Business

CVS Paying $10.4B in Cash for Drug Distributor Omnicare

Published

11 years ago

May 21, 2015

This March 25, 2014, file photo, shows a CVS store in Philadelphia. CVS Health will buy Omnicare in a deal valued at about $12.7 billion in move to expand its pharmacy services reach into assisted living and senior care facilities. (AP Photo/Matt Rourke, File)

TOM MURPHY, AP Business Writer

CVS Health 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 biggest U.S. 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 percent 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 Inc.

Cincinnati-based Omnicare’s core business involves distributing drugs and providing pharmacy services to long-term care providers, a market CVS Health doesn’t currently serve.

CVS Health CEO Larry Merlo told analysts that represents a “substantial growth opportunity” for his company, with the U.S. population aging.

U.S. Census Bureau researchers have predicted that the population age 65 and older will approach 84 million people by 2050, nearly double its total in 2012, due largely to the aging baby-boom generation.

Merlo noted that older people are more likely to take several medications and can have trouble making sure their prescriptions follow them as they move from their own home to long-term care or other settings. He believes his company can help ease these transitions.

“Omnicare significantly expands our business and provides us with access into a new pharmacy dispensing channel,” Merlo said.

CVS Health said Thursday that it would spend $98 in cash for each Omnicare share. The total value of the deal, expected to close later this year, is $12.7 billion counting about $2.3 billion in debt.

Omnicare has shelled out millions of dollars in recent years to settle federal lawsuits over kickback allegations.

Last June, it agreed to pay more than $124 million to settle lawsuits alleging it gave kickbacks to some facilities so they would keep the company as their drug provider for elderly Medicare and Medicaid recipients. Omnicare said it settled the case to end litigation and committed no wrongdoing.

In 2009, Omnicare said it would pay $98 million to settle allegations that it solicited or paid a variety of kickbacks. That included an accusation that it received kickbacks from Johnson & Johnson for recommending that doctors prescribe to nursing home patients the antipsychotic Risperdal, which can hasten death in elderly people with dementia.

In December, the U.S. Department of Justice filed another lawsuit against Omnicare alleging that it received millions of dollars in kickbacks from Abbott Laboratories in exchange for buying and recommending the prescription anti-seizure drug Depakote for controlling behavior problems in nursing home patients with dementia.

CVS Health spokeswoman Carolyn Castel said in an email that these cases amounted to “legacy issues,” and Omnicare management has worked “diligently over the past few years to create a new foundation around regulatory and compliance matters.”

An Omnicare representative did not immediately return a call from The Associated Press seeking comment about the litigation.

Shares of Woonsocket, Rhode Island-based CVS Health Corp. climbed 2.2 percent, or $2.21, to $103.48 in Thursday afternoon trading, while broader indexes edged up slightly. Omnicare Inc. shares advanced $1.63 to $96.26.

___

AP Business Writer Damian J. Troise contributed to this story from New York. Murphy reported from Indianapolis.

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Oakland Post: Week of March 4 – 10, 2026

The printed Weekly Edition of the Oakland Post: Week of March 4 – 10, 2026

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March 7, 2026

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Chase Oakland Community Center Hosts Alley-Oop Accelerator Building Community and Opportunity for Bay Area Entrepreneurs

Over the past three years, the Alley-Oop Accelerator has helped more than 20 Bay Area businesses grow, connect, and gain meaningful exposure. The program combines hands-on training, mentorship, and community-building to help participants navigate the legal, financial, and marketing challenges of small business ownership.

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3 weeks ago

February 21, 2026

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Bay Area entrepreneurs attend the Alley-Oop Accelerator, a small business incubation program at Chase Oakland Community Center. Photo by Carla Thomas.

By Carla Thomas

The Golden State Warriors and Chase bank hosted the third annual Alley-Oop Accelerator this month, an empowering eight-week program designed to help Bay Area entrepreneurs bring their visions for business to life.

The initiative kicked off on Feb. 12 at Chase’s Oakland Community Center on Broadway Street, welcoming 15 small business owners who joined a growing network of local innovators working to strengthen the region’s entrepreneurial ecosystem.

At its core, the accelerator is designed to create an ecosystem of collaboration, where local entrepreneurs can learn from one another while accessing the resources of a global financial institution.

“This is our third year in a row working with the Golden State Warriors on the Alley-Oop Accelerator,” said Jaime Garcia, executive director of Chase’s Coaching for Impact team for the West Division. “We’ve already had 20-plus businesses graduate from the program, and we have 15 enrolled this year. The biggest thing about the program is really the community that’s built amongst the business owners — plus the exposure they’re able to get through Chase and the Golden State Warriors.”

According to Garcia, several graduates have gone on to receive vendor contracts with the Warriors and have gained broader recognition through collaborations with JPMorgan Chase.

“A lot of what Chase is trying to do,” Garcia added, “is bring businesses together because what they’ve asked for is an ecosystem, a network where they can connect, grow, and thrive organically.”

This year’s Alley-Oop Accelerator reflects that vision through its comprehensive curriculum and emphasis on practical learning. Participants explore the full spectrum of business essentials including financial management, marketing strategy, and legal compliance, while also preparing for real-world experiences such as pop-up market events.

Each entrepreneur benefits from one-on-one mentoring sessions through Chase’s Coaching for Impact program, which provides complimentary, personalized business consulting.

Garcia described the impact this hands-on approach has had on local small business owners. He recalled one candlemaker, who, after participating in the program, was invited to provide candles as gifts at Chase events.

“We were able to help give that business exposure,” he explained. “But then our team also worked with them on how to access capital to buy inventory and manage operations once those orders started coming in. It’s about preparation. When a hiccup happens, are you ready to handle it?”

The Coaching for Impact initiative, which launched in 2020 in just four cities, has since expanded to 46 nationwide.

“Every business is different,” Garcia said. “That’s why personal coaching matters so much. It’s life-changing.”

Participants in the 2026 program will each receive a $2,500 stipend, funding that Garcia said can make an outsized difference. “It’s amazing what some people can do with just $2,500,” he noted. “It sounds small, but it goes a long way when you have a plan for how to use it.”

For Chase and the Warriors, the Alley-Oop Accelerator represents more than an educational initiative, it’s a pathway to empowerment and economic inclusion. The program continues to foster lasting relationships among the entrepreneurs who, as Garcia put it, “build each other up” through shared growth and opportunity.

“Starting a business is never easy, but with the right support, it becomes possible, and even exhilarating,” said Oscar Lopez, the senior business consultant for Chase in Oakland.