CVS Caremark Agrees to Buy Specialty Pharmacy Business
Woonsocket, Rhode Island-based CVS Caremark (NYSE: CVS – $66.83) announced that it was buying Coram LLC, the infusion services and enteral nutrition business unit of Apria Healthcare Group for $2.1 billion. Infusion therapy involves administering medication through a needle or catheter when a patient’s condition is too severe to be treated effectively by oral medications. While infused therapies can be administered in hospitals, physician’s offices and infusion centers, CVS said its studies have found that providing the services at patients’ homes or in ambulatory care settings are by far the most cost-effective. The company said Coram would add $1.4 billion to revenues in the first year after the deal closes, sometime in the first quarter of 2014 and be net earnings neutral, but will add 3 to 5 cents per share to CVS’s adjusted earnings per share in 2015. CVS Caremark should continue to outperform over the long-term as it is one of the country’s largest retail drugstore chains and pharmacy benefit management companies, both of which should capitalize on an aging population and increased use of drug prescription insurance benefits.