Long-term care pharmacy company PharMerica Corp. intends to launch a new initiative focused on assisted living to increase its share of that market this year, CEO Greg Weishar said Friday during an earnings call.

“We have done a lot of work, we have done a lot of thinking and we have done a lot of market research,” he said, explaining that the company is attracted by market dynamics.

“As most of you know,” Weishar told analysts and others, “the assisted living segment is a rapidly growing alternative for seniors needing support with their activities of daily living. There are about 1 million residents currently residing in these facilities, and this resident population is growing about 6% per year. As these residents age, demand for comprehensive institutional prescription services grows as well.”

The Louisville, KY-based company’s desire to expand in assisted living was the motive behind its acquisition of independent pharmacy companies Express Care and Stanley LTC Pharmacy in the fourth quarter of 2016, Weishar said, noting that the company picked up their combined annual revenues exceeding $100 million in the process. Express Care, based in Washington, NC, and Leesburg, VA, and Stanley LTC Pharmacy both serve North Carolina and Virginia, which Weishar described as “fast-growing assisted living facility markets.” Stanley, headquartered in Charlotte, NC, additionally serves Florida and South Carolina.

PharMerica also has worked to ensure adequate reimbursement over the past few years, anticipating the impending opportunity in assisted living, Weishar said.

“Historically, this market was difficult for institutional pharmacies like PharMerica to serve, given inadequate reimbursement,” he said. “Reimbursement was based on prevailing retail rates, which would not support the scope of the services PharMerica provides and this population requires.”

PharMerica has renegotiated most of its Medicare Part D contracts, Weishar said, adding: “Over the last two years or three years, we have been pecking away at trying to get adequate reimbursement on the assisted living and having that type of reimbursement similar to what we would get under long-term care. And I would say that we have been very successful in getting that done, and that has positioned us now, and we think we can serve that market, which is predominantly Part D.”

Additionally, Weishar said, his company’s model will help PharMerica find success in assisted living when others have not. “We have created a model that we believe responds to some of the, I would say, deficiencies that people have articulated in the past with regards to traditional LTC services trying to serve that market,” he said.

The company will try to work with administrators and appeal to older adults and their families as new residents move into assisted living communities, Weishar said, noting that regional pharmacy companies such as the newly acquired Express Care and Stanley LTC Pharmacy already “are pretty adept at getting a high percentage” of residents to sign up for services.

Not all residents will be interested at first, he said.

“Some of the folks, depending on their age and depending on their health, would certainly prefer to use a retail outlet, and we know that,” Weishar said. “We are not going to get 100% of the patients in any facility. …You are not going to get the certainty with regards to revenues that you normally will get when you sign up a 100-bed skilled nursing facility. But that being said, there is a built-in growth factor of these folks. As they age, they are going to come over to your service levels.”

Also, he added, the increasing preference of older adults to age in place should help PharMerica’s efforts.

“Whereas before, maybe 5 years ago, it was very difficult to get 50% of the population to use your services, today it’s much easier to get 50% of the population to use your services, because they are aging in place, and their traditional pharmacy solution is not working as well for them as it has in the past,” Weishar said. “So there is a lot of dynamics coming together here, and we think it’s a good time for us to get aggressive about it.”

PharMerica operates 99 institutional pharmacies, 19 specialty home infusion pharmacies and four specialty oncology pharmacies in 45 states, according to the company.