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excelleRX

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About excelleRX

Omnicare strives to be omnipresent in US nursing homes. The firm is the country's largest institutional pharmacy services provider, dispensing drugs to nursing homes, assisted-living centers, and other long-term care (LTC) facilities in the US and parts of Canada. In addition, it provides clinical and financial software, consulting, and billing services – more... to LTC facilities, as well as infusion, respiratory, and chronic disease therapy products and services for nursing home residents and hospice patients. It also provides some services to drugmakers. The company has pharmacy and distribution locations across the US, and it serves LTC facility customers with a combined capacity of more than 1 million patient beds.

Operations

The company's operations are organized into a "hub-and-spoke" model. Its pharmacy service administrative activities, as well as some routine prescription refilling operations, are located at some 30 regional hubs where scale, centralization, and automation can produce greater efficiency. More than 100 smaller local pharmacies (the "spokes") in turn focus on activities requiring direct customer interaction.

Omnicare divides its operations into two business categories. The long-term care (LTC) group handles the company's primary institutional pharmacy service operations for nursing, retirement, and other care facilities. This segment, which accounts for more than 80% of annual revenues, also provides compliance and efficiency consulting services and technology programs such as the Omniview online prescription management platform.

The company's other division, the specialty care group, is a growing supplier of specialty pharmaceuticals (medications for chronic conditions that require special handling) and chronic disease management services to long-term care facilities, hospice organizations, and other health care centers. It also provides branding, commercialization, and logistics support services to drugmakers.

Financials

Omnicare returned its operations to profitability in fiscal 2011, reporting some $87 million in net income. Omnicare's net income loss in 2010 was primarily attributed to the devaluation of its former CRO business, which was suffering from adverse market conditions. Omnicare also reported a 1% increase in revenues to some $6.2 billion in 2011.

Over the years, Omnicare has struggled to keep its earnings and revenue levels climbing due to lower reimbursements on drugs from health insurers, including Medicare and Medicaid policies, which together account for about two-thirds of sales. Economic and competitive factors have also impeded the company's growth progress. Though it hopes to overcome these elements with its new strategic priorities, changes in federal health legislation could lead to further challenges in the future.

Strategy

The highly acquisitive Omnicare has expanded its long-term care operations over the years by purchasing small, independent institutional pharmacies and integrating them into its organization. However, in mid-2010 the company announced plans to pull in and focus on organic growth measures within its existing operations, with a focus on increasing the number of beds (facilities) its LTC segment serves through customer satisfaction and retention efforts; promoting the specialty care unit's services to drugmakers; and streamlining its organization through technology enhancements in areas such as billing and dispensing automation. The change in strategic priorities led to a number of operational restructuring programs, including some layoffs and noncore asset sales.

In addition to divesting its noncore home infusion operations through an asset-swap arrangement with Walgreen in 2010, the company's restructuring efforts included the sale of its remaining durable goods operations and its Tidewater group purchasing operation in 2011. Omnicare also sold its former CRO Services division, Omnicare Clinical Research (now known as Theorem Clinical Research), to private equity firm Nautic Partners for an undisclosed sum in 2011. Following the asset sale, Omnicare divided its remaining operations (previously lumped into the pharmacy services segment) into two business divisions: long-term care and specialty care.

Mergers and Acquisitions

Regardless of its shift in strategies, Omnicare still completed about a half dozen small pharmacy acquisitions in 2010 and 2011. The company also completed a larger-than-usual deal with Walgreen in late 2010; the asset swap transaction allowed Omnicare to take over Walgreen's long-term care pharmacy operations in five states, while Walgreen took control of Omnicare's home infusion service operations. The swap fit in with Omnicare's strategy of focusing on and growing its LTC business. And in 2012 the firm reached a $40 million deal to purchase the institutional pharmacy business of Five Star Quality Care. The acquisition will add eight pharmacies serving LTC facilities in 13 states.

The company attempted to complete a large-scale acquisition in 2011 by making an offer to acquire rival institutional pharmacy operator PharMerica in a $716 million cash-and-debt deal in 2011. However, after PharMerica rejected the bid as undervalued and the FTC frowned upon Omnicare's hostile tender offer attempt, Omnicare dropped the acquisition efforts in early 2011. – less

excelleRX Employer Reviews

Clinical Pharmacist (Current Employee), telecommuteFebruary 28, 2014
Customer Service Representative (Former Employee), Philadelphia, PAFebruary 24, 2014
Prescription Management Service Technician (Former Employee), Philadelphia, PADecember 28, 2013
Prescription Management Specialist Level II (Current Employee), Cherry Street, Philadelphia, PADecember 11, 2013
Prescription Management Specialist Level II (Current Employee), Philadelphia, PANovember 30, 2013

Working at excelleRX

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