Catamaran Extends Reach with Salveo Specialty Pharmacy Acquisition


Salveo currently manages approximately $400 million in annual drug spend.

Salveo currently manages approximately $400 million in annual drug spend.

The Catamaran Corporation expanded further in the rapidly changing specialty pharmacy marketplace following a major acquisition last month.

Catamaran entered into an agreement to purchase Salveo Specialty Pharmacy, an outfit headquartered in Florida with brick-and-mortar pharmacy locations in New York and California. Salveo currently manages approximately $400 million in annual drug spend.

“Salveo is entirely complementary to Catamaran’s specialty offering, providing a local market presence on the east and west coasts,” said Catamaran Vice President of Specialty Pharmacy Operations Michael Zeglinski. “With this acquisition, Catamaran will have 14 specialty pharmacies across the United States. In addition, Salveo’s core focus on oncology, HIV, organ transplant, hepatitis C, and gastrointestinal diseases augments Catamaran’s expertise in a number of rapidly growing therapies and access to limited distribution drugs.”

Catamaran purchased Salveo for $260 million in cash, which represents a purchase price multiple of approximately 13 times Salveo's trailing-twelve-month EBITDA, the company noted. The purchase is expected to be funded through cash on the balance sheet.

Zeglinski noted that Salveo will contribute their expertise in a number of rapidly growing therapies while providing access to limited distribution drugs across certain therapeutic categories, primarily in oncology. The addition of Salveo is also expected to enhance Catamaran’s existing services.

“We are currently the fourth largest specialty pharmacy in the US. As we continue to grow and expand, we will maintain our patient-centric philosophy, providing patients with the expert, personalized support they need to manage their complex conditions,” Zeglinski said. “It is through this hands-on approach that we will continue to guide patients through their treatment regimens to ensure safe, effective and timely administration.

“Clients and patients will continue to experience the high-touch, personalized specialty services we’ve always brought to the table, and together with Salveo’s complementary locations and therapy mix, we will be able to expand our capabilities even further.”

The acquisition comes at a time that the specialty marketplace is expanding at a rapid pace. Spending on prescription drugs is estimated to increase in the retail space by $227 billion between 2010 and 2020, while the average cost of a specialty prescription grew 17%, to $2860, last year as a result of increased utilization and more expensive products.

In light of this anticipated growth, specialty pharmacy stakeholders need to implement various measures to help contain costs.

“Managing these costs requires a well-rounded set of tools and services. We are doing everything from optimizing our clients’ benefit design, contracting with drug manufacturers, closely monitoring the pipeline, and working aggressively to maximize new agents,” Zeglinski said. “Most importantly, we are investing in a robust set of clinical programs that addresses patients’ overall clinical needs. One thing we have noticed within our own segmentation of the data is that many of our specialty patients have 5 to 6 comorbidities. These patients have to be supported holistically, which is where we see the advantage in being the PBM and specialty pharmacy: we can do that for them.”

This past year saw a number of independent specialty pharmacies acquired by larger companies in response to the projected market growth. Included among the major purchases were the acquisition of Rx21 Specialty Pharmacy by multi-format retailer Giant Eagle, Inc; Pharmerica bought a minority stake in the specialty pharmacy Onco360; Midwestern grocery store chain Hy-Vee agreed to acquire specialty pharmacy solutions provider Amber Pharmacy; and CVS Health purchased the assets of Navarro Discount Pharmacy.

Zeglinski noted that this trend allow companies to expand at a more rapid pace by utilizing the existing services independent pharmacies have to offer.

“Independent specialty pharmacies often bring disease-specific expertise and/or geographic concentration to an acquirer,” he said. “These aspects of specialty pharmacies should allow the acquirer to accelerate its growth in specialty, which is already expected to grow significantly faster than other areas of pharmacy. Independent specialty pharmacies typically employ a member-centric service model, which is another aspect that resonates with potential acquirers as its members tend to be stickier. This trend could mean greater geographic and therapeutic expansion for the larger acquiring entities if the trend continues.”

Related Videos
biosimilar word or concept represented by wooden letter tiles on a wooden table with glasses and a book | Image Credit: lexiconimages -
Image credit: alicja neumiler |
Laboratory test tubes and solution with stethoscope background | Image Credit: Shutter2U -
Laboratory test tubes and solution with stethoscope background | Image Credit: Shutter2U -
Image credit: |
Human brain digital illustration. Electrical activity, flashes, and lightning on a blue background. | Image Credit: Siarhei -
Physician and kidneys
Image credit: gamjai -
© 2024 MJH Life Sciences

All rights reserved.