IHP: Market transitions â€˜ate them alive’
MURRAY, Ky.--Independence Home Pharmacy, one of the largest providers of respiratory medicines in the country, suddenly shut down Aug. 22, when parent company Soporex filed for Chapter 7 bankruptcy protection.
“It’s pretty shocking they went under like that,” said one industry insider. “I don’t see how the company could go sour so quickly.”
No one was more shocked than IHP’s Kentucky-based employees. Most were fired Aug. 20.
“We were notified via e-mail at 4:45 p.m. and all of our 123 employees were let go that day without pay,” said a company insider.
IHP was formed in 2006 when Soporex, headed by former Rotech executive Steven Linehan, acquired Liberty Medical’s neb-med business for an undisclosed sum. The company grew to 20,000 neb-med patients, mostly referred from independent HMEs.
“They kind of leapfrogged over everybody when they took over Liberty’s patient base,” said one industry insider. “The only other competitors they had were the nationals.”
It is possible IHP’s large size and continuous upheavals in Medicare’s quarterly average sales price for neb-meds helped bring about the company’s downfall, said Mickey Letson, president of Decatur, Ala.-based Letco Companies.
“The bigger you get, the more you have to plan and it’s very difficult to plan quarterly,” he said. “They got caught in a couple of market transitions that ate them alive.”
IHP management in Kentucky was originally instructed to contact referral sources so that patients could be transferred to pharmacies of their choice. That changed abruptly when executives at the Dallas-based headquarters said to transfer all patients to Lincare’s respiratory pharmacy, Med4Home.
“The Med4Home people showed up on (8.21) with a U-Haul truck and started loading all the billing and pharmacy charts,” said a source. “The next morning, the computer system would not work. We are absolutely shocked that the corporate office in Dallas called Med4Home.”
Letson said the shifting of patients could be problematic for Soporex executives.
“You can’t offload assets just before you file bankruptcy,” he said. “Then you’ve got all these creditors hung out there-and I’m one of the biggest-who could demand the bankruptcy judge recall all those patients and put them in an independent pharmacy until the court decides what to do.”