What is an indirect subsidiary?
Department of Health and Human Servicesissued a Notice of Action on or about June 17, 2004 against PharMerica DrugSystems, Inc. ("PDSI"), an indirect subsidiary of the Registrant and asubsidiary of PharMerica, Inc. ("PharMerica"), for alleged violations in 1997 byPDSI of the anti-kickback provisions of the Social Security Act, 42 U.S.C.�1320a-7a(a)(7). The Registrant does not expect the resolution of this matter tohave a material adverse effect on its financial condition.
PDSI's acquisition of HMI in 1997 predated both Bergen Brunswig Corporation'sacquisition of PharMerica, PDSI's parent, in 1999 and the subsequent merger ofAmeriSource Health Corporation and Bergen Brunswig Corporation to form theRegistrant in August 2001.
This is a gray area....But like OCR did not pay a mulitple on SUNH's business when they bought SUNH's pharmacy division (in addition to asking for a commitment letter)? You are right that this is a little more blatant being that it wasn't an active pharmacy (merely L/T commitment contracts w/ little to no current operations).
This issue may be a "shot accross the bow" in the industry. There were many shady deals in the late '90's while OCR, NCS, PharMerica and the rest consolidated LTC pharmacy. This was pretty blatent, but there are lots of shades of grey that will be examined.
Can't wait to see what else surfaces.
There was controversy and legal issues when Merck bought Medco years ago. The issues stemmed around Merck infuencing Medco on the use of Merck drugs.
Merck weathered the controversy, recently set up Medco as a seperate entity and 'life goes on'.
If there is a dollar to be made many will take the risk.
The "specialty pharmacy" could be PMSI or ABC's specialty group. I think PMSI is what Aetna is interested in. PMSI is a PBM for workman's comp.
ABC's specialty group is a distribution and marketing network for biotech and oncology products to physicians - has been extremely successful with little competition.
Specialty physician networks; group purchasing; distribution of biologics, biotech, injectables, plasma, oncolytics and vaccines; reimbursement education & practice management tools; payer research & advisory panels; and patient education & adherence programs.