Diplomat Pharmacy (Diplomat) launched CastiaRx in April 2018 to respond to industry demand for a leader in specialty benefit management. CastiaRx united the PBM capabilities of LDI Integrated Pharmacy Services and National Pharmaceutical Services with Diplomat’s specialty pharmacy and infusion expertise.
Less than a year later, Diplomat has realized it needs to accelerate the implementation of its new payer sales strategy for CastiaRx as to improve its performance. CastiaRx has $35 million in revenue in 2018.
Diplomat announced that Joel Saban, president of Diplomat, and Albert Thigpen, president and chief operating officer of CastiaRx, are leaving the company effective immediately. The company has initiated searches for their replacements. Chairman and CEO Brian Griffin will directly oversee CastiaRx and the operational review of that business pending completion of the search.
Diplomat announced some good news for CastiaRx. Diplomat has been selected by Hospitality Rx as the exclusive provider of specialty pharmacy and infusion services for its UNITE HERE HEALTH (UHH) plan members. UHH is a multiemployer union plan that provides health benefits to approximately 250,000 members across the nation.
Pharmacy benefit management services for most UHH markets are provided by UHH subsidiary Hospitality Rx. As part of the agreement, Diplomat will provide services including specialty product fulfillment, reimbursement support, clinical assistance and adherence programs, and data reporting and analytics.
Diplomat also launched a program with CSI Specialty Group for hospitals and health systems interested in starting or expanding their own specialty pharmacy services to benefit from Diplomat’s limited-distribution drug portfolio and expertise treating rare, chronic, and complex diseases. CSI, a partner of leading national healthcare solutions organization and Intermountain Healthcare company Intalere, offers specialty pharmacy solutions to help health systems improve patient care and optimize access to specialty medications.
Diplomat’s preliminary 2019 outlook assumes a revenue contribution from CastiaRx of $450 million to $500 million. The revenue range expected to be generated by CastiaRx includes approximately $200 million in previously disclosed Medicare Part D contract losses, an additional $120 million combined revenue impact from client losses impacting 2019 and the pricing impact of contract renewals, $35 million in January 1, 2019 new business, as well as further awards given a strong pipeline for the remainder of 2019.
CastiaRx Value Proposition
- Address costs under the pharmacy and medical benefit
- Flexible business models tailored to client’s specific needs
- Give payers analytics and insights to manage overall pharmacy trend
- Empower members with intuitive digital tools