Omnicare Remains a Burden for CVS Health

In our previous post titled CVS Health’s Dilemma with Omnicare Continues, we provided insight into CVS Health continuing to blame industry performance in the nursing home market as causing ongoing headaches in a review of its third quarter 2018 financial results.

The post also shared that CVS Health is targeting upward of $150 million in “cost takeout opportunities,” utilizing automation and better leveraging of its local presence looking to become a low-cost operator of LTC pharmacies.

Recently we learned that a lawsuit is accusing Omnicare and its parent CVS of “alienating” more than 100 skilled nursing and assisted living facilities in Southern California by delivering allegedly shoddy services following an acquisition of one pharmacy provider.

The lawsuit was filed against Omnicare of Cerritos doing business as a local retailer of Evergreen Pharmaceutical of California, Inc. The “vast majority” of the 150 skilled nursing and assisted living facilities formerly serviced by Modern terminated their agreements with the new owner, the legal filing claims.

CVS Health’s most recent financial results and long-term care strategies and activities reinforces the observation that companies competing with Omnicare have an opportunity to gain market share by focusing on customer service in specific markets.