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Kroger Creates Specialty Pharmacy Subsidiary

Kroger's Axium Pharmacy Holdings Inc. is acquiring the outstanding shares of Modern HC Holdings Inc. to create a combined specialty pharmacy that will operate as a wholly owned subsidiary of The Kroger Co.

 "This strategic investment will accelerate the growth of Kroger's health-and-wellness business," said Robert Clark, SVP of merchandising at Cincinati-based Kroger. "Expanding our specialty pharmacy services will provide our customers with greater access to medications we don't currently dispense, and access to additional services without going to another pharmacy."

Doing business as ModernHealth, based in Orlando, Fla., Modern HC Holdings is one of the nation's largest independent providers of specialty pharmacy services. Its 500 associates provide comprehensive services that include IV-based therapies for autoimmune and primary immune deficiency diseases, and comprehensive medication management for HIV, cystic fibrosis, transplant, hepatitis C, rheumatoid arthritis and dermatology.

Axium is a subsidiary of Kroger, which operates 2,230 pharmacy locations and 195 Little Clinic locations. Kroger is the fifth-largest pharmacy operator in the United States.

Expanding Services Into New Territories

With specialty pharmacy the primary area of growth in pharmaceuticals, the merging of ModernHealth and Axium is expected to improve purchasing efficiencies and allow the companies to combine each other's payer strategies to bring down costs. The combination will also allow Kroger's specialty pharmacy business to expand into new territories in the West and Southwestern United States and expand offerings to other disease states.

"Combining Axium and ModernHealth's expertise with Kroger's health-and-wellness services will allow Kroger to both serve more customers who require complex drug therapies, and deliver those therapies at greater value to customers and insurance payers," Clark said.

ModernHealth comprises several business segments that provide highly specialized services, with locations in Alabama, California, Florida, Louisiana and Texas.

Based in Lake Mary, Fla., Axium employs 300 associates who provide a range of clinical services to patients with complex chronic conditions through locations in California, Puerto Rico, Tennessee and Mississippi.

Headquarters for the combined company will be located in a new facility under construction in Lake Mary, with continued support from existing facility locations. The combined organization will employ approximately 800 associates and continue to operate as an independent company within the Kroger family. 

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