CHICAGO -- Walgreens Boots Alliance's home-infusion division has been relaunched as an independent company called Option Care, after the drugstore chain sold a majority stake in the business to a Chicago private-equity firm.
Walgreens, which has its headquarters in suburban Chicago, unloaded the business soon after completing its merger with European pharmacy chain Alliance Boots at the end of last year, as part of a corporatewide restructuring. The newly merged company plans to focus on its retail business and is looking to cut $1.5 billion in costs by the end of 2017.
Option Care delivers a vast majority of medicine in the home with a team of about 1,000 nurses. These are medicines such as antibiotics and chemotheraphy that have to be administered intravenously, either by injection or catheters.
Home-infusion therapy is a big and growing business. Paul Mastrapa, Option Care's chief executive officer, estimates that infusion therapy is a $14 billion industry in the U.S., expanding 10 percent a year.
Mastrapa said he expects demand for home infusion to accelerate because more Americans have health insurance, and insurers and health care providers are under increasing pressure to cut costs. Administering medicine in the home can be 10 times less expensive than in the hospital, Mastrapa said.
"As access to care has increased, payers are looking aggressively at right site of care for patients who require infusion therapy," Mastrapa said in a conference call Tuesday.
The potential growth attracted private-equity firm Madison Dearborn Partners, which has an undisclosed majority stake in the business. Terms of the deal were not disclosed when it was first announced in January. Walgreens retains minority ownership in Option Care and has three seats on the nine-member board of directors, Mastrapa said.
Option Care is one of the leading companies in the infusion-therapy industry with about 10 percent market share, Mastrapa said. Walgreens rapidly built the business after acquiring an infusion services business in 2007, which was called Option Care. Mastrapa said it made sense to go back to a familiar brand as a newly independent company.
Mastrapa was Option Care's chief financial officer in 2007 and stayed on with Walgreens to run the business. Walgreens acquired 16 more infusion-based pharmacies across the country.
Option Care said it has 92 pharmacies, 110 independent treatment clinics and a workforce of about 5,000. Its corporate offices are on Walgreens' campus. The company plans to move but will stay in Chicago's northern suburbs, Mastrapa said.
Option Care has about 150 employees in the corporate office and a large pharmacy in the area.
SundayMonday Business on 05/24/2015