Institutional Pharmacy Market Growing

Most attention is given to the two largest players in the institutional pharmacy market, Omnicare and PharMerica. Together, they control nearly 60% of the market. Institutional pharmacy represents approximately 7% of total prescriptions, with about 325 million. The market size is estimated to be $14 billion and grow to $21 billion in 2015.

Key issues the institutional market is facing this year includes a change in the benchmark used by Medicaid to calculate reimbursements, and changes to short-cycle dispensing rules. Another key development will be the introduction of the Alzheimer’s drug Aricept, made by Pfizer.

As the two major players continue to make acquisitions in the market, a number of the regional independents are aggressively strengthening their position.

BGS Pharmacy Partners’ growth strategy includes acquiring well-run, closed door, alternate care pharmacies. BGS recently acquired Spectrum Pharmacy Services, LLC, a rapidly growing institutional pharmacy based in Las Vegas, which services approximately 4,500 patients in nursing home, assisted living, and hospice settings.

Golden Horizons operates more than 300 skilled nursing facilities and more than 40 assisted living facilities under the Golden Living brand. Golden Living has recently established a new, in-house consulting pharmacy company that will focus on improving medication safety and patient outcomes.  Golden Clinical Rx Services is based on an innovative clinical pharmacist model that will make certified geriatric pharmacists (CGPs) part of the interdisciplinary clinical teams that care for Golden LivingCenter patients and will leverage technology to improve patient outcomes.

NuScriptRx, formerly New Day Pharmacy, is an institutional pharmacy that serves the pharmaceutical needs of long-term care facilities and their patients.  NuScriptRx currently serves long-term care facilities in Ohio, Indiana and Tennessee. The company will soon begin serving new customers in other states across the nation.

UVANTA is America’s first and only long-term care pharmacy company that combines the advantages of local ownership with the capabilities and resources of a national organization to offer the very best care and overall value.

Omnicare and PharMerica have not been idle.  Omnicare and Walgreen Co. recently announced a transaction in which Omnicare will acquire substantially all of the assets of Walgreens long-term care pharmacy business. Omnicare acquired Continuing Care Rx (CCRx), a privately owned institutional pharmacy provider based in Harrisburg, Pennsylvania. Omnicare also recently named John Figueroa, the former president of McKesson’s pharmaceutical business, as its new CEO.

Chem Rx Corporation, the third largest long-term care pharmacy in the United States, reached a “stalking horse” asset purchase agreement to sell substantially all of the assets of the company to PharMerica. Partnering with Chem Rx will allow PharMerica to expand into New York and New Jersey, where it currently does not have a presence. PharMerica also acquired substantially all the assets of Lone Star Pharmacy based in Garland, Texas. Lone Star Pharmacy is a full service pharmacy to long-term care and assisted living facilities primarily in Dallas and Houston.