Pharmaceutical Commerce - May/June 2013 - (Page 10)

Business/ Finance A Conversation with Nitin Sahney, Omnicare Specialty Care Group Since the 1990s, Omnicare (Cincinnati) has been one of the leading pharmacy supply services to the long-term care (LTC) market. Starting in the mid-2000s, the company made a series of acquisitions and, in November 2010, unified them as the Omnicare Specialty Care Group (SCG). Nitin Sahney, who had founded one of the acquired companies, RxCrossroads, in 2001, was appointed president of SCG in 2010 and recently became president and chief operating officer of Omnicare. SCG has five “platforms” for services to the biopharma industry: Brand Support Services; Supply Chain Solutions; Patient Support Services; Specialty Pharmacy; and End of Life Care. The first three are offered on a fee-for-service basis to manufacturers, making SCG a marketing support organization, a specialty hub provider and a specialty distributor; the latter two involve consigned pharmaceutical products, some of which flow into the parent’s LTC business. Currently, SCG is growing at a 20% per year clip, and reported revenue of about $1.3 billion in 2012, representing more than a fifth of the parent company’s business. Pharmaceutical Commerce sat down with Mr. Sahney to talk about specialty distribution, the healthcare market and industry needs. Here’s what he had to say. 1 Omnicare Specialty Care Group is made up of four businesses—PBM Plus, RxCrossroads, Excellerx and ACS, all of whom maintain their own identity. How did these companies come together, and how is it planned for them to work together going forward? Little more than two years ago, the Specialty Care Group essentially did not exist. Instead, it was a collection of five separate businesses that Omnicare had acquired over the years, each operating independently and unaware of any operating and strategic synergies that may have existed. These businesses also lacked direction and the structure required to generate consistent operating improvements and sales results. Today, the Specialty Care Group is an integrated, well-oiled operating entity that is competing very well in the marketplace. We achieved this by laying a very solid foundation operationally and strategically by constructing a very good operational team and developed a brand new sales function. What we did was to integrate these four entities into five distinct platforms. You can notice these are five platforms; four of them are pointed toward biopharmaceutical services. That is brand support services, supply chain, patient support services and our specialty pharmacy business. Three out of our five platforms are fee-for-service, which is very exciting for us and we feel there’s a lot of opportunity in that area. In three of the five platforms the manufacturer owns the product, so we do not have any inventory risk. On the other two that are focused on dispensing to the patients, our specialty pharmacy has been growing very robustly and we expect that to continue. We want to be a full-service commercialization partner for challenging products of today’s biopharma industry. We also promise to provide the quickest possible access to patients for these specialty products. We’ve also made substantial capital investments in the past two years, building or expanding two logistics centers in Kentucky, and opening another patient-support call center last year. Specialty pharmacy is headquarted in Orlando, FL, and is backed up by facilities in Memphis, Louisville and Philadelphia. 2 How much overlap is there with Omnicare’s main line of business, which is focused strongly on the LTC market? We believe our specialty care group adds tremendous value to Omnicare. In addition to being closer to the manufacturer, the business also diversifies Omnicare’s payer mix with the substantial amount of EBITDA now coming from nongovernment resources. Within our SCG business, our focus remains on accelerating growth within our fee-for-service business, and we are actively developing new solutions for our biopharma clients. Our specialty pharmacy platform is also gaining traction through limited distribution networks. One unique example is the drug Xenazine [ed. note: tetrabenazine, a therapy for Huntington’s disease, marketed 10 Visit our website at May | June 2013 in the US by Lundbeck], where we have utilized our LTC footprint to become the exclusive provider of this product within the LTC channel. We will continue to evaluate opportunities like this to better leverage our assets; with both our businesses now under the leadership of one team, we believe we are in a better position to do so. Now that both our businesses are in the single management team, we are focused in a very standardized way on metrics and with the same sense of urgency that helped us construct the Specialty Care Group. Our multiphase plan for our longterm care business is underway and we’ll focus on Omnicare’s key differentiated services, clinical operations and technology. 3 Brand Support and Supply Chain Solutions are focused very clearly on serving manufacturers. What does Omnicare do that differentiates it from other players in this market, and what do these differentiators mean for your biopharma clients? We believe our specialty offering is very differentiated from our competitors, due to the integrated nature of our services and that is resonating very well with our customers. Our structure allows us to provide a complete turnkey alternative for some of the manufacturers. While we can handle selected services for our clients, it is our integrated, end-to-end approach from sales support to dispensing where we can be a true partner with our pharma clients. One of the key differentiators is that we can represent a manufacturer. So we’re out there to help them in the fee-forservice business, vs. somebody else who may be offering a multitude of products for that therapeutic class. This aligns us perfectly with the manufacturer. We have an internal physician sales staff—of not insignificant size—that calls on physicians to help with accessing specialty pharmaceuticals. And again, due to the fact that we have the Specialty Pharmacy, we are unique as we’re the only company to cross all these different platforms. 4 How are the patient support services structured and delivered? Does Omnicare Specialty have an advantage in providing both supplier services and patient services? We try to make certain through the solutions that we develop for these branded products that we are engaging the patients and making them involved in their therapies. And then we leverage our distribution expertise to deliver either

Table of Contents for the Digital Edition of Pharmaceutical Commerce - May/June 2013

Pharmaceutical Commerce - May/June 2013
Table of Contents
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Brand Marketing & Communications
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Manufacturing & Packaging
Legal & Regulatory
Meetings and Editorial Index

Pharmaceutical Commerce - May/June 2013