Merger creates new powerhouse in long-term care pharmacy
Even before the dust settles on the November 1997 union of Pharmacy Corporation of America (PCA) and Capstone Pharmacy Services, Pharmerica--the result of that merger--is already planning expansion into new areas and possibly more acquisitions. It claims to be the nation's largest consultant pharmacy service, with projected revenues in the $1 billion range.
Pharmerica serves more than 300,000 skilled care, subacute, and assisted-living facility beds as well as 110,000 correctional facility patients. Add to that the almost 80,000 workers' compensation beneficiaries and chronic or catastrophically disabled home care customers who receive more than one million prescriptions annually via Pharmerica's mail service, and the company surpasses competitor Omnicare in overall number of patients served, or so
it claims. With almost 6,000 employees working out of the company's Tampa, Fla., corporate headquarters and 117 pharmacy facilities in 35 states--with more planned--Pharmerica looks ready to dominate the consultant pharmacy market like Godzilla taking on Tokyo.
Pharmerica is playing down its size, however, stressing instead that the PCA-Capstone merger is less about numbers and more about a union of two different but complementary approaches to long-term care services. R. Scott Jones, v.p. of marketing and sales, suggested that the new firm will benefit from PCA and Capstone's experiences. "PCA is a little bit bigger, has been around a little bit longer, and has invested heavily in clinical and information systems," he explained. "Capstone is very acquisitive. With 14 acquisitions in the last year, they've gotten very strong with integration. They work on more of a regional focus.... We feel that the small, entrepreneurial organization and the bigger organization have a lot of good blending."
Pharmerica is banking on the rapidly expanding elderly population for its success. Jones cited a near doubling of the over-85 population by 2010 and the push from managed care for more aggressive acute care discharges as factors that are creating a $16 billion market in long-term care, ranging from skilled nursing to home care.
The sheer size of Pharmerica and its national scope should result in significant purchasing power, noted Jones. Part of the plan to secure lower drug prices and improved distribution will be the creation of 12 regional "megapharmacies" serving 8,000 beds or more.
There are even grander plans in the works, too, as Pharmerica gears up to pilot consultant pharmacy programs with some of the nation's largest assisted-
living facility chains, including Leisure Care and Marriott. Jones doesn't rule out future acquisitions for Pharmerica, either. "There are about 150 key multipharmacy chain acquisitions left out there," he estimated. "Our strategy, if you think about it, is consolidation. That's how you get your scale."
While using size as muscle for purchasing drugs at lower prices, Jones said Pharmerica won't limit itself to large-scale drug distribution. Instead, the firm is creating several programs to address the needs of individual patients and facilities. "The trick is to be national in getting your best practices and leverage, but to be local in terms of the attentive care programs," he said.
Some of the programs Pharmerica has in place or plans to unveil soon include:
Profiles Plus: While Pharmerica is still in the process of linking Capstone and PCA's individual computer platforms, this interface program is already up and running, sorting through 30 million records a minute to provide data on drug utilization by disease state, age, location, or facility. Jones claimed that Profiles Plus can work with any of Pharmerica's existing information platforms to provide both retrospective and prospective analysis of prescribing trends.
Medi-Quick: The facility-level interface "ultimately provides the best level of care for the patient," Jones claimed. It allows individual facilities to develop cost profiles and track admissions, ensuring both a financially sound case mix for the facility and access to needed services for the patient.
Consultware: Consulting pharmacists can use this interface to profile facility prescribing habits and to lower costs. Jones gave one example of a pharmacist who, using Consultware to analyze prescription trends for glaucoma eye drops, realized an $11,000 monthly savings when he worked with a physician to switch more than 60 patients from their old Rx to a new, less-expensive and more user-friendly option.
Jones added that Consultware can also be used by R.Ph.s to share information or seek recommendations from their colleagues. Capstone pharmacists will join PCA R.Ph.s--who are already using this platform--within a year, he said.
Chronic and Cat Care: Working with the chronic and catastrophically disabled--such as quadriplegics and traumatic brain injury patients--Pharmerica signs on from point of discharge to create better quality-of-life conditions for individuals, including setups of conversion vans and homes with items such as durable medical equipment and respiratory therapy. There are already 3,000 patients in the program, which evolved out of servicing workers' compensation claimants.
I.V. Complete: This is a turnkey infusion option that allows users to determine the level of service they need, from drug supplies to nursing care.