Pharmacy Industry News: Mississippi Pharmacy Recognized on Inc. 5000 List
Mississippi Pharmacy Recognized on Inc. 5000 List
Transcript Pharmacy lands on the Inc. 5000 List of the Fastest Growing Privately Owned Businesses in America for the fourth year in a row and is ranked 116 in the health industry.
“We are blessed to be trusted by so many health care professionals and so many patients who, month after month, give us the opportunity to serve their needs,” said Cliff Osbon, president of Transcript Pharmacy. “We are successful only because of the trust others place in us, which we believe we have to earn with excellent service.”
Osbon says the Jackson-based pharmacy’s high-touch patient model focuses on giving patients, nurses and doctors nationwide direct access to their staff – they can actually talk to someone on the phone when they call; they don’t have to work with a complicated phone system.
“Our personalized service feels like a ‘mom and pop’ drugstore of years past, while being supported by a high-tech, behind-the-scenes software system which guarantees the best service possible,” said Osbon.
Osbon says maintaining personal relationships with both patients and clinic staff is Transcript’s key to success. Patient intake coordinators say the nurses they work with tell them that Transcript helps save them 45 minutes to an hour when getting prescriptions for their patients.
“One of our nurses in Memphis says her patients tell her they are impressed with the personal service and care they receive from Transcript,” said LaDanna Goodloe, a Transcript patient intake coordinator. “She says they never hear complaints and that everyone at Transcript really cares about each and every patient.”
Rosie DeHart, also a patient intake coordinator, says it is rewarding to hear satisfaction from nurses who work directly with patients.
“A nurse in Dayton, Ohio, told us that they have worked with a lot of specialty pharmacies, but they’ve never experienced this type of ‘grade A’ service from any other pharmacy,” said DeHart. “She said Transcript really knows how to treat people; from clients to patients, catering to people is definitely a priority.”
This high-touch patient model is the same for offices and patients across the country. Transcript’s consistency has garnered positive feedback from health care professionals nationwide.
“Another nurse I work with in Little Rock says that Transcript Pharmacy provides exceptional customer service,” said DeHart. “She says we have a friendly, dedicated staff that truly puts the patient first and that Transcript is her specialty pharmacy of choice.”
Osbon says his staff cares about the end result for the patient and strives to see better health outcomes.
“Our patient care service model results in better adherence to prescribed treatment regimens, which translates into better outcomes and lower overall health care costs, in many cases,” said Osbon.
In fact, a yearlong study conducted by Virginia Commonwealth University (VCU) has shown that through personalized communication with each patient, Transcript has improved compliance. Better compliance leads to fewer doctor and hospital visits, which can significantly reduce medical costs for patients.
Sigma’s clean bill of health
Chairman Brian Jamieson and his then-new chief executive Mark Hooper decided last year that Sigma Pharmaceuticals, despite its near-death experiences, did have a down-sized independent future and rejected what appeared to be a reasonable offer in the group’s distressed circumstances. Today’s results would appear to vindicate that decision.
While Sigma rejected the $650 million bid from South Africa’s Aspen Pharmacare, it did strike a deal with its suitor to sell its pharmaceutical division to that group for $900 million. That wiped out Sigma’s net debt, allowed it to pay a special dividend, and created a simpler and less volatile healthcare business focused on wholesaling and distribution and its own retail pharmacy brands.
Today Sigma reported a $26.7 million profit for the six months to end-July, which compares with a $211 million loss for the same half last year. That’s despite losing a contract to distribute Pfizer’s products, representing about 15 per cent of its sales, when Pfizer decided to distribute directly to pharmacists last year.
Sigma’s underlying sales grew 9 per cent and its earnings before interest and tax were up 55 per cent, so Hooper is generating some momentum in what remains a tough sector, where ongoing reform of the Pharmaceutical Benefits Scheme means the wholesalers are under continuing pressure.
Sigma was destabilised by a combination of poor management, too much debt and the difficult industry environment in which its former pharmaceutical business was operating in.
Its inability to extract synergies from acquisitions, blow-outs in inventory levels that inflated its working capital requirements, overly generous payment terms offered to large customers and heavy discounting were contributing factors.
The sectoral issues that afflicted its pharmaceutical business – intense competition for market share in generics in anticipation of a range of blockbuster drugs coming off patent over the next few years – were also an influence in Pfizer’s decision to take control of its own distribution.
Hooper has steadily reduced the group’s working capital position by improving (from Sigma’s perspective) the terms offered to customers and getting its inventory position under control. A year ago, working capital stood at $777 million. Today it is about $522 million.
He’s improved margins and cash flow conversion, with the group’s operating cash flows rising from $40 million to $106 million. Sigma has no net debt – it has net cash of about $88.5 million after making major debt repayments and paying the 15 cents a share special dividend earlier this year.
Future results should also benefit from Sigma’s coup in winning a contract to supply about 300 pharmacies previously aligned with its rival, Australian Pharmaceutical Industries, as well as from further reductions in costs and improvement in the detail of its businesses.
Its now pristine balance sheet, rising cash flows and improving returns on capital provide insurance against the probable contraction in the PBS scheme next year and the continuing ripples from the Pfizer decision.
Sigma may remain a work-in-progress but the decisions to reject Aspen’s bid, sell the pharmaceutical business and concentrate on better managing what was left appear to be paying off.