Thread regarding Allscripts layoffs

https://www.bloomberg.com/news/articles/2020-01-29/health-records-company-pushed-o---ids-to-doctors-in-secret-deal

"Its maker, a software company called Practice Fusion, was paid by a major o—id manufacturer to design it in an effort to boost pr-scrip-ions for addictive pain pills – even though overdose deaths had almost tripled during the prior 15 years, creating a public-health disaster. The software was used by tens of thousands of doctors’ offices.

Its existence was revealed this week thanks to a government investigation. Practice Fusion agreed to pay $145 million to resolve civil and criminal cases, according to documents filed in a Vermont federal court. Practice Fusion admitted to the scheme with an unnamed o—id maker, though the details of the government case closely match a public research partnership between Practice Fusion and Purdue Pharma Inc., which makes O-yco–in.

Representatives for Purdue Pharma and the Vermont U.S. attorney declined to comment. Health-software company Allscripts Healthcare Solutions Inc., which bought Practice Fusion for $100 million in 2018, said in a statement the conduct predated the deal and it has “further strengthened” compliance at Practice Fusion, but didn’t answer specific questions about the settlement."

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Post ID: @OP+13gZamoe

7 replies (most recent on top)

@1wib+13gZamoe: wouldn't prevention of being skrooed over be the point of due diligence? It's amazing what such huge corporations ignore during a M&A just to get the deal done. It's impossible to feel any sadness for MCK. They've been profiting off the O crisis for a good decade. May they all rot in hell.

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Post ID: @2qot+13gZamoe

At the time Practice Fusion was acquired, it was in legal trouble related to meaningful use. The liability was evaluated to less than 100 million dollars. So Allscripts acquired them with bargain price and was planning to make some money from the deal. The o—id issue was not disclosed at that time. Now the legal liability will be at least 500 million dollars with a rough estimate. Just read the CFO’s bluffing on the earnings call related to the EIS acquisition, you will understand their thinking process. So sad a tech company is not focus on building a good product and is just trying to become a hedge fund company to make money from bargain hunting.

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Post ID: @2vtc+13gZamoe

Whoever approved buying this dump of a company probably got promoted - the Allscripts way!

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Post ID: @2fcv+13gZamoe

Respectfully disagree on Allscripts having no exposure on the M&A piece of the mess. Do you really think Allscripts doesn’t have people smart enough to recognize the scary shape Practice Fusion was in at the time they were acquired or were they forced by internal management to acquire the company?

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Post ID: @1xaa+13gZamoe

My bad regarding McK purchase, thanks for the call-out. Remaining observations are in the Bloomberg article.

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Post ID: @1pcb+13gZamoe

Please do your research before posting. Practice Fusion is not a MCK product. Paragon is.

If the article is true, allscripts will face a series of lawsuits from local governments and patient families. Just check what happened with McKesson and Purdue Pharma. It is a poison pill we swallowed. It is always a risk to do bargains hunting by acquiring these struggling companies. They were put on sale cheap with a reason.

That explains why the stock dropped like a rock recently.

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Post ID: @1mku+13gZamoe

A couple observations:
+ Practice Fusion was a McKesson asset, acquired by Allscripts in 2018.
+ MCK coded the feature which programmatically over-prescribed o—id treatment plans in 2016.
+ Allscripts, having no d–g wholesaler exposure, would be unaware of the problem.
+ This isn’t the first time a M&A resulted in scandal; MCK got screwed by HBOC cooking their books, circa 1999.

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Post ID: @1wib+13gZamoe

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