In today's sorta surprising (but not really) M&A news, Cardinal Health (NYSE: CAH) has signed a letter of intent to acquire regional wholesaler Dik Drug. No press release yet, so consider this post to be another Drug Channels exclusive. (The news was confirmed to me by Cardinal's SVP of Public Relations.)This deal is one more step in the long-running consolidation of the U.S. pharmaceutical distribution business. It also helps further boost Cardinal's business with smaller pharmacies. Dik is a closely-held and fairly secretive private company, so there's no official data on revenues, but most likely less than $2 billion. [UPDATE: I have learned that revenues are actually below $500 million.]Industries do not consolidate forever (even drug wholesaling). Given the limited number of possible buyers and the pharmacy industry's pace of change, I expect that the remaining regional wholesalers will be looking for a reasonable exit strategy over the next few years, too. Read on for some additional background.Read more »Copyright © 2006-2012 Pembroke Consulting, Inc. and Copyright © 2006-2012 Drug Channels. This Feed is for personal non-commercial use only. read more..
Tuesday, 19 June 2012
Regional Wholesaler Dik Drug-Letter Of Intent-Cardinal Health
Monday, 12 March 2012
Drug Enforcement Administration-Temporary Restraining Order-Prescription Drugs-Cardinal Health
Does the Drug Enforcement Administration (DEA) understand the distribution system for legitimate, prescription drugs? It sure doesn't look that way. The DEA once again went after Cardinal Health (NYSE:CAH) by suspending the company’s controlled substances license at its Lakeland, FL, facility. Late Friday, Cardinal successfully won a temporary restraining order against the DEA. See Cardinal Health’s statement. Kudos to Cardinal Health CEO George Barrett for standing up to an overzealous DEA. When this happened in 2007, Cardinal’s tentative and indecisive response led to major business losses, from which the company has never fully recovered. I'm curious to see how CVS Caremark (NYSE:CVS) reacts to last Friday's raid at 2 of its Florida stores.As I explain below, the DEA started targeting wholesalers and manufacturers because they can't stop the real criminals—the patients abusing prescription drugs, the physicians running “pill mills,” and the pharmacies dealing these drugs. And don’t even get me started on how the DEA has created a shortage of ADHD meds by putting manufacturers under their thumb…Read more »Copyright © 2006-2012 Pembroke Consulting, Inc. and Copyright © 2006-2012 Drug Channels. This Feed is for personal non-commercial use only. read more..