NeighborCare (Baltimore, MD), the wholly-owned pharmacy subsidiary of Genesis Health Ventures, Inc., announced that it has selected Cardinal Health, Inc. (Dublin, OH) as its primary pharmaceutical supplier.
The five-year contract calls for Cardinal to supply NeighborCare's 36 professional retail and 74 long-term care pharmacies. Last year, NeighborCare purchased approximately $500 million worth of pharmaceuticals, according to a company release.
Separately, NeighborCare and Allegiance Healthcare Corp., a Cardinal Health subsidiary, have also agreed to develop a partnership for the nationwide distribution of medical supplies.
The proposed partnership, aimed at increasing distribution channels while decreasing costs, is said to be viewed by both companies as an opportunity to develop a distribution network focused on the country's growing senior population.
Under the pharmaceutical contract and the proposed supply partnership, Cardinal will assume greater responsibility for many supply-chain management activities allowing NeighborCare to grow without capital investment.
"This new alliance should not only allow NeighborCare to deliver pharmaceuticals and supplies more efficiently, but expand market share in the 41 states we serve," said Michael Bronfein, president of NeighborCare.
NeighborCare, with annual revenues of $900 million, serves more than a million customers, including over 240,000 long-term care customers. The company's professional and long-term care pharmacies, medical supply centers, infusion therapy services, and home medical equipment facilities are a part of the Genesis ElderCare Network.