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Diplomat Pharmacy, which sells medications to people with complex conditions and acts as a drug benefit middleman, is a shell of itself. The company was worth more than $3 billion in its heyday in 2015, but is now worth a little more than $200 million after a disastrous third quarter.

The bottom line: Larger specialty drug players — owned by Cigna, CVS Health and UnitedHealth Group — have crushed Diplomat with their size. Now, Diplomat is running out of cash and is being forced to sell assets, or the entire company, because it has "substantial doubt surrounding our ability to continue,” the company said in its earnings report.

By the numbers: Diplomat's main business, which distributes high-cost infusion drugs and other medicines that you don't find at your typical pharmacy, is still lucrative.

The pharmacy benefit manager business, which Diplomat just got into a couple years ago, has been a mess.

  • Health insurers continue to drop Diplomat's PBM, including one of Diplomat's largest clients.
  • Executives were not allowed to name the new insurer that is leaving due to a gag clause, but it likely is one of the big insurers that also owns its own specialty PBM.

What to watch: Diplomat executives will have to spell out their plans for a full or partial sale before the end of the year.

  • Diplomat "would be perfect" for a company like Amazon, according to a high-ranking person who worked at Diplomat.
  • Amazon now owns PillPack, but lacks a PBM and is not involved with these kinds of specialty medications.

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