In April, I posted some thoughts on the pending acquisition of PSS/DSI by McKesson ( McKesson and PSS World Medical ). In the niche called "clinic dispensing", that transaction was a mega-merger. PSS had rolled up no fewer than half a dozen repackagers specializing in clinic dispensing over the last 36 months and created a very large organization focused on supplies and services for medical clinics. McKesson purchased PSS for its access to clinics across the country and to supplement its existing supplies and services operations tailored to the clinic marketplace. Nearly six months later, the strategy and focus behind the acquisition are beginning to emerge. The McKesson juggernaut is not interested in the physician dispensing market and likely views it has a huge risk relative to its tiny revenue stream. With PSS came multiple repackaging locations, all magnets for FDA scrutiny, and a host of potential regulatory land mines. With a revenue base that doesn't even total a decimal point in the McKesson P&L, it is clear that the risk does not match the reward. The most credible rumors I've heard include the following:
- McKesson/PSS/DSI is not interested in maintaining their presence in the clinic dispensing space.
- McKesson/PSS/DSI plans to let their sales representatives go in the near-term.
- Customers will likely see access to controlled substances disappear first.
- Pricing and availability will likely change as they begin to contract packaging operations.
- Service will become spotty as resources are redeployed.
For existing customers of McKesson/PSS, there are some very good alternatives in the market. We've already begun converting previous McKesson/PSS clinics over to our systems and processes. The good news is that clinics currently using McKesson/PSS dispensing software can easily migrate to our software platform with little to no re-entry of data. The bottom line is that you have options, resources are available and you can transition to a new supplier with very little disruption to your existing operation. Questions? Feel free to email me at phil.berry@nwpharma.com.
FULL DISCLOSURE: My company, Northwind Pharmaceuticals, competes with McKesson/PSS/DSI in the physician dispensing space. This post is merely my opinion on developments I've seen in the clinic dispensing market relative to McKesson's acquisition of PSS. McKesson is a strong company and I wish the organization and all of its stakeholders nothing but great success.
