Diplomat to acquire Pharmaceutical Technologies
November 7, 2017Diplomat Pharmacy, has entered into a definitive agreement to acquire Pharmaceutical Technologies, doing business as National Pharmaceutical Services. The transaction is expected to close in 30 days.
National Pharmaceutical Services (NPS) is a full-service pharmacy benefit manager (PBM) based in Omaha, Nebraska. It features a proprietary claims-processing system and offers mail-order service under its Integrated HMO Pharmacy.
“Industry dynamics and the evolution of our payor strategy have accelerated our push to add PBM-like services,” said Phil Hagerman, CEO and chairman of Diplomat.
Hagerman said small and midsize payors, self-funded employers, and unions are seeking flexible solutions to improve health care outcomes and reduce costs. Partnering with NPS, he said, is a crucial step toward Diplomat’s strategy of meeting those clients’ unique needs.
“Enhancing our managed markets strategy with PBM services expands Diplomat’s service offerings from a specialty pharmacy provider to a broader health care company,” Hagerman said.
He said the acquisition should increase Diplomat’s ability to develop complete solutions—including cost justification, containment, and health care reporting.
Hagerman said that these services impact outcomes and cost as the industry pushes toward value-based care.
NPS’ mission is to improve member quality of life through flexible, affordable solutions with personalized service to its pharmacy benefit partners. The company builds end-to-end solutions to control prescription drug spend and manages a proprietary claims-processing system.
“Our innovative technology offers health plans unparalleled flexibility and utility,” said Eric Schram, president of NPS. “This system is a hallmark of our pharmacy benefit management philosophy—focusing on transparency and efficiency while challenging waste and inflation.”
Shellie Schoening, CEO of NPS, said the company’s history makes it a natural fit for Diplomat.
“NPS was founded by pharmacists as a differentiated PBM solution to address the inefficiency and high cost of pharmacy benefits,” Schoening said. “We offer the capabilities and economies of a big-box provider, the services and agility of a small provider, and the mentality of a partner.”
NPS’ transparent pricing model upholds full disclosure of claim accuracy and payments, she added.
“Clients receive accountability and traceability for every dollar through a comprehensive reporting package,” Schoening said.
Under the terms of the agreement, Diplomat will pay NPS $31 million cash and $16 million in Diplomat common stock. NPS is expected to generate approximately $32 million in net revenue and $5 million in adjusted EBITDA in 2017.
