Apothecary Shops continues fast growth with distribution agreements for specialty pharmaceuticals

The lifeblood of specialty pharmacies is distribution rights for specialty pharmaceuticals, which are high-value, high-touch products that usually require a raft of ancillary services. The Apothecary Shops (Phoenix, AZ) is one of relatively small number of independent pharmacy networks that appears to be breaking away from the herd in its success in ophthalmology, oncology, infectious diseases and a handful of other specialties. Its latest win is exclusive distribution of Mitosol (mitomycin for solution), used in glaucoma procedures, and commercialized by Mobius Therapeutics. This was preceded by a nonexclusive agreement with Pfizer for Inlyta (axitinib), just approved by FDA; and that builds on earlier rights for Bayer Healthcare’s Nexavar (sorafenib)—both are oral oncolytics for kidney cancer. The ophthalmology specialty is also supported by the distribution rights for Regeneron’s Eylea (aflibercept injection), for macular degeneration, obtained last year.

The company’s wholesaling arm, Apothecary Shop Wholesale, received Verified Accredited Wholesale Distribution (VAWD) status from the National Assn. of State Boards of Pharmacy; it opened a 21,000-sq.ft. mail-order facility in 2010. The company is currently No. 1640 on the INC 5000, with three-year growth of 165%, and 2010 revenue of $171 million.

What accounts for this growth, especially in a hotly competitive distribution business like oncology--and with the added limitation that the company avoids injectable oncolytics? "We’re all about service to the physician practice," says Hamilton Baiden, EVP of sales. "The big companies provide an 800 number for practice support; we have individual reps covering various regions of the country, and are on call 24 hours a day. We've also invested in staff pharmacists, an oncologist and service reps for obtaining prior authorizations. The motto is, 'We practice pharmacy so you can practice medicine.'" These reps, he emphasizes, are not a replacement for a manufacturer's own reps; they’re oriented around the Apothecary Shops services, not in promoting one drug or another. The company has its own network of 17 pharmacy locations, mostly in the Arizona and western states region, but also in Columbus, OH, St. Louis and Austin, TX.

Leslie Yendro, VP of business development, is responsible for interfacing with pharma manufacturers; she says that "data collection on outcomes, and adherence programs" are the "hot buttons" that manufacturers are looking for. "We generate some revenue from manufacturers for running things like adherence programs, but that’s not going to do much more than keep the lights on," she says. Still, the combination of carving out specialized therapeutic areas, and surrounding the drug with as many ancillary services as can be managed, is making the difference.