Research
Interview Synopsis

Golden State Medical Supply – potential sale

  • Multi-asset Class
  • Healthcare
  • North America

The competitive landscape is "very favourable" for Golden State but its position could be strengthened in areas where it is lagging, according to the former SVP at the US-based company.

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Golden State Medical Supply: a Dose of M&A Could Unlock Further Potential

The Interview started with an overview of the reselling and repackaging sector in which Golden State operates, with the specialist remarking that consolidation has “slowed considerably”. He also flagged “the [generic] pricing collusion issue”, noting that how it will affect the company, including pricing and margins, is “still up in the air”.

In terms of growth potential, the specialist said Golden State’s biggest opportunity is the government’s move towards national contracts. The government wants a five-year view on a book of business, rather than purchasing from a federal supply schedule and being subjected to pricing movements. 

With just 10% of the generic book of business on national contracts, 90% “is sitting on the horizon”, the specialist said. “They’re going to dictate what products go out to national bid, but Golden State’s sitting in a very, very pretty position to play in that space.” 

Although Golden State is well positioned among its peers, he nonetheless emphasised the need for the company to offer unit dose, liquid and powder capabilities. He suggested that the company could acquire another pharmaceutical company such as AvKare, Exelan, Cipla or Blue Pharma to leverage cost synergies or alternative repackaging capabilities. 

Indeed, there are seemingly tier-one and tier-two acquisitions options available to Golden State. Some would offer direct synergies or contract purchases while others would allow the company to expand its repackaging portfolio. While now could be the right time for an acquisition, the specialist said one might not occur in the foreseeable future.

To access all the human insights from Third Bridge Forum’s Golden State Medical Supply Inc Interview, click below to view the full transcript.

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