Diplomat Pharmacy, Inc. said Feb. 1 that it had finalized its deal for specialty pharmacy and infusion services company Affinity Biotech, Inc. The purchase should strengthen Diplomat’s growing presence within the specialty infusion space, it said.

Diplomat paid $16 million for Affinity, which had an estimated $27 million in revenues last year. Affinity provides treatments and services for people with hemophilia and has locations in New York and Houston. The facility in New York will give Diplomat access to 4.8 million Medicaid patients in that state, and the Texas facility gives Diplomat a second location there and “builds upon our service to the state’s 3.7 million Medicaid patients,” says Diplomat CEO Phil Hagerman.

Bill Sullivan, principal consultant at Specialty Pharmacy Solutions LLC, agrees that those two locations “are strategically valuable, especially for Medicaid.”

Sullivan tells AIS Health that the deal “appears to be a relatively benign acquisition. As long as acquisitions of this type are financially accretive, they are usually good moves.”

Firm Will Join Specialty Infusion Unit

The company will be part of the Diplomat Specialty Infusion Group, which Diplomat formed recently to bring together five of its subsidiaries (SPN 12/16, p. 11). The unit consists of American Homecare Federation, Inc. (SPN 2/14, p. 5); At-Home IV Infusion Professional, Inc.; BioRx, LLC (SPN 3/15, p. 1); MedPro Rx, Inc. (SPN 7/14, p. 8); and XAS Infusion Suites, Inc. The division focuses on areas that include hemophilia and bleeding disorders, hereditary angioedema, alpha-1 antitrypsin deficiency, immune deficiencies, and parenteral and enteral needs.

Asked about Diplomat’s focus on specialty infusion, Sullivan maintains that “if you are going to be a big player in the specialty pharmacy world, you can’t cherry pick only those therapies that generate the most net profit. The FDA pipeline is still clogged with numerous infused medications, many that will be in the costly specialty category. All the top 25 specialty pharmacies have distributor licenses, which enable them to sell directly to physicians, clinics and even hospitals (not frequent). So, if you can cover all the bases, you become a much more useful provider in the eyes of health plans and also manufacturers — so it is strategically important to be a multidimensional provider.”

According to Philip Rielly, Diplomat vice president and president of Diplomat Specialty Infusion Group, “Our goal has been to provide the best possible care for patients in the bleeding disorders community. [The] partnership with Affinity Biotech will build upon this dedication in a larger geographic footprint, enabling Diplomat to provide more services to more patients through greater patient access. Expanded market penetration strengthens our ties with pharmaceutical manufacturers by satisfying their need for multichannel reach, and for our payer partners, our expanded offering improves our ability to take care of their members.”

He tells AIS Health that “In joining forces [through the specialty infusion unit], we continue to strengthen our broad range of expertise while providing more treatments for patients who require specialty infusion services….Diplomat is a family-grown business guided by the philosophy ‘Take good care of the patients and the rest falls into place.’ We are committed to maintaining the highest standard of care in the industry.”

Diplomat, says Rielly, “is dedicated to personalized medication therapies for patients with chronic and complex therapies. Our ability to provide specialty pharmacy and infusion therapy services is critical for comprehensive patient care. As the nation’s largest independent specialty pharmacy, we are working to expand our reach to better meet the needs of the country’s sickest patients, who need high-touch care and unmatched clinical expertise.”

According to Sullivan, “Wall Street likes to see smart deal-making by traded entities. It shows that growth is not only organic but also strategic/accretive. They watch the fallout from these deals to determine the savviness of senior management…which is a qualitative component of their confidence in the forecasts they issue to their investors and ultimately stock price.”