PSS World Medical, Inc.
), a medical supplies and equipment distributor to office-based
physicians, recently extended its relationship with Minnesota
Multistate Contracting Alliance for Pharmacy (MMCAP). In this
regard, Government Solutions Group, a subsidiary of PSS World will
work as the prime vendor to MMCAP, a voluntary group purchasing
organization of healthcare facilities of the U.S Government. The
deal extends to May 2014 with the flexibility for extension of up
to 5 more years. However, financial terms of the contract have not
As a major vendor to MMCAP, PSS will supply its wide range of
quality care products at a lower cost to MMCAP that provides a full
range of pharmaceuticals and other healthcare products and services
(including medical supplies, influenza vaccines, dental supplies,
drug testing, wholesaler invoice auditing and returned goods) to
state agencies, counties, cities, school districts, correctional
institutions and public higher education. In the government's
current phase of budget cuts and staff retrenchment, PSS World
expects its low-margin products to have a positive influence on
With increase in healthcare awareness amongst the aging
population in the U.S., new medical technology, new pharmaceutical
treatments and the recently enacted healthcare reform legislation
that includes expanded insurance coverage, the medical products
distribution industry is expected to experience continued growth in
the forthcoming period. Recent industry reports point to 5% to 7%
long term growth in the physician office end-market as well as long
term growth of 1% to 3% and 5% to 7% in the care and home health
care markets, respectively.
As a result, PSS World is currently focusing on the alternate
site healthcare provider market that comprises the physician office
market (worth $12 billion), long-term care and assisted living
market ($4 billion), and home health and hospice markets ($11
billion). The company targets approximately 212,000 sites in the
physician office market and 40,000 sites in the extended care
However, as a result of the current macroeconomic environment,
PSS World is seeing increasing price competition from players like
Patient Safety Technologies, Inc.
Bio-Reference Laboratories, Inc.
). Currently PSS World retains a Zacks #3 Rank, which translates
into a short-term Hold rating.
BIO REFERNC LAB (BRLI): Free Stock Analysis
PSS WORLD MED (PSSI): Free Stock Analysis
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