Inside This Issue - News
CVS renews pacts with Cardinal, McKesson
May 20th, 2013
NEW YORK – Two of the industry’s largest drug wholesalers said last month that CVS Caremark Corp. will continue to be their customer.
McKesson Corp. and Cardinal Health Inc. announced in late April that the Woonsocket, R.I.-based chain has agreed to renew its relationship with them for the next several years.
“We are extremely pleased to continue our long-standing relationship with CVS Caremark,” McKesson executive vice president and group president Paul Julian says. “McKesson’s comprehensive supply-chain solutions continue to help CVS Caremark ensure the highest levels of product availability and product integrity, empowering CVS Caremark to provide outstanding pharmaceutical care to its customers.”
McKesson and Cardinal say that CVS Caremark represents a significant portion of their annual sales.
For McKesson’s 2012 fiscal year, CVS Caremark accounted for about 16% of the company’s total revenue. Cardinal says the drug chain/PBM accounted for nearly 22% of its revenue last year.
“CVS Caremark has been a long and valued partner to Cardinal Health,” chairman and chief executive officer George Barrett says. “We are excited to continue to build on that tradition. We look forward to working together to create value for our evolving heath care system.”
The latest deal between the companies will see Cardinal supply pharmaceuticals to CVS Caremark’s retail pharmacies and distribution centers through the middle of 2016.
Keeping CVS Caremark as a customer is crucial for Cardinal in light of the recent decision by Walgreen Co. to sever its ties with the distributor when its current contract ends this summer.
Walgreens accounted for 22% of Cardinal’s total revenue last year but on the same day it agreed to acquire a stake in AmerisourceBergen Corp., the drug chain announced that it would not renew its deal with Cardinal.
Cardinal executives say the loss of Walgreens will have a minimal impact on its business.