Diplomat: Oncology, infusion and acquisitions drive growth


With 981,000 prescriptions dispensed in 2016, independent specialty pharmacy operator Diplomat Pharmacy’s 8% script growth over 2015 was the result of the company’s continued efforts to move into and expand its existing presence in several markets — in part through strategic acquisitions of independent companies demonstrating best practices. Driven by its oncology and infusion divisions, the company’s growth brings with it more access to specialty drugs that have limited distribution.

Since the fourth quarter of 2016, Diplomat has announced it is dispensing such limited-distribution drugs as primary immunodeficiency treatment Cuvitru, multiple myeloma drugs Darzalex and Revlimid, carcinoid syndrome diarrhea drug Xermelo and metastatic breast cancer treatment Kisqali. “In 2016, our strength continued to be driven by oncology, a dominating revenue contributor for us, and our infusion business, which more than doubled the industry with mid-teens year-over-year growth in the fourth quarter,” Diplomat chairman and CEO Phil Hagerman told Drug Store News. Diplomat in December 2016 brought together five of its infusion subsidiaries — American Homecare Federation, At-Home IV Infusion Professional, BioRx, MedPro Rx and XAS Infusion Suites —as Diplomat Specialty Infusion Group.

Other key drivers of growth have been the company’s customized care management services, which are responsible for generating Diplomat’s “core revenues,” Hagerman explained. “This customized approach also offers significant opportunities and support for small and emerging biotech companies that need nimble partners as they elect to contract out for more and more services,” Hagerman said. “We have grown our business in the past year by strengthening our clinical expertise in major therapeutic categories, strengthening our relationships with pharmaceutical manufacturers and physicians and broadening our scope of comprehensive specialty pharmacy management services.”

And Diplomat — which appointed Paul Urick president in October 2016 — has an acquisition eye for companies best in class in a particular area of expertise. One of the company’s most notable acts of 2016 was its acquisition of Van Nuys, Calif.-based TNH Advanced Specialty Pharmacy, which broadened Diplomat’s access to providers and patients in California, as well as Texas, where it gained access to Texas Medicaid patients last year.

“We acquired TNH to expand our existing business, enhance our propriety technology and increase our geographic presence,” Hagerman said. “And, in combination with the purchase of a licensed Texas facility to enable a brick-and-mortar presence, it allowed us to open the door to service the state’s 3.7 million Medicaid patients.”

In February, Diplomat acquired Houston-based Affinity Biotech, whose specialty pharmacy and infusion services for patients with hemophilia have a strong brick-and-mortar presence in New York City. The move into New York City also opens up the doors for Diplomat to serve New York’s Medicaid population — estimated to be around 4.8 million patients — who are in need of specialty pharmacy services.

Even as the company has grown in its geographic footprint, and its access both to limited-distribution drugs and increasing numbers of patients, Diplomat has been subject to many of the same pressures facing the entire pharmacy industry — in particular, direct and indirect remuneration fees, which took a bite out of Diplomat’s profit margins in the third and fourth quarters. But the company is working to find solutions, all the while providing the patient care that is at the center of its business, and keeping an eye out for ways to grow.

“Given the strength of our balance sheet, we will continue to take a very selective and disciplined approach to act on highly attractive strategic opportunities,” Hagerman said.

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