IPS begins expansion plans in Avon Lake
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IPS begins expansion plans in Avon Lake

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IPS begins expansion plans in Avon Lake

:: 20 September, 2009

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IPS, as the company is known, processes mail-order prescriptions for about 1.8 million members of health plans, labor unions and government agencies across the 50 states, according to company President Tom Garvey. Started in North Royalton in 1989, the company moved to a 50,000-square-foot Fisher's Big Wheel store on Walker Road about 10 years ago when more space was needed, Garvey said.

Formerly a unit of Medina-based Discount Drug Mart, the company was acquired for $40 million in August 2008 by HealthExtras Inc., now known as Catalyst Health Solutions Inc., based in Rockville, Md.

A busy summer has seen IPS gain a three-year contract with the state of Ohio to handle pharmacy benefits for about 126,000 members of its health plan. In addition, IPS recently earned $1.1 million worth of incentives from the Ohio Department of Development and up to $100,000 in tax breaks from the city of Avon Lake to help with the expansion.

Garvey said he could not reveal the company's production rate of prescriptions processed per day, week or year. But the company's investment in new dispensing automation will increase its current capacity by a factor of about five times, he said.

"Ninety-five percent of our orders go out in two days," Garvey said, with a touch of pride. The company's 90-person staff has swelled to more than 100 since hiring began two months ago to start filling the 200 jobs it has pledged to add during the next three years. The new jobs, including data entry, customer service, shipping clerks and pharmacists, are expected to average $21.50 per hour.

In the front-end operation, about 65 workers at huge computer screens process orders and resolve snags with customers. The large screens show prescriptions larger than the originals, to help decipher doctors' handwriting, Garvey said. Workers wear telephone headsets, and the company policy is not to hang up until the member is happy, according to Garvey.

"We serve lots of retirees, some of whom are hearing- or sight-impaired," he said. Phones are open from 8 a.m. to 10 p.m.

IPS fills prescriptions chiefly for maintenance medications, not prescriptions for acute conditions, Garvey said.

Packages leave the building via DHL Express, United Parcel Service or the U.S. Postal Service, depending on the urgency, Garvey said.

The company is undergoing major changes inside its 50,000-square-foot building to make way for the improved conveyor system that will enable IPS to add more workers in the coming years. Walls are coming down, a conference room is being added and work will flow from north to south instead of its current west-to-east orientation, Garvey said.

An outmoded conveyor system installed in 2001 is being replaced by an automated system supplied by AutoMed Technologies, of Buffalo Grove, Ill., according to Chuck Genaro, manager of inventory controls.

Starting with a hopper of clear plastic bottles dyed orange to protect their contents from light, the bottles are dropped right side up on the conveyor system. Adhesive labels printed with the prescription information are attached to the bottles before they pass beneath canisters that dispense the medications.

Each tablet or capsule falls through a curtain of light that counts the bottles' contents to insure accuracy, according to Nimesh Patel, vice president of operations.

The bottles' contents are photographed before the cap goes on, so pharmacists can identify the correct pills or tablets inside. Later in the process, pharmacists take the bottles off the line to check them against the computer ordering system.

Planning for the new conveyor system began shortly after Catalyst Health Solutions acquired Immediate Pharmaceutical Services, Nimesh said. The new system will begin testing in November.

Bob Grevey, spokesman for Ohio Department of Development, said a rapid outreach grant of $75,000 was released to IPS Monday, as the start of a package of incentives totalling about $1.1 million. The grant will help the company pay for equipment and machinery.

A performance-based tax credit, estimated to be worth $900,000, is designed to return 50 percent of state income taxes on new hires to IPS over the next eight years, Grevey said.

"The company has committed to create 200 jobs," Grevey said. "The $900,000 is estimated, based on average wage, for 200 positions over the term of the agreement. If they hire more, the tax credit will be worth more."

The city of Avon Lake has authorized tax incentives for IPS as well. Twenty percent of income taxes for new employees hired in the next five years, up to a total of $100,000, will be returned to the company, according to an agreement approved by Avon Lake City Council. In return, the company has agreed to stay in Avon Lake for at least 16 years.

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