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CVS Paying $10.4B in Cash for Drug Distributor Omnicare

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This March 25, 2014, file photo, shows a CVS store in Philadelphia. CVS Health will buy Omnicare in a deal valued at about $12.7 billion in move to expand its pharmacy services reach into assisted living and senior care facilities. (AP Photo/Matt Rourke, File)

This March 25, 2014, file photo, shows a CVS store in Philadelphia. CVS Health will buy Omnicare in a deal valued at about $12.7 billion in move to expand its pharmacy services reach into assisted living and senior care facilities. (AP Photo/Matt Rourke, File)

TOM MURPHY, AP Business Writer

CVS Health will pay more than $10 billion for pharmaceutical distributor Omnicare in a deal primed to feed its fast-growing specialty drug business and tap a lucrative and growing market: care for the elderly.

The acquisition announced Thursday will give one of the biggest U.S. pharmacy benefits managers national reach in dispensing prescription drugs to assisted living and skilled nursing homes, long-term care facilities, hospitals and other care providers. Omnicare’s long-term care business operates in 47 states and the District of Columbia.

The deal also will bring in more business doling out specialty drugs. These complex and expensive medications for cancer, hepatitis C and other conditions can represent treatment breakthroughs but are raising growing concerns over cost. Insurers and other bill payers want help containing that expense.

Specialty drug revenue soared 46 percent for CVS Health in the first quarter, helping the company trump analyst expectations and make up for a sales hit from its decision to stop selling tobacco products last year in its drugstores. CVS Health also runs the nation’s second largest drugstore chain, trailing only Wagreens Boots Alliance Inc.

Cincinnati-based Omnicare’s core business involves distributing drugs and providing pharmacy services to long-term care providers, a market CVS Health doesn’t currently serve.

CVS Health CEO Larry Merlo told analysts that represents a “substantial growth opportunity” for his company, with the U.S. population aging.

U.S. Census Bureau researchers have predicted that the population age 65 and older will approach 84 million people by 2050, nearly double its total in 2012, due largely to the aging baby-boom generation.

Merlo noted that older people are more likely to take several medications and can have trouble making sure their prescriptions follow them as they move from their own home to long-term care or other settings. He believes his company can help ease these transitions.

“Omnicare significantly expands our business and provides us with access into a new pharmacy dispensing channel,” Merlo said.

CVS Health said Thursday that it would spend $98 in cash for each Omnicare share. The total value of the deal, expected to close later this year, is $12.7 billion counting about $2.3 billion in debt.

Omnicare has shelled out millions of dollars in recent years to settle federal lawsuits over kickback allegations.

Last June, it agreed to pay more than $124 million to settle lawsuits alleging it gave kickbacks to some facilities so they would keep the company as their drug provider for elderly Medicare and Medicaid recipients. Omnicare said it settled the case to end litigation and committed no wrongdoing.

In 2009, Omnicare said it would pay $98 million to settle allegations that it solicited or paid a variety of kickbacks. That included an accusation that it received kickbacks from Johnson & Johnson for recommending that doctors prescribe to nursing home patients the antipsychotic Risperdal, which can hasten death in elderly people with dementia.

In December, the U.S. Department of Justice filed another lawsuit against Omnicare alleging that it received millions of dollars in kickbacks from Abbott Laboratories in exchange for buying and recommending the prescription anti-seizure drug Depakote for controlling behavior problems in nursing home patients with dementia.

CVS Health spokeswoman Carolyn Castel said in an email that these cases amounted to “legacy issues,” and Omnicare management has worked “diligently over the past few years to create a new foundation around regulatory and compliance matters.”

An Omnicare representative did not immediately return a call from The Associated Press seeking comment about the litigation.

Shares of Woonsocket, Rhode Island-based CVS Health Corp. climbed 2.2 percent, or $2.21, to $103.48 in Thursday afternoon trading, while broader indexes edged up slightly. Omnicare Inc. shares advanced $1.63 to $96.26.

___

AP Business Writer Damian J. Troise contributed to this story from New York. Murphy reported from Indianapolis.

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Activism

Kaiser Mental Health Therapists Strike for Racial Justice on MLK Day

“People of color don’t stop being people of color when negotiations are done,” said Jessica Dominguez, the founder and lead clinician at Kaiser Permanente’s La Clínica. “Racism within the Kaiser system does not end when we ratify a contract. These issues are deeply embedded in this system and will not simply go away. And it is not enough to denounce racism. We must be anti-racist… We will not give up and we will not give in because mental health is a social justice issue.”

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Striking Kaiser workers march for racial justice. Photo courtesy of the National Union of Healthcare Workers web site.
Striking Kaiser workers march for racial justice. Photo courtesy of the National Union of Healthcare Workers web site.

By Matthew Artz

Refusing to let Kaiser pay lip service to racial justice while failing to provide culturally responsive health care for communities of color, mental health clinicians at Kaiser Permanente’s Richmond and Oakland offices held a one-day strike on Martin Luther King Jr. Day.

Nearly 100 psychologists, social workers, addiction counselors and marriage and family therapists picketed outside Kaiser’s Oakland Medical Center at 3600 Broadway and marched through Downtown Oakland, chanting “Therapist! Power!” on their way to a rally outside Kaiser’s corporate headquarters in the Ordway Building at 1 Kaiser Plaza.

“This is my ‘bus boycott.’ This is my ‘sitting at the lunch counter’… This is what MLK would have done,” Sabrina Chaumette, a social worker, who is one of only five Black clinicians on Kaiser’s adult team in Oakland, told colleagues and allies during the rally.

Speaking on the picket line, Assemblymember Mia Bonta, D-Alameda, told the striking clinicians, “When you have people and workers here who want the dignity of celebrating the most sacred and important day in our country… I say, ‘be anti-racist, Kaiser.’”

Clinicians in Oakland and Richmond voted nearly unanimously to strike after Kaiser executives broke their promise to make Martin Luther King Jr. Day a paid holiday in 2022.

In response, Kaiser CEO Greg Adams announced that Kaiser will treat the King holiday as a paid holiday for all Kaiser employees in 2023, but Kaiser executives have still refused to work with clinicians to address structural racism within the HMO, which has resulted in the departure of clinicians of color, further depriving patients of culturally competent care.

Kaiser has rejected proposals aimed at improving recruitment of therapists of color and bilingual therapists, as well as addressing structural racism within the organization.

“Kaiser pays a lot of lip service to racial justice, but when it comes to taking action, it’s always ‘wait till next year,’” said Chaumette, whose schedule is so overbooked that new patients must wait four months for an appointment. “If Kaiser can’t even keep its promise about honoring Martin Luther King Jr. Day this year, how can we trust that it will ever take action to address structural racism in its ranks?”

Besides Bonta, participating elected officials included Alameda County Supervisor Nate Miley and Oakland City Council members Sheng Thao, Nikki Fortunato-Bas and Dan Kalb.

According to a 2019 report from the Substance Abuse and Mental Health Services Administration, Black adults in the U.S are significantly more likely than their white counterparts to report persistent symptoms of emotional distress, such as sadness, hopelessness and feeling like everything is an effort. Despite the need for mental health care, the same report found only one in three Black adults receives it.

At Kaiser, a recent survey of more than 1,500 Kaiser employees represented by the National Union of Healthcare Workers found that 62% of non-white workers reported experiencing racism on the job and 37% of all workers surveyed reported witnessing racism toward their patients.

Additionally, 41% of all respondents reported having patients who struggled to access or maintain treatment because they could not be seen by a culturally competent provider.

“We are living in a time of reckoning, a time when people of color are no longer content with the status quo,” said Jessica Dominguez, the founder and lead clinician at Kaiser Permanente’s La Clínica. “Because (the) status quo has never included people of color. Status quo is white supremacy.”

In response to claims from Kaiser that the clinicians were “weaponizing” the King holiday because they’re bargaining for a new contract, Dominguez said that “structural racism is baked into the Kaiser system.

“People of color don’t stop being people of color when negotiations are done,” Dominguez said. “Racism within the Kaiser system does not end when we ratify a contract. These issues are deeply embedded in this system and will not simply go away. And it is not enough to denounce racism. We must be anti-racist… We will not give up and we will not give in because mental health is a social justice issue.”

Matthew Artz works for the National Union of Healthcare Workers, a member-led movement representing 15,000 healthcare workers, including more than 4,000 Kaiser mental health clinicians in California and Hawaii.

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Activism

Oakland A’s Star Tony Kemp Tells Us Why He’s Planting Trees, Messaging with Fans

For the 2021 baseball season, Kemp teamed up with a national organization and pledged to plant 100 trees in urban communities for every stolen base and extra-base hit he recorded.

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Oakland Athletics outfielder Tony Kemp in an undated photo. Kemp partnered with Breaking T to produce his +1 Effect merchandise. A portion of the sale proceeds go to the Players Alliance, a national organization committed to creating an inclusive culture within baseball. Photo courtesy of Tony Kemp.
Oakland Athletics outfielder Tony Kemp in an undated photo. Kemp partnered with Breaking T to produce his +1 Effect merchandise. A portion of the sale proceeds go to the Players Alliance, a national organization committed to creating an inclusive culture within baseball. Photo courtesy of Tony Kemp.

By Nick Marnell, Bay City News Foundation

Oakland A’s infielder Tony Kemp picked a great year to pledge a charitable contribution based upon his on-field performance.

For the 2021 baseball season, Kemp teamed up with a national organization and pledged to plant 100 trees in urban communities for every stolen base and extra-base hit he recorded.

Fortunately for the environment, Kemp, 30, produced the best season of his six-year major league career, compiling 27 extra-base hits and eight stolen bases to go along with a strong .382 on-base percentage. He was also one of only two hitters in the American League (with at least two plate appearances per every regular season game) to walk more often than he struck out.

“I’m glad I got the chance to play and show what I can do,” Kemp said.

The 3,500 trees Kemp donated were just the catalyst as PG&E, one of the team’s corporate sponsors, doubled down on the pledge “to further its support of environment and sustainability awareness,” company representative Lynsey Paulo said. “With PG&E’s donation, there will be 7,000 trees planted as part of this program.”

On Dec. 10, volunteers from the A’s, PG&E, the City of Oakland and various charitable organizations met at Sobrante Park in Oakland and planted 15 trees. Kemp said he will plant trees this spring in his hometown near Nashville.

One of Kemp’s partners in the tree planting venture is Players for the Planet, a national organization founded by former major leaguer Chris Dickerson. Players for the Planet asserts a goal of uniting professional athletes to create positive change for the environment. “Our programs are designed by the players so they can contribute wherever they see a need or opportunity,” Dickerson said.

“I always wanted to do a reforestation project,” Kemp said. Possibly as a giveback for the amount of lumber used in his profession? Kemp chuckled, but said his goal was much greater than replacing a handful of broken bats. “I’ve always cared about the planet. I’ve been an advocate for a recycling project for a long time. This one was a no-brainer.”

Dickerson agreed that Kemp is a committed activist. “Tony has been a tremendous advocate for giving back to the community,” he said.

Addressing systemic racism

Even though he is not a fan of confrontation, in summer 2020 Kemp became one of the most active ballplayers speaking out against racial injustice. Haunted by the murder of George Floyd on May 25, 2020, and the unfolding civil unrest, Kemp logged onto Twitter on June 5, 2020, and posted to his followers, then numbering more than 40,000: “Let’s be honest. It’s been a tough week. If any of you want to talk or want to be more informed don’t hesitate to ask me.”

That tweet prompted a series of one-on-one direct message conversations with friends, teammates and fans about systemic racism and his own life experiences as a Black man. Kemp then formalized these conversations into a campaign called the +1 Effect.

Explaining the name of his campaign, Kemp said he wanted his perspective to achieve a domino effect, of one positive conversation leading to another, and then another, through honest and respectful dialogue.

“I ask questions. Simple questions, and there is no yelling,” said Kemp, in keeping with his distaste of confrontation. “Those who yell the loudest, what are they trying to accomplish?”

Kemp shared portions of a +1 Effect conversation he had with a suburban white woman in Texas who wanted to do a better job of combating racism but feared that she had no platform.

“Of course, you have a platform and voice,” Kemp told her. “You can always be an influence and inspiration to those around you.” He went on to explain that undoing systemic racism “starts with calling out people for their offhand comments that they may not even realize are racially biased.

“Make it known that you will not tolerate racism or prejudice in any way,” he advised her, and recommended media for her to check out, including “The 13th,” Ava DuVernay’s documentary about racism in the criminal justice system; Nikole Hannah-Jones’ “1619” podcast on how slavery shapes American culture to this day; and Ibram X. Kendi’s history-driven guide “How to Be Anti-Racist.”

Supporting Black kids

Kemp also gives back through the Players Alliance, an organization of major league ballplayers who work to create an inclusive culture within baseball in order to promote racial equality and provide greater opportunities for the Black community. According to Society for American Baseball Research, since Jackie Robinson broke the color line starting with the Brooklyn Dodgers in 1947, the percentage of Black players in the MLB peaked at 18.7% in 1981 and declined to less than 10% by the mid-2000s. In 2016, only 6.7% of major leaguers were Black.

“We’re trying to get Black players to mentor kids who can’t afford equipment to play baseball,” Kemp said. “Black kids look up to us, and we’re trying to help these kids understand that they can succeed in Major League Baseball.”

Kemp, though, is realistic about the slim chances for kids to make it to the big leagues, as Kemp himself fought through early life and career struggles. His parents divorced when he was 12. He was repeatedly optioned to the minor leagues while with the Houston Astros.

Kemp drew on his inner strength and closeness to his family — especially his older brother Corey — to help get him through the rough patches.

Corey told his brother that it was never going to be easy for him to succeed in athletics because Kemp was the little guy.

“They’re always going to be looking at the big guy,” Corey Kemp said. “You’ve got to keep a chip on your shoulder, get back out there and continue to perform.”

The advice worked. “I realized there will always be guys physically stronger than me,” said Kemp, who is 5-feet-6-inches tall and 160 pounds. “But they will never be stronger mentally.”

Understanding that the baseball hopefuls he mentors will need a fallback position should their baseball dreams flame out, Kemp imparted reality to the young athletes when he demonstrated the importance of a strong educational foundation at an Alliance event in Oakland.

“I got out a book and a baseball. I asked the kids to stand on each one and see which one provided more stability,” he said. “They got the message. I told them that getting a degree is always the end goal.”

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Activism

Oakland Black Contractors Demand Access to Contracts, Jobs for Oakland Residents 

The press conference was led by the NAACP Oakland Chapter, representatives from the Oakland African American Chamber of Commerce, National Association of Minority Contractors Northern California, BuildOUT California, Oakland Latino Chamber of Commerce, Oakland LGBTQ Community Center, Bay Area Contract Compliance Officer’s Association, Asian, Inc. They were joined by Councilmembers Loren Taylor (District 6) and Treva Reid (District 7), (Sheng Thao, District 4,) who each addressed the importance of honoring the City’s commitment to distribute contracts in an equitable manner.

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First Row left to right: John Baptiste, Black Contractor, Antoinette Clark, NAACP, Bendu Griffin, Professional Services Consultants, Cathy Adams, OAACC, Stanley Cooper, Chair of Labor and Industry , NAACP Oakland Branch & Cooper Construction and Engineering, Councilmember Loren Taylor, District 6; Second Row left to right: Mario Wagner, NAACP Oakland Branch, George Holland, Sr., President NAACP, Oakland Branch, Jumoke Hinton, NAACP, Oakland Branch; Upper row: Nick Colina Anco Iron & Construction, Inc. & NAMC , co-founder Build Out California, Joe Patida, President of the Latino Chamber of Commerce, Derrick Johnson, representing the LGBTQ Community Center, Baasim Khufu, NAMC, Black Contractor, Jonathan “Fitness” Jones, (Post Newspaper Group) and Clifton Cooper, Vice President, NAACP Oakland. Photo by Auintard Henderson.
First Row left to right: John Baptiste, Black Contractor, Antoinette Clark, NAACP, Bendu Griffin, Professional Services Consultants, Cathy Adams, OAACC, Stanley Cooper, Chair of Labor and Industry , NAACP Oakland Branch & Cooper Construction and Engineering, Councilmember Loren Taylor, District 6; Second Row left to right: Mario Wagner, NAACP Oakland Branch, George Holland, Sr., President NAACP, Oakland Branch, Jumoke Hinton, NAACP, Oakland Branch; Upper row: Nick Colina Anco Iron & Construction, Inc. & NAMC , co-founder Build Out California, Joe Patida, President of the Latino Chamber of Commerce, Derrick Johnson, representing the LGBTQ Community Center, Baasim Khufu, NAMC, Black Contractor, Jonathan “Fitness” Jones, (Post Newspaper Group) and Clifton Cooper, Vice President, NAACP Oakland. Photo by Auintard Henderson.

By Post Staff

On Tuesday, Jan. 18, 2022, a coalition of community and business leaders held a press conference to call out the request by the City of Oakland’s Department of Transportation (DOT) to waive requirements that would ensure that small, local businesses get opportunities to bid for paving contracts worth up to $60 million.

The formal language to ‘Waive Further Advertising, Competitive Bidding, and The City’s Small-Very Small Local Business Enterprise Participation Requirement,’ essentially locks out minority contractors as well.

In blatant disregard for the City’s policy, the DOT requested that five contracts be awarded to Gallagher & Burk, McGuire & Hester and O.C. Jones & Sons, three non-minority contractors headquartered outside the City of Oakland.

The press conference was led by the NAACP Oakland Chapter, representatives from the Oakland African American Chamber of Commerce, National Association of Minority Contractors Northern California, BuildOUT California, Oakland Latino Chamber of Commerce, Oakland LGBTQ Community Center, Bay Area Contract Compliance Officer’s Association, Asian, Inc. They were joined by Councilmembers Loren Taylor (District 6) and Treva Reid (District 7), (Sheng Thao, District 4,) who each addressed the importance of honoring the City’s commitment to distribute contracts in an equitable manner.

Oakland NAACP Chapter President George Holland noted that this item was ironically scheduled a day after MLK Day. “It is a shame that we are still fighting for the same things that Dr. King fought for nearly five decades ago. We will not concede the progress we have made and understand we have a long way to go.”

Councilmember Taylor’s office released a statement. “If we were to approve this waiver without pushing for higher levels of participation from our local, small, and diverse contractors, it would undermine the work that we have been doing over the past year. That is why I proudly stand with the community members calling for us to have a more concerted effort to seek out diverse contractors and will not support the requested waivers.”

Although unable to attend the press conference, Ed Dillard of the NAACP LIC stated, “Black contractors are taxpayers in Oakland and deserve work on City of Oakland funded projects. These Black contractors provide jobs for Oakland Black residents.”

When reflecting on her work to address the City’s contracting issues, Cathy Adams, president of the Oakland African American Chamber of Commerce notes, “We are committed to ensuring Black businesses receive their fair share of City contracts.

“We were successful in our fight for the Disparity Study to be released. We were successful in establishing a better L/SLBE policy. We will be successful in our fight to eliminate current contracting disparities,” Adams said (L/SLBE refers to Oakland’s Local and Small Local Business Enterprise program).

Reid stated “It is an honor to stand with you all today and agree that we have to unite our power to deliver votes that delivers for us, our communities and our City to ensure we have an equitable outcome for all.” She also indicated that she would vote against the waiver.

Each organization echoed the sentiments expressed that the proposed waiver means a loss of opportunity, a loss of local businesses and a loss of jobs for Oaklanders.

District 3 Councilmember Carroll Fife motioned that the awards be rejected and sent back out to bid. Councilmember Taylor seconded the motion with an amendment that the bidders be given until Friday, Jan. 21, 2022, to comply with the City’s L/SLBE requirements.

Council directed staff to work with the bidders to ensure that they comply with the City’s L/SLBE requirements in a unanimous vote with the motion as amended.

As Bendu Griffin from the Bay Area Contractor Compliance Officer’s Association stated, “it’s not a Black thing, it’s the right thing!”

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