The 13 Fastest-Growing, Private Specialty Pharmacies

Time to check in with the recently-released Inc. 5000 list of fastest-growing private companies. The 2012 list nicely highlights the boom in specialty drug dispensing.

There are 13 companies on the 2012 list, compared to only 10 on the 2011 list. The pharmacies and their key stats are listed below. With revenues of $772 million, Diplomat Pharmacy again topped the list. The other 12 pharmacies had total revenues of $1.1 billion.

Given the eye-popping growth, I suspect that many of these companies will not remain independent for much longer.

THE DATA

The 2012 Inc. 5000 list is based on percentage revenue growth from 2008 through 2011, shown as “3-Year Growth Rate %” in the table below. Companies have to be based in the United States, privately held, for profit, and independent—not subsidiaries or divisions of other companies—as of December 31, 2011. Companies must apply to be considered, so secretive or shy specialty pharmacies do not appear on the list.

In the Inc. 5000, there are 377 companies in the “health” industry. We reviewed the company descriptions and identified 13 companies whose primary business is dispensing specialty pharmaceuticals.

BTW, the list contains other pharmacy-related services companies, such as Prime Therapeutics, the pharmacy benefit manager owned by 13 Blue Cross and Blue Shield plans.

THE LUCKY 13

The table below lists the 13 independent specialty pharmacies on the 2012 Inc. magazine list of the fastest-growing private U.S. companies. Click here to search the individual company listings.

The companies on this list exemplify the boom in specialty dispensing. Some observations:

• The average 3-year revenue growth rate of these 13 pharmacies is 166%. All but two of these companies were founded within the past 15 years.

• Only Diplomat Pharmacy is large enough to show up on Pembroke Consulting’s 2011 market share chart. The other 12 companies, which had total 2011 revenues of $1.1 billion, fall into the “All Other” category.

• Based on a cursory look at the websites, some of these private specialty pharmacies can only access specialty drugs in open distribution, i.e., products stocked by full-line wholesalers that lack a manufacturer-limited network. Manufacturers have good reasons for these limits, as I outline in To Limit Counterfeits, Build a Solid Channel Strategy. (Full disclosure: I help manufacturers develop these strategies.) The larger pharmacies, such as Diplomat and Avella, are more likely to participate in limited specialty networks.

• As I discuss in Chapter 5 of the 2012-13 Economic Report on Pharmaceutical Wholesalers, full-line wholesalers will benefit as entrepreneurial pharmacy owners target specialty drug dispensing opportunities.

• One non-specialty pharmacy appears on the Inc. 5000 list. It’s myMatrixx, which “provides an online pharmacy specializing in workers' compensation, auto insurance, and pain management.” The company is headquartered in Florida, naturally.

To read more about the specialty boom, check out these two articles:

• 7 Reasons Why Specialty Drug Dispensing Will Boom (from Specialty Pharmacy Times) 

• Armada 2012: Reflections on the Evolving Specialty Marketplace (observations on the May 2012 Armada Summit)

So, any comments on this list?

P.S. This table above updates Exhibit 54 (on page 84) of the 2011-12 Economic Report on Retail and Specialty Pharmacies.