Home infusion market stable, strong

When it comes to home infusion, big deals may be fewer and farther between, but there's still a lot of runway for buyers and sellers looking to make smaller deals, say industry analysts. 

These days, most deals tend to come in at under $10 million and involve companies with one or two locations that service a specific geographic area, say analysts.

“By acquiring them, the larger company gets the coverage they want for the payers or just gets to have coverage in those geographies,” said Reg Blackburn, managing director of specialty pharmacy and infusion services for The Braff Group.

BioScrip's planned purchase of CarePoint Partners for $223 million may be the last of the big deals in the home infusion market due to lack of available larger companies. During the heyday of home infusion, Walgreens acquired OptionCare for $850 million and Apria acquired Coram for $350 million.

Still, home infusion remains an attractive market for several key reasons, say analysts. The home is a cost-effective place to care for patients; pricing, while under some pressure, remains steady; and, perhaps most importantly, it's not easily turned into a commodity.

“You can't ship it across the country—you kind of need to be there,” said Blackburn. “That gives some stability to it, and allows the operators and potential investors to feel like one big entity can't, with the stroke of a pen, take a big chunk of the business.”

Even the surprise announcement by CMS in 2012 to include infusion pumps in the Round 1 re-compete isn't expected to have too much impact on the market, say analysts.

“The percentage of their revenues that is Medicare is relatively small,” said Jonathan Sadock, managing partner with Paragon Ventures. “They are handling more specialty drugs, antibiotics and chemotherapy.”