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Drug Channel’s analysis of Inc. 5000 shows some eye-popping growth
By way of DrugChannels.net, industry guru Adam Fein’s blog of trends in pharma distribution, the recently released Inc. 5000 list of high-growth private companies in the US shows some dramatic growth rates among specialty pharmacies. The biggest players in this market, companies like Express Script’s Accredo Pharmacy, or Diplomat Pharmacy, are either subsidiaries of other companies or have made the transition to a public company. So, the Inc. 5000 list reveals (self-reported) information about private companies not readily available elsewhere. “Although the Inc. list is a self-selected sample, the revenue growth rates are truly astounding,” says Fein, looking at the top 12 that made his list. “Average (median) 2015 revenue for these 12 businesses was $265 million ($127 million), and the average 3-year revenue growth rate was 1,440% (401%). Eleven of the companies also appeared on last year’s list. Their average year-over-year revenue growth rate for 2015 was an impressive 63% (median=53%).”
Avella Specialty Pharmacy tops the list, having just passed $1 billion in annual revenue, and up 25% from the preceding year. The company announced a relocation to new offices, and significantly expanded clean room capacity (see photo) that will go online in 2017. But the fastest-growing company on the list is PantherRx Specialty Pharmacy, which grew by over 13,000% (!) over the 2012-2015 period. An article accompanying the Inc. 5000 list attributes this growth to the company’s success in winning exclusive distribution agreements for some orphan drugs.
According to Fein, Avella and another company, BioPlus, are prime candidates for acquisition; together, they account for 60% of the total 2015 revenue of the 12 on the list, and presumably thus have a scale that makes their acquisition worthwhile.
Specialty pharmacies continue to provide one of the clearest signals in the US drug market—the impact of specialty drugs, with the add-on services that those drugs require. The Inc. article on PantherRx, for example, notes the extra efforts the company makes in handling prior authorizations and reimbursements for patients and physicians, and the use of nurse educators that visit patients. “We work hand-in-hand with the manufacturers and patients to make sure the drugs are being administered correctly,” Gordon Vanscoy, PantherRx CEO, told Inc. “We send nurses to train patients, track results, and make sure the therapies are being used correctly. The big pharmacies do not have this type of soft touch, they are in an efficiency model.” Manufacturers can work with specialty pharmacies in this fashion; they can also work with hub services providers to complement the pharmacies’ efforts.