Pharmacy chain CVS Caremark Corp and pharmaceutical distributor Cardinal Health Inc on Tuesday announced a 10-year agreement to form the largest generic drug sourcing operation in the United States, the world's biggest generic drug market.The 50-50 joint venture will be operational as soon as July 1, 2014. Under the agreement, Cardinal will pay CVS $25 million on a quarterly basis for the duration of the contract, with an estimated after-tax value to CVS of $435 million.The companies also announced a three-year extension of their existing distribution agreements, taking them through June 2019.The U.S. market for medicines has seen a major shift toward cheaper generic drugs following a wave of patent expiries in recent years for major brand-name treatments and a growing effort to lower costs throughout the healthcare system.
Cardinal Health, Inc. is a healthcare services company providing products and services that help pharmacies, hospitals, surgery centers, physician offices and other healthcare providers. Shares of CAH traded higher by 3.64% or $2.34/share to $66.61. In the past year, the shares have traded as low as $40.49 and as high as $65.45. On average, 2940280 shares of CAH exchange hands on a given day and today's volume is recorded at 6529556.
CVS Caremark Corporation (CVS Caremark), together with its subsidiaries, is a pharmacy health care provider in the United States. Shares of CVS traded higher by 1.78% or $1.19/share to $67.92. In the past year, the shares have traded as low as $47.35 and as high as $67.64. On average, 5625820 shares of CVS exchange hands on a given day and today's volume is recorded at 7183983.
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