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Genesis sues HCR over termination of Rx contract.

Genesis Health Ventures Inc. and its subsidiary Vitalink Pharmacy Services (doing business as NeighborCare) filed suits requesting injunctive relief and compensatory damages against HCR Manor Care Inc. The suits, which also name two of HCR Manor Care's principals and two of its subsidiaries, arise from HCR Manor Care's threatened termination of two long term pharmacy services contracts effective June 1, 1999. Kennett Square, Pennsylvania-based Genesis and Vitalink are seeking more than $100 million in damages and enforcement of a 10-year non-competition clause.

Genesis acquired Vitalink from Toledo, Ohio-based Manor Care in August 1998. In 1991, Vitalink and Manor Care entered into long term master pharmacy agreements that gave Vitalink the right to provide pharmacy services to all of HCR Manor Care's facilities. In 1998, the terms of the agreements, which are worth about $100 million per year, were extended to September 2004.

HCR Manor Care said in a statement that it was "surprised and disappointed" to learn that Genesis and Vitalink had initiated legal action regarding the contracts, noting that "the companies have recently been engaged in intense negotiations to address certain provisions of the contracts."
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Publication:Contemporary Long Term Care
Geographic Code:1USA
Date:Jul 1, 1999
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