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Diplomat to Acquire National Pharmaceutical Services

FLINT, Mich. — Nov. 6, 2017 — The nation’s largest independent provider of specialty pharmacy services adds a pharmacy benefit manager to bolster clinical and technology offerings.

Diplomat Pharmacy, Inc. (NYSE: DPLO), has entered into a definitive agreement to acquire Pharmaceutical Technologies, Inc., doing business as National Pharmaceutical Services. The transaction is expected to close in 30 days.

For more information about the transaction, click here.

National Pharmaceutical Services (NPS) is a full-service pharmacy benefit manager (PBM) based in Omaha, Nebraska. It features a proprietary claims-processing system and offers mail-order service under its Integrated HMO Pharmacy.

“Industry dynamics and the evolution of our payor strategy have accelerated our push to add PBM-like services,” said Phil Hagerman, CEO and chairman of Diplomat.

Hagerman said small and midsize payors, self-funded employers, and unions are seeking flexible solutions to improve health care outcomes and reduce costs. Partnering with NPS, he said, is a crucial step toward Diplomat’s strategy of meeting those clients’ unique needs.

“Enhancing our managed markets strategy with PBM services expands Diplomat’s service offerings from a specialty pharmacy provider to a broader health care company,” Hagerman said. “This further positions us to offer necessary services to our partners throughout the industry.”

He said the acquisition should increase Diplomat’s ability to develop complete solutions—including cost justification, containment, and health care reporting.

“These services impact outcomes and cost as the industry pushes toward value-based care,” Hagerman said.

NPS’ mission is to improve member quality of life through flexible, affordable solutions with personalized service to its pharmacy benefit partners. The company builds end-to-end solutions to control prescription drug spend and manages a proprietary claims-processing system.

“Our innovative technology offers health plans unparalleled flexibility and utility,” said Eric Schram, president of NPS. “This system is a hallmark of our pharmacy benefit management philosophy—focusing on transparency and efficiency while challenging waste and inflation.”

Shellie Schoening, CEO of NPS, said the company’s history makes it a natural fit for Diplomat.

“NPS was founded by pharmacists as a differentiated PBM solution to address the inefficiency and high cost of pharmacy benefits,” Schoening said. “We offer the capabilities and economies of a big-box provider, the services and agility of a small provider, and the mentality of a partner.”

NPS’ transparent pricing model upholds full disclosure of claim accuracy and payments, she added.

“Clients receive accountability and traceability for every dollar through a comprehensive reporting package,” Schoening said.

Under the terms of the agreement, Diplomat will pay NPS $31 million cash and $16 million in Diplomat common stock. NPS is expected to generate approximately $32 million in net revenue and $5 million in adjusted EBITDA in 2017.

Forward-Looking Statements

This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events or our future financial or operating performance. The forward-looking statements contained in this press release are based on management’s good-faith belief and reasonable judgment based on current information. These statements are qualified by important risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from those forecasted or indicated by such forward-looking statements. For a discussion of such risks and uncertainties, you should review Diplomat’s filings with the Securities and Exchange Commission, including “Risk Factors” in Diplomat’s Annual Report on Form 10-K for the year ended Dec. 31, 2016, and in subsequent reports filed with or furnished to the Securities and Exchange Commission. Except as may be required by any applicable laws, Diplomat assumes no obligation to publicly update such forward-looking statements, which are made as of the date hereof or the earlier date specified herein, whether as a result of new information, future developments or otherwise.

About Diplomat

Diplomat (NYSE: DPLO) is the nation’s largest independent provider of specialty pharmacy services—helping patients and providers in all 50 states. The company offers medication management programs for people with complex chronic diseases and delivers unique solutions for manufacturers, hospitals, payors, providers, and more. Diplomat opened its doors in 1975 as a neighborhood pharmacy with one essential tenet: “Take good care of patients and the rest falls into place.” Today, that tradition continues—always focused on improving patient care and clinical adherence. For more information, visit diplomat.is.

About National Pharmaceutical Services

National Pharmaceutical Services (NPS) is a is a fully integrated pharmacy benefit manager serving group health plans, Medicare Part D, managed Medicaid, health insurance exchanges, and workers’ compensation programs. Using its proprietary claims-processing system, NPS partners with plans to customize innovative solutions to manage prescription drug costs and ensure appropriate care for members nationwide. For more information, visit pti-nps.com.


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Diplomat to Acquire National Pharmaceutical Services

Diplomat to Acquire National Pharmaceutical Services

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