United Drugs’ size to double with API merger

United Drugs
CEO: Bruce Semingson
Corp. Offices: Phoenix
Number of Members: 1,008 (more than 2,000 if merger is approved)
Web page: www.uniteddrugs.com

United Drugs and the Associated Pharmacies Inc. on Feb. 23 announced that the organizations’ boards of directors voted to merge. If the merger is approved, the new group’s membership will exceed 2,000.

One driving force behind the merger is that United Drugs does not have a warehouse, while API does. Bruce Semingson, CEO of Phoenix-based United Drugs, said having the ability to actually purchase products and distribute to 2,000 stores will increase the group’s ability to purchase generic drugs, as well as select OTC and other items, at attractive prices. According to the two organizations, API is eager to tap into the benefits of United Drugs’ successful managed care network. And, Semingson added, while both organizations have members across the country, United Drugs’ strength is in the West while API’s is in the East, adding to the anticipated benefit of the merger.

That said, “Perhaps United Drugs’ main claim to fame is our managed care contracting programs, whose combined strength and professional management have put independents in a position to negotiate with PBMs and other payers,” Semingson said.

One unique feature of the United Drugs network is they let members join one of three reimbursement levels. It also lets individual members sign onto contracts the group declined. This way, each pharmacy gets the maximum benefit of the group’s negotiating power, combined with individual store flexibility.

The managed care program provides for central billing, electronic funds transfer, pre-post edits, adjudication and reconciliation services, all of which help speed up and improve reimbursement. Built into the program is an MTM program, enhanced counseling and even immunization programs that help the group win contracts and provide pharmacies an opportunity to earn additional service fees. They also have a cash card program that supports a fixed-fee generics program, the most popular service being a 90-day supply for $12.00. Semingson said every United Drugs pharmacy must agree to participate in the quality assurance program, patterned after NCQA criteria, before they are allowed to dispense prescriptions as a United Drugs provider.

Two years ago, United Drugs completely revamped its preferred partners program, and it said the success of its new way of working with preferred partners has been well received. Liz Schrader, VP operations and finance, explained that the program moved from a passive endorsement of vendors selected primarily for their willingness to provide discounts to a proactive, RFP-based selection process. Vendors in a variety of technology and service programs were invited to bid on the rights to be included, and United Drugs’ team members interviewed potential partners and checked references with members on the performance of each vendor. Vendors were selected and put into various levels of support, and United Drugs’ field support and team leaders are tasked to help members select these preferred vendors when they make purchasing decisions.

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