Posted On: 03/07/2015 10:32:27 AM
Post# of 7769
In a previous post I wrote the following, "Compounding revenues will only grow if SCRC increases MAV's staff & facility or expands the number of pharmacies filling prescriptions". Then I read in Friday's PR that Mr. Schneiderman plans to acquire equity interest in two additional pharmacies. This is a brilliant strategy to protect a revenue stream which could feel the impact of insurance regulations affecting reimbursements. One thing I know for sure, compounding is here to stay. Physician will continue to write these scripts and patients like the benefits of this mode of therapy. This is a $5.6B market which is not monopolized by any one company. Let's say MAV's revenues realize a loss of 10-30% (just a guess), and SCRC averaged $4M each month. Monthly revenues would now be $2.8M - $3.6M, if SCRC acquires interest in two additional pharmacies generating the same volume, total monthly revenues could top $6M each month. Could you imagine the monthly revenue number if Mr. Schneiderman continues to add additional pharmacies (see comment below)?
We have to remember, MAV is not the revenue stream. Compounding pharmacy is. I see future PRs stating "SCRC's monthly revenues for compounding were $6M" versus "MAV reported x-amount of revenues".
Mr. Schneiderman also highlighted the importance of a diversified product line with "PIMD, the Diabetic Medical Supplies line, additional pharmacies, and, prospectively, a Physician dispensing program", all of which will impact profitability. We already saw the impact PIMD ($554K) and Diabetes ($103K) in this week's PRs. Notice too, he mentions additional pharmacies. In reference to what I wrote in the above paragraph, this guy knows what he's doing. Look at PIMD, they grew from doing business in 8 States to 16 States are referred to in last week's PR. $554K is just the beginning. And, the potential of the Physician Dispensing program could possibly exceed all other revenue streams.
Do I like the decision from one insurance carrier to not reimburse – NO, absolutely not! Do I like what Mr. Schneiderman is doing to maintain and grow the revenue stream – YES, definitely! Plus, let’s not forget about RapiMeds. I know it’s a sore subject for some, but as long as Mr. Schneiderman believes RapiMeds will be a reality, so do I.
Final Comment - SCRC is stronger today as a diversified business than ever before.
We have to remember, MAV is not the revenue stream. Compounding pharmacy is. I see future PRs stating "SCRC's monthly revenues for compounding were $6M" versus "MAV reported x-amount of revenues".
Mr. Schneiderman also highlighted the importance of a diversified product line with "PIMD, the Diabetic Medical Supplies line, additional pharmacies, and, prospectively, a Physician dispensing program", all of which will impact profitability. We already saw the impact PIMD ($554K) and Diabetes ($103K) in this week's PRs. Notice too, he mentions additional pharmacies. In reference to what I wrote in the above paragraph, this guy knows what he's doing. Look at PIMD, they grew from doing business in 8 States to 16 States are referred to in last week's PR. $554K is just the beginning. And, the potential of the Physician Dispensing program could possibly exceed all other revenue streams.
Do I like the decision from one insurance carrier to not reimburse – NO, absolutely not! Do I like what Mr. Schneiderman is doing to maintain and grow the revenue stream – YES, definitely! Plus, let’s not forget about RapiMeds. I know it’s a sore subject for some, but as long as Mr. Schneiderman believes RapiMeds will be a reality, so do I.
Final Comment - SCRC is stronger today as a diversified business than ever before.
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