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Diplomat Specialty Pharmacy Featured In Detroit Free Press

14 March 10

Flint-area company helps patients find ways to pay for drugs

BY PATRICIA ANSTETT FREE PRESS MEDICAL WRITER

Eager to create a different type of pharmacy, Phil Hagerman has built his once family owned, Flint-area business over the last 30 years into the nation’s largest independent specialty pharmacy company.

Diplomat Specialty Pharmacy stocks increasingly costly drugs, often with a high risk of side effects, which no longer are carried at neighborhood pharmacies.

It offers individual telephone counseling to ensure patients take the medicines correctly for chronic conditions. It has a staff of eight whose sole responsibility is to help people find ways to pay for medicines.

And it has one of the biggest compounding pharmacies in the country, making customized medicines for cancer, multiple sclerosis and HIV patients and pets, among others. The compounded medicines include aspirin made into gels, liquid medicines for children unable to swallow pills, natural hormone preparations for women for menopause symptoms and three cancer medicines combined into a single preparation.

It fills about 5,000 of these customized prescriptions a month, said Phil Hagerman, president and CEO, who started the company in 1975 with his father, Dale Hagerman, also a pharmacist.

Though compounding accounts for as little as 2% of the company’s revenue, the market is important, Phil Hagerman said.

“It’s all about positioning yourself with doctors in a customized manner,” said Hagerman, a 1975 graduate of Ferris State University’s pharmacy school. “The reason we are growing is we have built a reputation as the highest-touch specialty pharmacy in the country,” he said, in reference to the company’s focus on serving consumers by phone and other direct methods, rather than relying on Internet correspondence.

Large chains with pharmacy services also offer specialized programs, but many focus on volume so much that they can’t offer the service a smaller company like Diplomat strives to offer, Hagerman said.

Overall, Diplomat ranks sixth nationwide among specialty pharmacies, after big chains like Walgreens and MedCo, Hagerman said. Diplomat is Michigan’s only large specialty pharmacy, he said.

The company offers conventional pharmacy services but 95% of its business is by mail, which it follows up with phone calls to see whether patients have questions, have experienced side effects or are having trouble with other issues.

Half of its business is in the field of cancer drugs. A growing market involves drugs with so-called risk-management strategies, following a 2007 law that set stricter rules for drugs with higher chances of side effects.

“More and more drugs are coming onto the market that never will be in a community pharmacy,” Hagerman explained. Some drugs require pregnancy tests, because they can cause birth defects; others necessitate special training by pharmacists or doctors may need to be authorized by a company to prescribe a drug, Hagerman said.

The company has contracts with insurers and others to help patients manage chronic diseases.

Hagerman expects this business to increase as health systems, insurers and others stress disease-management programs to prevent health problems from spiraling into costly complications that result in hospitalization.

Priority Health, a Grand Rapids health insurance company, has used Diplomat for six years to supervise the distribution of its high-cost specialty drugs.

The company has helped the insurer hold down prices of these drugs, tracks patient compliance in taking drugs, offers free supplies and overnight delivery and cutting-edge technology to reduce errors, spokeswoman Juanita Vorel said.

The company has 364 employees at its Flint, Swartz Creek, Grand Rapids, Cleveland, Chicago, Ft. Lauderdale, Fla., and Los Angeles offices.

On the heels of its best year ever last year, the company expects $500 million in revenue this year and plans to continue hiring—about 100 people this year and 175 next year.
The company’s Web site (www.diplomatpharmacy.com) has hiring information. “It’s an exciting time to be in our spot,” Hagerman said. “We are working hard as a company. We have a tremendous opportunity to grow more.”