December 10, 2013 / 4:25 PM / 4 years ago

CVS, Cardinal Health enter U.S. generic drug joint venture

Dec 10 (Reuters) - Pharmacy chain CVS Caremark Corp and pharmaceutical distributor Cardinal Health Inc said on Tuesday they would form the largest U.S. generic drug sourcing operation in a 10-year agreement to serve the world’s biggest market for generic drugs.

The 50-50 joint venture will be operational as soon as July 1, 2014. Under the agreement, Cardinal will pay CVS $25 million on a quarterly basis for the duration of the contract, with an estimated after-tax value of $435 million.

The U.S. market for medicines has seen a major shift toward cheaper generic drugs following a wave of patent expiries in recent years for major brand-name treatments and a growing effort to lower costs throughout the healthcare system.

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