Radar on Specialty Pharmacy

Diplomat Pharmacy, Inc.’s sale to OptumRx (see story, p. 1) will mark the end of a specialty pharmacy that is nearly half a century old.

Diplomat began operations in 1975 as a small, regional operation, and, in 2014, it made the decision to go public (RSP 7/14, p. 1). At the time, the company was the fourth largest specialty pharmacy in the U.S., and the move was hailed by industry experts. Diplomat made multiple acquisitions to expand into areas such as bleeding disorders, immune globulin therapy and hepatitis C (RSP 7/15, p. 1).

Late last month, the Trump administration moved ahead with a proposed rule and draft guidance that could open the door to drug importation. The moves, it contended, would lower U.S. prescription drug prices. But skepticism exists as to whether the policies will ever be implemented, as well as if all involved entities would even participate in the efforts.

An HHS notice of proposed rulemaking (84 Fed. Reg. 70796, Dec. 23, 2019) would allow states and certain nonfederal government entities to submit for review to HHS proposals for programs to import drugs from Canada that have been approved by Health Canada’s Health Products and Food Branch. Those programs also may have co-sponsors, which could be a pharmacist, a wholesaler, another state or another nongovernment entity. Drugs not eligible for importation include controlled substances, biologics, infusibles, intravenous injectables, drugs inhaled during surgery, certain parenteral drugs and drugs with Risk Evaluation and Mitigation Strategies (REMS).

An earlier version of this story incorrectly said that Neupogen (filgrastim) and Neulasta (pegfilgrastim) are Pfizer Inc. treatments. They are Amgen Inc. products. This version has been corrected.

So far, biosimilar uptake has been relatively slow in the U.S. since the 2015 launch of Sandoz Inc.’s Zarxio (filgrastim-sndz), the first product to use the 351(k) approval pathway. But recent and pending launches have resulted in therapeutic classes with more than one biosimilar, which may be the push that payers need to begin preferring them over their reference products, according to Zitter Insights data and, in turn, realizing savings in some costly therapeutic classes.

As independent specialty pharmacies and infusion providers continue to be squeezed by various market pressures, 2019 saw an end to two long-time industry presences. In August, BioScrip, Inc. and Option Care Enterprises, Inc. finalized a merger. And in December, Diplomat Pharmacy, Inc. said that it had agreed to be acquired by UnitedHealth Group unit OptumRx, putting an end to its struggles over the past couple of years.

On Dec. 9, Diplomat and OptumRx unveiled a deal by which OptumRx would acquire Diplomat’s outstanding common stock for $4 per share — well under the $5.81 per share at which it was valued when the markets closed before that weekend. Diplomat’s board unanimously approved the deal, through which OptumRx gains locations in all 50 states and Washington, D.C. The transaction is expected to close early this year.