McGaw OKs $10-Million-a-Year Pharmacy Deal

McGaw Inc. said Thursday that it has reached a preliminary agreement to supply its medical products to a Houston company that manages hospital pharmacies, a deal that McGaw expects to boost sales by about $10 million annually over five years.

Irvine-based McGaw would become the primary supplier of intravenous solutions, pumps and other drug delivery equipment to Owen Healthcare Inc.

The agreement includes McGaw’s Excel IV Bag, which is used to store intravenous solutions. The bag is the only one of its kind on the market that does not contain polyvinyl chloride, which can release harmful emissions when incinerated, said Larry Watts, a McGaw spokesman.

The agreement comes just three months after McGaw signed a four-year, $45-million accord to distribute disposable intravenous therapy products for Block Medical Inc. of Carlsbad to the home-care industry. And it comes just four months after an investor group led by John Sweeney, an Irvine health-care entrepreneur, acquired McGaw for $200 million.

“McGaw’s products are of superior quality,” said Carl E. Isgren, Owen’s president.

Owen Healthcare provides pharmacy management services to more than 200 hospitals across the country. McGaw, formerly Kendall McGaw Laboratories Inc., supplies intravenous therapy products and services to hospitals and home care providers.

Hospital use of intravenous products is projected to grow at about 6% annually. “This represents a significant contract to our company,” said David Bush, McGaw’s executive vice president.

Bush added that 80% of McGaw’s business comes from hospitals and 20% from the home care industry.

McGaw’s had sales of $230 million in 1990. The privately held company has more than 2,700 employees, most of them in Irvine.