Omnicare, Inc. is the nation's major provider of pharmaceutical products and services to nursing homes, assisted living institutions, and other long-term care facilities. Its pharmacies usually provide prescription drugs and pharmaceutical consulting services to geriatric institutions located within a 150-mile radius. It buys many of its drugs from wholesale distributor McKesson Corporation, but increasingly purchases drugs directly from manufacturers. Related services include infusion therapy, computerized billing and drug monitoring, and dialysis services. Omnicare also uses its relationships with nursing homes to serve as a contract research organization (CRO) that conducts a wide variety of clinical trials in 27 countries for pharmaceutical and biotechnology companies.
On May 19, 1981, Omnicare, Inc. was incorporated under the laws of Delaware. The company was started to operate healthcare services that it had gained from W.R. Grace & Company and Chemed Corporation. On May 20, 1981, the company chose Edward L. Hutton, a longtime W.R. Grace officer, as chairman and Joel F. Gemunder as president; they continued to lead the company for many years. Two months later, in July 1981, Omnicare began publicly trading its common stock.
Omnicare and Chemed remained closely entwined for several years. Chemed had started as a W.R. Grace subsidiary in 1971 with Edward L. Hutton as its president and CEO. In 1982 Chemed became totally independent as a public entity. Other Omnicare officers or directors, such as Jon D. Krahulik and Kevin J. McNamara, also served as Chemed leaders, while Chemed owned a great deal of Omnicare common stock. In addition, Omnicare for many years subleased its corporate headquarters from Chemed in Cincinnati.
In its early years Omnicare ran a variety of businesses that generally provided products and services to hospitals. In 1984 Omnicare acquired Labtronics, Inc. for an initial payment of $3 million in cash and stock. Based in Palo Alto, California, Labtronics served hospitals by maintaining and repairing their medical equipment.
Omnicare proved to be a great example of a company that changed directions to take advantage of healthcare and demographic trends beginning in the 1980s. Since hospital occupancy rates fell and numerous community hospitals closed their doors, Omnicare quit providing products and services for such large institutions. Second, it shifted to serving the rapidly aging American population by providing pharmacy services to nursing homes, assisted living facilities, and other geriatric institutions. Omnicare's focus on such smaller facilities was part of a general decentralization trend in the postindustrial Information Age.
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