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DEERFIELD, Ill. — Walgreens Infusion Services is now Option Care, an independent company and brand, though Walgreens has retained “significant” minority ownership.
Madison Dearborn Partners (MDP), a private equity firm based in Chicago, now owns the lion’s share of the new infusion services provider.
Paul Mastrapa, chief executive officer of Option Care and the former division vice president of Walgreens Infusion Services, made the announcement last month.
The move, Mastrapa said, will provide greater service and efficiency of high-quality care to the company’s 50,000 infusion therapy patients. “Our focus is on high-quality infusion patient care. Madison Dearborn Partners, with its broad and deep health care expertise and resources, will help accelerate that,” Mastrapa said, adding that continued commercial collaboration with Walgreens will enhance that focus as well.
Infusion therapy, which is the administering of intravenous treatment to patients through injections and catheters, is a rapidly expanding industry estimated to be worth $14 billion, of which Option Care’s market share is 10%, Mastrapa said.
While infusion therapy consists of a wide range of treatments, including chemotherapy, Mastrapa said 95% of infusion treatments are intravenous antibiotics for various infections. And most treatments, he added, are administered at home, which cuts down on costs and has a lot to do with the industry’s rise.
Infusion patients, Mastrapa said, can save as much as 90% of the total cost of an infusion therapy by having the treatment at home. So a treatment that would cost $1,500 at a hospital might only cost $150 for a patient being treated at home.
“A core part of our model is to enable self-administered treatment without a professional caregiver being present,” Mastrapa said, “which would lead to even further cost savings.”
As part of its corporate overhaul, Walgreens sold the large stake in its infusion company to MDP in January, shortly after its merger with the European pharmacy chain Alliance Boots at the end of December. But the creation of Option Care doesn’t mean Walgreens will not continue to benefit from the enormous growth of the infusion services market, according to Walgreens spokesman Jim Cohn.
“We’re not exiting the infusion business,” Cohn said. “Infusion services is still important to Walgreens.” According to Mastrapa, of the nine seats on the new Option Care Board, Walgreens will hold three.
However, Cohn noted, with MDP taking over the bulk of infusion services, Walgreens will be able to sharpen its focus on its core retail and specialty pharmacy operations.
“But for our infusion services patients, existing operations will continue as is,” Cohn said, “except now they are going to benefit from the ongoing relationship with Walgreens and the new company that is positioned to offer them greater service and value.”
Along with its 92 pharmacies across the country where the infusion drugs are prepared and delivered to homes or other alternate site treatment centers, Option Care employs an army of 1,400 clinicians and nurses to ensure safe treatments and to train caregivers and patients, and it has the capacity to serve 90% of the country’s infusion patients.
Other factors driving the growth of the infusion market, according to Mastrapa, are an aging population, a pipeline of new available infusion treatments, and more insured patients due to the Affordable Care Act.
“The ACA has accelerated the infusion market industry because of more access,” Mastrapa said. “As has the increasing demand for the right site of care. Patients love to be treated at home.”
Though it is a new company, Option Care’s name is a familiar one. In 2007, Walgreens acquired a regional infusion company, also called Option Care. Mastrapa said it was practical to stick with a well-known name. After the 2007 acquisition of Option Care, Walgreens acquired 16 additional infusion pharmacies under its corporate umbrella.
Option Care, which has 5,000 employees nationally and 150 in its corporate offices, is currently located at the Walgreens headquarters here, with its flagship pharmacy in Wood Dale, Ill. Mastrapa said the company plans to relocate, but it will stay within the northern suburbs of Chicago.
