Navigating Complexity: HomeTown Pharmacy’s Approach to Acquisitions and Specialty Services

“Owners want to just deal with filling prescriptions and taking care of people,” Grice declares. “It is a shame, it’s sad that today’s environment has become so complicated between the different fees and credentialing. If you’re a single-store operator, you’re spending 50 hours a week filling prescriptions, managing the floor, but you’ve got another 20 hours a week of paperwork and managing the changes of just surviving in pharmacy today.”

That paperwork and management responsibility is what HomeTown Pharmacy relieves a company of when it is acquired. “In the last few years, the trend has been that more owners are staying on,” Grice reports. “They want the freedom to shed that ownership burden, but they still want to work and serve their community as a pharmacist. Our hallmark and what we sell to owners is the flexibility. We are going to structure a deal that works well with their wants and desires and ensures their legacy remains intact, if that is what they want. A lot of pharmacists have spent decades building their businesses, and for them to sell them is not something they take lightly.”

Approximately two-thirds of HomeTown pharmacies retain the businesses’ original names. “Our branding or in some instances lack of branding is situation-specific, depending on an owner’s wishes, reputation and the goodwill he or she may still have in a town,” Grice says. Pharmacies whose owners want to make a clean break with their former businesses are branded immediately with the HomeTown name once the sale is completed.

Some owners are paid in full for the sale while others receive regular payments for a period of years. “We’ve done them both ways,” Grice says. “We have an entire finance committee that is involved in negotiations.” HomeTown Pharmacy’s acquisition approach has been successful. “Having 41 stores, you could say we do have a good track record,” Grice concedes. “They chose us to sell their businesses to as opposed to anyone else.”

Specialty Pharmacies

Every HomeTown Pharmacy location provides high-cost, specialty medications that usually are available only through mail order because they are so specialized. These intensive therapies require special instruction for dispensing and clinical monitoring afterwards. They include oncology drugs for cancer care, biologic injectable and oral drugs for autoimmune disorders.

To provide these medications, HomeTown Pharmacy has a dedicated team in its home office to assist the stores by working with prescribers and insurers to secure benefits for the patients. This allows patients to pick up their medication locally and still receive the specialty services that aren’t usually able to be provided at a retail pharmacy. “Our specialty model is unique,” Grice maintains. “It’s a different breed of specialty pharmacy than what has been traditionally in the marketplace. Our central site provides the back-end services that enables our retail pharmacies to provide specialty pharmacy care in the communities they serve.”

Receiving specialty prescriptions from other pharmacies by mail order usually requires 14 to 21 days. “We are considerably more efficient at getting patients their therapy in a shorter amount of time,” Grice maintains. “Not only are we fast, but patients are getting the personal care they expect out of a HomeTown Pharmacy. They know the pharmacist and can talk with him or her about their complex disease state.”

HomeTown Pharmacy’s specialty division has been growing quickly from less than 2 percent of the company’s total revenue to nearly 9 percent currently. Total long-term-care revenue is approximately 30 to 33 percent of the company’s total revenue, and the rest is retail sales.

“I attribute our growth in specialty medications to our strategic specialty partnership with KloudScript, and the effort of my brother, Jonathan Grice, a pharmacist with an MBA,” Grice says. “He is our vice president of pharmacy and has done an outstanding job growing the specialty division.” All facets of the family owned and managed company are growing, Grice asserts.

Long-term Care

HomeTown Pharmacy has four long-term care pharmacies that deliver medications to patients residing in skilled nursing or assisted-living facilities, hospices or adult foster care. They are located to serve patients in Michigan, northern Indiana and Ohio from Ann Arbor, Kalamazoo, Grand Rapids and Traverse City, Mich. “Our growth in long-term care has been through new contracts with new facilities,” Grice says. “We brought on over 2,000 beds last year of contracted business.”

HomeTown Pharmacy also operates two providers of durable medical equipment such as walkers, crutches and other types of intensive medical equipment. These locations in Monroe, Mich., and Traverse City perform nebulizer treatments and continuous positive airway pressure therapy. They are accredited by the National Association of Boards of Pharmacy and the Joint Commission on Accreditation of Health Care Organizations.

Monroe and Traverse City are two locations for HomeTown Pharmacies’ compounding labs, along with two in Indiana. The labs do no sterile compounding but instead provide medications such as capsules, creams and suppositories for uses such as at hospices and for procedures such as hormone replacement therapy. Compounding allows physicians to customize prescriptions for a particular individual.

Replenishing Stores

HomeTown Pharmacy sends out its own box truck and several trucks and trailers once or twice a month to its stores – which average approximately 4,500 square feet in size – to replenish front-end merchandise, which is stored in the company’s 14,000- square-foot distribution center in Newaygo. McKesson is Hometown Pharmacy’s primary wholesaler for a large majority of the approximately 2,000 prescription drugs each store carries.

“QS/1 is our pharmacy processing system that tells us what is on-hand at every store and generates our drug orders based on reorder points,” Grice explains. “SureCost helps analyze who’s using what and assists in making the best purchase for each product. QS/1 is the primary partner for helping us manage our inventory.”

HomeTown Pharmacy advertises most on television, then print with direct mailers, coupons and catalogs. It also markets over radio and social media. “We do quite a bit with Google, Yelp and the different search domains,” Grice says.

For the future, Grice foresees additional expansion within the Midwest. “Our greatest challenge will be personnel – making sure we have the proper management in place at those stores,” he says. “We’ve got a very strong HR department. We’ve been able to attract and maintain very strong people in our workforce.”

Grice also targets hitting an average of 5 percent to 7 percent growth every year. “Some years we hit 15 percent, some years we hit 4 percent,” he reports. “We simply strive to achieve continuous growth, based on opportunities that exist or are created.”

He attributes the success of HomeTown Pharmacy to the company’s culture and beliefs. “We are people-focused; No. 1 on our customer, but then as a corporate office, our customers are our people – our employees,” Grice insists. “We always put that first when evaluating decisions. What is going to be best for the patron that walks through our door and the employee?”

Grice also cites determination as key to success. “As I’ve sat back over the years and watched my dad, uncle and grandpa, Fred Grice Sr., it is a commitment to getting up and going after it every day – not getting down or not getting too up – just being determined to continue to grow the business,” Grice concludes. He also credits the employees. “You can’t do all these things without fantastic people, and I truly believe we are blessed with some of the best people working for this company.”