ZorroCard Round Up (10/2/24)

Hey everyone,

Today’s round up is dominated by consolidation. The more I see consolidation in healthcare, the more I think those firm need some sort of legal fiduciary requirement to stakeholders like patients and employees. Enjoy the rundown!

Best,

Jacob Brody (Co-Founder & CEO at ZorroCard)

Wall Street Journal (Drug Middlemen Battling for Customers): In a heartwarming display of corporate ambition, drug wholesalers like McKesson, Cencora, and Cardinal Health are snatching up medical providers left and right to secure their drug sales, especially in the oh-so-profitable oncology sector. With acquisition prices skyrocketing due to a lack of available targets, and because nothing says “patient care” like vertical integration, concerns about safety and quality are surely overblown. Full Article.

Wall Street Journal (CVS Health Considering Breakup): CVS Health is reviewing strategic options, including a potential breakup, as the company faces challenges in fulfilling its vision of an integrated healthcare conglomerate. The company’s Medicare business is struggling, Caremark is bleeding customers, and its $10.6 billion acquisition of Oak Street Health is shaping up to be a financial black hole. So, what’s the obvious solution? Layoffs and cost cuts, of course, because nothing fixes bad decisions like firing a few thousand people. Full Article.

Axios (Governor Newson Vetoes Private Equity Healthcare Acquisitions Bill): Governor Gavin Newsom vetoed a bill intended to stall private equity acquisitions of healthcare businesses. The bill would have required the state’s AG to sign off on healthcare acquisitions over $25 million, but apparently, that’s just too much oversight. Newsom assured voters that the Office of Health Care Affordability, which can’t actually block deals, is the right office to monitor such acquisitions. Meanwhile, private equity firms are unsurprisingly thrilled. Full Article.