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                                                                      Exhibit 99

                                  RISK FACTORS
INTEGRATION

         The effective integration of PCA and Capstone and the realization of
the economic benefits of the Merger are particularly critical to the Company's
success. Potential obstacles to successful integration include, but are not
limited to: (i) retaining and integrating the Company's management team; (ii)
consolidating pharmacies without losing any customer relationships; (iii)
achieving operating efficiencies; (iv) consolidating departmental functions; (v)
achieving anticipated purchasing efficiencies; (vi) consolidating management
information systems; (vii) coordinating field managerial activities with
corporate management; (viii) retaining and expanding the Company's customer
base; (ix) introducing new products and services to existing facilities; and (x)
adding and integrating key personnel. There can be no assurance that PCA and
Capstone will be successfully integrated, or that the effects of the Merger will
not have a material adverse effect upon the Company's results of operations,
financial condition, or prospects.

DEPENDENCE ON KEY CONTRACTS

         On a pro forma basis, sales to Beverly facilities and their residents
would have accounted for approximately 16.0% of the Company's net sales for the
year ended December 31, 1997. Prior to the Merger, Beverly owned PCA. Two of the
Company's directors are presently officers and directors of Beverly. The Company
has entered into non-competition and preferred provider agreements with Beverly
and IHS to provide for the delivery of pharmacy services and products and
ancillary services and products by the Company to Beverly's and IHS's long-term
care facilities. However, such agreements contain certain provisions allowing
for pricing adjustments and termination under certain circumstances, and there
can be no assurance that either the pricing will




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not be adjusted or all or part of such agreement or agreements will not be
terminated at some future date. At December 31, 1997, the Company serviced
approximately 58,000 and 17,000 Beverly and IHS long-term care beds,
respectively.

         The Company recently filed a lawsuit against IHS for breaches of
contracts and related torts. The lawsuit alleges that IHS's actions in
connection with its purchase of an institutional pharmacy business, including
its failure to offer to sell such business to the Company, and its causing the
acquired pharmacy, immediately prior to such sale, to enter into certain
provider agreements for long-term care pharmacy services is in violation of its
agreement signed in connection with its sale of its institutional pharmacy
business, Symphony Health Services, Inc. ("Symphony") to the Company and in
violation of the preferred provider agreement between IHS and the Company. The
Company cannot at this time predict the outcome or effect of this litigation.

         Any material loss of revenues or business from Beverly or IHS could
have a material adverse impact on the Company's future operations.

GROWTH STRATEGY; NEED FOR ADDITIONAL FINANCING

         The Company has experienced rapid growth since 1995 and intends to
continue its growth strategy. The Company's successful implementation of its
growth strategy depends upon its ability to identify, consummate and integrate
acquisitions and to attract and retain qualified personnel. The Company will
compete for acquisition candidates with buyers who may have greater financial
and other resources and may be able to pay higher acquisition prices than the
Company. No assurance can be given that the Company will be able to identify
suitable acquisition candidates or to consummate acquisitions on terms
acceptable to it or on terms consistent with past acquisitions or that
acquisitions of a substantial size will be available. To the extent that the
Company is unable to acquire institutional pharmacy companies, or to integrate
such acquisitions successfully, its ability to expand its business would be
reduced significantly. In addition, the Credit Facility contains certain
restrictions on the Company's ability to make acquisitions.

         The Company's acquisition strategy requires substantial capital
resources. To fund its acquisition strategy, the Company will incur, from time
to time, additional indebtedness (both short and long-term), including
indebtedness under the Credit Facility, and the amount of such indebtedness
could be significant. The Company may also fund acquisitions through the
issuance, in public or private transactions, of equity or debt securities. The
availability and terms of such equity or debt securities will depend on market
and other conditions existing at the time, and there can be no assurance that
any such additional financing will be available on terms acceptable to the
Company, if at all. In addition, the Credit Facility contains limitations on
the ability of the Company and its subsidiaries to incur indebtedness and issue
certain preferred stock. Availability of commitments under the Credit Facility
is subject to the Company complying with certain financial covenants and other
provisions.

DEPENDENCE ON REIMBURSEMENT BY THIRD-PARTY PAYORS

         The Company derives, directly or indirectly, a majority of its net
sales from government-sponsored reimbursement programs. The Company's revenues
and profitability will be affected by the efforts of all payors to continue to
reduce the costs of healthcare by lowering reimbursement





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rates, narrowing the scope of covered services, increasing case management
review of services, and negotiating reduced or fixed contract pricing. Any
changes in reimbursement levels under Medicare, Medicaid, or private pay
programs, including managed care contracts, could have a material adverse effect
on the Company's results of operations, financial condition and prospects. In
addition, changes to reimbursement policies requiring payment on a
pre-negotiated basis, based on specific rates for certain medical conditions or
on a capitated basis, could have a material adverse impact on the Company.
Changes in the mix of residents among Medicare, Medicaid and different types of
private pay sources may materially adversely affect the Company's revenues and
profitability.

HEALTHCARE REFORM

         The healthcare industry is subject to changing political, economic and
regulatory influences that may affect the institutional pharmacy industry. In
recent years, several comprehensive national healthcare reform proposals were
introduced in the United States Congress. While none of the proposals were
adopted, healthcare reform may again be addressed by the United States Congress.
Several states also are considering healthcare reforms through Medicaid managed
care demonstration projects. Although these projects generally exempt
institutional pharmacy services and long-term care facilities, no assurance can
be given that such projects or other proposals will not change the Medicaid
reimbursement system in a manner that would affect the Company's operations. The
Company cannot predict which, if any, federal or state modifications or reform
proposals will be adopted, when they may be adopted or what their impact on the
Company may be if adopted. There can be no assurance that the adoption of
certain modifications or proposals will not have a material adverse effect on
the Company's results of operations, financial condition or prospects.

MANAGEMENT

         In connection with the Merger, the management of PCA and Capstone were
combined such that two executive officers from each of PCA and Capstone became
executive officers of PharMerica. The management team now includes eleven former
PCA officers and twelve former Capstone officers. In addition, the Company's
Board of Directors was modified such that five former Capstone directors
continued to serve on the Board along with five directors nominated by Beverly,
including PharMerica's President and Chief Executive Officer, C. Arnold
Renschler, M.D. There can be no assurances that the Company will retain the
members of the combined management team or that the combined management team
will be as effective as the former management teams of Capstone or PCA, which
could have a material adverse effect on the Company's results of operations,
financial condition or prospects. PharMerica has entered into employments
contracts with each of its executive officers that contain non-compete clauses
with the Company, but there can be no assurance that such individuals will
remain with the Company.

ROLE OF MANAGED CARE

         As managed care assumes an increasing role in the healthcare industry,
the Company's future success will, in part, be dependent on obtaining and
retaining managed care contracts. Competition for such contracts is intense and,
in most cases, will require the Company to compete based on the breadth of
services offered, pricing, the ability to track and report patient outcomes and
cost data, and the provision of value-added pharmacy consulting services, among
other factors. In addition,





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reimbursement rates under managed care contracts typically are lower than those
paid by other private third-party payors and may be likely to be based on fixed
rates that will require the Company to accurately project costs and outcomes.
There can be no assurance that the Company will retain or continue to obtain
such managed care contracts or that the managed care contracts it obtains will
be on terms as favorable to the Company as those of its current managed care and
other contracts. To the extent reimbursement provisions in managed care or other
contracts or arrangements change to pre-negotiated prices for specific medical
conditions or to capitated rates, there can be no assurance that the Company
will be able to retain or continue to obtain such managed care contracts or
other arrangements, that the managed care contracts or other arrangements it
obtains will be on terms as favorable to the Company as those of its current
managed care and other contracts or that the Company will be able to service
such contracts or other arrangements profitably.

COMPETITION

         The long-term care pharmacy markets in which the Company operates are
fragmented and highly competitive. Competition for each long-term facility is
generally on a local basis and in such markets comes from both small to mid-size
local operators and regional and national operators. The Company's competition
in its mail service workers' compensation division comes primarily from regional
and local competitors and, occasionally, from national managed care companies.
The Company's competition in the correctional pharmacy market comes primarily
from other large providers. The Company believes that the primary competitive
factor in its industry is breadth and quality of service. Additional competitive
factors include reputation, ease of doing business with the specific providers,
ability to develop and to maintain relationships with general medical
contractors, and competitive pricing. Some of the present and potential
competitors including retail pharmacies, captive pharmacies and pharmaceutical
distributors are, or may become, larger than the Company and have, or may
obtain, greater financial and marketing resources.

GOVERNMENT REGULATION

         The Company is subject to extensive federal, state and local
regulation. Federal laws governing the Company's activities include regulations
covering the repackaging, storing and dispensing of drugs, Medicare
reimbursement, and certain financial relationships with physicians and other
healthcare providers. The Company is subject to state laws governing Medicaid,
workers' compensation, professional training, pharmacy licensure, payment in
exchange for patient referrals and the dispensing and storage of
pharmaceuticals. The pharmacies operated by the Company must comply with all
applicable laws, regulations and licensing standards. Many of the Company's
employees must maintain certain licenses in order to provide services. The
long-term care facilities that contract for pharmacy services are also subject
to federal and state regulations and are required to be licensed in the states
in which they are located. The failure by these institutions to comply with such
regulations or to obtain or renew any required licenses could result in the loss
of the Company's ability to provide pharmacy services to their residents. There
can be no assurance that federal, state or local governments will not change
existing standards or impose additional standards, compliance with which may
require the Company to incur significant additional expense. Any significant
additional expense incurred in connection with such compliance or any failure to
comply with existing or future standards could have a material adverse effect
upon the Company's results of operations, financial condition or prospects. In
addition, any restrictions on pharmaceutical





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companies marketing programs, including the ability of such companies to pay
incentives to dispense one particular product rather than another, could be
material to the Company.

LIABILITY AND ADEQUACY OF INSURANCE

         The provision of healthcare services entails an inherent risk of
liability. The Company currently maintains product and professional liability
insurance intended to cover such claims in amounts which it believes are
consistent with industry standards. There can be no assurance, however, that
claims in excess of the insurance coverage or claims not covered by insurance
will not arise. A successful claim in excess of the Company's insurance coverage
could have a material adverse effect upon the Company's results of operations,
financial condition and future prospects. Claims, regardless of their merit or
eventual outcome, may also have a material adverse effect upon the Company's
ability to attract customers, to maintain its insurance policies or to expand
its business. There can be no assurance that the Company will be able to obtain
adequate liability insurance coverage in the future on acceptable terms, if at
all.

SIGNIFICANT LEVERAGE

         The Company has had and will continue to have substantial indebtedness
and significant debt service obligations. As of December 31, 1997, the Company
would had approximately $435.4 million of indebtedness outstanding,
approximately $125.5 million committed under the Credit Facility (of which
approximately $47.0 million was available), approximately $1.1 billion of total
assets, approximately $379.8 million of net tangible assets and approximately
$528.9 million of stockholders' equity. The availability of funds under the
Credit Facility during 1998 is predicated on the Company maintaining an adjusted
leverage ratio of 4:1. As a result, the availability under the line of credit
may vary based upon the Company's operating results. There can be no assurance
that the Company's operating performance will be adequate to have available as
needed all of the committed funds under the Credit Facility.

         The level of the Company's indebtedness could have important
consequences to the holders of the Company's debt, including: (i) a significant
portion of the Company's cash flow from operations will be committed to the
payment of the Company's interest expense and principal repayment obligations,
thereby reducing the funds available to the Company for its operations and
future business opportunities; (ii) the Company's ability to obtain additional
financing in the future for working capital, capital expenditures, acquisitions
or other purposes may be limited; (iii) the Company may be more highly leveraged
than certain of its competitors, which may place it at a competitive
disadvantage, limit the Company's flexibility in reacting to changes in its
business and make it more vulnerable to downturns in general economic
conditions; (iv) certain of the Company's borrowings are at variable rates of
interest, which could result in higher interest expense in the event of an
increase in interest rates; and (v) the Credit Facility contains financial and
restrictive covenants that, if not complied with, could lead to a default that
could have a material adverse effect on the Company.