By Phil Lassiter
Pain Medications: Not a Painless Task to Acquire
When one thinks of pharmacy companies, any of the large corporate brands can come to mind, depending on where you live. The pharmacy one may visit regularly is usually the one down the street, and could include: Walgreen Company (NYSE:WAG), Rite Aid Corporation (NYSE:RAD), CVS Caremark Corporation (NYSE:CVS), or even Costco Wholesale Corporation (NASDAQ:COST) or Wal-Mart Stores Inc. (NYSE:WMT). They are big, they are reliable, and they are convenient. These retail chains are fine for getting toilet paper, toothpaste, or some over-the-counter allergy or cold meds. But what do you do as a patient when you are in dire need of highly specialized meds such as ones for chronic pain management or prescriptions that are more difficult to manage or acquire? What are your options when you need an uninterrupted, reliable source of closely regulated drugs?
The drugs in reference are various types of powerful painkillers, classified as Schedule II drugs under the Controlled Substances Act. The government has tightened its control and supervision of these drugs due to drug abuse and addiction, as well as theft, armed robbery, and subsequent illegal selling of these drugs on the black market. The FDA and the DEA have hands in these regulatory laws. The DEA crackdown is so hard, that both CVS and Walgreen’s stores have been targeted and forced to stop the sale of these drugs in the past.
Private, Reliable, Safe: A Small Pharmacy In Your Corner
As it currently stands, most patients that require these types of prescriptions may have to endure lengthy and arduous paperwork and verification processes, as regulations and laws surrounding pain medications are getting stricter. However, for those fortunate enough to live in the vicinity of an Assured Pharmacy Inc. (PINK:APHY) location, things just got a whole lot more pain-free.
Though a company of only 35 employees, Assured Pharmacy (APHY) provides some very important services to patients in need. Opened in 2003, the company provides chronic pain sufferers simplified and convenient access to drugs for pain management. The company helps patients with the “legal hoops”, by providing an understanding and knowledgeable staff that is well versed in the regulatory proceedings, making the paperwork and approval process as pain free as possible. When living with painful afflictions and disease, the last thing the patient wants is to experience hassle and pain when depending on the drugs that allow them to go about their lives. Assured Pharmacy takes pride in delivering without any needless delays or return visits, and always having the patient’s privacy in mind.
A Focus On Safety and Responsibility
Some of the drugs that Assured Pharmacy provides its circa 4000 patients monthly include: Oxycontin, Oxycodone, Fentanyl, Opana, Morphine, and Hydrocodone. The company’s objective in pain management includes orthopedics, neurology, oncology, psychiatry, physical rehabilitation, and industrial medicine. The focus is on treating patients with long-term, acute, chronic pain conditions. Assured Pharmacy practices responsible business with dispensing and distribution of prescriptions, data reporting, partnering with healthcare providers and physicians, and working with manufacturers. The company follows strict procedures, verifying legitimacy of scripts, and being 100% HIPPA (U.S. Dept. of Health & Human Services) compliant.
Bringing Value to Customers and Doctors
The company’s business practice is to make the customers feel valued, as Assured makes it a point to develop a relationship with customers—getting to know them. The store locations promise to be secured and safe, with an increased level of privacy due to the fact that there is low foot traffic since the store only caters to select patients and not everyday shoppers looking for toiletries and shampoo, etc. Furthermore, Assured has the goal of being convenient and reliable to doctors as well. The company helps with risk mitigation, will send a representative daily to pick up prescription orders (in order to negate the possibility of fraudulent prescriptions), generate customized patient reports, and aids in less time wasted for the doctors with prescription confirmation calls.
Expansion and A Look To the Horizon
Currently, Assured only has four pharmacy locations: Riverside, CA; Seattle, WA; Portland, OR; and Kansas City, KS. However, the company is looking to expand in a big way. Assured Pharmacy looks to open a store in Boston, MA and Denver, CO within the year, with three more on the near horizon. The goal set by the company is to have 25 or more locations opened within the next 5 years.
The Frisco, TX-based company is banking on the lucrative nature of the industry. The market for pain management is quite large, as 75 million Americans suffer from debilitating chronic pain, though there are reports that claim as high as 100 million. This condition is the cause of more disability than cancer, diabetes, and heart disease combined, and accounts for over $600 billion a year in medical treatments and lost productivity. With $30+ billion spent annually on pain meds in the U.S., it is easy to see the potential for investors.
Start-up costs are low for new branches—at about $350k—and success has already been demonstrated, and is completely replicable throughout the country. Any new location becomes profitable with a mere 75 scripts a day, according to company sources. Furthermore, the advantage that Assured has over the big retail brands is that the big pharmacy stores often have risk and liability policies in place that prevent the sufferers of acute and chronic pain from receiving the complete prescribed quantity of medications on a reliable and steady basis.
Worth An Investment?
Apparently investors are catching on and seeing the value in APHY, as the stock price has more than doubled in the past 30 days or so, and is currently at $0.92—nearing on its 52-week high of $1.05. Company market cap currently stands between $25-$26 million, if one accounts for preferred shares converting into common stock.
All great enterprises have small beginnings. Many a great corporations started out with only a few employees in a small office, or out of an individual’s garage; but the sky is the limit if the business is sound and there is consumer demand. Though Assured Pharmacy Inc. (APHY) is still a small company, the promise it holds is real. With its business focusing on one of the most significant (and lucrative) aspects of the medical field, Assured Pharmacy could eventually become the next big-brand pharmacy, but with a specialized focus. Investors may find the company very appealing, granted they are interested in young companies.
Disclosure: Long APHY