McKesson to acquire controlling interest in cancer outfit for $2.5 billion

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Healthcare services company McKesson has signed a definitive agreement to acquire a controlling interest in Community Oncology Revitalization Enterprise Ventures (Core Ventures) for about $2.49 billion.

Core Ventures, a business and administrative services organization, was established by Florida Cancer Specialists and Research Institute, a  physician-owned community oncology practice. FCS physicians will continue to retain a minority interest in Core Ventures.

For the price tag, McKesson will have a controlling interest representing about 70% ownership. Following completion of the transaction, Core Ventures will be part of the Oncology platform, and financial results will be reported within McKesson's U.S. Pharmaceutical segment.

WHAT'S THE IMPACT

Following the close of the transaction, FCS, a practice with more than 250 physicians and 280 advanced practice providers across nearly 100 locations in Florida, will remain independently owned and FCS will join McKesson's U.S. Oncology Network.

The transaction is subject to customary closing conditions, including necessary regulatory clearances.

FCS said that, over the years, its services have grown to include clinical trials, diagnostic imaging, medical oncology and chemotherapy infusion, integrative therapy, molecular and pathology lab services, radiation oncology, sequencing, medically integrated dispensing and data services.

FCS currently conducts clinical trials through Sarah Cannon Research Institute (SCRI), an oncology research organization conducting community-based clinical trials.

"This milestone marks an important step forward in our efforts to advance community-based oncology care," said McKesson CEO Brian Tyler. "By growing our Oncology platform, we will bring advanced treatments and improved care experiences to patients, while also reducing the overall cost of care."

THE LARGER TREND

Last year, the Center for Medicare and Medicaid Innovation released a new, voluntary Enhancing Oncology Model intended to reduce spending and improve quality of care for cancer patients. The EOM is a five-year voluntary model that has payment incentives and requires participant-redesign activities. The model will end in June 2028.

Under EOM, participating Physician Group Practices take on accountability for their patients' healthcare quality and for total spending during six-month episodes of care for Medicare patients with certain cancers.

ON THE RECORD

"Above all else, our patients are the true beneficiaries of this transaction, as we seek to drive meaningful outcomes and deliver sustained value with every interaction," said Dr. Lucio N. Gordon, president and managing physician, FCS. "Through the power of our combined operational expertise, we can bolster community oncology's role in increasing access to high-quality, affordable care."

"This is a historic moment for FCS and reflects the evolution of our practice and the forward-thinking of physician leadership, our board, and the entire organization at large," said FCS CEO Nathan H. Walcker. "The US Oncology Network and FCS share a mission and we both aim to strengthen patient-centered cancer care in the community to improve outcomes. We are thrilled to partner with McKesson and join The Network, which furthers the joint commitment to bringing the best medicine and innovation for patients into communities across Florida."

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.