MOUNTAIN VIEW, Calif. — Omnicell announced it has entered into a definitive agreement with Pharmaceutical Strategies Group (PSG) to acquire its 340B Link business for total aggregate cash consideration of $225 million, subject to customary adjustments. The acquisition will add a comprehensive and differentiated suite of software-enabled services and solutions used by certain eligible hospitals, health systems, clinics, and entities to manage compliance and capture 340B drug cost savings on outpatient prescriptions filled through the eligible entity’s pharmacy or a contracted pharmacy partner.
The federal 340B Drug Pricing Program has provided financial assistance to hospitals serving vulnerable communities for more than 25 years. The program offers drug discounts to support eligible entities, including certain hospitals and other federally-qualified health centers, that provide care for the nation’s underinsured and uninsured patients. The 340B program continues to be an important source of funding for vital patient care as covered entities face rising healthcare costs, reimbursement cuts, and uncompensated care. To manage the increasing complexities of program compliance, eligible hospitals and other entities rely on software-enabled services to manage the program. The importance of the 340B program continues to grow as covered entities seek solutions to help manage rising healthcare costs and uncompensated care.
The acquisition of the 340B Link business accelerates Omnicell’s journey to the fully Autonomous Pharmacy, building on the company’s recent launch of Omnicell One, which leverages cloud-based data and predictive, prescriptive analytics to provide real-time visibility with actionable insights and workflow optimization recommendations to improve outcomes across the pharmacy supply chain.
“This is an exciting transaction for Omnicell that accelerates our strategic transformation and brings us even closer to achieving the long-term vision of the Autonomous Pharmacy,” said Randall Lipps, chairman, president, CEO, and founder of Omnicell. “Key to realizing this vision is supporting health systems and providers as they manage an increasingly complex medication management supply chain. The 340B program is a significant part of that supply chain, and PSG’s market-leading 340B Link business adds distinct capabilities and software-enabled services to our portfolio, which will help providers manage compliance and reporting requirements for their 340B program, while capturing eligible drug cost savings. We believe that by expanding our offerings and enhancing our pharmacy supply chain capabilities, we will position Omnicell for long-term growth and success.”
“Since 2011, 340B Link has been helping our customers manage their 340B programs efficiently and compliantly in support of high-quality patient care, and we’re excited to watch our friends and colleagues continue this meaningful work as part of the Omnicell family,” said Dave Borden, chief executive officer of PSG. “We are confident that the combination of our team’s capabilities and the broader Omnicell portfolio will provide healthcare providers with the tools to navigate complex cost and compliance challenges across the pharmacy supply chain as part of their broader medication management strategy.”
Compelling Strategic Benefits
- Provides differentiated services and solutions: 340B Link combines industry-leading software, deep knowledge of the 340B program, and software-enabled services that deliver superior outcomes for its customers, significantly improving compliance through:
- Split Billing (Order Link): Drives productivity through a web-based ordering and inventory management tool, built on a market-leading qualification engine that optimizes 340B program value for mixed use and entity-owned pharmacy environments from a single platform.
- Contract Pharmacy Administration (Network Link): Optimizes the contract pharmacy network, providing access to any 340B contract or mail order pharmacy – including all major national chains, regional chains, and independent pharmacies across the U.S. – while simplifying program management to drive effective and compliant program value. With integration and active relationships currently connecting covered entities to more than 5,000 individual pharmacy locations, including all leading retail chains, mail order, and specialty pharmacies, 340B Link’s unmatched 340B pharmacy network drives increased program value to clients.
- Specialty Contract Pharmacy Administration (Specialty Link): Streamlines the specialty contract pharmacy network to extend covered entity 340B discounts and provide additional access to more than 90% of specialty drugs.
- Drug Discount Access Solutions (Community Link): Provides covered entities the ability to share 340B discounts with eligible patients through a discount card at their neighborhood pharmacy. Supports administration of free or subsidized medications to select patients in support of charity care or condition-specific programs.
- Extends the Autonomous Pharmacy Vision: 340B Link manages complex processes and compliance for 340B-administered medication across ambulatory settings, extending the vision of the Autonomous Pharmacy across the care continuum.
- Adds High-Growth, Immediately Accretive, Recurring Revenue Business: 340B Link is a high growth software-enabled services business with a recurring revenue business model, aligned with customer success.
- Complementary to Omnicell One: 340B Link’s capabilities are complementary to Omnicell One, Omnicell’s recently-announced, technology-enabled service which focuses on pharmacy supply chain optimization and diversion management. Omnicell One leverages a unique set of predictive and prescriptive analytics along with expert guidance to deliver insights and a closed-loop workflow that supports pharmacy labor efficiency, controlling medication spend and effective diversion management.