McKESSON/VALU-RITE DEAL CREATES 25,000-PHARMACY MANAGED CARE NETWORK

Executive Summary

McKESSON/VALU-RITE DEAL CREATES 25,000-PHARMACY MANAGED CARE NETWORK that will cover 4 mil. lives, McKesson announced Dec. 9. The wholesaler maintained that creation of its 25,000-outlet PCS Health System network incorporating the 4,500 independent pharmacies affiliated under the Valu-Rite banner forms "the nation's largest single-provider managed care pharmacy network." Calling Valu-Rite "the nation's largest and fastest growing voluntary organization of independently owned retail pharmacies," McKesson said the agreement gives the affiliated providers "access to the growing number of prescriptions being channeled to pharmacy networks by managed health care organizations." Valu-Rite stores "far outnumber" the largest pharmacy chain in outlets and, if their sales volume were consolidated, would rank as the third- largest chain. The Valu-Rite network offers a "rebate plan on both branded and generic products." Valu-Rite stores can receive rebates of 5% off the acquisition cost of generics in McKesson's program and 1% off brandname drugs purchased from McKesson and "dispensed to certain customers under the now network plans." McKesson said the agreement will give Valu-Rite pharmacies opportunities to increase their business with beneficiaries required to patronize network providers. The Valu-Rite network has grown from less than 4,000 pharmacies since the autumn, when McKesson sales personnel began notifying pharmacies of the wholesaler's plans for Valu-Rite.