CVS Sale Of Omnicare Long-Term Care Pharmacy Continues Portfolio Revamp

A bankruptcy court has approved the sale of CVS Health’s underperforming Omnicare long-term care pharmacy network to GenieRx in a deal valued at $250 million.

CVS said the sale to GenieRx followed a “comprehensive sale process” that was approved by the U.S. Bankruptcy Court for the Northern District of Texas. GenieRx, a joint partnership between private investment firm Milrose Capital LLC and health-care investment and management firm Integro Healthcare Services, “will have the opportunity to strengthen” Omnicare’s service, CVS said.

For CVS, the deal is the latest to focus on profitable businesses. The company’s Aetna health insurance unit left the business of selling individual coverage under the Affordable Care Act known as Obamacare and the company has scaled back opening senior health clinics in favor or smaller drugstore formats.

“We are entering this next phase with clarity on what matters most: delivering reliable pharmacy services, maintaining safe and clinically appropriate care, and being transparent and fair in how we operate,” said Omnicare’s president, David Azzolina, in a statement. “Our teams continue to show a deep commitment to our customers, and I am grateful for the work they do every day to support residents in skilled nursing and assisted living settings.”

When CVS purchased Omnicare for more than $12 billion more than a decade ago, the drugstore giant wanted to expand in the growing business of dispensing and managing prescriptions for the booming number of Americans taking specialized drugs. But the deal never really worked out and the business had low growth and was dogged by fraud investigation that cost CVS hundreds of millions of dollars.

The Omnicare sale is expected to close later this year, CVS said.

“GenieRx’s investment in Omnicare is a testament to the strength of their platform and their impressive employee culture and commitment to putting patients and customers first,” said Rowan Farber, CEO of Integro Healthcare Services. “We admire the trust Omnicare has earned with its customers over decades of serving skilled nursing and assisted living partners, and we look forward to working collaboratively with their team to continue building on that strong foundation and legacy. Together, we share a commitment to delivering reliable service, clinical expertise, and continuity of care to the patients and communities who depend on it most.”