Profiles

Axium Healthcare Pharmacy Poised for Record Growth

Merger with Kroger Opens Huge Distribution
Channel for Specialty Pharmacy

Moving a business to where a market is headed, not just reacting to where it is, distinguishes the good business leaders from the great ones. As NHL legend Wayne Gretzkey so memorably put it, “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” In our area few have been able to read the trends and position their organization to capitalize on that momentum like Mark Montgomery, CEO of Lake Mary-based Axium Healthcare Pharmacy, Inc.

The market trend is the meteoric growth of the specialty pharmacy business, which has soared from $17 billion in 2000 to $100 billion in 2012, with projections of $135 billion in 2014. According to Caremark, a leader in the field, it will reach $400 billion in the next four decades. By 2018, experts predict one half of all prescriptions will be from a specialty pharmacy.

This growth is being driven by two factors. One is the number of new products that companies are introducing. The other is the wave of Baby Boomers who are entering the senior population and being diagnosed with illnesses requiring a specialty pharmacy.

So what is a “specialty pharmacy?”

Still in its infancy, specialty pharmacies started about 15 years ago to provide medicines for patients with certain disease categories, particularly chronic care diseases like multiple sclerosis, rheumatoid arthritis or hepatitis C. In these cases, both the nature of the medications, the need to monitor the patient’s reaction and the cost of the treatments (on average several thousand dollars per month), was outside the scope of your corner drugstore. Axium helps patients with their medications by providing nurses and pharmacists who check the patient’s condition and serve as a liaison between the patient, their physicians, their insurance company and the drug manufacturer.

 

1 - 2Making the Shot

Gretzky also said, “You miss 100 percent of the shots you don’t take.” Montgomery has made some amazing calls, helping to position Axium as an emerging leader in the industry, which garnered him the recognition as the Florida Ernst & Young Entrepreneur of the Year in 2013 in the health care category.

Axium’s quantum leap came when they moved beyond referrals from physicians or health providers to being a preferred pharmacy provider for insurance companies. This resulted from a bold move into a completely new market for specialty pharmacies: Puerto Rico. “We became the solution to the pharmaceutical and the biotech companies, because we were the only one in the market. Therefore, if you wanted to introduce a product into Puerto Rico, we became the specialty pharmacy of choice to provide that type of service and care,” Montgomery explained.

As a result of this move Axium gained access to drug products with limited distribution. Then, manufacturers reciprocated; seeing the performance level Axium delivered in Puerto Rico, they gave them the ability to distribute pharmaceuticals that other companies their size couldn’t get here in the U.S. “We got access probably two years ahead of other specialty pharmacy companies of our size because of the level of service we delivered in Puerto Rico,” he said.

“The industry has three large companies that account for 60 percent of the market, but that leaves a pretty large slice of the pie, 40 percent, for other companies to compete for. We have focused on customer service and our ability to quickly respond to the needs of our customers, the patients. Also, we realized we could hire the best clinicians and provide the kind of environment where they would thrive. In addition, we have a reputation of being very clinically driven and clinically astute, providing better adherence and compliance.”

 

From Carousel to Kroger

Montgomery came to Orlando, having started a specialty pharmacy company in Georgia that he later sold to and then worked for Accredo Health, one of the largest in the industry, in November 2003. After serving as a consultant to the two founders, he became a minority partner and began adjusting Axium’s business model. While the industry grew 18 percent annually, Axium has enjoyed 30 percent growth every year Montgomery has been with them.

“We flourished and were able to enter more domestic markets, and like any healthy, growing organization we started to bring in superior talent. I have spent years in this sector, so I knew many of the best and brightest. Like our chief of pharmacy, our business development leader Gerry Dabkowski and Bill Bucher our CFO. In 2005, we purchased a 45,000 square foot facility in Lake Mary; this gave us great visibility and credibility within the industry and showed we were committed to growth. As a result they took us a lot more seriously. At the time, my two partners weren’t sure this was a viable way to go.”

In 2006, Montgomery’s partners, the majority owners, wanted a liquidity event, but Montgomery asked for the opportunity to buy the company himself. Through a lawyer he had hired to rewrite their incorporation documents, he was introduced to a private equity firm in Charlotte, Carousel Capital. From that relationship they were able to add not only the capital to buy, but added strategic board members and utilized Carousel’s expertise to continue their 30 percent growth trajectory.

The capital infusion that made headlines came as Axium was looking for the next round of funding. Their expertise in a growing market caught the attention of the grocery giant Kroger, which is also the fifth largest pharmacy operator in the U.S. and operates 80 walk-in medical clinics – yet they had no presence in the specialty pharmacy market. “There is real good synergy,” Montgomery said, adding, “Kroger’s approach is not to put everything under the Kroger brand or to relocate our company to their headquarters in Cincinnati. Our business is in all 50 states, so we have no need or reason to leave this area.”

Montgomery continues to drive Axium’s growth and expansion, now anchored by the reputation and resources of one of the largest and oldest companies in the country. Montgomery’s current goal is “to make Axium a billion dollar business.” If their track record is any indication, it looks like a pretty good bet.

About the author

i4 Business

i4 Business

I4 Business magazine has become one of the most trusted voices for and about the Central Florida business community. Each month through our print and digital platforms, we provide access to meet, to learn from and to learn about some of the incredible entrepreneurs and business leaders, along with economic trends that are shaping our region.

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