Transcript Pharmacy firmly planted on Inc. 5000 List of the Fastest Growing Privately Owned Businesses in America

After a career that included community pharmacy practice, working with a venture capital-funded nuclear pharmacy company, and five years in pharmacy benefits management consulting, pharmacist Cliff Osbon established Transcript Pharmacy with fellow pharmacist Todd Barrett to supply anti-rejection drugs to organ transplant recipients in the South.

"We recognized there was a void in this niche market," said Osbon, president of Transcript Pharmacy Inc. "We also recognized that patients with chronic medical conditions needed specialized pharmaceutical care and coordination of benefits."

For the fourth consecutive year, the Jackson, Miss.-based specialty pharmacy made the Inc. 5000 List of the Fastest Growing Privately Owned Businesses in America, ranked 116th in the healthcare sector.

"When we launched Transcript Pharmacy in January 2003, many folks were getting their anti-rejection drugs at local pharmacies that didn't tend to keep those drugs in stock. For one thing, they're expensive. For another, only one patient at a time would usually need those medications," said Osbon. "Also, Medicare Part B would pay for the drugs, but many retail pharmacies didn't bill Medicare Part B. We knew we could develop the billing expertise to get paid for the drugs, provide the drugs, and also the support and education services for patients in addition to home delivery. Once we did that, the pieces started to fall into place."

Organ transplant centers in a four-state area signed on as their core clients—the University of Alabama at Birmingham and The Children's Hospital in Birmingham; Tulane University and Oschner Health System, both in New Orleans; University of Mississippi Medical Center; and LeBonheur and University of Tennessee in Memphis.

By mid-2005, Osbon and Barrett had diversified their lines of business by supplying medications for other disease states.

"We started by adding hepatitis C, and then slowly added six other disease states," said Osbon. "We now work with patients with one of eight conditions and we've expanded geographically. We're now licensed in 17 states and work actively with clinics in 12 states—as far east as the Carolinas, then west to Ohio, Indiana, Illinois and Kansas, south through Missouri, Oklahoma and Texas, and all the states along the Gulf Coast."

When Hurricane Katrina ravaged the Mississippi Gulf Coast and New Orleans flooded via a levy breach on Aug. 29, 2005, Tulane University's transplant center shut down for six months and Oschner's had a lull in transplant activity since only critical cases were accepted.

"That same month, UAB opened their own transplant pharmacy for home delivery, so in one month, we lost 90 percent of our transplant business referrals. Fortunately, we had diversified our lines by then," said Osbon, who was featured in the National Federation of Independent Business article three months post-storm in "Five Things Katrina Taught Small Business."

When Transcript Pharmacy was left with no power following Katrina, Osbon used a generator to stay online but faced a major hurdle with delivery service suspension in storm-ravaged areas. Knowing that transplant patients face organ rejection—or even death—if they go a day without their medications, Osbon made a clever move: he partnered with competitors to deliver drugs to areas that had lost mail service.

"We met people at the Wal-Mart parking lot at noon and the Chick-Fil-A at 3 p.m.," he recalled, adding that the unlikely solution was made possible by the spirit of cooperation that flourished in Katrina's aftermath. "Armada Health Care, our purchasing group, drove us 165 gallons of gas from New Jersey. And our Novartis Pharmaceuticals account manager called from Dallas and said: 'I know you need gas; what else do you need?'"

Today, Transcript Pharmacy's four most significant lines are self-injectable drugs to treat hepatitis C, rheumatoid arthritis, psoriasis, and Crohn's disease. The company anticipates more than $50 million in sales in the coming year with a lean staff of 15, which includes pharmacists, pharmacy technicians, insurance experts, administrative staff, shipping technicians and clinic representatives covering multiple states in Cincinnati, Birmingham, Dallas, and the home base of Jackson.

"Typical retail pharmacies are built around high volume and low dollars," explained Osbon. "Their typical prescription is $70-$80 with a $4-$5 markup as insurance allows. Our drugs are more on the order of $1,500-$3,000 a month. Even though the percentage markup is low, we have larger dollar transactions. We can support that with a relatively small staff."

Step by Step

After the doctor writes the order to begin drug therapy for a disease, two steps are taken: one, finding a pharmacy that stocks the particular drug and has the personnel with the time to train, educate and support the patient; and two, gaining insurance approval.

"At $20,000 a month for some drug therapy, insurance documentation can be cumbersome," said Osbon. "We have staff that handles both key functions. First, our intake coordinators verify the patient's insurance benefits and work with insurers and the medical office to make sure that prior authorization is completed and approved. Second, we start the education and support process by reaching out to the patient to introduce ourselves and explain how we work with their doctor, what medication is prescribed, the cost, and how we ship it. We find financial assistance for more than half of our patients to help reduce the co-pay. That's significant! Third, we put every patient on the phone with a pharmacist for pre-therapy counseling. That's typically a 5-15 minute call, longer for hepatitis C. The pharmacist explains how they're going to take the drug, possible side effects, and what to do if those side effects occur.

"In many cases, we're asked to provide injection training, and we send nurses to the homes of these patients to teach them how to take prescribed shots and get them started on drug therapy. After that, a patient care coordinator calls patients once a month, which has an amazing effect on adherence. Those steps aren't done by retail pharmacies, and for all those reasons, nurses recommend us. To make it easier for patients, the nurse goes over drug therapy delivery options with them and faxes the order after patient approval rather than give the patient a script to take home."

Studies have shown that patients with hepatitis C that use a retail pharmacy for medications only receive about half of the prescribed doses on time during the course of treatment. By using a specialty pharmacy like Transcript Pharmacy, 90 percent of prescribed doses is received on time, Osbon pointed out. "That makes a huge difference in the success rate for treatment," he said.

Transcript Pharmacy's major competitors include the nationwide specialty pharmacies like Diplomat Pharmacy and Amber Pharmacy, "companies we greatly respect," said Osbon, and specialty pharmacies owned by insurance companies in states that allow it.

"Our growth rate has been 20-25 percent a year," said Osbon. "As a pharmacist first, I struggled with ensuring patient care and I haven't allowed us to grow as quickly as some companies. So far this year, it looks like we'll have another 40-50 percent growth over last year. We're growing as quickly as we can while continuing to service patients in an excellent manner."

TAGS: Cliff Osbon, Todd Barrett, Transcript Pharmacy Inc., Inc. 5000 List of the Fastest Growing Privately Owned Businesses in America.

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