CareFusion to be bought by BD for $12.2B

October 7, 2014 in Medical Technology

CareFusion, which develops medical devices such as smart pumps and automated medication administration tools, will be acquired by device maker BD for $12.2 billion in cash and stock.

The merger, announced on Oct. 5, would create one of the world’s largest medication management and patient safety companies, officials say. The deal, subject to regulatory and shareholder approvals and customary closing conditions, is expected to close in early 2015.

Together, BD – formerly known as  Becton, Dickinson Co – and San Diego-based CareFusion, which was formed as a spinoff from Cardinal Health in 2009, will offer integrated medication management tools and smart devices, deployed everywhere from the hospital pharmacy to the point of care.

Officials say the companies’ combined portfolios will help drive efficiencies, reduce medication errors and improve patient safety — especially as these devices are increasingly integrated with information technology such as electronic health records and computerized provider order entry system.

“BD’s acquisition of CareFusion allows us to align our highly complementary technologies and products to address unmet needs in the growing $20 billion global medication management industry,” said Vincent A. Forlenza, BD’s chief executive officer, in a press statement.

“It accelerates BD’s transition from a product-focused company to a customer-centric provider of innovative healthcare solutions with leading scale across the medication management value chain and expanded solutions for patient safety,” he added.

The deal “represents a powerful endorsement of our strong positions in medication management, informatics across our device platforms and leading products to help improve the effectiveness of acute-care procedures,” said Kieran T. Gallahue, CareFusion’s CEO, in a press statement.

In recent months, CareFusion has been in the headlines for other reasons. As Healthcare IT News contributor Neil Versel reported earlier this year, the company reached a deal in January with the U.S. Department of Justice to the tune of $40.1 million – but did not admit any guilt – to settle charges that it had allegedly paid Austin, Texas, physician Charles R. Denham, MD, more than $11 million in so-called “kickbacks.”

Denham, who formed a patient safety organization called the Texas Medical Institute of Technology, was also a co-chair the steering committee of the National Quality Forum’s Safe Practices for Better Healthcare program. The DoJ charged that those payments were meant to induce Denham to “recommend, promote and arrange for the purchase” of one of CareFusion’s products, called ChloraPrep.

“When companies pay kickbacks to doctors, especially doctors involved in setting standards for the healthcare industry, they undermine the integrity of the healthcare system,” said Assistant Attorney General Stuart F. Delery, in announcing the settlement.

Writing on his popular blog, Robert Wachter, MD, associate chair of the Department of Medicine at the University of California, San Francisco – who, coincidentally, we interview about entirely different topic this week – called the kickback case “Patient Safety’s First Scandal.”

“(T)he fields of patient safety and quality are no longer sleepy mom-and-pop affairs fueled by the passion of a handful of true believers,” Wachter wrote. “There is now big money involved.”

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