Pharmerica Long-Term Care, LLC

  • Overview

The only time you'll see PharMerica's products is when a nurse hands you a pill in a paper cup. It is the country's second-largest institutional pharmacy operator (behind Omnicare). The company provides purchasing, packaging, and dispensing of drugs to hospitals, nursing homes, assisted living facilities, and other long term care settings with more than 330,000 beds. PharMerica operates more than 90 institutional pharmacies, from which it packages and delivers medications in unit doses (rather than in bulk) to its customers in 44 states. It also provides consulting and monitoring services of drug usage to help care facilities comply with government regulations.

Geographic Reach

PharMerica operates facilities in more than 40 states and serves customers in 45 states. Its largest operating markets include Texas, California, Florida, Pennsylvania, Tennessee, and Hawaii.

Operations

PharMerica's institutional pharmacy segment accounts for more than 95% of sales. Other revenues come from the hospital pharmacy management division, which provides onsite management of pharmacies at more than 80 US hospitals in about 20 states, and its infusion business, which operates a dozen infusion pharmacies that ship products to homebound patients. Pharmacy management services include patient safety and regulatory compliance, work force optimization, and drug utilization management.

PharMerica offers a number of services through online portals including help with medication management (ordering, refills, discontinues, returns), regulatory updates, formulary guides, billing, reporting, and management and utilization reports. It also offers patient medical record management services.

Sales and Marketing

PharMerica receives nearly half of its annual pharmacy services revenue from commercial Medicare Part D Plans. The government reimbursement programs Medicare and Medicaid combined account for about 10%. Other payers include institutional health care providers (30%), commercial insurance companies, private payers, and contracted providers. PharMerica keeps a close eye on changes to federal health care laws and insurance reimbursement policies which have the potential to affect its bottom line.

The company's products and services are promoted through a national direct sales force. Revenues generated from facilities of its largest client, Kindred Healthcare, account for nearly 12% of sales.

Financial Performance

Revenues decreased 12% to $1.8 billion in 2012 due to lower contracted customer accounts in the institutional pharmacy segment. Other factors impacting sales included generic drug conversions. The decline was slightly offset by an increase in the pharmacy management and other segment due to the acquisition of Amerita in 2012. The drop in 2012 sales followed growth in 2010 and 2011.

Net income declined 2% to $23 million in 2012 as a result of lower revenues and higher amortization and interest expenses and other costs. PharMerica has seen fluctuating profits in recent years as the company has struggled to balance growth with expenses.

Strategy

By consolidating in what has historically been a highly fragmented market, PharMerica has secured its position as one of the largest institutional pharmacy providers in the country. It has grown geographically by acquiring smaller, regional competitors that operate in markets the company wishes to enter. It also targets new sales and retention of existing clients. Towards that end, the company is looking to broaden its product and service offerings into new areas. PharMerica introduced the majority of its online services in 2010 and continues to grow its digital offerings to keep up with growing demand from customers for such services.

Over the past few years the company has been beefing up the amount of generic drugs it dispenses as a way to reduce costs and capture more customers. More than 80% of the prescription drugs PharMerica dispensed in 2012 were generic (compared to roughly 70% in 2008). This number is likely to increase as more pharmaceutical companies lose exclusivity patents and additional generics are introduced to the market. However, selling generics is sort of a double-edged sword since a shift from brand-to-generic decreases PharMerica's revenue, but at the same improves gross margins.

Mergers and Acquisitions

Recent acquisitions of small institutional pharmacies included the 2010 purchases of Integrity Pharmacy Services, (Florida, Massachusetts, and Pennsylvania);  Lone Star Pharmacy, (Texas); and the bankrupt Chem Rx, (New Jersey and New York). Early in 2011 PharMerica entered South Carolina by purchasing Ark Pharmacy. During 2012 it added an institutional pharmacy in Clovis, New Mexico.

In addition, in 2012 the company expanded its operations into a new business area through the $85 million acquisition of Amerita, a provider of specialty home infusion services in Colorado, Tennessee, Texas, Oklahoma, and Utah. The deal added a dozen infusion pharmacies to PharMerica's operations.

▲ Show Less▼ Show Full Description


Pharmerica Long-Term Care, LLC


3625 Queen Palm Dr
Tampa, FL 33619-1309
Phone: 1 (877) 975-2273
Fax: 1 (813) 6227822
www.pharmerica.com

STATS


  • Employer Type: Unknown
  • V Pres-coo: Thomas Caneris
  • Senior Vice President Chief Information Officer: Stephen Meyers
  • President: William Shields

Major Office Locations

  • Tampa, FL

Career Update Newsletter

Tips and tools to help you manage your ideal career.