News
W Squared provides retained technology leadership to PharmMD.
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December 12, 2009
PharmMD Secures Equity Round
Medication therapy management biz expects to double employee base
By Erin Lawley
PharmMD Solutions has closed on a round of private equity funding in excess of $8 million.
Global private equity firm The Riverside Company and Clayton Associates' fund FCA Ventures IV are behind the $8.8 million investment round. Nashville-based Harpeth Capital advised PharmMD on the deal.
The three-year-old medication therapy management business will use the funding to support continued growth, said President and CEO Bo Bartholomew.
"We've achieved 400 percent growth over last year," he said. "We expect, in terms of employees, that in the next 12 months we'll double in size."
Bartholomew, whose team now consists of more than 30 people, would not identify the firm behind the funding round, which closed in early November. A formal announcement is expected later this week.
Brentwood-based PharmMD contracts with health plans and employers to ensure patients are taking the right medications in the right way with no adverse drug interactions. Its goal is to reduce costs to patients, providers and employers by better coordinating care and improving health outcomes.
Health care industry veteran Clayton McWhorter founded the privately held business in 2006. McWhorter's private equity firm Clayton Associates has provided PharmMD with two rounds of financing, and in 2008 the company received a $1.6 million round from local angel investment group Nashville Capital Network.
PharmMD recently moved into 6,800 square feet of space in Maryland Farms to accommodate future expansion.
Bartholomew said the government's increasing interest in the benefits of medication therapy has helped boost the business. In 2006, the Centers for Medicare and Medicaid Services began requiring Medicare Part D prescription drug plan providers to offer medication therapy management programs to Part D members.
CMS recently expanded the scope for those programs with new provisions, such as a requirement for person-to-person medication reviews.
Related to these requirements, PharmMD recently landed its second-largest contract to date - a deal with California-based pharmacy benefit manager Prescription Solutions, a UnitedHealth Group (Ticker: UNH) company serving more than 11 million members.
"We expect to see a whole lot more growth in that line of business next year," Bartholomew said, noting that any health reform bill passed by Congress should benefit the company. "There's just so much attention on medication therapy right now. It’s in all the reform bills that are proposed."
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W Squared provides retained technology leadership to PharmMD.