Illustration by Mark Speakman

Retail behemoth CVS announced in May it will acquire Omnicare, the long-term care industry’s largest institutional pharmacy company, for $10.4 billion.

Rumors have swirled around a potential Omnicare takeover for months, but few companies could afford the outlays needed to close the deal. CVS will assume another $2.3 billion in Omnicare debt in addition to the purchase price.

More than one-fourth of Omnicare’s revenue is derived from marketing, distributing and securing reimbursement for facilities dispensing high-price drugs, The Wall Street Journal reported. The company has 160 locations in long-term care facilities, including assisted living, in 47 states. 

“The acquisition of Omnicare significantly expands our business, providing CVS Health access into a new pharmacy dispensing channel,” CVS Health CEO Larry Merlo said.

Since CVS and Omnicare do not directly compete, the deal is expected to be palatable to those with antitrust concerns.

Experts said it’s believed Walgreens also has its eye on the long-term care market, specifically in a potential acquisition of PharMerica.

“Omnicare is gone, and next will be PharMerica,” Edward Buthusiem, a managing director at Berkeley Research Group, told McKnight’s. “Walgreens obviously is going to take a hard look at that. It would be a logical choice. But they [other mainstream pharmacies] are all looking at it.”

The pending Omnicare acquisition is the latest in a series of ups and downs for the pharmaceutical giant. 

At the end of 2014, the Department of Justice joined a False Claims Act case alleging Omnicare received millions in kickbacks from Abbott Laboratories over a 10-year period. In 2011, Omnicare attempted to buy PharMerica but stopped its pursuit after federal regulators filed a lawsuit to prevent the deal.