AmerisourceBergen Will Protest the Award of the Department of Veterans Affairs Pharmaceutical Distribution Contract
Tuesday January 20, 9:02 am ET
Company Will Seek Injunction and Reversal of Award In The United States Court of Federal Claims
Yost has made a serious error here. The poor service provided by ABC will now be aired in a public forum with no holds barred. I also believe that this will make all of the proposal public documents so ABC's bid will now be out in the open.
This will ultimately be VERY BAD for ABC.
I understand that ABC is behaving like a rat trapped in a corner and is clawing at everything that they can, but this is over the top bad.
Time will tell............
Makes me wonder - if MCK now knows they don't want the VA job, will they be able to use the ABC challenge as an excuse to back away from their bid. I doubt it, but it should depend on the grounds for the ABC challenge.
They all made the bid quite awhile ago, but I don't have the exact date handy. It took awhile to evaluate. MCK and CAH generate more profit from that kind of speculative buying than ABC. So IMO the bids would have been different.
Where did you get the information that "the bid was made prior to recent industry changes related to speculative inventory buying"? These changes have been clear for several months at least. Did MCK alone submit a bid several months ago or did all 3 players submit at the same time and VA took that long to evaluate the results?
shareman...you're about the only one on this board that gets it. The real issue is lack of senior mgmt. The only mgmt that's left after the merger is old AAS folk who don't have a clue how to run a business this large, in an industry this sophisticated. They only know cost savings and cutting (or when you're really desperate, litigation) which is not enough to build shareowner value. Their two year run on merger synergies is coming to an end, and as customers are coming up for renewal, and looking for value, we see where they are all going. How many accounts can you loss in the name of pricing discipline. I guess we will find out.
>It's likely just the warm-up act. <
I believe you do not understand what I am saying. MCK itself KNOWS they blew it. The bid was made prior to recent industry changes related to speculative inventory buying. IMO, there's is no way they would make the same bid now no matter what they claim. The return will be lower than they expected when they made the bid. No one on the planet could be that dumb.
<< Now that they know, future bids will not be as aggressive.>>
It's likely just the warm-up act. Because they have bid lean and mean, they will become smarter, hungrier, leaner, and meaner. And they will eat their competitors' lunch, unless everyone joins the fray.
If ABC looses one or two more decent sized deals, Yost will be under extreme pressure. After-all, any bozo can submit a bid with a 20% return on all capital invested. Where's the magic in that?
Investors will be looking to see how he can handle mano-a-mano combat where kid gloves have been replaced with brass knuckles and jagged knifes.
I think they had no choice. If the Caremark/AdvancePCS deal goes through and since Caremark just resigned with McKesson, they're going to lose that business. It won't be the big three any more - it will be the big two (GM and Ford) and that other guy (Chrysler). They see the handwriting on the wall and are trying to stall the end game.
I agree that ABC is basically calling the VA incompetent and stating that their process was incorrect.
Right or not, this will definitely play in future deals with the government sector which ABC used to dominate. Do you think that the people that are being questioned here will want to continue to business with ABC in the future........I think not.
Unless there is something blatant here, ABC has done additional damage and will continue to lose government business.
Poor service, poor business model, poor attitude, poor public communication. GRAND SLAM..................
I agree except for the commodity part.
MCK screwed up and they know it even if they won't admit it. They submitted their bid long before it became apparent that manufacturers were going to reduce speculative buying and move to a fee for service model. Without the same excess speculative buying profits, their margins will be lower than even they expect. If they had it to do over, IMO they would bid differently. Now that they know, future bids will not be as aggressive.