Partnership Deal for Omnicell - Analyst Blog

Recently, Omnicell (OMCL) entered into a partnership agreement with Sentry Data Systems to co-market the latter’s Sentinel RCM application. We believe this agreement will mutually benefit both as their businesses complement each other. While Omnicell’s Workflow software caters to inventory management system for hospital pharmacies, Sentry provides solutions to solve financial challenges of hospitals and pharmacies.

The respective products for both Omnicell and Sentry will enable hospitals to participate in the 340B drug pricing program. The companies expect the two products to improve visibility and management of drug costs by the hospitals thereby ensuring better operations.

This program provides hospitals with access to lower priced prescription drugs certified by the US Department of Health and Human Services (HHS). The hospitals which serve a significantly disproportionate number of low-income patients receive the adjustment payments. However, hospitals have to meet various other conditions to be able to participate in the program.

As a leader in hospital pharmacy automation, Omnicell can transform pharmacy operations by means of end-to-end automation solutions for the medication-use process. These solutions contain medication and supply dispensing systems, central pharmacy storage, retrieval and packaging solutions, a bedside automation solution, a physician order management solution, a decision support application and a Web-based procurement application.

We believe, the market for automated healthcare management systems should continue to grow based on the rise in information technology investment by healthcare providers. Besides, a gradual modernization of the healthcare system has created a demand for automated healthcare management systems.

However, capital investments by hospitals continue to remain a challenge for the small community hospitals than the bigger ones due to financial constraints. Moreover, the reimbursement mix also affected the endowments income, further affecting the hospital spending conditions. While Omnicell has continued to win some new deals in larger hospitals, the market is still being impacted by the economy and credit conditions.

We are currently Neutral on Omnicell.
 
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