Company overview

Starling Oncology serves adults with cancer through affiliated physician-owned practices and independent provider networks in the United States. Specialty pharmacy generates most of its revenue: physicians prescribe oral medicines, its clinic dispensaries and retail pharmacies fill those prescriptions, and pharmacy benefit managers and other payors reimburse them. What it earns from these prescriptions depends on reimbursement rates relative to the cost of buying the drugs.

Patient care supplies most of the remaining revenue. Commercial insurers, Medicare, Medicaid and patients pay for services such as physician visits and infusions. Some contracts pay for each service; others pay a fixed monthly amount per covered member for agreed oncology care. Under those fixed-payment arrangements, Starling takes responsibility for specified treatment costs, so profitability depends on keeping those costs below the payments received.

The business relies on a limited group of health-care payors and pharmacy benefit managers, and substantially on a single drug supplier. Most members covered by its capitation agreements live in California. Care is delivered by affiliated professional corporations, known as TOI PCs, which Starling manages but does not own. State laws restricting corporate medical practice and fee splitting limit how these relationships can be structured and could require changes to them.