kentucky-based company extended yesterday for a fourth time before the FTC’s announcement. The regulators’ complaint leaves little room for Omnicare to make changes or negotiate further, probably killing the deal, said A.J. Rice, an analyst with Susquehanna Financial Group LLP in New York. That would make PharMerica attractive to private equity firms, he said.