Acquisition strengthens Cardinal’s presence among independent pharmacies
As sole owner of Kinray, Inc., Stewart Rahr is about to put a $1.3-billion check in his pocket, ending one of the more colorful chapters in pharmaceutical wholesaling. Rahr took over his family’s pharmacy and distribution business in the mid-1980s when it had five employees and $1 million in sales, and grew it to a company with 1,000 employees and $3.5 billion in revenue, operated from a single facility in Queens, New York. The company serves primarily 2,000 independent pharmacies in the Northeast; its website lists long-term, alternative-care and specialty pharmacies as additional clients.
For Cardinal the acquisition boosts its client base among independents to around 7,000. "Kinray has a long-standing service tradition with its customers,” says George Barrett, CEO of Cardinal. “We intend to continue that tradition, utilizing its customer expertise and Whitestone distribution facility, while creating additional value for its customers through branded pharmaceutical programs, inventory and pharmacy management tools and Cardinal Health's extensive generic drug program.”
Along with McKesson’s recent acquisition of US Oncology, the Cardinal acquisition represents a further consolidation of pharma distribution and wholesaling in the US, a trend that has been continuing since the 1990s. That, in turn, puts a greater emphasis on specialty distribution, a fast-growing area matched by the growing number of specialty pharmaceuticals coming to market, along with the paucity of new branded drugs.