Most urban dwellers who see black physicians probably aren’t aware that the money generated from their prescriptions benefits the pharmaceutical industry to the tune of $100 million per week. Few of those dollars are recycled directly back into their communities.
However, Parran Foster, president and CEO of Phoenix Pharmaceuticals Inc., a four-year-old, 14-employee pharmaceutical company in Waldorf, Maryland, vowed that his firm would return a minimum of 10% of its earnings to the community in the form of college scholarships. “We’ve actually returned closer to between 30% and 50%,” says Foster. Last year, Phoenix gave $300,000 in scholarships.
To start Phoenix, Foster used $220,000 culled from personal savings and investments by family and friends in the medical community. The privately held corporation, with nine stockholders, took no loans, so it’s debt-free.
“I liked his idea of turning over 10% of the profits back to the community,” says Dr. Charles Curry, chief of cardiology at Howard University in Washington, D.C., and a Phoenix stockholder.
Armed with 20 years of experience in the pharmaceutical industry and the support of family and friends, Foster set out to become the first black owner of a pharmaceutical company to play a major role in that industry. To make his venture successful, Foster had to form a coalition with the minority physicians he’d done business with, securing many of them as his customers. He also had to align himself with a major pharmaceutical manufacturer with products that would serve the medical needs of urban communities.
In 1993, Foster contacted Parke-Davis, maker of the contraceptive Loestrin and the anti-hypersensitive drug Accupril. The two companies developed a partnership in which Phoenix would market and sell Parke-Davis’ products. Under the agreement, Phoenix would work to boost the number of prescriptions of those products in specific area codes. Phoenix and Parke-Davis would then share revenues generated by those increases. Phoenix has had a market share growth of between 4% to 7% over the past three years. Last year, Phoenix stopped marketing Loestrin and picked up Parke-Davis’ diabetic drug, Rezulin.
Foster used his seed money to conduct testing in Baltimore, Washington, D.C., and Richmond, Virginia, to determine how viable those areas were for use of Parke-Davis’ products. By the end of the first year, Phoenix had grown from three to 12 employees and revenues were $450,000.
Foster, whose customers include physicians and hospitals in nine major cities, expects Phoenix to earn $2.5
million to $3 million this year.
Phoenix Pharmaceuticals, 3162 Old Washington Rd., Waldorf, MD 20602; 301-870-0001