Cardinal Health acquires Healthcare Solutions Holding in a bid to corral specialty pharmaceutical services business

Big Three distributor Cardinal Health, which has recently mostly been divesting assets (Carefusion and Catalent Pharma Solutions) is back on the acquisition trail, putting down $517 million cash, plus incentives, for Healthcare Solutions (Elllicott City, MD), a holding company with a group of subsidiaries that offer online communications to patients and business services to physicians. Its best known unit might be P4 Pathways and P4 Healthcare, which specializes in oncology services. The acquisition is notable both for its strategic direction for Cardinal—deepening its position in specialty pharma services—and for the connectivity it provides between the pharma industry and patients.

(“P4” all by itself is an interesting acronym; for Healthcare Solutions, it seems to refer to “physicians, patients, pharmaceutical companies and payers,” according to company literature. But there is also a “P4 Medicine” movement among computational medicine policy thinkers, referring to “personalized, predictive, preventive, participatory” healthcare.)

Based on recent announcements, Healthcare Solutions has been concentrating on two things in oncology: online and print information services for patients and physicians (it has an award-winning publication, Caring4Cancer) and “clinical pathways” development. This refers to the development of outcomes-based treatment guidelines that would influence physician practices in managed care organizations (among others). MCOs are looking at clinical pathways as a technique both to improve outcomes and reduce treatment costs by targeting treatment more effectively. P4 has clinical pathways projects with several Blue Cross/Blue Shield organizations.

Another element of Healthcare Solutions is MedTrend, a compensated advisory panel and market research service for pharma and other clients.

For Cardinal, “The acquisition is an important building block in our strategy to create a differentiated set of services for oncology and specialty customers,” said George Barrett, chairman and CEO, in a statement. “Healthcare Solutions Holding is a natural extension of Cardinal Health’s businesses and will enable the growth of our specialty distribution operations.” Barrett cites company data that specialty pharmaceuticals will go from $75 billion to over $100 billion from last year to next; and that community-based practices are tracking equally with hospital-based ones in this growth.

A final twist is that P4 Healthcare’s roots go back to International Oncology Network (ION), founded in 1992 and acquired in 2003 by AmerisourceBergen, where it is now a key part of that company’s Specialty Group. ION functions as a group purchasing organization for several hundred oncology practices and provides some of the same services that Cardinal is now targeting.