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Caremark Specialty Pharmacy

ELMSFORD, N.Y. -- The merger earlier this month between MIM Corp. and Chronimed has created one of the country's largest specialty pharmacies.

On March 9, MIM Corp. announced it would acquire Chronimed, parent company of the specialty pharmacy retailer StatScript, for approximately $100 million, creating a combined company valued at $255 million that now will operate under the name BioScrip.

"We are confident that our complementary business models will provide an ideal platform for continued growth, said Henry Blissenbach, BioScrip's president and chief executive officer and former chairman and chief executive officer of Chronimed. "BioScrip is now uniquely positioned in the marketplace with its national mail service, community-based pharmacies and pharmacy benefit management businesses.

Outside of mail order and PBM services, BioScrip will operate 30 community-based retail locations in 25 major metropolitan markets, with about 10 percent to 15 percent of the business generated at the pharmacy counter and the remainder from back-door distribution of specialty pharmaceuticals in the areas of HIV/AIDS, organ transplant, oncology, blood products, hepatitis C, rheumatoid arthritis, multiple sclerosis and other specialty injectables.

Richard Friedman, BioScrip's chairman and former chairman and chief executive officer of MIM, said the retail locations in the short term will continue to operate under the name StatScript, but will phase over to a StatScript/BioScrip name and then fully operate under the BioScrip banner.

In the transition, the StatScript locations will not necessarily change from a physical standpoint--the typical footprint is about 1,500 square feet--but will feature more therapeutic areas, so former StatScript retail locations operate more like MIM's three New York-area locations (Fair Pharmacy in the Bronx, Vitality Pharmacy in Long Island and Adima Pharmacy in Livingston, N.J.), all of which specialize in biotech products for 13 disease states.

Friedman noted that the biotech pharmaceutical business is a $25 billion industry expected to hit $50 billion over the next several years, with about 600 products currently in development.

The new company is expected to generate total revenue of $1.2 billion, with $800 million coming from specialty pharmacy. Of that $800 million, 55 percent will come from community-based pharmacy operations, and 45 percent will come from the company's distribution facilities. The balance of the revenue will come from traditional mail order pharmacy, including the sale of tablets and capsules, and the company's PBM business.

Friedman said BioScrip's first priority is to integrate and consolidate functions on the operational side, including moving mail order capabilities to the company's major distribution center in Columbus, Ohio, for greater efficiency. It then will consolidate its finance and information technology departments, moving operations to Minnetonka, Minn.

BioScrip will be positioned to compete against such companies as CareMark, Medco, CVS PharmaCare and, on the HIV/AIDS portion of the business, Walgreens.

Its 900 employees will be dispersed between its corporate headquarters in Elmsford, N.Y., business headquarters in Minnetonka, Minn., three distribution centers and the community-based locations.

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