By Maureen Flanagan
MP TotalCare, Inc., is a national specialty pharmacy based in Tampa, FL. The company provides pharmaceutical and medical supplies by mail to more than 100,000 customers with chronic conditions such as diabetes, incontinence and respiratory disease. MP TotalCare also provides education and counseling services, operates drug compliance support programs and manages chronic care pharmacy operations for third-party customers. Its products are reimbursable by Medicare, Medicaid and commercial insurance programs.
MP TotalCare has grown dramatically through a series of successful acquisitions since being acquired by Charterhouse Group in 1999. As a result, it has become a leading supplier in the diabetes and respiratory segments of the direct-care pharmacy market. In an October 17, 2003 transaction, MP TotalCare made another acquisition with the purchase of Medical Holdings, Inc. (MHI), a leading national supplier of direct-to-consumer urological supplies, which serves customers with total or partial paralysis across the United States. To support this acquisition, American Capital Strategies, Ltd. (Nasdaq: ACAS) provided $15 million in senior term financing.
"The combined companies will hold leading positions in the diabetes, urological and respiratory medication supply markets in the U.S. MP TotalCare provides a number of valuable services including home delivery of products, insurance reimbursement, patient education and prescription compliance monitoring," said American Capital Principal Brian Graff. "In addition, American Capital is backing a strong senior management team with the specialized experience necessary to grow the company."
As a leading supplier in its market segments, the company fills a critical niche in providing pharmacy supplies to targeted chronic disease populations. Most of MP TotalCare customers have either diabetes or respiratory diseases. In its diabetes segment, MP TotalCare delivers on a regular basis the products patients need to manage their disease. These include test strips, lancets, pumps, and glucose monitors. The company's respiratory products consist principally of prescription medications used in the treatment of Chronic Obstructive Pulmonary Disease (COPD), which includes chronic bronchitis and emphysema.
MP TotalCare's incontinence products include a comprehensive line of bladder and bowel control products, including liners, undergarments, briefs, underpads, and wipes. With the MHI acquisition, the company adds a line of urological products including catheters, tubes, containers, syringes, and accessories to address the needs of patients suffering from total or partial paralysis due to spinal chord injuries.
MP TotalCare's direct customer mail delivery service is supplemented by customer support programs that include multiple call centers where health care professionals are available to answer questions. In addition, the company offers education, counseling and prescription regimen compliance programs, and same-day delivery of pharmacy products when required. After a prescription is delivered, the company tracks each patient's drug use and supply, following up with reminder calls when reorders are needed.
The company excels in processing forms and authorization procedures necessary to secure government reimbursement in a timely manner. The company handles the entire reimbursement process, from contacting the doctor and ensuring all information is collected to transmitting and properly archiving data. The result is an unsurpassed level of ease and convenience for MP TotalCare's customers.
American Capital's acquisition financing of $15 million was made alongside a revolving credit facility and senior term loan financing by GMAC Commercial Finance. Since 1997, American Capital has invested approximately $2 billion in more than 100 middle-market companies.
For more information about American Capital's portfolio click here.
From 1980 to 1998, total expenditures on drugs and other medical supplies in the U.S. increased at a compound annual rate of over 10%. This growth is expected to continue as the healthcare industry expands with the aging U.S. population, increase in life expectancy, and improvements in medical technology.
The $9.2 billion chronic care and drug fulfillment market in which MP TotalCare operates is projected to grow at a rate of 20% a year. Analysts estimate that there is currently only a 12% penetration of this market and that maximum potential penetration by specialty providers such as MP TotalCare could be as high as 60%. In 2001, COPD and diabetes represented the fourth and sixth leading causes of death in the U.S., respectively.
MP TotalCare's successful expansion through acquisitions and organic growth provides a solid basis for further expansion. The company anticipates further opportunities as populations needing chronic care treatment increase and as the trend toward outsourcing continues. While the company serves some of the largest markets for direct-mail chronic care diseases, it also anticipates addressing other disease states as opportunities arise.
As more people with chronic diseases rely on home care supplies, MP TotalCare's leading market position, operational efficiencies and focus on patient support allow it to deliver the treatment needed for a healthy future.
