United Pharmacy Partners Inc.
Nuclear pharmacy is a particular speciality within the pharmacy realm. Much like any pharmacy, it involves the dispensing of materials for medical procedures—but entails the highly complex use of radioactive materials or medical isotopes which in turn require a highly specialized knowledge. Given the complex and unique set of requirements for a nuclear pharmacy endeavour, it is no surprise that independent radiopharmacists in the United States formed an organization to represent their interests. This effort eventually evolved into United Pharmacy Partners (UPPI), which essentially functions as a GPO for radiopharmaceuticals.
“Think of the pharmacies themselves as being structurally like a Walgreens or any other standard pharmacy, except instead of dispensing pills and the typical things we buy at a pharmacy, they dispense radioactivity,” explains President Perry Polsinelli. Medical isotopes are heavily used in western medicine, occasionally for treatment such as in the case of chemotherapy, but they are primarily used for diagnostic tests. “The most common is a heart stress test. Somebody may have a problem with their heart. Those patients are injected with radioactive material to help perform those tests.”
The very nature of radioactive material renders it “very specialized and highly regulated”, notes Polsinelli. Radiopharmacists are extensively trained in the compounding and preparation of radioactive materials and are highly knowledgeable about radiation safety. The other critical element with which a radiopharmacist must contend is an elements half-life, which is the specific rate of decay for different radioactive atoms. This creates a particular need for a meticulous supply chain, as an ordered product that doesn’t go to use dissipates and goes to waste.
The importance of the supply chain
It is within this supply chain conundrum where UPPI is most vulnerable and benefits from a highly organized leadership. The challenges come from both ends as well, as there are limited reactors which can produce the kinds of specialized radioactive materials which are necessary. “Where we are the most susceptible [to problems] is really in the supply chain itself. We need certain reactor-based products,” says Polsinelli, explaining how reactors—and hence material supply—are limited. “The most prominent reactor is in Canada and this supplies most of the world’s needs for those types of products. There were recently problems with it and Canada invested a lot of money to repair it but its days are numbered, and the same thing with some of the reactors in Europe. So our immediate concern is that supply chain.”
There are younger facilities being built and new technologies in the works, but as Polsinelli explains, the timeframe to build a nuclear facility is lengthy. The entire process, from approval to funding to actual building of the facility, can take five to 10 years and is an expensive endeavour. While Polsinelli acknowledges that this is indeed frustrating, UPPI will continue to excel so long as it keeps a very close eye on the supply chain.
The GPO advantage
First and foremost, UPPI was created to impact one crucial factor: the bottom line. “The economic modelling of healthcare reform is always going to be tight and is always going to be driven by costs,” states Polsinelli. “When you go back to the whole purpose of why UPPI was founded, it was to keep price competitive.” It is this group purchasing power that helps businesses stay competitive in the healthcare arena and is ultimately the philosophy behind any GPO. “It is simple, but simple works: you get more people buying the same stuff so you hope you can get better pricing.”
With membership consistently on the rise, UPPI is clearly finding those better prices for its members. “We must be pretty successful because five years ago we were 45 radio pharmacies and now we are 157. I think right now we’re probably responsible for 45 per cent of the U.S. market for distribution of pharmaceuticals,” says Polsinelli. UPPI is also the only business in the radiopharmaceutical sector with a growth model. Last year it opened five new radio pharmacies and an acquisition by one of its members brought 36 new members on board.
UPPI was also recently awarded the HealthTrust GPO contract for the provision of radio pharmaceuticals to all the HealthTrust entities. “That will probably lead to another expansion spurt later this year and open at least another five to 10 radioactive pharmacies,” Polsinelli says with pride. “To my knowledge, none of the other companies in our arena have plans to do that this year.”
The business model of UPPI has been uniquely tailored to suit the needs of the radiopharmacies, a likely contributor to its continued growth and success. “One of the things we are finding with our industry is that those types of models used by other parts of the healthcare industry really don’t work in healthcare radio pharmacy,” explains Polsinelli, citing the operation efficiency and dynamics of the UPPI business model. “We can fulfill a lot of healthcare reform initiatives by the simplicity of our organization.”
“That has been our biggest achievement. We have become a branded entity that the industry recognizes—and the world knows who the independents are in the United States.”