New managed care contracting entity offers expanded services to pharmacies


Membership in buying groups can be important to the survival of independents. Now a new PSAO offers them "comprehensive support."

Membership in buying groups can be important to the survival of independents, with their notoriously thin profit margins. Very often they depend on the combined clout of many allied pharmacies to obtain drugs and other products in the best deal possible.

Now two organizations have joined forces in a new pharmacy services administration organization (PSAO) offering independent retail pharmacies “comprehensive support.”

In February, American Associated Pharmacies (AAP) and H.D. Smith announced plans to combine their respective PSAOs into a stand-alone entity, serving more than 2,300 independent pharmacies across the United States. The joint venture, known as Arete Pharmacy Network, will succeed H.D. Smith’s Third Party Network, based in Springfield, Ill., and AAP’s United Drugs, based in Phoenix, Ariz.

“We approached this business opportunity with the goal of helping pharmacies improve Star Ratings and other quality metrics by joining together and gaining efficiencies of scale,” said Rob McMahan, President of United Drugs and chief executive officer of Arete Pharmacy Network, in a press announcement. “This partnership allows each of us an expanded presence throughout the United States and enhanced capabilities that will make us a partner of choice for PBMs, plans, and other payers.”

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Tools and services

An H.D. Smith representative gave Drug Topics an idea, in an e-mail, of some of the services members can expect:

  • An online customer service helpdesk

  • A quality center that will offer insights into improvement of Star Ratings

  • A Star Ratings measurement tool

  • A program known as Compliance Guardian, offering “staff HIPAA training, OIG/GSA checks, and other tools needed for regulatory and contract requirements

  • An online credentialing platform

The H.D. Smith representative also specified financial protections offered by the new PSAO. They include:

  • Reconciliation

  • Identification, monitoring and pursuit of negatively reimbursed generic medication claims

  • Audit help for third-party contracts

  • Enhanced central pay and reporting capabilities

  • A pharmacy discount card program  

Because two existing PSAOs have combined to create the new network,  the H.D. Smith representative noted, each of these solutions has already been thoroughly vetted.

“Arete” is the Greek word for virtue or excellence. The ancients held the concept in high regard, along with the exceptional quality that it represents.

More information on the new company can be found at

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