American drug companies CVS Caremark Corp. and Cardinal Health Inc. reportedly plan to start a venture that will be the biggest source of generic medicines in the US.
CVS is the largest supplier of prescription drugs in the US. Meanwhile, Cardinal Health is the second-biggest drug distributor in the country, Bloomberg said in a report.
According to the report, the venture will be equally owned by CVS and Cardinal Health. Cardinal Health agreed to make a quarterly payment of USD25 million to CVS over the life of the 10-year pact. The partnership is set to debut as soon as July 1.
Bloomberg said that CVS and Cardinal Health will join forces to negotiate better rates from generic medicine makers and find savings in the medical system.
CVS and Cardinal Health will combine sourcing and supply chain expertise for the venture. No physical assets will be contributed to the enterprise. The joint venture could save the companies USD450 million to USD600 million a year, the report said.
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