Posted on 10/14/2014 8:54:32 AM PDT by Kaslin
Flint, Michigan -- Flint’s Diplomat Pharmacy (NYSE: DPLO) gained the spotlight when it completed a successful public stock offering (IPO) on Oct. 10 to raise funds to expand its operations, despite its home base in a place that naysayers have characterized as something akin to a hell hole.
The City of Flint, which operates under an emergency manager appointed by the state, has been disparaged as an economically depressed, crime-plagued excuse of a community for years due largely to the financial tailspin of General Motors (NYSE: GM), which once served as the engine that drove the local economy. But Diplomat Pharmacy has shown that the city can develop a world-class, home-grown business outside of the auto industry with the company’s focus on providing pharmaceutical products to people across the country who are afflicted with complex, chronic diseases that require special medications or treatment.
People who have complicated medical needs involving oncology, immunology, hepatitis, multiple sclerosis, HIV, specialized infusion therapy and others increasingly have turned to specialty pharmacies to ensure their essential prescriptions are filled, stored, shipped and dosed properly. The Flint-based company now ranks as the nation’s largest independent specialty pharmacy and it aims to use proceeds from its IPO to support future growth.
If the world’s view of Flint stemmed solely from media coverage, dire descriptions calling it the “world’s most apocalyptic, violent city” might suggest that the community had descended into a modern-day Dante’s Inferno. But compared to war-torn communities or locales elsewhere in which organized crime syndicates or terrorist organizations run amok, Flint is a place where its residents are looking to bounce back from decades of economic decline.
If GM-based employment in the Flint area is an indicator of economic health, the automaker’s dramatic workforce reduction in the area left the medium-sized city reeling. Once employing as many as 82,186 Flint-area workers in 1955, GM’s total of local employees had slipped to 5,516 as of June 2014, with 2,950 at an assembly plant, 862 at an engine operation, 1,396 at a metal center and 308 at a processing center.
I have a unique, first-hand view of Flint’s Diplomat Pharmacy from my boyhood years when it opened its first store within a short bicycle ride of my family’s house. The father-and-son co-founders, Dale and Philip Hagerman, launched the pharmacy in 1975 with the basic tenet of taking “good care of patients.”
My late father, a family physician whose medical office was less than two miles away on the same road as the pharmacy, also put the interests of his patients first. To that end, my father performed “house calls” early during his medical practice before the demands of having four young children prevented him from treating sick people at their homes if they had trouble getting to his medical office.
The emphasis on keeping the needs of patients first and foremost seems to have been lost in the intervening years industry-wide, with the policies of third-party payers, increasingly voluminous paperwork and calls to rein in rising health-care costs changing the way medicine is practiced in America.
Diplomat Pharmacy has sought to adapt to those changes by helping its patients work with their insurance providers to fulfill pre-authorization requirements that must be met before treatment begins, as well as to refer people to available funding sources to help cover out-of-pocket expenses. In 2013, the company reports that the latter effort helped its patients obtain more than $24 million in financial help to pay for costly medications.
The once-neighborhood pharmacy has grown into a now-public company that raised $173 million in an IPO led by Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC through the sale of 13.3 million shares of stock at $13 a share, slightly below the expected range of $14 to $16 a share. The stock price closed up 23 percent at $16.02, after its first day on trading on Oct. 10.
CEO Philip Hagerman also has talked about the company’s IPO potentially helping it to gain new business partners and attract future employees to work in Flint, where he said Diplomat Pharmacy will remain. Loyalty to its community is nothing new since the days when the CEO’s father headed the company, nor is its support for employees to participate in civic-minded activities.
I remember accompanying my mother into the pharmacy as a boy when she served on the board of directors for the Flint Area Science Fair and heard her ask then-CEO Dale Hagerman for a donation to support the effort. He paused briefly and then reached into a display case to pull out a handheld calculator that he thought might be a coveted prize for some of the area’s top science students who entered projects in the competition.
Now, his son likely will have a chance to offer jobs to some of the top graduates in the area without them needing to leave home when they finish their university studies. In the days of continuing GM job cuts and scant opportunities from other area employers, new graduates often moved to other states to start their careers.
It certainly will take much more than one IPO to transform a community economically. But the successful financing and the opportunities that may follow could go a long way toward demonstrating that Flint is not as hopeless a place as it once was portrayed during a Rush Limbaugh radio program in 2009 when the topic became whether at least 40 percent of the city should be razed by a bulldozer.
The level of education necessary to work in an automobile assembly plant and a pharmaceutical plant are way different, except for the menial type jobs. They may expand, but they will have to import people willing to live there with a higher education..................
If only we had colleges in Michigan. Places like MSU, UofM, Wayne State, Western, etc.
If only we had colleges in Michigan that weren’t liberal bastions of indoctrination..........
Like it or not, those colleges do still teach actual needed skills.
One hundred years later it became the powerhouse of General Motors.
The ones we have to thank for Flint's demise are liberal federal policies and democrat politicians.
Uh, Hillsdale College is in Michigan.
But will the grads want to live there? That is the question...............
Unum E Pluribus............
The tech crowd are moving to Detroit so I doubt Flint will be any different.
Despite the other liberal BS being pimped by the big schools they still are providing quality educations for those who really want to learn something useful.
Mahindra opened their North American technical center just outside Ann Arbor to take advantage of newly graduating engineers. They’ve hired something like 112 engineers so far. They’re also opening a factory producing electric scooters geared directly toward sales to college students. Shinola is another company that has a couple of factories in Michigan making high dollar wristwatches and bicycles.
While Rick Snyder is too fixated on tech jobs for my liking, only a fool would turn these companies away.
I really miss the lakes and the UP and all the tall green trees.
Actually this story does bring up an issue I think that conservatives need to do a little soul searching over.
Conservatives need to be smart enough to take credit where we have earned it instead of reacting with an apparent desire to be first to attack no matter what the news is.
For instance, Michelle Obama was in Detroit the other day taking credit for good things that are going on in Detroit. FReepers happily launched into the regular consensus based attack without ever even looking at the situation. Detroit has its obvious problems but GOP policies are making big changes there. We should not be handing credit for those good things to democrats on a silver platter. We should be aggressively claiming our rightful credit and promoting conservative free market ideals.
If I mention that the crime rate in Detroit is in free fall due to open carry, stand your ground laws and a pro self defense police chief, its met with the usual comments about a falling population. The reality is that the population level is flat or rising marginally these days. We should be using Detroit as a 2nd Amendment success story rather than mindless consensus based bashing.
If we are to have any chance of moving America in the direction of free market conservatism we’ve got to use our heads.
Snyder has concentrated pretty heavily on Israel for bringing business here as well.
If I were governor I would have been courting the east coast gun manufacturers as well. When one automotive supplier started to collapse in the Obama economy, they made a change and became the Detroit Gun Works and have a booming business making weapons parts.
Yeah, that Hillsdale churns out nothing but Godless commies
I was raised in Flint. no one wants to live there.
Hillsdale is a lone voice in the wilderness......................
1,486 undergrads according to Wiki.
Compared to 27,897 for Wayne State, 27,979 for U of M, 8,459 for Northwestern, 37,988 for MSU.......................
Siena Heights, GVSU, Alma—three others that aren’t the usual bastion of liberalism. It’s no worse in the mitten than it is in any other state.
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