Avella Specialty Pharmacy

Background

Founded in 1996 by Dr. John D. Musil, Avella Specialty Pharmacy, originally known as The Apothecary Shops, has evolved into a leading provider of specialty pharmaceutical services in the United States. Headquartered in Phoenix, Arizona, Avella operates facilities across eight states, offering comprehensive drug therapies for complex and chronic conditions such as cancer, HIV/AIDS, infertility, multiple sclerosis, Crohn's disease, and hepatitis. The company's mission is to optimize patient health through a relentless devotion to clinical excellence, emphasizing personalized care and support.

Key Strategic Focus

Avella's strategic focus centers on delivering specialized pharmaceutical services tailored to patients with complex medical needs. The company specializes in areas including oncology, dermatology, fertility, urology, ophthalmology, gastroenterology, and rheumatology. Utilizing advanced technologies, Avella offers a mobile application for medication refills and reminders, as well as a provider portal that grants physicians access to patient health data. The primary markets targeted include patients requiring high-touch, high-cost medications, healthcare providers seeking specialized pharmacy services, and healthcare systems aiming to improve patient outcomes through integrated care solutions.

Financials and Funding

In April 2009, Avella Specialty Pharmacy was acquired by RLH Equity Partners, marking a significant milestone in its financial history. Under RLH's ownership, Avella experienced substantial growth, with revenue increasing by over $1.4 billion, primarily through organic expansion. In 2018, Avella was acquired by OptumRx, a subsidiary of UnitedHealth Group, for approximately $325 million. This acquisition aimed to enhance OptumRx's specialty pharmacy capabilities and expand its service offerings.

Pipeline Development

Avella has focused on expanding its service offerings through strategic acquisitions. In October 2016, the company acquired Advanced Pharma, a provider of compounded sterile preparations to hospitals and health systems nationwide. This acquisition enhanced Avella's compounding capabilities and positioned it as a leading provider of compounded therapies in the hospital marketplace. Additionally, Avella acquired Oncology Plus, a provider of patient-specific chemotherapy admixtures, further strengthening its oncology service line.

Technological Platform and Innovation

Avella distinguishes itself through the integration of proprietary technologies and innovative methodologies:

Proprietary Technologies: The company offers a mobile application that facilitates medication refills and provides reminders, enhancing patient adherence to prescribed therapies. Additionally, Avella's provider portal grants physicians real-time access to patient health data, enabling informed decision-making and coordinated care.

Scientific Methodologies: Avella employs advanced compounding techniques within its state-of-the-art clean room facilities, ensuring the sterile and safe development of compounded drugs. This commitment to quality control supports the delivery of personalized medications tailored to individual patient needs.

Leadership Team

Avella's leadership team comprises experienced professionals dedicated to advancing the company's mission:

Rebecca Shanahan, CEO: Appointed in January 2014, Shanahan brings extensive experience in healthcare management and has been instrumental in guiding Avella's strategic growth and integration into OptumRx.

Dr. Joel V. Brill, Medical Advisor: With over 30 years of clinical and leadership experience, Dr. Brill joined Avella as a medical advisor, contributing expertise in value-based care and advanced payment models.

Leadership Changes

In January 2014, Rebecca Shanahan succeeded Dr. John D. Musil as CEO of Avella Specialty Pharmacy. Dr. Musil, the company's founder, transitioned to focus on other ventures, while Shanahan took the helm to lead Avella through its next growth phase.

Competitor Profile

Market Insights and Dynamics: The specialty pharmacy market has experienced significant growth, driven by the increasing prevalence of chronic diseases and the demand for specialized medications. In 2014, the top ten specialty pharmacies accounted for $78 billion in sales, with Avella contributing approximately $800 million.

Competitor Analysis:

Diplomat Pharmacy: As the largest independent provider of specialty pharmacy services in the U.S., Diplomat offers specialized medication management for complex conditions. The company has expanded through acquisitions, including Affinity Biotech and Comfort Infusion.

CVS Specialty: A division of CVS Health, CVS Specialty provides comprehensive specialty pharmacy services, leveraging its extensive retail network and integrated healthcare offerings.

Genoa Healthcare: Acquired by UnitedHealth Group's OptumRx in 2018, Genoa operates over 435 specialty pharmacies within behavioral health centers across 46 states, serving more than 650,000 individuals.

Strategic Collaborations and Partnerships

Avella has engaged in strategic collaborations to enhance its service offerings:

Partnership with Novartis: Avella partnered with Novartis to improve adherence rates for oral oncology medications, demonstrating a commitment to patient-centered care and outcomes.

Acquisition by OptumRx: The acquisition by OptumRx in 2018 aimed to integrate Avella's specialty pharmacy services into a broader healthcare platform, enhancing service delivery and patient care.

Operational Insights

Avella's strategic acquisitions, such as Advanced Pharma and Oncology Plus, have expanded its compounding capabilities and oncology services, positioning the company as a leading provider of compounded therapies in the hospital marketplace. The integration into OptumRx has further strengthened Avella's market position, enabling access to a broader patient base and enhanced resources.

Strategic Opportunities and Future Directions

Under OptumRx's ownership, Avella is poised to leverage synergies within the UnitedHealth Group ecosystem to expand its specialty pharmacy services. Opportunities include integrating with Optum's data analytics capabilities to enhance patient outcomes, expanding service offerings to address emerging therapeutic areas, and strengthening partnerships with healthcare providers to deliver coordinated, value-based care.