Diplomat Pharmacy (DPLO) 10-K 18 Mar 19 2018 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Mar. 15, 2019	Jun. 30, 2018
Document and Entity Information
Entity Registrant Name	Diplomat Pharmacy, Inc.
Entity Central Index Key	0001610092
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1,445
Entity Common Stock, Shares Outstanding		74,489,773
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and equivalents	$ 9,485	$ 84,251
Receivables, net	326,602	332,091
Inventories	210,573	206,603
Prepaid expenses and other current assets	9,596	11,125
Total current assets	556,256	634,070
Property and equipment, net	34,525	38,990
Capitalized software for internal use, net	30,506	36,520
Goodwill	609,592	832,624
Definite-lived intangible assets, net	240,810	392,011
Other noncurrent assets	4,670	6,208
Total assets	1,476,359	1,940,423
Current liabilities:
Accounts payable	308,084	384,719
Rebates payable to PBM customers	23,264	28,744
Borrowings on line of credit	176,300	188,250
Current portion of long-term debt	11,500	11,500
Accrued expenses:
Compensation and benefits	13,348	9,584
Contingent consideration	5,075	8,100
Other	21,014	20,560
Total current liabilities	558,585	651,457
Long-term debt, less current portion	438,369	521,098
Deferred income taxes	2,781	14,367
Contingent consideration	1,820	4,000
Derivative liability	4,292
Deferred gain	5,175
Other	253
Total liabilities	1,011,275	1,190,922
Commitments and contingencies (Note 16)
Shareholders' equity:
Preferred stock (10,000,000 shares authorized; none issued and outstanding)
Common stock (no par value; 590,000,000 shares authorized; 74,474,677 and 73,871,424 shares issued and outstanding at December 31, 2018 and 2017, respectively)	629,411	619,235
Additional paid-in capital	50,544	38,450
(Accumulated deficit) retained earnings	(210,579)	91,816
Accumulated other comprehensive loss	(4,292)
Total shareholders' equity	465,084	749,501
Total liabilities and shareholders' equity	$ 1,476,359	$ 1,940,423

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2018	Dec. 31, 2017
Consolidated Balance Sheets
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common shares, par value (in dollars per share)	$ 0	$ 0
Common shares, authorized shares	590,000,000	590,000,000
Common shares, issued shares	74,474,677	73,871,424
Common shares, outstanding shares	74,474,677	73,871,424

Consolidated Statements of Oper

Consolidated Statements of Operations and Comprehensive (Loss) Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Consolidated Statements of Operations and Comprehensive (Loss) Income
Net sales	$ 5,492,524	$ 4,485,230	$ 4,410,388
Cost of sales	(5,116,515)	(4,211,085)	(4,144,802)
Gross profit	376,009	274,145	265,586
Selling, general and administrative expenses	(335,650)	(255,580)	(213,705)
Goodwill impairments	(224,966)
Impairments of definite-lived intangible assets	(82,678)		(4,804)
(Loss) income from operations	(267,285)	18,565	47,077
Other (expense) income:
Interest expense	(41,650)	(10,716)	(6,573)
Equity loss and impairment of non-consolidated entities	(329)		(4,659)
Other	1,956	213	370
Total other expense	(40,023)	(10,503)	(10,862)
(Loss) income before income taxes	(307,308)	8,062	36,215
Income tax benefit (expense)	5,039	7,126	(11,195)
Net (loss) income	(302,269)	15,188	25,020
Less net loss attributable to noncontrolling interest		(322)	(3,253)
Net (loss) income attributable to Diplomat Pharmacy, Inc.	(302,269)	15,510	28,273
Other comprehensive loss, net of tax	(4,292)
Total comprehensive (loss) income	$ (306,561)	$ 15,510	$ 28,273
(Loss) income per common share:
Basic (in dollars per share)	$ (4.07)	$ 0.23	$ 0.43
Diluted (in dollars per share)	$ (4.07)	$ 0.23	$ 0.42
Weighted average common shares outstanding:
Basic (in shares)	74,244,520	68,130,322	65,970,396
Diluted (in shares)	74,244,520	68,780,053	68,047,723

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities:
Net (loss) income	$ (302,269)	$ 15,188	$ 25,020
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	97,112	66,566	50,045
Goodwill impairments	224,966
Impairments of definite-lived intangible assets	82,678		4,804
Share-based compensation expense	18,172	7,281	5,412
Net provision for doubtful accounts	8,660	9,424	9,534
Amortization of debt issuance costs	4,733	2,655	1,176
Change in fair value of contingent consideration	3,364	3,675	(8,922)
Contingent consideration payments	(4,239)		(4,174)
Deferred income tax (benefit) expense	(11,847)	(10,795)	8,779
Equity loss and impairment of non-consolidated entities	329		4,659
Other	(73)	1	2
Changes in operating assets and liabilities, net of business acquisitions:
Accounts receivable	(2,333)	7,735	(15,128)
Inventories	(3,932)	13,813	(44,342)
Accounts payable	(80,412)	23,088	(5,906)
Rebates payable	(5,479)	1,238
Other assets and liabilities	5,612	(4,615)	367
Net cash provided by operating activities	35,042	135,254	31,326
Cash flows from investing activities:
Payments to acquire businesses, net of cash acquired	(13,070)	(3,505)	(12,595)
Expenditures for property and equipment	(1,139)	(623,067)	(67,156)
Expenditures for capitalized software for internal use	(10,474)	(6,652)	(6,217)
Capital investments in and loans to non-consolidated entities		(100)
Net proceeds from sales of property and equipment	13,448	5	1
Net cash used in investing activities	(11,235)	(633,319)	(85,967)
Cash flows from financing activities:
Net (payments) borrowings from line of credit	(11,950)	148,995	39,255
Proceeds from long-term debt		575,000
Payments on long-term debt	(85,500)	(136,000)	(6,000)
Payments of debt issuance costs	(891)	(21,507)	(28)
Proceeds from issuance of stock upon stock option exercises	4,098	7,875	4,448
Contingent consideration payments	(4,330)		(2,681)
Net cash (used in) provided by financing activities	(98,573)	574,363	34,994
Net (decrease) increase in cash and equivalents	(74,766)	76,298	(19,647)
Cash and equivalents at beginning of year	84,251	7,953	27,600
Cash and equivalents at end of year	9,485	84,251	7,953
Supplemental disclosures of cash flow information:
Cash paid for interest	37,851	7,327	5,273
Cash paid for income taxes	$ 3,520	$ 5,876	$ 728

Consolidated Statement of Chang

Consolidated Statement of Changes in Shareholders' Equity - USD ($) $ in Thousands	TNHCommon Stock	TNHTotal Diplomat Pharmacy, Inc. Shareholders' Equity	TNH	Several AcquisitionsCommon Stock	Several AcquisitionsTotal Diplomat Pharmacy, Inc. Shareholders' Equity	Several Acquisitions	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Total Diplomat Pharmacy, Inc. Shareholders' Equity	Noncontrolling Interest	Total
Balance at Dec. 31, 2015							$ 451,620	$ 29,221	$ 31,130		$ 511,971	$ 3,575	$ 515,546
Balance (in shares) at Dec. 31, 2015							64,523,864
Changes in Shareholders' Equity
Cumulative effect adjustment, excess tax benefits on share-based awards (Note 12)									16,903		16,903		16,903
Net income (loss)									28,273		28,273	(3,253)	25,020
Issuance of stock upon full contingent consideration payout (in shares)							1,346,282
Issuance of stock as partial consideration	$ 9,507	$ 9,507	$ 9,507				$ 36,888				36,888		36,888
Issuance of stock as partial consideration (in shares)	324,244
Stock issued upon exercises of stock options							$ 5,526	(1,078)			4,448		4,448
Stock issued upon exercises of stock options (in shares)							564,844
Share-based compensation								5,412			5,412		5,412
Restricted stock award activity							$ 287	(287)
Restricted stock award activity (in shares)							5,765
Balance at Dec. 31, 2016							$ 503,828	33,268	76,306		613,402	322	613,724
Balance (in shares) at Dec. 31, 2016							66,764,999
Changes in Shareholders' Equity
Net income (loss)									15,510		15,510	$ (322)	15,188
Issuance of stock as partial consideration				$ 105,433	$ 105,433	$ 105,433
Issuance of stock as partial consideration (in shares)				5,852,291
Stock issued upon exercises of stock options							$ 9,752	(1,877)			7,875		7,875
Stock issued upon exercises of stock options (in shares)							1,217,320
Share-based compensation								7,281			7,281		7,281
Restricted stock award activity							$ 222	(222)
Restricted stock award activity (in shares)							36,814
Balance at Dec. 31, 2017							$ 619,235	38,450	91,816		749,501		$ 749,501
Balance (in shares) at Dec. 31, 2017							73,871,424						73,871,424
Balance at Dec. 31, 2017							$ 619,235	38,450	91,816		749,501		$ 749,501
Balance (in shares) at Dec. 31, 2017							73,871,424						73,871,424
Changes in Shareholders' Equity
Cumulative effect adjustment, new revenue recognition accounting standard (Note 2)									(126)		(126)		$ (126)
Net income (loss)									(302,269)		(302,269)		(302,269)
Stock issued upon exercises of stock options							$ 5,316	(1,218)			4,098		4,098
Stock issued upon exercises of stock options (in shares)							379,194
Share-based compensation								18,172			18,172		18,172
Stock issued upon vesting of restricted stock units							$ 4,299	(4,299)
Stock issued upon vesting of restricted stock units (in shares)							183,263
Restricted stock award activity							$ 561	(561)
Restricted stock award activity (in shares)							40,796
Other comprehensive loss, net of tax										$ (4,292)	(4,292)		(4,292)
Balance at Dec. 31, 2018							$ 629,411	$ 50,544	$ (210,579)	$ (4,292)	$ 465,084		$ 465,084
Balance (in shares) at Dec. 31, 2018							74,474,677						74,474,677

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	12 Months Ended
	Dec. 31, 2018
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS	1. DESCRIPTION OF BUSINESS Diplomat Pharmacy, Inc. and its consolidated subsidiaries (the “Company”) is the largest independent provider of specialty pharmacy and infusion services in the United States of America (“U.S.”). The Company is focused on improving the lives of patients with complex chronic diseases while also delivering unique solutions for manufacturers, hospitals, payers and providers. The Company’s patient-centric approach positions it at the center of the healthcare continuum for treatment of complex chronic disease states, including oncology, specialty infusion therapy, immunology, hepatitis, multiple sclerosis and many other serious or long-term conditions. Beginning after its acquisition of LDI Holding Company, LLC, in December 2017, the Company operates in two reportable segments — Specialty and Pharmacy Benefit Management (“PBM”). The Specialty segment offers a broad range of innovative solutions to address the dispensing, delivery, dosing and reimbursement of clinically intensive, high-cost specialty drugs and a wide range of applications and the PBM segment provides services designed to help the Company’s customers reduce the cost and manage the complexity of their prescription drug programs. The Company dispenses to patients in all U.S. states and territories through its advanced distribution centers and manages centralized clinical call centers to deliver localized services on a national scale.

NEW ACCOUNTING STANDARDS

NEW ACCOUNTING STANDARDS	12 Months Ended
	Dec. 31, 2018
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS	2. NEW ACCOUNTING STANDARDS Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), which supersedes the previous revenue recognition guidance. The new standard focuses on creating a single source of revenue guidance for revenue arising from contracts with customers for all industries. The core principle of the new standard is for an entity to recognize revenue to depict the transfer of promised goods or services to its customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also includes a cohesive set of disclosure requirements intended to provide users of financial statements with comprehensive information about the nature, amount, timing and uncertainty of revenue and cash flows arising from a company’s contracts with its customers. Topic 606 permits two methods of adoption: retrospectively to each prior reporting period presented as in the full retrospective method, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application as in the modified retrospective transition method. On January 1, 2018, the Company adopted Topic 606 using the modified retrospective transition method. Therefore, the comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company recorded the cumulative effect of initially applying the new revenue recognition standard on January 1, 2018 and recorded an after-tax adjustment of $126 to decrease beginning retained earnings. This cumulative adjustment relates to a change in the timing of revenue recognition of dispensing prescription drugs for home delivery from the date the drugs are shipped under the previous accounting guidance to the date the drugs are physically delivered which better reflects when control transfers to the customer under the new accounting standard. The effect of this change is not significant as there is a very short timeframe from the shipment date to the physical delivery date of the prescription drugs. Additionally, in the PBM segment, revenue related to a portion of customer contracts was previously recognized on a net basis as the Company was considered to be acting as an agent in those transactions under the prior guidance in Topic 605 primarily because it did not have inventory risk or credit risk. As part of the implementation of Topic 606, the Company assessed the principal versus agent guidance in Topic 606 and determined that the Company is the principal in these transactions under the new guidance as it controls the process by which pharmaceutical drugs are dispensed to its customers and, effective January 1, 2018, began to recognize revenue on a gross basis. As stated, the comparative prior period information for the year ended December 31, 2017 and 2016 has not been adjusted and continues to be reported under the Company’s historical revenue recognition policies. The details of the significant changes and quantitative impact on the financial statement line items in the consolidated balance sheet as of January 1, 2018 for the adoption of Topic 606 was as follows: As Reported, As Adjusted, December 31, 2017 Adjustment January 1, 2018 Receivables, net $ 332,091 $ (6,483) $ 325,608 Inventories 206,603 6,313 212,916 Total current assets 634,070 (170) 633,900 Total assets 1,940,423 (170) 1,940,253 Accrued expenses — other 20,560 (44) 20,516 Total current liabilities 651,457 (44) 651,413 Total liabilities 1,190,922 (44) 1,190,878 Retained earnings 91,816 (126) 91,690 Total shareholders’ equity 749,501 (126) 749,375 Total liabilities and shareholders’ equity 1,940,423 (170) 1,940,253 The table below summarize the impacts of the application of Topic 606 as compared with the guidance that was in effect before the change on the consolidated balance sheet, statement of operations and comprehensive loss, and statement of cash flows as of and for the year ended December 31, 2018, as follows: Adjustments As Reported for Topic 606 As Adjusted Consolidated Balance Sheet: Receivables, net $ 326,602 $ 15,106 $ 341,708 Inventories 210,573 (14,489) 196,084 Total current assets 556,256 617 556,873 Total assets 1,476,359 617 1,476,976 Accrued expenses – other 21,014 160 21,174 Total current liabilities 558,585 160 558,745 Total liabilities 1,011,275 160 1,011,435 Accumulated deficit (210,579) 457 (210,122) Total shareholders’ equity 465,084 457 465,541 Total liabilities and shareholders’ equity 1,476,359 617 1,476,976 Consolidated Statement of Operations and Comprehensive Loss: Net sales $ 5,492,524 $ (358,543) $ 5,133,981 Cost of sales (5,116,515) 358,990 (4,757,525) Gross profit 376,009 447 376,456 Loss from operations (267,285) 447 (266,838) Loss before income taxes (307,308) 447 (306,861) Income tax benefit 5,039 (116) 4,923 Net loss (302,269) 331 (301,938) Net loss attributable to Diplomat Pharmacy, Inc. (302,269) 331 (301,938) Total comprehensive loss (306,561) 331 (306,230) Consolidated Statement of Cash Flows: Net loss $ (302,269) $ 331 $ (301,938) Change in: Accounts receivable (2,333) (15,106) (17,439) Inventories (3,932) 14,489 10,557 Other assets and liabilities 5,612 286 5,898 The disclosure requirements of Topic 606 are included within the revenue recognition accounting policy, effective January 1, 2018, in Note 3. Derivatives and Hedging In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). ASU 2017-12 aligns hedge accounting with risk management activities and simplifies the requirement to qualify for hedge accounting. ASU 2017-12 is effective for annual periods beginning on or after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted. Effective January 1, 2018, the Company early adopted ASU 2017-12. There was no impact to the Company at the time of adoption. Accounting Standards Issued Not Yet Adopted Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) which requires lessees to recognize the following for all leases, except for short-term leases, at the commencement date: (1) a lease liability which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessor accounting is largely unchanged. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, which provides corrections or clarification on narrow aspects of Topic 842. Also, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provides entities with another transition method for adopting the new leasing guidance. As originally issued, Topic 842 requires entities to use a modified retrospective transition approach to apply the new guidance as of the beginning of the earliest period presented in the financial statements in the period adopted. The optional transition method allows entities to apply the new guidance at the adoption date and record a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, and not to restate the comparative periods presented. ASU No. 2016-02 will also require expanded disclosures. ASU No. 2016-02 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2018. The Company plans to adopt the new lease accounting guidance in the first quarter of 2019 using the optional transition method. The Company elected to apply the package of practical expedients upon transition, which includes no reassessment of whether existing contracts are or contain leases as well as the lease classification for existing leases was retained. The adoption of the standard will result in recognition of net lease right-of-use assets and lease liabilities as of January 1, 2019, primarily related to its real estate operating leases. Also, a cumulative effect adjustment to retained earnings will be recorded which relates to a deferred gain recorded upon a sale-leaseback transaction in 2018 which will be recognized under the new leasing guidance on January 1, 2019. The Company is in the process of quantifying these items. The new guidance will not have a significant impact on the timing or measurement of lease expense. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is intended to improve financial reporting by requiring the recording of credit losses on financial assets, including receivables, on a more timely basis. The guidance will replace the current incurred loss accounting model with an expected loss approach. The new methodology requires an entity to estimate the credit losses expected over the life of an exposure based on historical experience, current conditions, and reasonable and supportable forecasts. The guidance requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses. ASU No. 2016-13 is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2019. The effect of adoption of the standard is required as an adjustment to the opening balance of retained earnings as of the beginning of the first reporting period in which ASU No. 2016-13 is effective. The Company has not yet determined the magnitude of any such one-time adjustment or the overall impact of ASU No. 2016-13 on its consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Financial Statement Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates. Principles of Consolidation The consolidated financial statements include the accounts of Diplomat Pharmacy, Inc., its wholly owned subsidiaries, and a 51 percent owned subsidiary, formed in August 2014, which the Company controlled until it was dissolved during the fourth quarter of 2017. The Company also owns a 22 percent interest in a non-consolidated entity which is accounted for under the equity method of accounting since the Company does not control the entity but has the ability to exercise significant influence over its operating and financial policies. This equity method investment was fully impaired during the fourth quarter of 2014 (Note 9). An investment in an entity in which the Company owned less than 20 percent and did not have the ability to exercise significant influence was accounted for under the cost method. This cost method investment was impaired during the fourth quarter of 2016 and dissolved in 2018 (Note 9). Noncontrolling interest in a consolidated subsidiary in the consolidated balance sheets represented the minority shareholders’ proportionate share of the equity in such subsidiary. Consolidated net income (loss) was allocated to the Company and noncontrolling interests (i.e., minority shareholders) in proportion to their percentage ownership. All intercompany transactions and balances have been eliminated in consolidation. Reclassifications During the second quarter of 2018, the Company changed its accounting policy to classify shipping and handling costs incurred at its dispensing pharmacies in “Cost of sales” which were previously reported in “Selling, general and administrative expenses” (“SG&A”) in its consolidated statements of operations. The amounts of the reclassifications from SG&A to Cost of sales were $55,426 and $45,795 for the years ended December 31, 2017 and 2016, respectively. The Company has historically classified the cost of its nursing support services within SG&A as these amounts were not considered significant in relation to total cost of sales. During the second quarter of 2018, the Company reclassified these nursing support service costs from SG&A to cost of sales. The amounts reclassified were $19,108 and $13,447 for the years ended December 31, 2017 and 2016, respectively. In addition, certain prior year amounts have been reclassified to conform with the current year presentation. These reclassifications, discussed above, had no impact on “(Loss) income from operations,” “Net (loss) income,” or “(Loss) income per common share, basic and diluted,” for any of the periods presented. Concentrations of Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash on deposit with banks or other financial institutions and trade accounts receivable. A federal program provides noninterest-bearing cash balances insurance coverage up to $250 per depositor at each financial institution. The Company’s cash balances often exceed federally insured limits. Concentration of credit risk with respect to trade accounts receivable is limited by the large number of patients comprising the Company’s customer base and their dispersion across multiple payers and multiple geographic areas. No single payer customer accounted for more than 10 percent of net sales for any period presented or trade accounts receivable at December 31, 2018 and 2017 . The Company purchases prescription drug inventory from AmerisourceBergen, a prescription drug wholesaler. Such purchases from AmerisourceBergen accounted for approximately 28 percent, 41 percent and 49 percent of drug purchases for the years ended December 31, 2018, 2017 and 2016, respectively. The Company has alternative vendors available, if necessary. See Note 16 for a discussion of the terms of the Company’s distribution agreement and minimum purchase obligation under the agreement. Also, the Company purchases certain prescription drugs from the drug manufacturers, Celgene Corporation (“Celgene”) and Pharmacyclics, Inc. (“Pharmacyclics”). Purchases from Celgene and Pharmacyclics accounted for approximately 17 percent and 17 percent, 17 percent and 14 percent, and 13 percent and 10 percent of total drug purchases for the years ended December 31, 2018, 2017 and 2016, respectively, with no minimum purchase obligation. The specialty drugs that the Company purchases from Celgene and Pharmacyclics are not available from any other source. Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. Receivables, net Receivables, net consisted of the following: December 31, 2018 2017 Trade receivables, net of allowances of $(25,342) and $(22,050), respectively $ 299,407 $ 317,004 Rebate receivables 22,375 12,847 Other receivables 4,820 2,240 $ 326,602 $ 332,091 Trade receivables are stated at the invoiced amount. Trade receivables primarily include amounts due from clients,third-party pharmacy benefit managers and insurance providers and are based on contracted prices. Trade receivables are unsecured and require no collateral. Trade receivable terms vary by payer, but generally are due within 30 days after the sale of the product or performance of the service. Rebate receivables are amounts due from pharmaceutical manufacturers related to drug purchases by participants of the various pharmacy benefit plans that the Company manages, a portion of which, depending on contract terms, are paid back to the Company's customers. The Company estimates these rebates at period-end based on its contractual arrangements with its manufacturers and such rebates are recorded as a reduction of cost of sales. The Company maintains an allowance for doubtful accounts that reduces receivables to amounts that are expected to be collected. In estimating the allowance, management considers factors such as current overall economic conditions, historical and anticipated customer performance, historical experience with write-offs and the level of past due accounts. The Company’s general policy for uncollectible accounts, if not reserved through specific examination procedures, is to reserve based upon the aging categories of accounts receivable. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Activity in the allowance for doubtful accounts was as follows: Year Ended December 31, 2018 2017 2016 Beginning balance $ (22,050) $ (15,257) $ (8,123) Charged to expense (8,660) (9,424) (9,534) Write-offs, net of recoveries 5,368 2,631 2,400 Ending balance $ (25,342) $ (22,050) $ (15,257) Inventories Inventories consist of prescription and over-the-counter medications and are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. Prescription medications are returnable to the Company’s vendors and fully refundable before six months of expiration, and any remaining expired medication is relieved from inventory on a quarterly basis. Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is generally computed on a straight-line basis over the estimated useful lives of the assets. The costs of leasehold improvements are amortized either over the life of the improvement or the lease term, whichever is shorter. For income tax purposes, accelerated methods of depreciation are generally used. Significant improvements are capitalized, and disposed or replaced property is written off. Maintenance and repairs are charged to expense in the period they are incurred. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss is included in income. Capitalized Software for Internal Use, net The Company capitalizes certain development costs primarily related to custom-developed, proprietary, scalable patient care systems. The Company expenses the costs incurred during the preliminary project stage, and capitalizes the direct development costs, including the associated payroll and related costs for employees and outside contractors working on development, during the application development stage. The Company monitors development on an ongoing basis and capitalizes the costs of any major improvements or that result in significant additional functionality. Capitalized internal use software costs are amortized on a straight-line basis over the estimated useful lives of the assets, generally three years. For income tax purposes, accelerated methods of amortization are generally used. Management evaluates the useful lives of these assets on an annual basis. Definite-Lived Intangible Assets, net Definite-lived intangible assets are amortized over their estimated useful lives using an accelerated method for the majority of customer, patient and physician relationships, and the straight-line method for the remaining intangible assets. Long-Lived Assets Long-lived assets, such as property and equipment, capitalized software for internal use and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company compares the undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying amount exceeds fair value. Fair values of long-lived assets are determined through various techniques, such as applying probability weighted, expected present value calculations to the estimated future cash flows using assumptions a market participant would utilize, or through the use of a third-party independent appraiser or valuation specialist. Goodwill Goodwill represents the excess acquisition cost of an acquired entity over the estimated fair values of the net tangible assets and the identifiable intangible assets acquired. Goodwill is not amortized, but rather is reviewed for impairment annually during the fourth quarter, or more frequently if facts or circumstances indicate that the carrying value of the reporting unit’s goodwill may not be recoverable. The Company has three reporting units — Diplomat Specialty Pharmacy (“DSP”), Diplomat Specialty Infusion Group (“DSIG”) and PBM. An entity has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount prior to performing a quantitative impairment test. The qualitative assessment evaluates various events and circumstances, such as macro-economic conditions, industry and market conditions, cost factors, relevant events and financial trends that may impact a reporting unit’s fair value. If it is determined that the estimated fair value of the reporting unit is more-likely-than-not less than its carrying amount, including goodwill, a quantitative assessment is required. Otherwise, no further analysis is necessary. If a quantitative assessment is performed, a reporting unit’s fair value is compared to its carrying value. A reporting unit’s fair value is determined by the market approach, when available and appropriate, or the income approach, or combination of both. The income approach utilizes projected future cash flows discounted at rates commensurate with the risks involved, and multiples of current and future earnings. Management assesses the valuation methodology based upon the relevance and availability of the data at the time of the valuation is performed. If multiple valuation methodologies are used, the results are weighted appropriately. If the fair value of a reporting unit is less than its carrying amount, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. Debt Issuance Costs Costs incurred related to the issuance of the Company’s credit facility were deferred and are being amortized to interest expense using the effective interest method over the term of the agreement. Revenue recognition (effective January 1, 2018) The following table disaggregates net sales by therapeutic categories for the Specialty segment and by product and service distribution channels for the PBM segment: Year Ended December 31, 2018 2017 2016 Specialty Segment: Oncology $ 2,788,154 $ 2,545,708 $ 2,102,130 Specialty infusion 704,872 617,904 505,240 Immunology 555,115 561,730 644,173 Hepatitis 148,470 281,063 583,751 Other 594,226 466,452 575,094 Total Specialty segment 4,790,837 4,472,857 4,410,388 PBM Segment: Retail networks 549,760 5,166 — Specialty pharmacy 88,457 2,914 — Mail order 68,158 2,261 — Other 23,080 2,032 — Total PBM segment 729,455 12,373 — Inter-segment eliminations (27,768) — — Total net sales $ 5,492,524 $ 4,485,230 $ 4,410,388 Specialty Segment The Company recognizes revenue from dispensing prescription drugs for home delivery at the time the drugs are physically delivered which is the point in time when control transfers to the customer. Revenue from dispensing prescription drugs that are picked up by patients at an open-door or retail pharmacy location are recorded at prescription adjudication, which approximates the fill date. Each prescription claim is considered an arrangement with the customer and is a separate performance obligation. The Company accrues an estimate of fees, including direct and indirect remuneration fees (“DIR fees”), which are assessed or expected to be assessed by payers at some point after adjudication of a claim, as a reduction of revenue at the time revenue is recognized. Changes in the estimate of such fees are recorded as an adjustment to revenue when the change becomes known. PBM Segment The Company provides a pharmacy benefit management service, including mail order pharmacy and specialty pharmacy services, to its clients, which include Medicare Part D Plans, regional health Plans, self-insured clients and Medicaid Plans , which culminates in the dispensing of prescription drugs. The Company sells prescription drugs directly through its mail service dispensing pharmacy and indirectly through its contracted network of retail pharmacies. The Company recognizes revenue from the sale of prescription drugs by its mail order pharmacy service when the drugs are physically delivered when control transfers to the customer and by its retail pharmacy network when the claim is adjudicated. The Company’s pharmacy benefit management services are accounted for in a manner consistent with a master supply arrangement as there are no contractual minimum volumes and each prescription is considered a separate purchasing decision and distinct performance obligation transferred at a point in time. Pharmacy benefit management services performed in connection with each prescription claim are considered part of a single performance obligation which culminates in the dispensing of prescription drugs. The Company acts as the principal in the arrangement, exercises pricing latitude and independently has a contractual obligation to pay its network pharmacy providers for benefits provided to its clients’ members, and assumes primary responsibility for fulfilling the promise to provide prescription drugs to its client plan members while also performing the related pharmacy benefit management services and therefore recognizes revenue on a gross basis. The Company includes the total prescription price (drug ingredient cost plus dispensing fee) it has contracted with these clients as revenue, including member co-payments to pharmacies. Net sales include (i) the portion of the price the client pays directly to the Company, net of any variable consideration including volume-related or other discounts paid back to the client, (ii) the price paid to the Company by client plan members for mail order prescriptions and the price paid to retail network pharmacies by client plan members for retail prescriptions and (iii) claims-based administrative fees. The Company records revenue, net of manufacturer’s rebates, which are earned by and paid to its clients based on their plan members’ utilization of brand-name formulary drugs. The Company estimates these rebates at period-end based on actual claims data and its estimates of manufacturers’ rebates earned by its clients based upon their claims volume and utilization of certain brand-name formulary drugs. The Company adjusts against revenues its estimated rebates payable to clients to the actual amounts paid when such adjustments become known. The Company also adjusts revenues for refunds owed to its clients resulting from pricing and performance guarantees against defined metrics which are estimated and accrued for based upon current performance to date against contractual performance guarantees. Sales taxes are presented on a net basis, excluded from revenue and cost, for both reportable segments. Cost of sales includes the cost of pharmaceuticals dispensed to customers either directly at its mail pharmacy locations, or indirectly through its nationwide network of participating pharmacies. Rebates attributable to clients are accrued as rebates receivable and a reduction of cost of sales with a corresponding payable for the amounts of the rebates to be remitted to those clients in accordance with their contracts which is recorded as a reduction of product revenue. Cost of sales also includes the cost of personnel to support the transaction processing services, system sales, maintenance and professional services. Rebates retained, which represents the difference between the manufacturers’ rebates earned and rebates incurred to customers, approximated 17.9% and 0.4% of total gross profit for the years ended December 31, 2018 and 2017, respectively. Advertising and Marketing Costs Advertising and marketing costs are expensed as incurred as a component of SG&A and were $3,075, $2,251 and $3,868 for the years ended December 31, 2018, 2017 and 2016, respectively. Defined Contribution Savings Plans The Company maintains certain defined contribution savings plans for eligible employees. The total expenses attributable to the defined contribution savings plans are recorded as a component of SG&A and were $4,056, $2,908 and $2,665 for the years ended December 31, 2018, 2017 and 2016, respectively. Share-Based Compensation The Company grants stock options to key employees, which are accounted for as equity awards. The exercise price of a granted stock option is equal to the closing market stock price of the underlying common share on the date the option is granted. The grant date fair value of these awards is measured using the Black-Scholes-Merton option pricing model. Stock options generally become exercisable in installments of 25 percent per year, beginning on the first anniversary of the grant date and each of the three anniversaries thereafter or 33 percent per year, beginning on the first anniversary of the grant date and each of the two anniversaries thereafter, and have a maximum term of ten years. The Company expenses the grant date fair values of stock options over their respective vesting periods on a straight-line basis. Estimating grant date fair values for employee stock options requires management to make assumptions regarding expected volatility of the underlying shares, the risk-free rate over the expected life of the stock options and the length of time in years that the granted options are expected to be outstanding. Expected volatility is based on a weighted average of the Company’s historic volatility and an implied volatility for a group of industry-relevant healthcare companies as of the measurement date. Risk-free rate is determined based upon U.S. Treasury rates over the estimated expected option of lives. Expected dividend yield is zero as we do not anticipate declaring a dividend during the expected term of the options. Expected option life is calculated using the simplified method (the midpoint between the end of the vesting period and the end of the maximum term). Forfeitures are accounted for when they occur. The Company also grants restricted stock units (“RSU” or “RSUs”) to key employees, which are accounted for as equity awards. Certain RSU grants have performance-based conditions, which require the satisfaction of certain revenue and/or adjusted EBITDA targets prior to vesting. The grant date fair value of a RSU is determined by the closing market price of the Company’s common stock as of the date of grant. The Company expenses the grant date fair values of RSUs on a straight-line basis over their respective vesting periods, which range from immediate vesting to three years from grant date. The Company grants restricted stock awards (“RSA” or “RSAs”) to non-employee directors, which are accounted for as equity awards. RSAs generally fully vest on the first anniversary of the grant date. The grant date fair value of a RSA is determined by the closing market price of the Company’s common stock as of the date of grant. The Company expenses the grant date fair values of RSAs on a straight-line basis over their respective vesting periods. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax assets are evaluated quarterly to determine if valuation allowances are required or should be adjusted. The Company establishes valuation allowances for deferred tax assets based on a more likely than not standard. The ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. The assessment regarding whether a valuation allowance is required or should be adjusted also considers all available positive and negative evidence factors. It is difficult to conclude a valuation allowance is not required when there is significant objective and verifiable negative evidence, such as cumulative losses in recent years. We utilize a rolling three years of actual and current year results as the primary measure of cumulative losses in recent years. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. The Company records uncertain tax positions on the basis of a two-step process whereby it is determined whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position, and for those tax positions that meet the more likely than not criteria, the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority is recognized. The Company records interest and penalties on uncertain tax positions in Income tax benefit (expense).

BUSINESS ACQUISITIONS

BUSINESS ACQUISITIONS	12 Months Ended
	Dec. 31, 2018
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS	4. BUSINESS ACQUISITIONS The Company accounts for its business acquisitions using the acquisition method as required by FASB ASC Topic 805 , Business Combinations . The Company ascribes significant value to the synergies and other benefits that do not meet the recognition criteria of acquired identifiable intangible assets. Accordingly, the value of these components is included within goodwill. The Company’s business acquisitions described below, except for a portion of LDI (defined below), were treated as asset purchases for income tax purposes and the related goodwill resulting from these business acquisitions is deductible for income tax purposes. The results of operations for acquired businesses are included in the Company’s consolidated financial statements from their respective acquisition dates. For the entities acquired by the Company during 2017 and 2016, their net sales following their acquisition dates and solely in the year acquired represented approximately 2 percent and 6 percent, respectively, of the Company’s consolidated net sales.The assets acquired and liabilities assumed in the business combinations described below, including identifiable intangible assets, were based on their estimated fair values as of the acquisition date. The excess of purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill. The allocation of the purchase price required management to make significant estimates in determining the fair values of assets acquired and liabilities assumed, especially with respect to identifiable intangible assets. These estimated fair values were based on information obtained from management of the acquired companies and historical experience and, with respect to the long-lived tangible and intangible assets, were made with the assistance of an independent valuation firm. These estimates included, but were not limited to, the cash flows that an asset is expected to generate in the future, and the cost savings expected to be derived from acquiring an asset, discounted at rates commensurate with the risks and uncertainties involved. For acquisitions that involved contingent consideration, the Company recorded a liability equal to the fair value of the contingent consideration obligation as of the acquisition date. The estimate of fair value of a contingent consideration obligation required subjective assumptions regarding future business results, discount rates and probabilities assigned to various potential business result scenarios. These estimates are preliminary and subject to change up to one year following each acquired entity’s respective acquisition date. The measurement period related to the acquisitions discussed below has been closed. LDI Holding Company LLC On December 20, 2017, the Company acquired LDI Holding Company LLC, doing business as LDI Integrated Pharmacy Services ("LDI"). LDI is a full-service PBM based in St. Louis, Missouri. LDI's service offerings include URAC-accredited mail-order and specialty pharmacies, a national network of retail pharmacies and comprehensive clinical programs. The following table summarizes the consideration transferred to acquire LDI: Cash $ 520,157 4,113,188 restricted common shares 79,088 $ 599,245 The above share consideration at closing is based on 4,113,188 shares, in accordance with the purchase agreement, multiplied by the per share closing market price of the Company's common stock as of December 19, 2017 ($20.24) and multiplied by 95 percent to account for the restricted nature of the shares. Approximately $7,500 of the purchase consideration was deposited into an escrow account to satisfy any indemnification claims that may be made by the Company. Approximately $6,357 and $1,143 was released from escrow to the sellers and the Company, respectively, during 2018. The Company incurred acquisition-related costs of $794 and $948 which were charged to SG&A during the years ended December 31, 2018 and 2017, respectively. The following table summarizes the fair values of identifiable assets acquired and liabilities assumed at the acquisition date: Cash $ 780 Receivables 40,852 Inventories 2,857 Prepaid expenses and other current assets 750 Property and equipment 1,930 Capitalized software for internal use 1,325 Definite-lived intangible assets 201,523 Other noncurrent assets 148 Accounts payable (16,409) Rebates payable (23,121) Accrued expenses — compensation and benefits (2,329) Accrued expenses — other (1,948) Deferred income taxes (31,434) Total identifiable net assets 174,924 Goodwill 424,321 $ 599,245 Definite-lived intangible assets that were acquired and their respective useful lives are as follows: Useful Life Amount Customer relationships 10 years $ 184,973 Trade names and trademarks 4 years 16,550 $ 201,523 Pharmaceutical Technologies, Inc. On November 27, 2017, the Company acquired Pharmaceuticals Technologies, Inc., doing business as National Pharmaceutical Services (“NPS”). NPS is a full-service PBM based in Omaha, Nebraska. The following table summarizes the consideration transferred to acquire NPS: Cash $ 36,534 835,017 restricted common shares 12,753 $ 49,287 The above share consideration at closing is based on 835,017 shares, in accordance with the purchase agreement, multiplied by the per share closing market price of the Company’s common stock as of November 24, 2017 ($16.97) and multiplied by 90 percent to account for the restricted nature of the shares. Approximately $9,005 of the purchase consideration was deposited into an escrow account to be held for 18 to 36 months after the closing date to satisfy any indemnification claims that may be made by the Company. The Company incurred acquisition-related costs of $555 and $804 which were charged to SG&A during the years ended December 31, 2018 and 2017, respectively. The following table summarizes the fair values of identifiable assets acquired and liabilities assumed at the acquisition date: Cash $ 9,851 Accounts receivable 20,622 Inventories 200 Prepaid expenses and other current assets 650 Property and equipment 13,544 Capitalized software for internal use 1,800 Definite-lived intangible assets 6,720 Accounts payable (14,968) Rebates payable (7,882) Accrued expenses — compensation and benefits (160) Accrued expenses — other (4,891) Total identifiable net assets 25,486 Goodwill 23,801 $ 49,287 Definite-lived intangible assets that were acquired and their respective useful lives are as follows: Useful Life Amount Customer relationships 10 years $ 5,900 Trade names and trademarks 2 years 820 $ 6,720 Focus Rx Pharmacy Services Inc. and Focus Rx Inc. On September 1, 2017, the Company acquired Focus Rx Pharmacy Services Inc. and Focus Rx Inc. (collectively, “Focus”), a specialty pharmacy focusing on infusion services located in Ronkonkoma, New York. The following table summarizes the consideration transferred to acquire Focus: Cash $ 17,252 374,297 restricted common shares 5,643 Contingent consideration at fair value 2,080 $ 24,975 The above share consideration at closing is based on 374,297 shares, in accordance with the purchase agreement, multiplied by the per share closing market price of the Company’s common stock as of August 31, 2017 ($16.75) and multiplied by 90 percent to account for the restricted nature of the shares. The purchase price includes a contingent consideration arrangement that requires the Company to pay the former owners additional cash payouts of up to $1,500 per performance period based upon the achievement of certain gross profit targets in each of the 12-month periods ending September 30, 2018 and 2019. The maximum additional cash payout is $3,000. The fair value of this liability as of December 31, 2018 and 2017 was $1,420 and $2,600, respectively. Based upon Focus' actual results for the 12-month period ended September 30, 2018, the Company paid $1,500 in cash to Focus' former owners in November 2018. Approximately $1,200 of the purchase consideration was deposited into an escrow account to be held for 12 months after the closing date to satisfy any of the Company’s indemnification claims. The full amount was released to the sellers from escrow in October 2018. The Company incurred acquisition-related costs of $329 which were charged to SG&A during the year ended December 31, 2017. The following table summarizes the fair values of identifiable assets acquired and liabilities assumed at the acquisition date: Cash $ 1,809 Accounts receivable 5,123 Inventories 261 Definite-lived intangible assets 7,100 Other noncurrent assets 22 Accounts payable (5,122) Accrued expenses — compensation and benefits (156) Total identifiable net assets 9,037 Goodwill 15,938 $ 24,975 Definite-lived intangible assets that were acquired and their respective useful lives are as follows: Useful Life Amount Patient relationships 7 years $ 3,700 Non-compete employment agreements 3 years 2,200 Trade names and trademarks 3 years 1,200 $ 7,100 Accurate Rx Pharmacy Consulting, LLC On July 5, 2017, the Company acquired Accurate Rx Pharmacy Consulting, LLC (“Accurate”), a specialty pharmacy focusing on infusion services located in Columbia, Missouri. The following table summarizes the consideration transferred to acquire Accurate: Cash $ 9,408 131,108 restricted common shares 1,776 Contingent consideration at fair value 1,980 $ 13,164 The above share consideration at closing is based on 131,108 shares, in accordance with the purchase agreement, multiplied by the per share closing market price of the Company’s common stock as of July 3, 2017 ($15.05) and multiplied by 90 percent to account for the restricted nature of the shares. The purchase price includes a contingent consideration arrangement that requires the Company to pay the former owners additional cash payouts of up to $3,600 per performance period based upon the achievement of certain gross profit targets in each of the 12-month periods ending July 31, 2018 and 2019. The maximum additional cash payout is $7,200. The fair value of this liability as of December 31, 2018 and 2017 was $1,715 and $1,600, respectively. Based upon Accurate's actual results for the 12-month period ended July 31, 2018, the Company paid $1,800 in cash to Accurate's former owners in November 2018. Approximately $1,000 of the purchase consideration was deposited into an escrow account to be held for 15 months after the closing date to satisfy any of the Company’s indemnification claims. The full amount was released to the sellers from escrow in October 2018. The Company incurred acquisition-related costs of $218 which were charged to SG&A during the year ended December 31, 2017. The following table summarizes the fair values of identifiable assets acquired and liabilities assumed at the acquisition date: Cash $ 1,295 Accounts receivable 2,196 Inventory 936 Prepaid expenses and other current assets 34 Definite-lived intangible assets 3,420 Other noncurrent assets 3 Accounts payable (3,303) Accrued expenses — compensation and benefits (152) Accrued expenses — other (6) Total identifiable net assets 4,423 Goodwill 8,741 $ 13,164 Definite-lived intangible assets that were acquired and their respective useful lives are as follows: Useful Life Amount Patient relationships 7 years $ 2,100 Non-compete employment agreements 5 years 670 Trade names and trademarks 4 years 650 $ 3,420 WRB Communications, LLC On May 8, 2017, the Company acquired WRB Communications, LLC (“WRB”), a communications and contact center company based in Chantilly, Virginia that specializes in relationship management programs for leading pharmaceutical manufacturers and service organizations. The following table summarizes the consideration transferred to acquire WRB: Cash $ 26,804 299,325 restricted common shares 4,291 Contingent consideration at fair value 530 $ 31,625 The above share consideration at closing is based on 299,325 shares, in accordance with the purchase agreement, multiplied by the per share closing market price of the Company’s common stock as of May 5, 2017 ($15.93) and multiplied by 90 percent to account for the restricted nature of the shares. The purchase price includes a contingent consideration arrangement that requires the Company to pay the former owners additional cash payouts of up to $500 per performance period based upon the achievement of certain earnings before interest, taxes, depreciation and amortization targets in each of the 12-month periods ending May 31, 2018 and 2019. During the fourth quarter of 2017, the Company guaranteed a full payout to allow for the acceleration of certain integration activities. The formers owners received $1,000 in cash in January 2018. Approximately $1,950 of the purchase consideration was deposited into an escrow account to be held for 18 months after the closing date to satisfy any of the Company’s indemnification claims. The full amount was released to the sellers from escrow in November 2018. The Company incurred acquisition-related costs of $259 which were charged to SG&A during the year ended December 31, 2017. The following table summarizes the fair values of identifiable assets acquired and liabilities assumed at the acquisition date: Cash $ 1,018 Accounts receivable 2,593 Prepaid expenses and other current assets 179 Property and equipment 498 Definite-lived intangible assets 7,730 Other noncurrent assets 24 Accounts payable (100) Accrued expenses — other (498) Total identifiable net assets 11,444 Goodwill 20,181 $ 31,625 Definite-lived intangible assets that were acquired and their respective useful lives are as follows: Useful Life Amount Customer relationships 7 years $ 5,200 Non-compete employment agreements 4 years 1,530 Trade names and trademarks 2 years 1,000 $ 7,730 Comfort Infusion, Inc. On March 22, 2017, the Company acquired Comfort Infusion, Inc. (“Comfort”), a specialty pharmacy and infusion services company based in Birmingham, Alabama that specializes in intravenous immune globulin therapy to support patients’ immune systems. The following table summarizes the consideration transferred to acquire Comfort: Cash $ 10,613 Contingent consideration at fair value 3,800 $ 14,413 The purchase price includes a contingent consideration arrangement that requires the Company to pay the former owners additional cash payouts of up to $2,000 per performance period based upon the achievement of certain gross profit targets in each of the 12-month periods ending March 31, 2018, 2019 and 2020. The maximum payout of contingent consideration is $6,000. The fair value of this liability as of December 31, 2018 and 2017 was $3,760 and $4,300, respectively. Based upon Comfort's actual results for the 12-month period ended March 31, 2018, the Company paid $2,000 in cash to Comfort's former owners in July 2018. Approximately $1,050 of the purchase consideration was deposited into an escrow account to be held for 18 months after the closing date to satisfy any of the Company’s indemnification claims. The full amount was released to the sellers from escrow in September 2018. The Company incurred acquisition-related costs of $204 which were charged to SG&A during the year ended December 31, 2017. The following table summarizes the fair values of identifiable assets acquired and liabilities assumed at the acquisition date: Cash $ 104 Accounts receivable 575 Inventories 118 Prepaid expenses and other current assets 15 Definite-lived intangible assets 2,400 Other noncurrent assets 5 Accounts payable (372) Accrued expenses - other (101) Total identifiable net assets 2,744 Goodwill 11,669 $ 14,413 Definite-lived intangible assets that were acquired and their respective useful lives are as follows: Useful Life Amount Physician relationships 7 years $ 1,200 Non-compete employment agreements 5 years 1,200 $ 2,400 Affinity Biotech, Inc. On February 1, 2017, the Company acquired Affinity Biotech, Inc. (“Affinity”), a specialty pharmacy and infusion services company based in Houston, Texas that provides treatments and nursing services for patients with hemophilia. The following table summarizes the consideration transferred to acquire Affinity: Cash $ 17,228 Contingent consideration at fair value 35 $ 17,263 The purchase price includes a contingent consideration arrangement that requires the Company to pay the former owners an additional cash payout based upon the achievement of a certain earnings before interest, taxes, depreciation and amortization target in the 12-month period ending February 28, 2018. The maximum payout of contingent consideration was $4,000. The fair value of this liability as of December 31, 2017 was $2,600. Based upon Affinity’s actual results for the 12-month period ended February 28, 2018, the Company paid $2,269 in cash to Affinity’s former owners in June 2018. Approximately $2,000 of the purchase consideration was deposited into an escrow account to be held for 18 months after the closing date to satisfy any of the Company’s indemnification claims. Approximately $1,851 and $149 was released from escrow to the sellers and the Company, respectively, in August 2018. The Company incurred acquisition-related costs of $204 which were charged to SG&A during the year ended December 31, 2017. The following table summarizes the fair values of identifiable assets acquired and liabilities assumed at the acquisition date: Cash $ 1,043 Accounts receivable 3,433 Inventories 79 Prepaid expenses and other current assets 74 Definite-lived intangible assets 5,100 Other noncurrent assets 5 Accounts payable (1,075) Accrued expenses - compensation and benefits (144) Accrued expenses - other (25) Total identifiable net assets 8,490 Goodwill 8,773 $ 17,263 Definite-lived intangible assets that were acquired and their respective useful lives are as follows: Useful Life Amount Patient relationships 7 years $ 4,000 Non-compete employment agreements 5 years 1,100 $ 5,100 Valley Campus Pharmacy, Inc. On June 1, 2016, the Company acquired Valley Campus Pharmacy, Inc., doing business as TNH Advanced Specialty Pharmacy (“TNH”). TNH, a specialty pharmacy based in Van Nuys, California, provides medication management programs for individuals with complex chronic diseases, including oncology, hepatitis and immunology. The following table summarizes the consideration transferred to acquire TNH: Cash $ 70,117 324,244 restricted common shares 9,507 $ 79,624 The above share consideration at closing is based on 324,244 shares, in accordance with the purchase agreement, multiplied by the per share closing market price of the Company's common stock as of May 31, 2016 ($32.58) and multiplied by 90 percent to account for the restricted nature of the shares. Approximately $3,800 of the purchase consideration was deposited into an escrow account to be held for 12 months after the closing date to satisfy any indemnification claims that may be made by the Company. Approximately $3,650 and $150 was released from escrow to the sellers and the Company, respectively, during the first half of 2018. The Company incurred acquisition-related costs of $410 which were charged to SG&A during the year ended December 31, 2016. The following table summarizes the fair values of identifiable assets acquired and liabilities assumed at the acquisition date: Cash $ 2,114 Accounts receivable 16,271 Inventories 4,740 Prepaid expenses and other current assets 46 Property and equipment 200 Capitalized software for internal use 14,000 Definite-lived intangible assets 13,890 Other noncurrent assets 21 Accounts payable (29,773) Accrued expenses - compensation and benefits (400) Accrued expenses - other (1,962) Total identifiable net assets 19,147 Goodwill 60,477 $ 79,624 Definite-lived intangible assets that were acquired and their respective useful lives are as follows: Useful Life Amount Physician relationships 10 years $ 7,700 Non-compete employment agreements 5 years 4,490 Trade names and trademarks 1 year 1,700 $ 13,890 Unaudited Pro Forma Operating Results The following unaudited pro forma summary presents consolidated financial information as if the Accurate, Affinity, Comfort, Focus, LDI, NPS and WRB acquisitions had occurred on January 1, 2016. The unaudited pro forma results reflect certain adjustments related to the acquisitions, such as amortization expense resulting from intangible assets acquired and adjustments to reflect the Company’s borrowings and the related income tax effect of such adjustments. Accordingly, such pro forma operating results were prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the acquisitions been made as of the as if date or of results that may occur in the future. Year Ended December 31, 2017 Net sales $ 4,954,494 Net income attributable to Diplomat Pharmacy, Inc. $ 6,733 Income per common share — basic and diluted $ 0.09

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	12 Months Ended
	Dec. 31, 2018
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	5. FAIR VALUE MEASUREMENTS The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy was established, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. An asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques: A. Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. B. Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost). C. Income approach: Techniques to convert future amounts to a single present amount based upon market expectations (including present value techniques, option-pricing and excess earnings models). The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured and disclosed at fair value on a recurring basis: Asset / Valuation (Liability) Level 2 Level 3 Technique December 31, 2018: Contingent consideration $ (6,895) $ — $ (6,895) C Interest rate swaps (Note 11) (4,292) (4,292) — A December 31, 2017: Contingent consideration $ (12,100) $ — $ (12,100) C The following table sets forth the change in contingent consideration (Level 3 measurements): Contingent Consideration Balance at January 1, 2016 $ (52,665) Change in fair value 8,922 Payments 43,743 Balance at December 31, 2016 — Affinity acquisition (35) Comfort acquisition (3,800) WRB acquisition (530) Accurate acquisition (1,980) Focus acquisition (2,080) Changes in fair values (3,675) Balance at December 31, 2017 (12,100) Change in fair value (3,364) Payments 8,569 Balance at December 31, 2018 $ (6,895) The carrying amount of debt approximates fair value due to variable interest rates at customary terms and rates the Company could obtain in current financing.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	12 Months Ended
	Dec. 31, 2018
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT	6. PROPERTY AND EQUIPMENT Property and equipment consisted of the following: December 31, Useful Life 2018 2017 Land — $ 3,532 $ 5,232 Buildings 40 years 12,945 18,818 Leasehold improvements 5 - 15 years* 6,410 5,247 Equipment and fixtures 5 - 10 years 18,769 14,116 Computer equipment 3 - 5 years 11,999 8,527 Construction in progress 2,274 2,425 55,929 54,365 Accumulated depreciation and amortization (21,404) (15,375) $ 34,525 $ 38,990 * Unless applicable lease term is shorter. In November 2018, the Company entered into a sale-leaseback agreement with an unrelated party involving land and building. Under this arrangement, the property with a net book value of $7,660 was sold for $14,300 in cash and leased back under a 12-year operating lease agreement. The gain on the sale of $5,725 was deferred and is recognized in proportion to the related gross rental charged to expense over the lease term. The lease provides for initial monthly base rental payments of $78 and thereafter increasing 2% per year. The lease expires in 2030, with options to extend the term of the lease for three additional five-year terms at the market rental rate at the time of renewal. Depreciation expense for the years ended December 31, 2018, 2017 and 2016 was $6,228, $4,941 and $3,075, respectively.

CAPITALIZED SOFTWARE FOR INTERN

CAPITALIZED SOFTWARE FOR INTERNAL USE	12 Months Ended
	Dec. 31, 2018
CAPITALIZED SOFTWARE FOR INTERNAL USE
CAPITALIZED SOFTWARE FOR INTERNAL USE	7. CAPITALIZED SOFTWARE FOR INTERNAL USE Capitalized software, consisting of software acquired and developed internally, was comprised as follows: December 31, Useful Life 2018 2017 Capitalized software for internal use 3-7 years $ 88,356 $ 82,017 Construction in progress 10,510 502 98,866 82,519 Accumulated amortization (68,360) (45,999) $ 30,506 $ 36,520 Construction in progress at December 31, 2018 primarily represents costs associated with the implementation of a new end-to-end specialty pharmacy software platform which is expected to be fully placed in service by the end of the second quarter of 2019. Amortization expense for the years ended December 31, 2018, 2017 and 2016 was $22,361, $19,781 and $13,102, respectively.

GOODWILL AND DEFINITE-LIVED INT

GOODWILL AND DEFINITE-LIVED INTANGIBLE ASSETS	12 Months Ended
	Dec. 31, 2018
GOODWILL AND DEFINITE-LIVED INTANGIBLE ASSETS
GOODWILL AND DEFINITE-LIVED INTANGIBLE ASSETS	8. GOODWILL AND DEFINITE-LIVED INTANGIBLE ASSETS The following table sets forth the changes in goodwill by segment: Specialty PBM Total Balance at January 1, 2016 $ 256,318 $ — $ 256,318 Acquisitions: TNH 59,275 — 59,275 Miscellaneous 1,023 — 1,023 Balance at December 31, 2016 316,616 — 316,616 Acquisitions: Affinity 8,772 — 8,772 Comfort 11,669 — 11,669 WRB 20,181 — 20,181 TNH 1,351 — 1,351 Accurate 8,741 — 8,741 Focus 15,237 — 15,237 NPS — 20,735 20,735 LDI — 426,005 426,005 Miscellaneous 3,317 — 3,317 Balance at December 31, 2017 385,884 446,740 832,624 Other measurement period adjustments 552 1,382 1,934 Impairments (45,776) (179,190) (224,966) Balance at December 31, 2018 $ 340,660 $ 268,932 $ 609,592 The goodwill for the Specialty and PBM segments is net of accumulated impairment losses of $45,776 and $179,190, respectively, at December 31, 2018. Goodwill is not subject to amortization and is reviewed at least annually in the fourth quarter of each year using data as of December 31 of that year, or earlier if an event occurs or circumstances change and there is an indication of impairment. The Company tests goodwill at the reporting unit level. The impairment test consists of comparing a reporting unit’s fair value to its carrying value. Based on the results of the 2018 annual impairment test, the fair value of the DSP and PBM reporting units were less than their respective carrying value. The estimated fair value for each of the reporting units was determined using the income approach. With the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. We use our internal forecasts to estimate future cash flows and include an estimate of long-term future growth rates based on our most recent views of the long-term outlook for each business. Such projections contain Management’s best estimates of economic and market conditions over the projected period, including growth rates in revenue and costs and best estimates of future expected changes in operating margins and cash expenditures. Our projection of estimated operating results and cash flows are discounted using a weighted average cost of capital that reflects current market conditions appropriate to each reporting unit. The discount rate is sensitive to changes in interest rates and other market rates in place at the time the assessment is performed. The discount rates used in the annual reporting unit valuations were 10.5% for the DSP reporting unit and 12.25% for the PBM reporting unit. For the DSP reporting unit, the Company began experiencing a decline in the volume of pharmacy prescriptions, pressure on reimbursement rates from certain payors and a less favorable medication drug mix within certain payer specialty contracts which reduced profitability. As such, these conditions resulted in downward revisions of the forecasts on current and future projected earnings and cash flows of the Specialty business. In 2018, the Company recorded a non-cash impairment of $45,776, which is not deductible for income tax purposes. The impairment loss is recorded in the caption “Goodwill impairments” in the consolidated statement of operations. After the impairment charge, the adjusted carrying value of the Specialty segment goodwill was $340,660 at December 31, 2018, of which $68,218 was allocated to the DSP reporting unit. The goodwill in the PBM segment was recorded as a result of two separately acquired entities (i) Pharmaceutical Technologies, Inc. d/b/a National Pharmaceutical Services, acquired in November 27, 2017, and (ii) LDI Holding Company, LLC, acquired December 20, 2017. The PBM segment began to experience a substantial loss of customer contracts primarily as a result of service issues experienced while transitioning to a new claims processing platform, third-party acquisitions of such clients, contract non-renewals, reduced contracted rates, and terminations prior to expiration as well as other factors. Also, it has been taking longer than initially expected to replace these customers and client retention has also suffered as legacy customers can easily cancel, without penalty, and not renew their contracts with us. These conditions resulted in downward revisions of the forecasts on current and future projected earnings and cash flows of the PBM business. In 2018, the Company recorded a non-cash impairment loss of $179,190, which is not deductible for income tax purposes. The impairment loss is recorded in the caption “Goodwill impairments” in the consolidated statement of operations. After the impairment charge, the adjusted carrying value of the PBM segment goodwill was $268,932 at December 31, 2018. Also, the Company assessed whether the carrying amounts of the reporting units long-lived assets may not be recoverable and therefore may be impaired. To assess the recoverability at the PBM reporting unit asset group level, the undiscounted cash flows of the PBM business were analyzed over a range of potential remaining useful lives with the PBM customer relationships as the primary asset. As a result, the Company determined that certain trade names and trademarks, and certain customer relationships in its PBM reporting unit were not recoverable and were impaired. The Company recorded an impairment loss related to these intangible assets. It was determined, using the same methodology, that the long-lived assets of the DSP reporting unit were not impaired. Refer to the additional discussion below. Definite-lived intangible assets consisted of the following: December 31, 2018 Weighted Average Gross Accumulated Net Amortization Carrying Amortization/ Carrying Period Amount Impairments Amount Customer relationships 9.8 $ 100,200 $ (1,238) $ 98,962 Patient relationships 5.9 170,100 (67,964) 102,136 Trade names and trademarks 1.8 30,650 (20,270) 10,380 Non-compete employment agreements 1.6 61,389 (44,100) 17,289 Physician relationships 4.8 21,700 (9,657) 12,043 $ 384,039 $ (143,229) $ 240,810 December 31, 2017 Weighted Average Gross Net Amortization Carrying Accumulated Carrying Period Amount Amortization Amount Customer relationships 9.9 $ 196,073 $ (1,141) $ 194,932 Patient relationships 6.8 170,100 (49,643) 120,457 Trade names and trademarks 3.7 44,020 (13,624) 30,396 Non-compete employment agreements 3.1 61,389 (30,560) 30,829 Physician relationships 5.7 21,700 (6,303) 15,397 $ 493,282 $ (101,271) $ 392,011 As disclosed above, certain intangible assets, consisting of certain trade names and trademarks, and customer relationships, were impaired. The Company performed a valuation to determine the fair value of these intangible assets and as a result recorded a non-cash impairment charge of $82,678 which is recorded in the caption “Impairments of definite-lived intangible assets” in the consolidated statement of operations. In conjunction with the valuation performed, Management also reviewed the useful lives of the trade name and trademarks, and customer relationships. As a result of the review, no significant changes were necessary to the remaining estimated useful lives. At December 31, 2018, the residual balance of the trade names and trademarks of $4,000 and customer relationships of $95,000 will be amortized over their remaining estimated useful lives. Amortization expense for the years ended December 31, 2018, 2017 and 2016 was $68,523, $41,844 and $33,868, respectively. Estimated future amortization expense is as follows: 2019 $ 53,944 2020 41,612 2021 33,781 2022 27,738 2023 25,911 Thereafter 57,824 $ 240,810 On August 28, 2014, the Company and two unrelated third-party entities entered into a contribution agreement to form a new company, Primrose Healthcare, LLC (“Primrose”). Primrose functioned as a management company, managing a network of physicians and medical professionals providing continuum care for patients infected with the hepatitis C virus. The Company contributed $5,000 for its 51 percent ownership interest, of which $2,000 and $3,000 were contributed during the years ended December 31, 2015 and 2014, respectively. The unrelated third-party entities contributed a software licensing agreement valued at $2,647 and intellectual property valued at $2,157. During the third quarter of 2016, primarily due to updated projections of continuing losses into the foreseeable future, the Company fully impaired Primrose’s intangible assets and recorded an impairment charge of $4,804. Primrose was dissolved during the fourth quarter of 2017.

INVESTMENT IN NON-CONSOLIDATED

INVESTMENT IN NON-CONSOLIDATED ENTITIES	12 Months Ended
	Dec. 31, 2018
INVESTMENT IN NON-CONSOLIDATED ENTITIES
INVESTMENT IN NON-CONSOLIDATED ENTITIES	9. INVESTMENTS IN NON-CONSOLIDATED ENTITIES Ageology From October 2011 through January 2017, the Company maintained a 25 percent minority interest in Worksmart MD, LLC, also known as Ageology, although it fully impaired its investment during the fourth quarter of 2014. In transactions unrelated to the Company, SkyPoint Ventures LLC (“SkyPoint”), an affiliated entity of the Company’s former chief executive officer, provided funding through loans to Ageology through January 2017. In February 2017, SkyPoint elected to convert its outstanding loans into equity in Ageology, which equated to an approximate ownership of 43 percent. Concurrently, the Company converted its $2,500 in outstanding loans (which the Company had written off during the fourth quarter of 2014) into equity in Ageology, which resulted in the Company having an approximate 22 percent minority interest. Subsequent to the February 2017, SkyPoint continued to provide funding through loans during the remainder of the year ended December 31, 2017 and into 2018. The outstanding loans plus accrued interest were then converted into equity in November 2018, which further diluted the Company’s ownership interest to approximately 4.7 percent. Because the Company does not direct the activities that most significantly impact the economic performance of Ageology, management has determined that the Company is not nor ever has been Ageology’s primary beneficiary. Physician Resource Management, Inc. In December 2014, the Company invested $3,500 in Physician Resource Management, Inc. (“PRM”) in exchange for a 15 percent equity position. In October 2015, the Company invested an additional $1,459, which increased its equity position in PRM to 19.9 percent. The Company accounted for this investment under the cost method, as the Company does not have significant influence over its operations. In transactions unrelated to the Company, the Company's former chief executive officer personally invested $250 in PRM through December 31, 2016. During January 2017, PRM completed the planned sale of its primary asset. The Company recorded impairment charges of $286 and $4,659, which are reflected within “Equity loss and impairment of non-consolidated entities,” for the years ended December 31, 2018 and 2016, respectively, to write-down its cost method investment in PRM to net realizable value. PRM was subsequently dissolved in December 2018.

DEBT

DEBT	12 Months Ended
	Dec. 31, 2018
DEBT
DEBT	10. DEBT Total outstanding debt consisted of the following: December 31, 2018 2017 Short-term debt, borrowings on line of credit $ 176,300 $ 188,250 Long-term debt: Term loan A $ 142,500 $ 150,000 Term loan B 322,000 400,000 Total 464,500 550,000 Unamortized debt issuance costs (14,631) (17,402) Total long-term debt 449,869 532,598 Less: current portion 11,500 11,500 Long-term debt, less current portion $ 438,369 $ 521,098 On December 20, 2017, in conjunction with the LDI acquisition, the Company entered into a credit agreement with by JPMorgan Chase Bank, N.A., and Capital One, National Association (“Capital One”), that provides for a $250,000 revolving line of credit and a $150,000 Term Loan A and a $400,000 Term Loan B (“credit facility”). The credit agreement also provides for issuances of letters of credit of up to $10 million and swingline loans up to $20 million. The revolving line of credit and Term Loan A mature on December 20, 2022 and Term Loan B matures on December 20, 2024. The proceeds from the credit facility were used to finance the LDI acquisition, pay related transaction fees and expenses, and repay the Company’s former credit facility (as defined below), as well as provide sufficient liquidity for the Company's future needs. The Company incurred debt issuance costs of $21,507 associated with the credit facility, of which all but $744 were capitalized. These debt issuance costs, along with $2,079 in previously incurred unamortized debt issuance costs, are amortized over the contractual term of the credit facility into interest expense using the effective interest method. The Company also expensed $636 in previously incurred unamortized debt issuance costs to interest expense upon entering into the credit facility in 2017. Interest on the revolving line of credit and Term Loan A is accrued at a rate equal to the monthly LIBOR plus an applicable margin or a base rate that is the highest of the U.S. prime rate, federal funds rate (plus ½ of 1 percent) and LIBOR (plus 1 percent), at the Company’s option. The applicable margin is adjusted quarterly based on the Company’s leverage ratio. At December 31, 2018, the applicable margin was 2.25 percent for LIBOR loans and 1.25 percent for base rate loans. Interest on the Term Loan B is accrued similarly to Term Loan A, except the applicable margin is fixed at 4.50 percent for LIBOR loans and 3.50 percent for base rate loans. The Company’s Term Loan A and Term Loan B interest rates were 4.78 percent and 7.03 percent, respectively, at December 31, 2018 and 4.04 percent and 6.04 percent, respectively, at December 31, 2017. The interest rate on the revolving line of credit was 5.19 percent and 4.04 percent at December 31, 2018 and 2017, respectively. The Company is charged a monthly unused commitment fee ranging from 0.3 percent to 0.4 percent on the average unused daily balance on its $250,000 line of credit. The Company had weighted average borrowings on its line of credit of $164,301 and $28,238 and maximum borrowings on its line of credit of $231,200 and $188,250 during the years ended December 31, 2018 and 2017, respectively. The Company had $73,700 and $61,750 available to borrow on its line of credit at December 31, 2018 and 2017, respectively. Line of credit-related unamortized debt issuance costs of $4,246 and $5,316 as of December 31, 2018 and 2017, respectively, are classified within “Other noncurrent assets” in the consolidated balance sheets. The Term Loan A and Term Loan B requires quarterly principal payments of $1,875 and $1,000, plus accrued interest, respectively. During 2018, the Company made a voluntary prepayment of $74,000 on the Term Loan B. The credit facility is collateralized by substantially all of the Company’s assets. The credit facility contains covenants requiring, among other things, to provide financial and other information reporting, and provide notice upon certain events. These covenants also place restrictions on the Company’s ability to incur additional indebtedness, pay dividends or make other distributions, redeem or repurchase capital stock, make investments and loans, and enter into certain transactions, including selling assets, engaging in mergers or acquisitions, or engaging in transactions with affiliates. The Company was in compliance with all such covenants as of December 31, 2018. On April 1, 2015, in conjunction with the BioRx acquisition, the Company entered into a Second Amended and Restated Credit Agreement with Capital One, as agent and as a lender, the other lenders party thereto, and the other credit parties thereto, which provided for an increase in the Company’s line of credit from $120,000 to $175,000, a fully drawn term loan for $120,000 and a delayed draw term loan (“DDTL”) for an additional $25,000 (“former credit facility”). The Company fully drew upon the $25,000 DDTL during 2017. The former credit facility was subsequently paid in full and extinguished using the proceeds of the credit facility. At December 31, 2018, the Company’s scheduled principal payments on its Term Loan A and Term Loan B for the next five years is as follows: 2019 $ 11,500 2020 11,500 2021 11,500 2022 124,000 2023 4,000

INTEREST RATE SWAPS

INTEREST RATE SWAPS	12 Months Ended
	Dec. 31, 2018
INTEREST RATE SWAPS
INTEREST RATE SWAPS	11. INTEREST RATE SWAPS The In 2018, the Company became a party to two pay-fixed and receive-floating interest rate swaps, which are effective on March 29, 2019 and terminate on March 31, 2022. The combined notional amount of the interest rate swaps was $290.6 million at December 31, 2018. At December 31, 2018, the fair value of the interest rate swaps (derivative liability) was $4,292. The Company recognized other comprehensive loss of $4,292 (a valuation allowance was established against the full amount of the net deferred tax benefit of $1,099).

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	12 Months Ended
	Dec. 31, 2018
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION	12. SHARE-BASED COMPENSATION Effective October 2014, the Company established the 2014 Omnibus Incentive Plan (the “2014 Plan”), which permits the granting of stock options, stock appreciation rights, RSAs, RSUs and other stock-based awards. The 2014 Plan initially authorized up to 4,000,000 shares of common stock for awards to be issued to employees, directors or consultants of the Company, and each fiscal year, the number of shares reserved for issuance under the plan automatically increases by an amount equal to 2 percent of the total number of outstanding shares of common stock as of the beginning of such fiscal year . The Company’s 2007 Stock Option Plan, as amended (the “2007 Plan”), authorized the granting of stock options to employees, directors or consultants at no less than the market price on the date the option was granted. Options generally become exercisable in installments of 25 percent per year, beginning on the first anniversary of the grant date and each of the three anniversaries thereafter, and have a maximum term of 10 years. No further awards will be granted under the 2007 Plan. All outstanding awards previously granted under the 2007 Plan, including those granted in 2014, will continue to be governed by their existing terms. Adoption of ASU 2016-09 Effective January 1, 2016, the Company early adopted the accounting guidance contained within ASU 2016-09 , Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) . The Company recorded a $16,903 deferred tax asset and a $16,903 increase to retained earnings on January 1, 2016 to recognize the Company’s excess tax benefits related to share-based awards that existed as of December 31, 2015 (modified retrospective application). Beginning January 1, 2016, the Company recognizes all newly arising excess tax benefits related to share-based awards as a reduction to income taxes in its consolidated statement of operations, which resulted in the Company’s recognition of $80, $3,003 and $4,148 in benefits to income taxes during the years ended December 31, 2018, 2017 and 2016, respectively. Effective January 1, 2016, the Company elected to account for share-based compensation forfeitures when they occur. There was no impact of this election because prior to the adoption the Company did not have adequate historical information to estimate forfeitures. No prior period amounts were adjusted as a result of the adoption of ASU 2016-09. Stock Options A summary of the Company’s stock option activity for the years ended December 31, 2016, 2017 and 2018 is as follows: Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Options Price Life Value (In years) Outstanding at January 1, 2016 4,114,685 $ 17.53 7.7 $ 76,567 Granted 1,546,532 22.64 Exercised (564,844) 7.87 Cancelled/expired (683,032) 27.41 Outstanding at December 31, 2016 4,413,341 19.02 7.0 11,558 Granted 4,066,735 16.43 Exercised (1,217,320) 6.47 Cancelled/expired (1,154,464) 25.25 Outstanding at December 31, 2017 6,108,292 18.62 8.5 25,777 Granted 411,486 21.39 Exercised (379,194) 10.81 Cancelled/expired (954,559) 24.13 Outstanding at December 31, 2018 5,186,025 $ 18.42 8.0 $ 2,910 Exercisable at December 31, 2018 2,011,169 $ 18.35 7.1 $ 2,910 The Company recorded share-based compensation expense associated with stock options of $7,895, $6,628 and $5,073 for the years ended December 31, 2018, 2017 and 2016, respectively. The Company granted service-based awards of 330,135, 2,805,976 and 1,165,000 options to purchase common stock to key employees under its 2014 Plan during the years ended December 31, 2018, 2017 and 2016, respectively. The options granted during 2016 and 2017, as well as 105,000 of the options granted during 2018, become exercisable in installments of 25 percent per year, beginning on the first anniversary of the grant date and each of the three anniversaries thereafter. The remaining 225,135 options granted during 2018 become exercisable in installments of 33.3 percent per year, beginning on the first anniversary of the grant date and each of the two anniversaries thereafter. These options have a maximum term of 10 years. The Company granted a make-whole inducement award of 81,351 options to purchase common stock to an executive during the second quarter of 2018. These options become exercisable in installments of 33.3 percent per year, beginning on the first anniversary of the grant date and each of the two anniversaries thereafter. These options have a maximum term of 10 years. The Company granted service-based awards of 200,000 options to purchase common stock to key employees under its 2014 Plan during the year ended December 31, 2017 that were immediately vested at time of grant. These options have a maximum term of 10 years. The Company granted performance-based awards of 260,759 and 381,532 options to purchase common stock to key employees under the 2014 Plan during the years ended December 31, 2017 and 2016, respectively, that are earned based upon the Company’s performance relative to specified revenue and Adjusted EBITDA targets corresponding to the year in which granted. None of the performance-based awards granted during 2017 and 2016 were earned and, therefore, no share-based compensation expense was recorded for these awards in either 2017 or 2016. The Company granted performance-based awards of 800,000 options to purchase common stock to key employees under its 2014 Plan during the year ended December 31, 2017 that will be earned or forfeited in increments based on the cumulative growth in Adjusted EBITDA of a certain therapeutic category during the years ending December 31, 2017, 2018, 2019 and 2020. The earned options, if any, will be determined annually each March 31 of the subsequent year and vest as of that date. During the first quarter of 2018, it was determined that 225,862 of these options were earned/vested based upon 2017’s actual results. These options have a maximum term of 10 years. At December 31, 2018, the total compensation cost related to non-vested options not yet recognized was $15,677, which will be recognized over a weighted average period of 2.44 years, assuming all employees complete their respective service periods for vesting of the options. The total intrinsic value of options exercised during the years ended December 31, 2018, 2017 and 2016 was $4,560, $11,973 and $13,048, respectively. The weighted average grant date fair value of options granted during the years ended December 31, 2018, 2017 and 2016 was $8.75, $6.23 and $6.34, respectively. The grant-date fair value of each option award was estimated using the Black-Scholes-Merton option-pricing model using the assumptions set forth in the following table: Year Ended December 31, 2018 2017 2016 Exercise price $20.52 - $24.29 $14.36 - $20.87 $14.40 - $36.60 Expected volatility 36.06% - 38.36% 33.44% - 36.38% 23.90% - 24.76% Expected dividend yield 0% 0% 0% Risk-free rate for expected term 2.33% - 2.84% 1.88% - 2.34% 1.23% - 2.06% Expected term (in years) 6.00 - 6.25 5.00 - 6.25 6.25 Estimating grant date fair values for employee stock options requires management to make assumptions regarding expected volatility of value of those underlying shares, the risk-free rate over the expected life of the stock options and the date on which share-based payments will be settled. Expected volatility is based on a weighted average of the Company’s historic volatility and an implied volatility for a group of industry-relevant healthcare companies as of the measurement date. Risk-free rate is determined based upon U.S. Treasury rates over the estimated expected option lives. Expected dividend yield is zero as the Company does not anticipate that any dividends will be declared during the expected term of the options. The expected term of options granted is calculated using the simplified method (the midpoint between the end of the vesting period and the end of the maximum term). Forfeitures are accounted for when they occur. RSUs A summary of the Company’s RSU activity as of and for the years ended December 31, 2017 and 2018 is as follows: Weighted Average Number Grant Date of RSUs Fair Value Nonvested at January 1, 2017 — $ — Granted 90,718 14.65 Cancelled/expired (24,079) 14.65 Nonvested at December 31, 2017 66,639 14.65 Granted 2,059,066 22.00 Vested and issued (183,263) 23.46 Cancelled/expired (73,413) 20.21 Nonvested at December 31, 2018 1,869,029 $ 21.67 The Company granted service-based awards of 1,131,591 and 90,718 RSUs to key employees under its 2014 Plan during the years ended December 31, 2018 and 2017, respectively. The Company also granted a sign-on inducement award of 124,875 RSUs and a make-whole inducement award of 33,716 RSUs to an executive during the second quarter of 2018. The value of a RSU is determined by the market value of the Company’s common stock at the date of grant. This value is recorded as compensation expense on a straight-line basis over the vesting period, which ranges from immediate vesting to three years from the grant date. The Company granted performance-based awards of 139,512 RSUs to certain executives under its 2014 Plan during the first quarter of 2018, which will be earned or forfeited based upon the Company’s performance relative to a specified Adjusted EBITDA goal for the year ending December 31, 2018. The earned RSUs, if any, will vest in three equal installments, with the first installment vesting upon the earlier of the date that the Company files its 2018 Annual Report on Form 10-K or Audit Committee confirmation of the satisfaction of the applicable performance goals, with the remaining installments vesting annually thereafter. The Company is accounting for these performance-based RSUs under the current presumption that 37.5 percent will be earned and 62.5 percent will be forfeited. The Company granted performance-based awards of 629,372 RSUs as a make-whole inducement award to an executive during the second quarter of 2018, which will be earned or forfeited based upon the Company’s performance relative to specified Adjusted EBITDA and revenue goals for the year ending December 31, 2018. The earned RSUs, if any, will vest in three equal installments, with the first installment vesting upon the earlier of the date that the Company files its 2018 Annual Report on Form 10-K or Audit Committee confirmation of the satisfaction of the applicable performance goals, with the remaining installments vesting annually thereafter. The Company is accounting for these performance-based RSUs under the current presumption that they will be forfeited. The Company granted an additional performance-based award of 1,498,500 RSUs as a sign-on inducement award to an executive during the second quarter of 2018, which will be earned or forfeited based upon the Company’s performance relative to specified cumulative Adjusted EBITDA and revenue goals for the years ending December 31, 2018 and 2019. The earned RSUs, if any, will vest in three equal installments, with the first installment vesting upon the earlier of the date that the Company files its 2019 Annual Report on Form 10-K or Audit Committee confirmation of the satisfaction of the applicable performance goals, with the remaining installments vesting annually thereafter. The vesting of a portion of this award may be accelerated at the discretion of the Board of Directors of the Company or its Compensation Committee following completion of the Company’s 2018 external audit. Further, because of the awards subjectivity, a grant date for accounting purposes, at which date the fair value of the award is determined, was not established as of December 31, 2018, as the performance goals were not considered determinable. The Company recorded share-based compensation expense associated with RSUs of $9,634 and $203 for the years ended December 31, 2018 and 2017, respectively. At December 31, 2018, the total compensation cost related to non-vested RSUs not yet recognized was $17,791, which will be recognized over the next 2.2 years, assuming all employees complete their respective service periods for vesting of the RSUs. RSAs A summary of the Company’s RSA activity for the years ended December 31, 2016, 2017 and 2018 is as follows: Number Weighted of Shares Average Subject to Grant Date Restriction Fair Value Nonvested at January 1, 2016 10,805 $ 26.60 Granted 5,765 32.97 Vested (10,805) 26.60 Nonvested at December 31, 2016 5,765 32.97 Granted 36,814 17.13 Vested (8,288) 26.80 Nonvested at December 31, 2017 34,291 17.45 Granted 40,796 21.30 Vested (31,732) 17.68 Nonvested at December 31, 2018 43,355 $ 20.91 Under the 2014 Plan, the Company issued RSAs to non-employee directors. The value of a RSA is determined by the market value of the Company’s common stock at the date of grant. The value of a RSA is recorded as share-based compensation expense on a straight-line basis over the vesting period, which is typically one year. The Company recorded share-based compensation expense associated with RSAs of $643, $450 and $339 for the years ended December 31, 2018, 2017 and 2016, respectively. At December 31, 2018, the total compensation cost related to non-vested RSAs not yet recognized was $485, which will be recognized during 2019, assuming the non-employee directors complete their service period for vesting of the RSAs.

INCOME TAXES

INCOME TAXES	12 Months Ended
	Dec. 31, 2018
INCOME TAXES
INCOME TAXES	13. INCOME TAXES Significant components of the income tax benefit (expense) for the years ended December 31, 2018, 2017 and 2016 are as follows: Year Ended December 31, 2018 2017 2016 Current: Federal $ (4,304) $ (1,748) $ (703) State and local (2,504) (1,921) (1,713) Total current (6,808) (3,669) (2,416) Deferred: Federal 10,461 10,343 (7,989) State and local 1,386 452 (790) Total deferred 11,847 10,795 (8,779) $ 5,039 $ 7,126 $ (11,195) The reconciliation of income taxes computed at the U.S. federal statutory tax rate to income tax benefit (expense) is as follows: Year Ended December 31, 2018 2017 2016 Income tax benefit (expense) at U.S. statutory rate $ 64,535 $ (2,822) $ (12,675) Tax effect from: State income taxes, net of federal benefit 12,547 (418) (1,904) State income taxes, valuation allowance (13,140) — — Share-based compensation 80 3,003 4,148 Valuation allowance (48,677) — — Loss on noncontrolling interest — (113) (1,138) Change in tax laws 1,104 7,828 — Changes in uncertain tax positions (636) — — Disallowed compensation (678) — — Impairment losses (9,674) — — Other (422) (352) Income tax benefit (expense) $ 5,039 $ 7,126 (11,195) Significant components of deferred tax assets and liabilities are as follows: December 31, 2018 2017 Deferred tax assets: Intangible assets $ 50,630 $ — Allowance for doubtful accounts 6,501 5,696 Net operating loss and credit carryforwards 4,064 2,114 Compensation and benefits 7,407 4,611 Other temporary differences 2,164 679 Total deferred tax assets 70,766 13,100 Valuation allowance (62,916) — Total net deferred tax assets 7,850 13,100 Deferred tax liabilities: Property and equipment (9,358) (8,221) Intangibles assets — (18,185) Prepaid expenses and other current assets (1,158) (740) Investments (115) (321) Total deferred tax liabilities (10,631) (27,467) Net deferred tax liabilities $ (2,781) $ (14,367) At December 31, 2018, the Company had deferred tax assets of $70,766. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset is considered, along with other available positive and negative evidence. Concluding that a valuation allowance is not required is difficult when there is significant negative evidence which is objective and verifiable, such as cumulative losses in recent years. However, the three-year loss position is not solely determinative and accordingly, the Company considers all other available positive and negative evidence in its analysis. If, based upon the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded. Due primarily to the parent company, along with several of its subsidiaries, being in a three-year cumulative loss from continuing operations position as of December 31, 2018, the Company has determined it is not more likely its consolidated and a substantial portion of separate entities deferred tax assets established for state loss carryforwards and net deferred tax assets, will be realized as a benefit in the future. Accordingly, the Company has established a valuation allowance against these net deferred tax assets in the amount of $62,916. At December 31, 2018, the Company had $40,970 of state and local gross net operating loss carryforwards. These carryforwards expire between 2019 through 2037. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduced the U.S. federal corporate tax rate from 35 percent to 21 percent, effective January 1, 2018. In addition to the reduction in the tax rate, the major provisions of the Tax Act which were applicable to the Company include providing for immediate expense recognition of capital expenditures, modified the meals and entertainment deduction, changed the executive compensation deduction, along with repealing or modifying many other business deductions or credits. In addition, on December 22, 2017 the SEC Staff issued Staff Accounting Bulletin No. 118, which addressed how an entity should recognize provisional amounts when it does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes in the Tax Act. The measurement period ends when an entity has obtained, prepared, and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. At December 31, 2017, the Company had not completed its accounting for the effects of the Tax Act. The Company was able to determine a reasonable estimate of the impact of the Tax Act by calculating provisional amounts for 2017. In accordance with the Tax Act, the Company re-measured its deferred tax assets and liabilities based on the tax rates at which they are expected to reverse in the future, generally 21 percent, which resulted in an additional income tax benefit of $7,828 in 2017, which is included as a component of the income tax benefit for the year ended December 31, 2017. In the fourth quarter of 2018, the Company refined its previous estimates made in 2017 and completed its accounting for the Tax Act which resulted in recording an additional income tax benefit of $1,104, which is included as a component of the income tax benefit for the year ended December 31, 2018. The change in unrecognized tax benefits is as follows: Year Ended December 31, 2018 2017 2016 Balance, January 1, $ 268 $ 268 $ — Additions based on tax positions of prior years 783 — 268 Additions based on tax positions of the current year 1,302 — — Reductions due to lapse in statute of limitations (268) — — Balance, December 31, $ 2,085 $ 268 $ 268 If all these unrecognized tax benefits were recognized the impact on the income tax benefit would have been an increase of $816 for the year ended December 31, 2018. It is reasonably possible that our unrecognized tax benefits could decrease by approximately $723 in the next twelve months. The liability for unrecognized tax benefits for uncertain tax positions is included “Accrued expenses - other” in the consolidated balance sheets. The Company prepares and files its tax returns based on interpretations of tax laws and regulations. In the normal course of business, such tax returns are subject to examination by various taxing authorities. The Company has open tax years of 2014 to 2017 with various significant tax jurisdictions.

(LOSS) INCOME PER COMMON SHARE

(LOSS) INCOME PER COMMON SHARE	12 Months Ended
	Dec. 31, 2018
(LOSS) INCOME PER COMMON SHARE
(LOSS) INCOME PER COMMON SHARE	14. (LOSS) INCOME PER COMMON SHARE Basic (loss) income per common share is computed by dividing net (loss) income allocable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted income per common share further includes any common shares available to be issued upon exercise of outstanding service-based stock options; exercise of outstanding performance-based stock options for which all performance conditions were satisfied; and satisfaction of all contingent consideration performance conditions; and RSAs and RSUs, if such inclusions would be dilutive. The potentially dilutive common shares are determined for inclusion in diluted income per share using the treasury stock method. For periods of net loss, basic and diluted per share information are the same. The following table sets forth the computation of basic and diluted (loss) income per common share: Year Ended December 31, 2018 2017 2016 Numerator: Net (loss) income attributable to Diplomat Pharmacy, Inc. $ (302,269) $ 15,510 $ 28,273 Denominator: Weighted average common shares outstanding, basic 74,244,520 68,130,322 65,970,396 Weighted average dilutive effect of stock options, RSAs and RSUs — 649,731 1,739,750 Weighted average dilutive effect of contingent consideration — — 337,577 Weighted average common shares outstanding, diluted 74,244,520 68,780,053 68,047,723 (loss) income per common share: Basic $ (4.07) $ 0.23 $ 0.43 Diluted $ (4.07) $ 0.23 $ 0.42 The Company had a net loss for the year ended December 31, 2018. As a result, basic and diluted loss per share were the same as any potentially dilutive securities would be anti-dilutive. In the absence of a net loss, the weighted average dilutive effect of stock options, RSAs and RSUs would have been 399,522. The weighted average effect of certain common stock equivalents including stock options, RSUs and RSAs were excluded from the computation of weighted average diluted shares outstanding as inclusion of such items would be anti-dilutive, are summarized as follows: Year Ended December 31, 2018 2017 2016 Service-based and earned performance-based stock options 4,147,027 3,242,919 1,542,064 Performance-based stock options 574,138 770,503 291,277 Weighted average service-based RSUs 325,469 21,623 — Weighted average performance based RSUs 1,372,927 — — Weighted average RSAs 20,393 10,038 475 Total 6,439,954 4,045,083 1,833,816

RELATED PARTY TRANSACTION

RELATED PARTY TRANSACTION	12 Months Ended
	Dec. 31, 2018
RELATED PARTY TRANSACTION
RELATED PARTY TRANSACTION	15. RELATED PARTY TRANSACTION In December 2018, the Company signed a definitive agreement with ReactiveCore, Inc. (“ReactiveCore”) to provide information technology services to the Company over a period of three years, commencing on January 1, 2019. The Company will pay base fees to ReactiveCore of approximately $2,400 over the life of the agreement with the potential of paying additional fees for the provision of additional services. Kenneth Klepper, a member of the Board of Directors, is the co-founder, chairman and chief executive officer of ReactiveCore. Prior to the signing of this agreement, the Board of Directors reviewed and approved this transaction in accordance with the Company’s related persons transaction policy.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2018
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	16. COMMITMENTS AND CONTINGENCIES Legal Proceedings On On February 10, 2017, the Company’s Board of Directors received a demand letter from a purported shareholder containing allegations similar to those contained in the putative class action complaint described above. The letter demanded that the Board take action to remedy the alleged violations. In response, the Board of Directors established a Special Independent Committee of its disinterested and independent members to investigate the claims. Subsequently, on June 2, 2017, the shareholder filed a putative shareholder’s derivative lawsuit in the Michigan Circuit Court for the County of Genesee regarding the same matters alleged in the demand letter. The complaint names the Company as a nominal defendant and names a number of the Company’s current and former officers and directors as defendants. The complaint seeks unspecified monetary damages and other relief. On February 6, 2019, the parties reached an agreement-in-principle to settle the action. A preliminary settlement approval hearing is scheduled for April 8, 2019. The Company has previously accrued certain amounts incurred in connection with the settlement, and Management believes that any excess amounts beyond such amounts accrued would be appropriately covered by insurance. If approved by the Court, the settlement would not have a material impact on the Company’s results of operations, financial condition or cash flows. On February 24, 2019 and March 6, 2019 in the U.S. District Court for the Central District of California, and on March 12, 2019 in the U.S. District Court for the Northern District of Illinois, putative class actions complaints were filed against Diplomat Pharmacy, Inc. and certain current and former officers of the Company. The complaints allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 in connection with public filings made between February 26, 2018 and February 21, 2019 (the “potential class period”). The plaintiffs each seek to represent a class of shareholders who purchased stock in the potential class period. The complaints seek unspecified monetary damages and other relief. The Company believes the complaints and allegations to be without merit and intends to vigorously defend itself against the actions. The Company is unable at this time to determine whether the outcome of the litigation would have a material impact on its results of operations, financial condition or cash flows. The results of legal proceedings are often uncertain and difficult to predict, and the Company could from time to time incur judgments, enter into settlements, materially change its business practices or technologies or revise its expectations regarding the outcome of certain matters. In addition, the costs incurred in litigation can be substantial, regardless of the outcome. The Company’s business of providing specialized pharmacy services and other related services may subject it to litigation and liability for damages in the ordinary course of business. Nevertheless, Management believes there are no other legal proceedings, the outcome of which, if determined adversely to the Company, would individually or in the aggregate be reasonably expected to have a material adverse effect on its business, financial position, cash flows or results of operations. Purchase Commitments In 2018, the Company entered into a three-year distribution agreement with AmerisourceBergen for the supply of prescription drugs. The agreement provides for negotiated discounts by drug classification and requires the Company to purchase $1.3 billion in drugs during the first contract year to maintain these current negotiated discounts. The agreement expires on May 31, 2021. The Company’s previous agreement was for four years in duration , subsequently extended through September 30, 2018 but terminated in May 2018 with the execution of a new agreement. The agreement required the Company to purchase $1.8 billion to $2 billion in drugs, per contract year to maintain negotiated discounts and rates. Purchases of drugs from AmerisourceBergen were $1,294, $1,485 and $1,864 for the year ended December 31, 2018, 2017 and 2016, respectively. Lease Commitments The Company leases multiple pharmacy and distribution facilities and office equipment under various operating lease agreements expiring through December 2027. Total rental expense under operating leases for the years ended December 31, 2018, 2017 and 2016 was $8,416, $4,215 and $4,179, respectively, exclusive of property taxes, insurance and other occupancy costs generally payable by the Company. Future minimum payments under non-cancelable operating leases with initial or remaining terms in excess of one year as of December 31, 2018 are as follows: 2019 $ 5,961 2020 5,377 2021 4,831 2022 4,203 2023 3,356 Thereafter 14,406 $ 38,134

SEGMENT REPORTING

SEGMENT REPORTING	12 Months Ended
	Dec. 31, 2018
SEGMENT REPORTING
SEGMENT REPORTING	17. SEGMENT REPORTING Effective January 1, 2018, the Company reports in two reportable segments: Specialty and PBM. The Specialty segment offers a broad range of innovative solutions to address the dispensing, delivery, dosing and reimbursement of clinically intensive, high-cost specialty drugs and a wide range of applications and the PBM segment provides services designed to help the Company’s customers reduce the cost and manage the complexity of their prescription drug programs. The chief operating decision maker evaluates segment performance principally upon net sales and gross profit. Net sales, cost of sales and gross profit information by segment are as follows: Year Ended December 31, Net Sales Cost of Sales Gross Profit 2018 2017 2016 2018 2017 2016 2018 2017 2016 Specialty $ 4,790,837 $ 4,472,857 $ 4,410,388 $ (4,510,262) $ (4,202,766) $ (4,144,802) $ 280,575 $ 270,091 $ 265,586 PBM 729,455 12,373 — (634,021) (8,319) — 95,434 4,054 — Inter-segment eliminations (27,768) — — 27,768 — — — — — $ 5,492,524 $ 4,485,230 $ 4,410,388 $ (5,116,515) $ (4,211,085) $ (4,144,802) $ 376,009 $ 274,145 $ 265,586 Total assets by segment are as follows: December 31, December 31, 2018 2017 Specialty $ 1,045,174 $ 1,190,188 PBM 431,185 750,235 $ 1,476,359 $ 1,940,423

SELECTED QUARTERLY FINANCIAL DA

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)	12 Months Ended
	Dec. 31, 2018
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)	18. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) The following table presents selected quarterly financial data for each of the quarters in the years ended December 31, 2018 and 2017: For the 2018 Quarter Ended March 31 June 30 September 30 December 31 Net sales $ 1,342,484 $ 1,416,078 $ 1,373,334 $ 1,360,628 Gross profit (1)(2) 90,378 98,416 93,358 93,856 (Loss) income before income taxes (1,318) (2,224) 48 (303,814) Net (loss) income (450) (3,964) 169 (298,025) Net (loss) income attributable to Diplomat Pharmacy (450) (3,964) 169 (298,025) Basic (loss) income per common share (0.01) (0.05) 0.00 (4.00) Diluted (loss) income per common share (0.01) (0.05) 0.00 (4.00) For the 2017 Quarter Ended March 31 June 30 September 30 December 31 Net sales $ 1,078,740 $ 1,126,464 $ 1,124,957 $ 1,155,069 Gross profit (1)(2) 69,762 66,714 65,090 72,579 Income (loss) before income taxes 6,532 2,946 299 (1,714) Net income 4,225 3,490 961 6,513 Net income attributable to Diplomat Pharmacy 4,367 3,591 1,016 6,536 Basic income per common share 0.07 0.05 0.01 0.09 Diluted income per common share 0.06 0.05 0.01 0.09 (1) During the second quarter of 2018, the Company changed its accounting policy to reclassify (2) During the second quarter of 2018, the Company changed the classification of the cost of its nursing support services to Cost of sales, which were previously reported in Selling, general and administrative expenses in its consolidated statements of operations. As a result, this reclassification decreased gross profit by $4,187, $4,834, $4,805, $5,282 and $5,095 for the first quarter of 2017, second quarter of 2017, third quarter of 2017, fourth quarter of 2017 and first quarter of 2018, respectively. The Company’s results were also impacted by the following: · Quarter ended December 31, 2017: The Company recognized $1,710 of changes in the fair values of contingent consideration. The Company recognized a $7,828 income tax benefit due to the enactment of the Tax Act. · Quarter ended September 30, 2017: The Company recognized $1,965 of changes in the fair values of contingent consideration. · Quarter ended December 31, 2018: The Company recorded goodwill impairments of $224,966 and impairments of definite-lived intangible assets of $82,678.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statement Presentation	Financial Statement Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”).
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of Diplomat Pharmacy, Inc., its wholly owned subsidiaries, and a 51 percent owned subsidiary, formed in August 2014, which the Company controlled until it was dissolved during the fourth quarter of 2017. The Company also owns a 22 percent interest in a non-consolidated entity which is accounted for under the equity method of accounting since the Company does not control the entity but has the ability to exercise significant influence over its operating and financial policies. This equity method investment was fully impaired during the fourth quarter of 2014 (Note 9). An investment in an entity in which the Company owned less than 20 percent and did not have the ability to exercise significant influence was accounted for under the cost method. This cost method investment was impaired during the fourth quarter of 2016 and dissolved in 2018 (Note 9). Noncontrolling interest in a consolidated subsidiary in the consolidated balance sheets represented the minority shareholders’ proportionate share of the equity in such subsidiary. Consolidated net income (loss) was allocated to the Company and noncontrolling interests (i.e., minority shareholders) in proportion to their percentage ownership. All intercompany transactions and balances have been eliminated in consolidation.
Reclassifications	Reclassifications During the second quarter of 2018, the Company changed its accounting policy to classify shipping and handling costs incurred at its dispensing pharmacies in “Cost of sales” which were previously reported in “Selling, general and administrative expenses” (“SG&A”) in its consolidated statements of operations. The amounts of the reclassifications from SG&A to Cost of sales were $55,426 and $45,795 for the years ended December 31, 2017 and 2016, respectively. The Company has historically classified the cost of its nursing support services within SG&A as these amounts were not considered significant in relation to total cost of sales. During the second quarter of 2018, the Company reclassified these nursing support service costs from SG&A to cost of sales. The amounts reclassified were $19,108 and $13,447 for the years ended December 31, 2017 and 2016, respectively. In addition, certain prior year amounts have been reclassified to conform with the current year presentation. These reclassifications, discussed above, had no impact on “(Loss) income from operations,” “Net (loss) income,” or “(Loss) income per common share, basic and diluted,” for any of the periods presented.
Concentrations of Risk	Concentrations of Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash on deposit with banks or other financial institutions and trade accounts receivable. A federal program provides noninterest-bearing cash balances insurance coverage up to $250 per depositor at each financial institution. The Company’s cash balances often exceed federally insured limits. Concentration of credit risk with respect to trade accounts receivable is limited by the large number of patients comprising the Company’s customer base and their dispersion across multiple payers and multiple geographic areas. No single payer customer accounted for more than 10 percent of net sales for any period presented or trade accounts receivable at December 31, 2018 and 2017 . The Company purchases prescription drug inventory from AmerisourceBergen, a prescription drug wholesaler. Such purchases from AmerisourceBergen accounted for approximately 28 percent, 41 percent and 49 percent of drug purchases for the years ended December 31, 2018, 2017 and 2016, respectively. The Company has alternative vendors available, if necessary. See Note 16 for a discussion of the terms of the Company’s distribution agreement and minimum purchase obligation under the agreement. Also, the Company purchases certain prescription drugs from the drug manufacturers, Celgene Corporation (“Celgene”) and Pharmacyclics, Inc. (“Pharmacyclics”). Purchases from Celgene and Pharmacyclics accounted for approximately 17 percent and 17 percent, 17 percent and 14 percent, and 13 percent and 10 percent of total drug purchases for the years ended December 31, 2018, 2017 and 2016, respectively, with no minimum purchase obligation. The specialty drugs that the Company purchases from Celgene and Pharmacyclics are not available from any other source.
Cash Equivalents	Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents.
Receivables, net	Receivables, net Receivables, net consisted of the following: December 31, 2018 2017 Trade receivables, net of allowances of $(25,342) and $(22,050), respectively $ 299,407 $ 317,004 Rebate receivables 22,375 12,847 Other receivables 4,820 2,240 $ 326,602 $ 332,091 Trade receivables are stated at the invoiced amount. Trade receivables primarily include amounts due from clients,third-party pharmacy benefit managers and insurance providers and are based on contracted prices. Trade receivables are unsecured and require no collateral. Trade receivable terms vary by payer, but generally are due within 30 days after the sale of the product or performance of the service. Rebate receivables are amounts due from pharmaceutical manufacturers related to drug purchases by participants of the various pharmacy benefit plans that the Company manages, a portion of which, depending on contract terms, are paid back to the Company's customers. The Company estimates these rebates at period-end based on its contractual arrangements with its manufacturers and such rebates are recorded as a reduction of cost of sales. The Company maintains an allowance for doubtful accounts that reduces receivables to amounts that are expected to be collected. In estimating the allowance, management considers factors such as current overall economic conditions, historical and anticipated customer performance, historical experience with write-offs and the level of past due accounts. The Company’s general policy for uncollectible accounts, if not reserved through specific examination procedures, is to reserve based upon the aging categories of accounts receivable. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Activity in the allowance for doubtful accounts was as follows: Year Ended December 31, 2018 2017 2016 Beginning balance $ (22,050) $ (15,257) $ (8,123) Charged to expense (8,660) (9,424) (9,534) Write-offs, net of recoveries 5,368 2,631 2,400 Ending balance $ (25,342) $ (22,050) $ (15,257)
Inventories	Inventories Inventories consist of prescription and over-the-counter medications and are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. Prescription medications are returnable to the Company’s vendors and fully refundable before six months of expiration, and any remaining expired medication is relieved from inventory on a quarterly basis.
Property and Equipment, net	Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is generally computed on a straight-line basis over the estimated useful lives of the assets. The costs of leasehold improvements are amortized either over the life of the improvement or the lease term, whichever is shorter. For income tax purposes, accelerated methods of depreciation are generally used. Significant improvements are capitalized, and disposed or replaced property is written off. Maintenance and repairs are charged to expense in the period they are incurred. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss is included in income.
Capitalized Software for Internal Use, net	Capitalized Software for Internal Use, net The Company capitalizes certain development costs primarily related to custom-developed, proprietary, scalable patient care systems. The Company expenses the costs incurred during the preliminary project stage, and capitalizes the direct development costs, including the associated payroll and related costs for employees and outside contractors working on development, during the application development stage. The Company monitors development on an ongoing basis and capitalizes the costs of any major improvements or that result in significant additional functionality. Capitalized internal use software costs are amortized on a straight-line basis over the estimated useful lives of the assets, generally three years. For income tax purposes, accelerated methods of amortization are generally used. Management evaluates the useful lives of these assets on an annual basis.
Definite-Lived Intangible Assets, net	Definite-Lived Intangible Assets, net Definite-lived intangible assets are amortized over their estimated useful lives using an accelerated method for the majority of customer, patient and physician relationships, and the straight-line method for the remaining intangible assets.
Long-Lived Assets	Long-Lived Assets Long-lived assets, such as property and equipment, capitalized software for internal use and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company compares the undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying amount exceeds fair value. Fair values of long-lived assets are determined through various techniques, such as applying probability weighted, expected present value calculations to the estimated future cash flows using assumptions a market participant would utilize, or through the use of a third-party independent appraiser or valuation specialist.
Goodwill	Goodwill Goodwill represents the excess acquisition cost of an acquired entity over the estimated fair values of the net tangible assets and the identifiable intangible assets acquired. Goodwill is not amortized, but rather is reviewed for impairment annually during the fourth quarter, or more frequently if facts or circumstances indicate that the carrying value of the reporting unit’s goodwill may not be recoverable. The Company has three reporting units — Diplomat Specialty Pharmacy (“DSP”), Diplomat Specialty Infusion Group (“DSIG”) and PBM. An entity has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount prior to performing a quantitative impairment test. The qualitative assessment evaluates various events and circumstances, such as macro-economic conditions, industry and market conditions, cost factors, relevant events and financial trends that may impact a reporting unit’s fair value. If it is determined that the estimated fair value of the reporting unit is more-likely-than-not less than its carrying amount, including goodwill, a quantitative assessment is required. Otherwise, no further analysis is necessary. If a quantitative assessment is performed, a reporting unit’s fair value is compared to its carrying value. A reporting unit’s fair value is determined by the market approach, when available and appropriate, or the income approach, or combination of both. The income approach utilizes projected future cash flows discounted at rates commensurate with the risks involved, and multiples of current and future earnings. Management assesses the valuation methodology based upon the relevance and availability of the data at the time of the valuation is performed. If multiple valuation methodologies are used, the results are weighted appropriately. If the fair value of a reporting unit is less than its carrying amount, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit.
Debt Issuance Costs	Debt Issuance Costs Costs incurred related to the issuance of the Company’s credit facility were deferred and are being amortized to interest expense using the effective interest method over the term of the agreement.
Revenue recognition (effective January 1, 2018)	Revenue recognition (effective January 1, 2018) The following table disaggregates net sales by therapeutic categories for the Specialty segment and by product and service distribution channels for the PBM segment: Year Ended December 31, 2018 2017 2016 Specialty Segment: Oncology $ 2,788,154 $ 2,545,708 $ 2,102,130 Specialty infusion 704,872 617,904 505,240 Immunology 555,115 561,730 644,173 Hepatitis 148,470 281,063 583,751 Other 594,226 466,452 575,094 Total Specialty segment 4,790,837 4,472,857 4,410,388 PBM Segment: Retail networks 549,760 5,166 — Specialty pharmacy 88,457 2,914 — Mail order 68,158 2,261 — Other 23,080 2,032 — Total PBM segment 729,455 12,373 — Inter-segment eliminations (27,768) — — Total net sales $ 5,492,524 $ 4,485,230 $ 4,410,388 Specialty Segment The Company recognizes revenue from dispensing prescription drugs for home delivery at the time the drugs are physically delivered which is the point in time when control transfers to the customer. Revenue from dispensing prescription drugs that are picked up by patients at an open-door or retail pharmacy location are recorded at prescription adjudication, which approximates the fill date. Each prescription claim is considered an arrangement with the customer and is a separate performance obligation. The Company accrues an estimate of fees, including direct and indirect remuneration fees (“DIR fees”), which are assessed or expected to be assessed by payers at some point after adjudication of a claim, as a reduction of revenue at the time revenue is recognized. Changes in the estimate of such fees are recorded as an adjustment to revenue when the change becomes known. PBM Segment The Company provides a pharmacy benefit management service, including mail order pharmacy and specialty pharmacy services, to its clients, which include Medicare Part D Plans, regional health Plans, self-insured clients and Medicaid Plans , which culminates in the dispensing of prescription drugs. The Company sells prescription drugs directly through its mail service dispensing pharmacy and indirectly through its contracted network of retail pharmacies. The Company recognizes revenue from the sale of prescription drugs by its mail order pharmacy service when the drugs are physically delivered when control transfers to the customer and by its retail pharmacy network when the claim is adjudicated. The Company’s pharmacy benefit management services are accounted for in a manner consistent with a master supply arrangement as there are no contractual minimum volumes and each prescription is considered a separate purchasing decision and distinct performance obligation transferred at a point in time. Pharmacy benefit management services performed in connection with each prescription claim are considered part of a single performance obligation which culminates in the dispensing of prescription drugs. The Company acts as the principal in the arrangement, exercises pricing latitude and independently has a contractual obligation to pay its network pharmacy providers for benefits provided to its clients’ members, and assumes primary responsibility for fulfilling the promise to provide prescription drugs to its client plan members while also performing the related pharmacy benefit management services and therefore recognizes revenue on a gross basis. The Company includes the total prescription price (drug ingredient cost plus dispensing fee) it has contracted with these clients as revenue, including member co-payments to pharmacies. Net sales include (i) the portion of the price the client pays directly to the Company, net of any variable consideration including volume-related or other discounts paid back to the client, (ii) the price paid to the Company by client plan members for mail order prescriptions and the price paid to retail network pharmacies by client plan members for retail prescriptions and (iii) claims-based administrative fees. The Company records revenue, net of manufacturer’s rebates, which are earned by and paid to its clients based on their plan members’ utilization of brand-name formulary drugs. The Company estimates these rebates at period-end based on actual claims data and its estimates of manufacturers’ rebates earned by its clients based upon their claims volume and utilization of certain brand-name formulary drugs. The Company adjusts against revenues its estimated rebates payable to clients to the actual amounts paid when such adjustments become known. The Company also adjusts revenues for refunds owed to its clients resulting from pricing and performance guarantees against defined metrics which are estimated and accrued for based upon current performance to date against contractual performance guarantees. Sales taxes are presented on a net basis, excluded from revenue and cost, for both reportable segments. Cost of sales includes the cost of pharmaceuticals dispensed to customers either directly at its mail pharmacy locations, or indirectly through its nationwide network of participating pharmacies. Rebates attributable to clients are accrued as rebates receivable and a reduction of cost of sales with a corresponding payable for the amounts of the rebates to be remitted to those clients in accordance with their contracts which is recorded as a reduction of product revenue. Cost of sales also includes the cost of personnel to support the transaction processing services, system sales, maintenance and professional services. Rebates retained, which represents the difference between the manufacturers’ rebates earned and rebates incurred to customers, approximated 17.9% and 0.4% of total gross profit for the years ended December 31, 2018 and 2017, respectively.
Advertising and Marketing Costs	Advertising and Marketing Costs Advertising and marketing costs are expensed as incurred as a component of SG&A and were $3,075, $2,251 and $3,868 for the years ended December 31, 2018, 2017 and 2016, respectively.
Defined Contribution Savings Plans	Defined Contribution Savings Plans The Company maintains certain defined contribution savings plans for eligible employees. The total expenses attributable to the defined contribution savings plans are recorded as a component of SG&A and were $4,056, $2,908 and $2,665 for the years ended December 31, 2018, 2017 and 2016, respectively.
Share-Based Compensation	Share-Based Compensation The Company grants stock options to key employees, which are accounted for as equity awards. The exercise price of a granted stock option is equal to the closing market stock price of the underlying common share on the date the option is granted. The grant date fair value of these awards is measured using the Black-Scholes-Merton option pricing model. Stock options generally become exercisable in installments of 25 percent per year, beginning on the first anniversary of the grant date and each of the three anniversaries thereafter or 33 percent per year, beginning on the first anniversary of the grant date and each of the two anniversaries thereafter, and have a maximum term of ten years. The Company expenses the grant date fair values of stock options over their respective vesting periods on a straight-line basis. Estimating grant date fair values for employee stock options requires management to make assumptions regarding expected volatility of the underlying shares, the risk-free rate over the expected life of the stock options and the length of time in years that the granted options are expected to be outstanding. Expected volatility is based on a weighted average of the Company’s historic volatility and an implied volatility for a group of industry-relevant healthcare companies as of the measurement date. Risk-free rate is determined based upon U.S. Treasury rates over the estimated expected option of lives. Expected dividend yield is zero as we do not anticipate declaring a dividend during the expected term of the options. Expected option life is calculated using the simplified method (the midpoint between the end of the vesting period and the end of the maximum term). Forfeitures are accounted for when they occur. The Company also grants restricted stock units (“RSU” or “RSUs”) to key employees, which are accounted for as equity awards. Certain RSU grants have performance-based conditions, which require the satisfaction of certain revenue and/or adjusted EBITDA targets prior to vesting. The grant date fair value of a RSU is determined by the closing market price of the Company’s common stock as of the date of grant. The Company expenses the grant date fair values of RSUs on a straight-line basis over their respective vesting periods, which range from immediate vesting to three years from grant date. The Company grants restricted stock awards (“RSA” or “RSAs”) to non-employee directors, which are accounted for as equity awards. RSAs generally fully vest on the first anniversary of the grant date. The grant date fair value of a RSA is determined by the closing market price of the Company’s common stock as of the date of grant. The Company expenses the grant date fair values of RSAs on a straight-line basis over their respective vesting periods.
Income Taxes	Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax assets are evaluated quarterly to determine if valuation allowances are required or should be adjusted. The Company establishes valuation allowances for deferred tax assets based on a more likely than not standard. The ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. The assessment regarding whether a valuation allowance is required or should be adjusted also considers all available positive and negative evidence factors. It is difficult to conclude a valuation allowance is not required when there is significant objective and verifiable negative evidence, such as cumulative losses in recent years. We utilize a rolling three years of actual and current year results as the primary measure of cumulative losses in recent years. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. The Company records uncertain tax positions on the basis of a two-step process whereby it is determined whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position, and for those tax positions that meet the more likely than not criteria, the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority is recognized. The Company records interest and penalties on uncertain tax positions in Income tax benefit (expense).

NEW ACCOUNTING STANDARDS (Table

NEW ACCOUNTING STANDARDS (Tables)	12 Months Ended
	Dec. 31, 2018
ASU 2014-09
NEW ACCOUNTING STANDARDS
Schedule of impacts of adopting Topic 606	The details of the significant changes and quantitative impact on the financial statement line items in the consolidated balance sheet as of January 1, 2018 for the adoption of Topic 606 was as follows: As Reported, As Adjusted, December 31, 2017 Adjustment January 1, 2018 Receivables, net $ 332,091 $ (6,483) $ 325,608 Inventories 206,603 6,313 212,916 Total current assets 634,070 (170) 633,900 Total assets 1,940,423 (170) 1,940,253 Accrued expenses — other 20,560 (44) 20,516 Total current liabilities 651,457 (44) 651,413 Total liabilities 1,190,922 (44) 1,190,878 Retained earnings 91,816 (126) 91,690 Total shareholders’ equity 749,501 (126) 749,375 Total liabilities and shareholders’ equity 1,940,423 (170) 1,940,253 The table below summarize the impacts of the application of Topic 606 as compared with the guidance that was in effect before the change on the consolidated balance sheet, statement of operations and comprehensive loss, and statement of cash flows as of and for the year ended December 31, 2018, as follows: Adjustments As Reported for Topic 606 As Adjusted Consolidated Balance Sheet: Receivables, net $ 326,602 $ 15,106 $ 341,708 Inventories 210,573 (14,489) 196,084 Total current assets 556,256 617 556,873 Total assets 1,476,359 617 1,476,976 Accrued expenses – other 21,014 160 21,174 Total current liabilities 558,585 160 558,745 Total liabilities 1,011,275 160 1,011,435 Accumulated deficit (210,579) 457 (210,122) Total shareholders’ equity 465,084 457 465,541 Total liabilities and shareholders’ equity 1,476,359 617 1,476,976 Consolidated Statement of Operations and Comprehensive Loss: Net sales $ 5,492,524 $ (358,543) $ 5,133,981 Cost of sales (5,116,515) 358,990 (4,757,525) Gross profit 376,009 447 376,456 Loss from operations (267,285) 447 (266,838) Loss before income taxes (307,308) 447 (306,861) Income tax benefit 5,039 (116) 4,923 Net loss (302,269) 331 (301,938) Net loss attributable to Diplomat Pharmacy, Inc. (302,269) 331 (301,938) Total comprehensive loss (306,561) 331 (306,230) Consolidated Statement of Cash Flows: Net loss $ (302,269) $ 331 $ (301,938) Change in: Accounts receivable (2,333) (15,106) (17,439) Inventories (3,932) 14,489 10,557 Other assets and liabilities 5,612 286 5,898

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Schedule of receivables, net	December 31, 2018 2017 Trade receivables, net of allowances of $(25,342) and $(22,050), respectively $ 299,407 $ 317,004 Rebate receivables 22,375 12,847 Other receivables 4,820 2,240 $ 326,602 $ 332,091
Schedule of allowance for doubtful accounts	Year Ended December 31, 2018 2017 2016 Beginning balance $ (22,050) $ (15,257) $ (8,123) Charged to expense (8,660) (9,424) (9,534) Write-offs, net of recoveries 5,368 2,631 2,400 Ending balance $ (25,342) $ (22,050) $ (15,257)
Schedule of disaggregation of net sales by therapeutic categories for the Specialty segment and by product and service distribution channels for the PBM segment	Year Ended December 31, 2018 2017 2016 Specialty Segment: Oncology $ 2,788,154 $ 2,545,708 $ 2,102,130 Specialty infusion 704,872 617,904 505,240 Immunology 555,115 561,730 644,173 Hepatitis 148,470 281,063 583,751 Other 594,226 466,452 575,094 Total Specialty segment 4,790,837 4,472,857 4,410,388 PBM Segment: Retail networks 549,760 5,166 — Specialty pharmacy 88,457 2,914 — Mail order 68,158 2,261 — Other 23,080 2,032 — Total PBM segment 729,455 12,373 — Inter-segment eliminations (27,768) — — Total net sales $ 5,492,524 $ 4,485,230 $ 4,410,388

BUSINESS ACQUISITIONS (Tables)

BUSINESS ACQUISITIONS (Tables)	12 Months Ended
	Dec. 31, 2018
BUSINESS ACQUISITIONS
Schedule of unaudited pro forma results of operations	Year Ended December 31, 2017 Net sales $ 4,954,494 Net income attributable to Diplomat Pharmacy, Inc. $ 6,733 Income per common share — basic and diluted $ 0.09
LDI Holding Company LLC
BUSINESS ACQUISITIONS
Schedule of consideration transferred	Cash $ 520,157 4,113,188 restricted common shares 79,088 $ 599,245
Summary of the fair values of identifiable acquired assets and assumed liabilities	Cash $ 780 Receivables 40,852 Inventories 2,857 Prepaid expenses and other current assets 750 Property and equipment 1,930 Capitalized software for internal use 1,325 Definite-lived intangible assets 201,523 Other noncurrent assets 148 Accounts payable (16,409) Rebates payable (23,121) Accrued expenses — compensation and benefits (2,329) Accrued expenses — other (1,948) Deferred income taxes (31,434) Total identifiable net assets 174,924 Goodwill 424,321 $ 599,245
Schedule of definite-lived intangible assets that were acquired and their respective useful lives	Useful Life Amount Customer relationships 10 years $ 184,973 Trade names and trademarks 4 years 16,550 $ 201,523
Pharmaceutical Technologies, Inc.
BUSINESS ACQUISITIONS
Schedule of consideration transferred	Cash $ 36,534 835,017 restricted common shares 12,753 $ 49,287
Summary of the fair values of identifiable acquired assets and assumed liabilities	Cash $ 9,851 Accounts receivable 20,622 Inventories 200 Prepaid expenses and other current assets 650 Property and equipment 13,544 Capitalized software for internal use 1,800 Definite-lived intangible assets 6,720 Accounts payable (14,968) Rebates payable (7,882) Accrued expenses — compensation and benefits (160) Accrued expenses — other (4,891) Total identifiable net assets 25,486 Goodwill 23,801 $ 49,287
Schedule of definite-lived intangible assets that were acquired and their respective useful lives	Useful Life Amount Customer relationships 10 years $ 5,900 Trade names and trademarks 2 years 820 $ 6,720
Focus Rx Pharmacy Services Inc. and Focus Rx Inc.
BUSINESS ACQUISITIONS
Schedule of consideration transferred	Cash $ 17,252 374,297 restricted common shares 5,643 Contingent consideration at fair value 2,080 $ 24,975
Summary of the fair values of identifiable acquired assets and assumed liabilities	Cash $ 1,809 Accounts receivable 5,123 Inventories 261 Definite-lived intangible assets 7,100 Other noncurrent assets 22 Accounts payable (5,122) Accrued expenses — compensation and benefits (156) Total identifiable net assets 9,037 Goodwill 15,938 $ 24,975
Schedule of definite-lived intangible assets that were acquired and their respective useful lives	Useful Life Amount Patient relationships 7 years $ 3,700 Non-compete employment agreements 3 years 2,200 Trade names and trademarks 3 years 1,200 $ 7,100
Accurate Rx Pharmacy Consulting, LLC
BUSINESS ACQUISITIONS
Schedule of consideration transferred	Cash $ 9,408 131,108 restricted common shares 1,776 Contingent consideration at fair value 1,980 $ 13,164
Summary of the fair values of identifiable acquired assets and assumed liabilities	Cash $ 1,295 Accounts receivable 2,196 Inventory 936 Prepaid expenses and other current assets 34 Definite-lived intangible assets 3,420 Other noncurrent assets 3 Accounts payable (3,303) Accrued expenses — compensation and benefits (152) Accrued expenses — other (6) Total identifiable net assets 4,423 Goodwill 8,741 $ 13,164
Schedule of definite-lived intangible assets that were acquired and their respective useful lives	Useful Life Amount Patient relationships 7 years $ 2,100 Non-compete employment agreements 5 years 670 Trade names and trademarks 4 years 650 $ 3,420
WRB Communications, LLC
BUSINESS ACQUISITIONS
Schedule of consideration transferred	Cash $ 26,804 299,325 restricted common shares 4,291 Contingent consideration at fair value 530 $ 31,625
Summary of the fair values of identifiable acquired assets and assumed liabilities	Cash $ 1,018 Accounts receivable 2,593 Prepaid expenses and other current assets 179 Property and equipment 498 Definite-lived intangible assets 7,730 Other noncurrent assets 24 Accounts payable (100) Accrued expenses — other (498) Total identifiable net assets 11,444 Goodwill 20,181 $ 31,625
Schedule of definite-lived intangible assets that were acquired and their respective useful lives	Useful Life Amount Customer relationships 7 years $ 5,200 Non-compete employment agreements 4 years 1,530 Trade names and trademarks 2 years 1,000 $ 7,730
Comfort Infusion, Inc.
BUSINESS ACQUISITIONS
Schedule of consideration transferred	Cash $ 10,613 Contingent consideration at fair value 3,800 $ 14,413
Summary of the fair values of identifiable acquired assets and assumed liabilities	Cash $ 104 Accounts receivable 575 Inventories 118 Prepaid expenses and other current assets 15 Definite-lived intangible assets 2,400 Other noncurrent assets 5 Accounts payable (372) Accrued expenses - other (101) Total identifiable net assets 2,744 Goodwill 11,669 $ 14,413
Schedule of definite-lived intangible assets that were acquired and their respective useful lives	Useful Life Amount Physician relationships 7 years $ 1,200 Non-compete employment agreements 5 years 1,200 $ 2,400
Affinity Biotech, Inc.
BUSINESS ACQUISITIONS
Schedule of consideration transferred	Cash $ 17,228 Contingent consideration at fair value 35 $ 17,263
Summary of the fair values of identifiable acquired assets and assumed liabilities	Cash $ 1,043 Accounts receivable 3,433 Inventories 79 Prepaid expenses and other current assets 74 Definite-lived intangible assets 5,100 Other noncurrent assets 5 Accounts payable (1,075) Accrued expenses - compensation and benefits (144) Accrued expenses - other (25) Total identifiable net assets 8,490 Goodwill 8,773 $ 17,263
Schedule of definite-lived intangible assets that were acquired and their respective useful lives	Useful Life Amount Patient relationships 7 years $ 4,000 Non-compete employment agreements 5 years 1,100 $ 5,100
Valley Campus Pharmacy, Inc
BUSINESS ACQUISITIONS
Schedule of consideration transferred	Cash $ 70,117 324,244 restricted common shares 9,507 $ 79,624
Summary of the fair values of identifiable acquired assets and assumed liabilities	Cash $ 2,114 Accounts receivable 16,271 Inventories 4,740 Prepaid expenses and other current assets 46 Property and equipment 200 Capitalized software for internal use 14,000 Definite-lived intangible assets 13,890 Other noncurrent assets 21 Accounts payable (29,773) Accrued expenses - compensation and benefits (400) Accrued expenses - other (1,962) Total identifiable net assets 19,147 Goodwill 60,477 $ 79,624
Schedule of definite-lived intangible assets that were acquired and their respective useful lives	Useful Life Amount Physician relationships 10 years $ 7,700 Non-compete employment agreements 5 years 4,490 Trade names and trademarks 1 year 1,700 $ 13,890

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	12 Months Ended
	Dec. 31, 2018
FAIR VALUE MEASUREMENTS
Schedule of assets and liabilities measured and disclosed at fair value on a recurring basis	Asset / Valuation (Liability) Level 2 Level 3 Technique December 31, 2018: Contingent consideration $ (6,895) $ — $ (6,895) C Interest rate swaps (Note 11) (4,292) (4,292) — A December 31, 2017: Contingent consideration $ (12,100) $ — $ (12,100) C
Schedule of change in contingent consideration (Level 3 measurements)	Contingent Consideration Balance at January 1, 2016 $ (52,665) Change in fair value 8,922 Payments 43,743 Balance at December 31, 2016 — Affinity acquisition (35) Comfort acquisition (3,800) WRB acquisition (530) Accurate acquisition (1,980) Focus acquisition (2,080) Changes in fair values (3,675) Balance at December 31, 2017 (12,100) Change in fair value (3,364) Payments 8,569 Balance at December 31, 2018 $ (6,895)

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2018
PROPERTY AND EQUIPMENT
Schedule of property and equipment	December 31, Useful Life 2018 2017 Land — $ 3,532 $ 5,232 Buildings 40 years 12,945 18,818 Leasehold improvements 5 - 15 years* 6,410 5,247 Equipment and fixtures 5 - 10 years 18,769 14,116 Computer equipment 3 - 5 years 11,999 8,527 Construction in progress 2,274 2,425 55,929 54,365 Accumulated depreciation and amortization (21,404) (15,375) $ 34,525 $ 38,990 * Unless applicable lease term is shorter.

CAPITALIZED SOFTWARE FOR INTE_2

CAPITALIZED SOFTWARE FOR INTERNAL USE (Tables)	12 Months Ended
	Dec. 31, 2018
CAPITALIZED SOFTWARE FOR INTERNAL USE
Schedule of balances of capitalized software, acquired and developed internally	December 31, Useful Life 2018 2017 Capitalized software for internal use 3-7 years $ 88,356 $ 82,017 Construction in progress 10,510 502 98,866 82,519 Accumulated amortization (68,360) (45,999) $ 30,506 $ 36,520

GOODWILL AND DEFINITE-LIVED I_2

GOODWILL AND DEFINITE-LIVED INTANGIBLE ASSETS (Tables)	12 Months Ended
	Dec. 31, 2018
GOODWILL AND DEFINITE-LIVED INTANGIBLE ASSETS
Schedule of changes in goodwill by segment	Specialty PBM Total Balance at January 1, 2016 $ 256,318 $ — $ 256,318 Acquisitions: TNH 59,275 — 59,275 Miscellaneous 1,023 — 1,023 Balance at December 31, 2016 316,616 — 316,616 Acquisitions: Affinity 8,772 — 8,772 Comfort 11,669 — 11,669 WRB 20,181 — 20,181 TNH 1,351 — 1,351 Accurate 8,741 — 8,741 Focus 15,237 — 15,237 NPS — 20,735 20,735 LDI — 426,005 426,005 Miscellaneous 3,317 — 3,317 Balance at December 31, 2017 385,884 446,740 832,624 Other measurement period adjustments 552 1,382 1,934 Impairments (45,776) (179,190) (224,966) Balance at December 31, 2018 $ 340,660 $ 268,932 $ 609,592
Schedule of definite-lived intangible assets	December 31, 2018 Weighted Average Gross Accumulated Net Amortization Carrying Amortization/ Carrying Period Amount Impairments Amount Customer relationships 9.8 $ 100,200 $ (1,238) $ 98,962 Patient relationships 5.9 170,100 (67,964) 102,136 Trade names and trademarks 1.8 30,650 (20,270) 10,380 Non-compete employment agreements 1.6 61,389 (44,100) 17,289 Physician relationships 4.8 21,700 (9,657) 12,043 $ 384,039 $ (143,229) $ 240,810 December 31, 2017 Weighted Average Gross Net Amortization Carrying Accumulated Carrying Period Amount Amortization Amount Customer relationships 9.9 $ 196,073 $ (1,141) $ 194,932 Patient relationships 6.8 170,100 (49,643) 120,457 Trade names and trademarks 3.7 44,020 (13,624) 30,396 Non-compete employment agreements 3.1 61,389 (30,560) 30,829 Physician relationships 5.7 21,700 (6,303) 15,397 $ 493,282 $ (101,271) $ 392,011
Schedule of estimated future amortization expense of definite-lived intangible assets	2019 $ 53,944 2020 41,612 2021 33,781 2022 27,738 2023 25,911 Thereafter 57,824 $ 240,810

DEBT (Tables)

DEBT (Tables)	12 Months Ended
	Dec. 31, 2018
DEBT
Schedule of outstanding debt	December 31, 2018 2017 Short-term debt, borrowings on line of credit $ 176,300 $ 188,250 Long-term debt: Term loan A $ 142,500 $ 150,000 Term loan B 322,000 400,000 Total 464,500 550,000 Unamortized debt issuance costs (14,631) (17,402) Total long-term debt 449,869 532,598 Less: current portion 11,500 11,500 Long-term debt, less current portion $ 438,369 $ 521,098
Summary of scheduled principal payments on term loans	2019 $ 11,500 2020 11,500 2021 11,500 2022 124,000 2023 4,000

SHARE-BASED COMPENSATION (Table

SHARE-BASED COMPENSATION (Tables)	12 Months Ended
	Dec. 31, 2018
SHARE-BASED COMPENSATION
Summary of entity's stock option activity	Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Options Price Life Value (In years) Outstanding at January 1, 2016 4,114,685 $ 17.53 7.7 $ 76,567 Granted 1,546,532 22.64 Exercised (564,844) 7.87 Cancelled/expired (683,032) 27.41 Outstanding at December 31, 2016 4,413,341 19.02 7.0 11,558 Granted 4,066,735 16.43 Exercised (1,217,320) 6.47 Cancelled/expired (1,154,464) 25.25 Outstanding at December 31, 2017 6,108,292 18.62 8.5 25,777 Granted 411,486 21.39 Exercised (379,194) 10.81 Cancelled/expired (954,559) 24.13 Outstanding at December 31, 2018 5,186,025 $ 18.42 8.0 $ 2,910 Exercisable at December 31, 2018 2,011,169 $ 18.35 7.1 $ 2,910
Schedule of assumptions used to determine the valuation of granted options	Year Ended December 31, 2018 2017 2016 Exercise price $20.52 - $24.29 $14.36 - $20.87 $14.40 - $36.60 Expected volatility 36.06% - 38.36% 33.44% - 36.38% 23.90% - 24.76% Expected dividend yield 0% 0% 0% Risk-free rate for expected term 2.33% - 2.84% 1.88% - 2.34% 1.23% - 2.06% Expected term (in years) 6.00 - 6.25 5.00 - 6.25 6.25
Summary of restricted stock units activity	Weighted Average Number Grant Date of RSUs Fair Value Nonvested at January 1, 2017 — $ — Granted 90,718 14.65 Cancelled/expired (24,079) 14.65 Nonvested at December 31, 2017 66,639 14.65 Granted 2,059,066 22.00 Vested and issued (183,263) 23.46 Cancelled/expired (73,413) 20.21 Nonvested at December 31, 2018 1,869,029 $ 21.67
Summary of restricted stock awards activity	Number Weighted of Shares Average Subject to Grant Date Restriction Fair Value Nonvested at January 1, 2016 10,805 $ 26.60 Granted 5,765 32.97 Vested (10,805) 26.60 Nonvested at December 31, 2016 5,765 32.97 Granted 36,814 17.13 Vested (8,288) 26.80 Nonvested at December 31, 2017 34,291 17.45 Granted 40,796 21.30 Vested (31,732) 17.68 Nonvested at December 31, 2018 43,355 $ 20.91

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2018
INCOME TAXES
Schedule of components of the income tax benefit (expense)	Year Ended December 31, 2018 2017 2016 Current: Federal $ (4,304) $ (1,748) $ (703) State and local (2,504) (1,921) (1,713) Total current (6,808) (3,669) (2,416) Deferred: Federal 10,461 10,343 (7,989) State and local 1,386 452 (790) Total deferred 11,847 10,795 (8,779) $ 5,039 $ 7,126 $ (11,195)
Schedule of reconciliation of income taxes computed at the U.S. federal statutory tax rate to income tax benefit (expense)	Year Ended December 31, 2018 2017 2016 Income tax benefit (expense) at U.S. statutory rate $ 64,535 $ (2,822) $ (12,675) Tax effect from: State income taxes, net of federal benefit 12,547 (418) (1,904) State income taxes, valuation allowance (13,140) — — Share-based compensation 80 3,003 4,148 Valuation allowance (48,677) — — Loss on noncontrolling interest — (113) (1,138) Change in tax laws 1,104 7,828 — Changes in uncertain tax positions (636) — — Disallowed compensation (678) — — Impairment losses (9,674) — — Other (422) (352) Income tax benefit (expense) $ 5,039 $ 7,126 (11,195)
Schedule of components of the entity's deferred tax assets and liabilities	December 31, 2018 2017 Deferred tax assets: Intangible assets $ 50,630 $ — Allowance for doubtful accounts 6,501 5,696 Net operating loss and credit carryforwards 4,064 2,114 Compensation and benefits 7,407 4,611 Other temporary differences 2,164 679 Total deferred tax assets 70,766 13,100 Valuation allowance (62,916) — Total net deferred tax assets 7,850 13,100 Deferred tax liabilities: Property and equipment (9,358) (8,221) Intangibles assets — (18,185) Prepaid expenses and other current assets (1,158) (740) Investments (115) (321) Total deferred tax liabilities (10,631) (27,467) Net deferred tax liabilities $ (2,781) $ (14,367)
Schedule of change in unrecognized tax benefits	Year Ended December 31, 2018 2017 2016 Balance, January 1, $ 268 $ 268 $ — Additions based on tax positions of prior years 783 — 268 Additions based on tax positions of the current year 1,302 — — Reductions due to lapse in statute of limitations (268) — — Balance, December 31, $ 2,085 $ 268 $ 268

(LOSS) INCOME PER COMMON SHARE

(LOSS) INCOME PER COMMON SHARE (Tables)	12 Months Ended
	Dec. 31, 2018
(LOSS) INCOME PER COMMON SHARE
Schedule of the calculation for basic and diluted income per common share	Year Ended December 31, 2018 2017 2016 Numerator: Net (loss) income attributable to Diplomat Pharmacy, Inc. $ (302,269) $ 15,510 $ 28,273 Denominator: Weighted average common shares outstanding, basic 74,244,520 68,130,322 65,970,396 Weighted average dilutive effect of stock options, RSAs and RSUs — 649,731 1,739,750 Weighted average dilutive effect of contingent consideration — — 337,577 Weighted average common shares outstanding, diluted 74,244,520 68,780,053 68,047,723 (loss) income per common share: Basic $ (4.07) $ 0.23 $ 0.43 Diluted $ (4.07) $ 0.23 $ 0.42
Schedule of weighted average effect of shares were excluded from the computation of weighted average diluted shares outstanding	Year Ended December 31, 2018 2017 2016 Service-based and earned performance-based stock options 4,147,027 3,242,919 1,542,064 Performance-based stock options 574,138 770,503 291,277 Weighted average service-based RSUs 325,469 21,623 — Weighted average performance based RSUs 1,372,927 — — Weighted average RSAs 20,393 10,038 475 Total 6,439,954 4,045,083 1,833,816

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	12 Months Ended
	Dec. 31, 2018
COMMITMENTS AND CONTINGENCIES
Schedule of future minimum payments under non-cancelable operating leases	Future minimum payments under non-cancelable operating leases with initial or remaining terms in excess of one year as of December 31, 2018 are as follows: 2019 $ 5,961 2020 5,377 2021 4,831 2022 4,203 2023 3,356 Thereafter 14,406 $ 38,134

SEGMENT REPORTING (Tables)

SEGMENT REPORTING (Tables)	12 Months Ended
	Dec. 31, 2018
SEGMENT REPORTING
Schedule of information by segment	Year Ended December 31, Net Sales Cost of Sales Gross Profit 2018 2017 2016 2018 2017 2016 2018 2017 2016 Specialty $ 4,790,837 $ 4,472,857 $ 4,410,388 $ (4,510,262) $ (4,202,766) $ (4,144,802) $ 280,575 $ 270,091 $ 265,586 PBM 729,455 12,373 — (634,021) (8,319) — 95,434 4,054 — Inter-segment eliminations (27,768) — — 27,768 — — — — — $ 5,492,524 $ 4,485,230 $ 4,410,388 $ (5,116,515) $ (4,211,085) $ (4,144,802) $ 376,009 $ 274,145 $ 265,586 Total assets by segment are as follows: December 31, December 31, 2018 2017 Specialty $ 1,045,174 $ 1,190,188 PBM 431,185 750,235 $ 1,476,359 $ 1,940,423

SELECTED QUARTERLY FINANCIAL _2

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables)	12 Months Ended
	Dec. 31, 2018
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
Schedule of selected quarterly financial data	For the 2018 Quarter Ended March 31 June 30 September 30 December 31 Net sales $ 1,342,484 $ 1,416,078 $ 1,373,334 $ 1,360,628 Gross profit (1)(2) 90,378 98,416 93,358 93,856 (Loss) income before income taxes (1,318) (2,224) 48 (303,814) Net (loss) income (450) (3,964) 169 (298,025) Net (loss) income attributable to Diplomat Pharmacy (450) (3,964) 169 (298,025) Basic (loss) income per common share (0.01) (0.05) 0.00 (4.00) Diluted (loss) income per common share (0.01) (0.05) 0.00 (4.00) For the 2017 Quarter Ended March 31 June 30 September 30 December 31 Net sales $ 1,078,740 $ 1,126,464 $ 1,124,957 $ 1,155,069 Gross profit (1)(2) 69,762 66,714 65,090 72,579 Income (loss) before income taxes 6,532 2,946 299 (1,714) Net income 4,225 3,490 961 6,513 Net income attributable to Diplomat Pharmacy 4,367 3,591 1,016 6,536 Basic income per common share 0.07 0.05 0.01 0.09 Diluted income per common share 0.06 0.05 0.01 0.09 (1) During the second quarter of 2018, the Company changed its accounting policy to reclassify (2) During the second quarter of 2018, the Company changed the classification of the cost of its nursing support services to Cost of sales, which were previously reported in Selling, general and administrative expenses in its consolidated statements of operations. As a result, this reclassification decreased gross profit by $4,187, $4,834, $4,805, $5,282 and $5,095 for the first quarter of 2017, second quarter of 2017, third quarter of 2017, fourth quarter of 2017 and first quarter of 2018, respectively.

DESCRIPTION OF BUSINESS (Detail

DESCRIPTION OF BUSINESS (Details)	12 Months Ended
	Dec. 31, 2018segment
DESCRIPTION OF BUSINESS
Number of reportable segments	2

NEW ACCOUNTING STANDARDS - Sign

NEW ACCOUNTING STANDARDS - Significant changes and quantitative impact for adoption of ASC 606 (Details) - USD ($) $ in Thousands	Jan. 01, 2018	Dec. 31, 2018	Jan. 02, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
NEW ACCOUNTING STANDARDS
Cumulative effect on retained earnings after-tax adjustment		$ (126)
Consolidated Balance Sheets
Receivables, net		326,602	$ 325,608	$ 332,091
Inventories		210,573	212,916	206,603
Total current assets		556,256	633,900	634,070
Total assets		1,476,359	1,940,253	1,940,423
Accrued expenses - other		21,014	20,516	20,560
Total current liabilities		558,585	651,413	651,457
Total liabilities		1,011,275	1,190,878	1,190,922
(Accumulated deficit) retained earnings		(210,579)	91,690	91,816
Total shareholders' equity		465,084	749,375	749,501	$ 613,724	$ 515,546
Total liabilities and shareholders' equity		$ 1,476,359	$ 1,940,253	$ 1,940,423
Difference between Revenue Guidance in Effect before and after Topic 606
NEW ACCOUNTING STANDARDS
Cumulative effect on retained earnings after-tax adjustment	$ (126)
Consolidated Balance Sheets
Receivables, net	(6,483)
Inventories	6,313
Total current assets	(170)
Total assets	(170)
Accrued expenses - other	(44)
Total current liabilities	(44)
Total liabilities	(44)
(Accumulated deficit) retained earnings	(126)
Total shareholders' equity	(126)
Total liabilities and shareholders' equity	$ (170)

NEW ACCOUNTING STANDARDS - Impa

NEW ACCOUNTING STANDARDS - Impacts of the application of ASC 606 as compared with the guidance (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Jan. 02, 2018	Jan. 01, 2018	Dec. 31, 2015
Consolidated Balance Sheet:
Receivables, net	$ 326,602				$ 332,091				$ 326,602	$ 332,091		$ 325,608
Inventories	210,573				206,603				210,573	206,603		212,916
Total current assets	556,256				634,070				556,256	634,070		633,900
Total assets	1,476,359				1,940,423				1,476,359	1,940,423		1,940,253
Accrued expenses - other	21,014				20,560				21,014	20,560		20,516
Total current liabilities	558,585				651,457				558,585	651,457		651,413
Total liabilities	1,011,275				1,190,922				1,011,275	1,190,922		1,190,878
Accumulated deficit	(210,579)				91,816				(210,579)	91,816		91,690
Total shareholders' equity	465,084				749,501				465,084	749,501	$ 613,724	749,375		$ 515,546
Total liabilities and shareholders' equity	1,476,359				1,940,423				1,476,359	1,940,423		$ 1,940,253
Consolidated Statement of Operations and Comprehensive Loss:
Net sales	1,360,628	$ 1,373,334	$ 1,416,078	$ 1,342,484	1,155,069	$ 1,124,957	$ 1,126,464	$ 1,078,740	5,492,524	4,485,230	4,410,388
Cost of sales									(5,116,515)	(4,211,085)	(4,144,802)
Gross profit	93,856	93,358	98,416	90,378	72,579	65,090	66,714	69,762	376,009	274,145	265,586
Loss from operations									(267,285)	18,565	47,077
Loss before income taxes	(303,814)	48	(2,224)	(1,318)	(1,714)	299	2,946	6,532	(307,308)	8,062	36,215
Income tax benefit (expense)									5,039	7,126	(11,195)
Net loss	(298,025)	169	(3,964)	(450)	6,513	961	3,490	4,225	(302,269)	15,188	25,020
Net loss attributable to Diplomat Pharmacy, Inc.	(298,025)	169	(3,964)	(450)	6,536	1,016	3,591	4,367	(302,269)	15,510	28,273
Total comprehensive loss									(306,561)	15,510	28,273
Consolidated Statement of Cash Flows:
Net loss	(298,025)	$ 169	$ (3,964)	$ (450)	$ 6,513	$ 961	$ 3,490	$ 4,225	(302,269)	15,188	25,020
Change in : Accounts receivable									(2,333)	7,735	(15,128)
Change in : Inventories									(3,932)	13,813	(44,342)
Change in : Other assets and liabilities									5,612	$ (4,615)	$ 367
Difference between Revenue Guidance in Effect before and after Topic 606
Consolidated Balance Sheet:
Receivables, net													$ (6,483)
Inventories													6,313
Total current assets													(170)
Total assets													(170)
Accrued expenses - other													(44)
Total current liabilities													(44)
Total liabilities													(44)
Accumulated deficit													(126)
Total shareholders' equity													(126)
Total liabilities and shareholders' equity													$ (170)
Difference between Revenue Guidance in Effect before and after Topic 606 | ASU 2014-09
Consolidated Balance Sheet:
Receivables, net	15,106								15,106
Inventories	(14,489)								(14,489)
Total current assets	617								617
Total assets	617								617
Accrued expenses - other	160								160
Total current liabilities	160								160
Total liabilities	160								160
Accumulated deficit	457								457
Total shareholders' equity	457								457
Total liabilities and shareholders' equity	617								617
Consolidated Statement of Operations and Comprehensive Loss:
Net sales									(358,543)
Cost of sales									358,990
Gross profit									447
Loss from operations									447
Loss before income taxes									447
Income tax benefit (expense)									(116)
Net loss									331
Net loss attributable to Diplomat Pharmacy, Inc.									331
Total comprehensive loss									331
Consolidated Statement of Cash Flows:
Net loss									331
Change in : Accounts receivable									(15,106)
Change in : Inventories									14,489
Change in : Other assets and liabilities									286
Revenue Guidance in Effect before Topic 606 | ASU 2014-09
Consolidated Balance Sheet:
Receivables, net	341,708								341,708
Inventories	196,084								196,084
Total current assets	556,873								556,873
Total assets	1,476,976								1,476,976
Accrued expenses - other	21,174								21,174
Total current liabilities	558,745								558,745
Total liabilities	1,011,435								1,011,435
Accumulated deficit	(210,122)								(210,122)
Total shareholders' equity	465,541								465,541
Total liabilities and shareholders' equity	$ 1,476,976								1,476,976
Consolidated Statement of Operations and Comprehensive Loss:
Net sales									5,133,981
Cost of sales									(4,757,525)
Gross profit									376,456
Loss from operations									(266,838)
Loss before income taxes									(306,861)
Income tax benefit (expense)									4,923
Net loss									(301,938)
Net loss attributable to Diplomat Pharmacy, Inc.									(301,938)
Total comprehensive loss									(306,230)
Consolidated Statement of Cash Flows:
Net loss									(301,938)
Change in : Accounts receivable									(17,439)
Change in : Inventories									10,557
Change in : Other assets and liabilities									$ 5,898

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Principles of Consolidation thru Goodwill (Details)	12 Months Ended
	Dec. 31, 2018USD ($)item	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)	Nov. 30, 2018	Jan. 02, 2018USD ($)	Feb. 28, 2017
Principles of Consolidation
Percentage of interest in a non-consolidated entity	22.00%			4.70%		22.00%
Reclassifications
Shipping and handling costs, reclassified from SG&A to Cost of sales		$ 55,426,000	$ 45,795,000
Cost of nursing support services, reclassified from SG&A to cost of sales		19,108,000	13,447,000
Concentrations of Risk
Noninterest-bearing cash balances insurance coverage per depositor at each financial institution	$ 250
Receivables
Receivables, net	326,602,000	332,091,000			$ 325,608,000
Trade receivables and allowance for doubtful accounts
Trade receivables collateral amount	$ 0
Trade receivables terms after sale of product or performance of service	30 days
Beginning balance	$ (22,050,000)	(15,257,000)	(8,123,000)
Charged to expense	8,660,000	9,424,000	9,534,000
Write-offs, net of recoveries	5,368,000	2,631,000	2,400,000
Ending balance	$ (25,342,000)	(22,050,000)	$ (15,257,000)
Inventories
Maximum period before expiration within which Inventory is returnable and fully refundable	6 months
Goodwill
Number of reporting units | item	3
Software and Software Development Costs
Capitalized Software for Internal Use, net
Useful life	3 years
Trade receivables
Receivables
Receivables, net	$ 299,407,000	317,004,000
Allowance for trade receivables	(25,342,000)	(22,050,000)
Rebate receivables
Receivables
Receivables, net	22,375,000	12,847,000
Other receivables
Receivables
Receivables, net	$ 4,820,000	$ 2,240,000
Celgene
Concentrations of Risk
Percentage of total drug purchases	17.00%	17.00%	13.00%
Minimum purchase obligation	$ 0
Pharmacyclics
Concentrations of Risk
Percentage of total drug purchases	17.00%	14.00%	10.00%
Minimum purchase obligation	$ 0
AmerisourceBergen
Concentrations of Risk
Percentage of total drug purchases	28.00%	41.00%	49.00%
Not wholly owned subsidiary
Principles of Consolidation
Percentage of ownership interest in subsidiary that the entity has the ability to control	51.00%

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition (effective January 1, 2018) thru Income Taxes (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018USD ($)	Sep. 30, 2018USD ($)	Jun. 30, 2018USD ($)	Mar. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Sep. 30, 2017USD ($)	Jun. 30, 2017USD ($)	Mar. 31, 2017USD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Revenue
Revenue	$ 1,360,628	$ 1,373,334	$ 1,416,078	$ 1,342,484	$ 1,155,069	$ 1,124,957	$ 1,126,464	$ 1,078,740	$ 5,492,524	$ 4,485,230	$ 4,410,388
Manufacturer's rebates earned on total gross profit (in percent)									17.90%	17.90%
Manufacturer's rebates incurred on total gross profit (in percent)									0.40%	0.40%
Advertising and Marketing Costs
Advertising and marketing costs									$ 3,075	$ 2,251	3,868
Defined Contribution Savings Plans
Expenses for defined contribution savings plans									$ 4,056	$ 2,908	$ 2,665
Share-Based Compensation
Expected dividend yield (as a percent)									0.00%	0.00%	0.00%
Stock Options | Key employees
Share-Based Compensation
Maximum term of stock options									10 years
Expected dividend yield (as a percent)									0.00%
Stock Options | Key employees | Tranche One
Share-Based Compensation
Vesting percentage									25.00%
Number of anniversaries dates upon which stock options become exercisable									3 years
Stock Options | Key employees | Tranche Two
Share-Based Compensation
Vesting percentage									33.00%
Number of anniversaries dates upon which stock options become exercisable									2 years
Restricted Stock Units
Share-Based Compensation
Vesting period (in years)									3 years
Restricted Stock Units | Key employees
Share-Based Compensation
Vesting period (in years)									3 years
Inter-segment eliminations
Revenue
Revenue									$ (27,768)
Specialty
Revenue
Revenue									4,790,837	$ 4,472,857	$ 4,410,388
PBM
Revenue
Revenue									729,455	12,373
Oncology | Specialty
Revenue
Revenue									2,788,154	2,545,708	2,102,130
Specialty infusion | Specialty
Revenue
Revenue									704,872	617,904	505,240
Immunology | Specialty
Revenue
Revenue									$ 555,115	$ 561,730	644,173
Hepatitis | Specialty
Revenue
Revenue											583,751
Percentage of minimum Revenue									1,484.70	2,810.63
Other | Specialty
Revenue
Revenue									$ 594,226	$ 466,452	$ 575,094
Other | PBM
Revenue
Revenue									23,080	2,032
Retail networks | PBM
Revenue
Revenue									549,760	5,166
Specialty pharmacy | PBM
Revenue
Revenue									88,457	2,914
Mail order | PBM
Revenue
Revenue									$ 68,158	$ 2,261

BUSINESS ACQUISITIONS - LDI Hol

BUSINESS ACQUISITIONS - LDI Holding Company LLC (Details) - USD ($) $ / shares in Units, $ in Thousands	Dec. 20, 2017	Dec. 19, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	May 08, 2017	Dec. 31, 2014
BUSINESS ACQUISITIONS
Percentage of acquired entities sales in consolidated net sales				2.00%	6.00%
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets						$ 7,730
Goodwill			$ 609,592	$ 832,624	$ 316,616		$ 256,318
LDI Holding Company LLC
BUSINESS ACQUISITIONS
Cash	$ 520,157
Restricted common shares	79,088
Total	$ 599,245
Restricted common shares (in shares)	4,113,188
Market price (in dollars per share)		$ 20.24
Market price multiplier to factor in restricted nature of the shares (as a percent)		95.00%
Purchase consideration deposited into an escrow account	$ 7,500
Released from escrow to the sellers			6,357
Released from escrow to the company			1,143
Acquisition-related costs charged to Selling, general, and administrative expenses			$ 794	$ 948
Summary of the preliminary fair value determination of the acquired assets and liabilities
Cash	780
Receivables	40,852
Inventories	2,857
Prepaid expenses and other current assets	750
Property and equipment	1,930
Capitalized software for internal use	1,325
Definite-lived intangible assets	201,523
Other noncurrent assets	148
Accounts payable	(16,409)
Rebates payable	(23,121)
Accrued expenses - compensation and benefits	(2,329)
Accrued expenses - other	(1,948)
Deferred income taxes	(31,434)
Total identifiable net assets	174,924
Goodwill	424,321
Total acquisition price	599,245
Customer relationships | LDI Holding Company LLC
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 184,973
Definite-lived intangible assets
Useful Life	10 years
Trade names and trademarks | LDI Holding Company LLC
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 16,550
Definite-lived intangible assets
Useful Life	4 years

BUSINESS ACQUISITIONS - Pharmac

BUSINESS ACQUISITIONS - Pharmaceutical Technologies, Inc. (Details) - USD ($) $ / shares in Units, $ in Thousands	Nov. 27, 2017	Nov. 24, 2017	Dec. 31, 2018	Dec. 31, 2017	May 08, 2017	Dec. 31, 2016	Dec. 31, 2014
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets					$ 7,730
Goodwill			$ 609,592	$ 832,624		$ 316,616	$ 256,318
Pharmaceutical Technologies, Inc.
BUSINESS ACQUISITIONS
Cash	$ 36,534
Restricted common shares	12,753
Total	$ 49,287
Restricted common shares (in shares)	835,017
Market price (in dollars per share)		$ 16.97
Market price multiplier to factor in restricted nature of the shares (as a percent)		90.00%
Purchase consideration deposited into an escrow account	$ 9,005
Acquisition-related costs charged to Selling, general, and administrative expenses			$ 555	$ 804
Summary of the preliminary fair value determination of the acquired assets and liabilities
Cash	9,851
Accounts receivable	20,622
Inventories	200
Prepaid expenses and other current assets	650
Property and equipment	13,544
Capitalized software for internal use	1,800
Definite-lived intangible assets	6,720
Accounts payable	(14,968)
Rebates payable	(7,882)
Accrued expenses - compensation and benefits	(160)
Accrued expenses - other	(4,891)
Total identifiable net assets	25,486
Goodwill	23,801
Total acquisition price	$ 49,287
Pharmaceutical Technologies, Inc. | Minimum
BUSINESS ACQUISITIONS
Deposit term into an escrow account	18 months
Pharmaceutical Technologies, Inc. | Maximum
BUSINESS ACQUISITIONS
Deposit term into an escrow account	36 months
Customer relationships | Pharmaceutical Technologies, Inc.
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 5,900
Definite-lived intangible assets
Useful Life	10 years
Trade names and trademarks | Pharmaceutical Technologies, Inc.
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 820
Definite-lived intangible assets
Useful Life	2 years

BUSINESS ACQUISITIONS - Focus R

BUSINESS ACQUISITIONS - Focus Rx Pharmacy Services Inc. and Focus Rx Inc. (Details) - USD ($) $ / shares in Units, $ in Thousands	Sep. 01, 2017	Aug. 31, 2017	Nov. 30, 2018	Dec. 31, 2017	Dec. 31, 2018	May 08, 2017	Dec. 31, 2016	Dec. 31, 2014
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets						$ 7,730
Goodwill				$ 832,624	$ 609,592		$ 316,616	$ 256,318
Focus Rx Pharmacy Services Inc. and Focus Rx Inc.
BUSINESS ACQUISITIONS
Cash	$ 17,252
Restricted common shares	5,643
Contingent consideration at fair value	2,080		$ 1,500
Total	$ 24,975
Restricted common shares (in shares)	374,297
Market price (in dollars per share)		$ 16.75
Market price multiplier to factor in restricted nature of the shares (as a percent)		90.00%
Maximum additional cash payouts per performance period	$ 1,500
Maximum payout of contingent consideration	3,000
Fair value of contingent liability				2,600	$ 1,420
Purchase consideration deposited into an escrow account	$ 1,200
Deposit term into an escrow account	12 months
Acquisition-related costs charged to Selling, general, and administrative expenses				$ 329
Summary of the preliminary fair value determination of the acquired assets and liabilities
Cash	$ 1,809
Accounts receivable	5,123
Inventories	261
Definite-lived intangible assets	7,100
Other noncurrent assets	22
Accounts payable	(5,122)
Accrued expenses - compensation and benefits	(156)
Total identifiable net assets	9,037
Goodwill	15,938
Total acquisition price	24,975
Patient relationships | Focus Rx Pharmacy Services Inc. and Focus Rx Inc.
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 3,700
Definite-lived intangible assets
Useful Life	7 years
Non-compete employment agreements | Focus Rx Pharmacy Services Inc. and Focus Rx Inc.
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 2,200
Definite-lived intangible assets
Useful Life	3 years
Trade names and trademarks | Focus Rx Pharmacy Services Inc. and Focus Rx Inc.
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 1,200
Definite-lived intangible assets
Useful Life	3 years

BUSINESS ACQUISITIONS - Accurat

BUSINESS ACQUISITIONS - Accurate Rx Pharmacy Consulting, LLC (Details) - USD ($) $ / shares in Units, $ in Thousands	Jul. 05, 2017	Jul. 03, 2017	Nov. 30, 2018	Dec. 31, 2017	Dec. 31, 2018	May 08, 2017	Dec. 31, 2016	Dec. 31, 2014
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets						$ 7,730
Goodwill				$ 832,624	$ 609,592		$ 316,616	$ 256,318
Accurate Rx Pharmacy Consulting, LLC
BUSINESS ACQUISITIONS
Cash	$ 9,408
Restricted common shares	1,776
Contingent consideration at fair value	1,980		$ 1,800
Total	$ 13,164
Restricted common shares (in shares)	131,108
Market price (in dollars per share)		$ 15.05
Market price multiplier to factor in restricted nature of the shares (as a percent)		90.00%
Maximum additional cash payouts per performance period	$ 3,600
Maximum payout of contingent consideration	7,200
Fair value of contingent liability				1,600	$ 1,715
Purchase consideration deposited into an escrow account	$ 1,000
Deposit term into an escrow account	15 months
Acquisition-related costs charged to Selling, general, and administrative expenses				$ 218
Summary of the preliminary fair value determination of the acquired assets and liabilities
Cash	$ 1,295
Accounts receivable	2,196
Inventory	936
Prepaid expenses and other current assets	34
Definite-lived intangible assets	3,420
Other noncurrent assets	3
Accounts payable	(3,303)
Accrued expenses - compensation and benefits	(152)
Accrued expenses - other	(6)
Total identifiable net assets	4,423
Goodwill	8,741
Total acquisition price	13,164
Patient relationships | Accurate Rx Pharmacy Consulting, LLC
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 2,100
Definite-lived intangible assets
Useful Life	7 years
Non-compete employment agreements | Accurate Rx Pharmacy Consulting, LLC
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 670
Definite-lived intangible assets
Useful Life	5 years
Trade names and trademarks | Accurate Rx Pharmacy Consulting, LLC
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 650
Definite-lived intangible assets
Useful Life	4 years

BUSINESS ACQUISITIONS - WRB Com

BUSINESS ACQUISITIONS - WRB Communications, LLC (Details) - USD ($) $ / shares in Units, $ in Thousands	May 08, 2017	May 05, 2017	Dec. 31, 2017	Dec. 31, 2018	Jan. 31, 2018	Dec. 31, 2016	Dec. 31, 2014
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 7,730
Goodwill			$ 832,624	$ 609,592		$ 316,616	$ 256,318
WRB Communications, LLC
BUSINESS ACQUISITIONS
Cash	26,804
Restricted common shares	4,291
Contingent consideration at fair value	530
Total	$ 31,625
Restricted common shares (in shares)	299,325
Market price (in dollars per share)		$ 15.93
Market price multiplier to factor in restricted nature of the shares (as a percent)		90.00%
Maximum additional cash payouts per performance period	$ 500
Amount received by the formers owners					$ 1,000
Purchase consideration deposited into an escrow account	$ 1,950
Deposit term into an escrow account	18 months
Acquisition-related costs charged to Selling, general, and administrative expenses			$ 259
Summary of the preliminary fair value determination of the acquired assets and liabilities
Cash	$ 1,018
Accounts receivable	2,593
Prepaid expenses and other current assets	179
Property and equipment	498
Definite-lived intangible assets	7,730
Other noncurrent assets	24
Accounts payable	(100)
Accrued expenses - other	(498)
Total identifiable net assets	11,444
Goodwill	20,181
Total acquisition price	31,625
Customer relationships | WRB Communications, LLC
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 5,200
Definite-lived intangible assets
Useful Life	7 years
Non-compete employment agreements | WRB Communications, LLC
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 1,530
Definite-lived intangible assets
Useful Life	4 years
Trade names and trademarks | WRB Communications, LLC
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 1,000
Definite-lived intangible assets
Useful Life	2 years

BUSINESS ACQUISITIONS - Comfort

BUSINESS ACQUISITIONS - Comfort Infusion, Inc. (Details) - USD ($) $ in Thousands	Mar. 22, 2017	Jul. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	May 08, 2017	Dec. 31, 2016	Dec. 31, 2014
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets					$ 7,730
Goodwill			$ 832,624	$ 609,592		$ 316,616	$ 256,318
Comfort Infusion, Inc.
BUSINESS ACQUISITIONS
Cash	$ 10,613
Contingent consideration at fair value	3,800	$ 2,000
Total	14,413
Maximum additional cash payouts per performance period	2,000
Maximum payout of contingent consideration	6,000
Fair value of contingent liability			4,300	$ 3,760
Purchase consideration deposited into an escrow account	$ 1,050
Deposit term into an escrow account	18 months
Acquisition-related costs charged to Selling, general, and administrative expenses			$ 204
Summary of the preliminary fair value determination of the acquired assets and liabilities
Cash	$ 104
Accounts receivable	575
Inventories	118
Prepaid expenses and other current assets	15
Definite-lived intangible assets	2,400
Other noncurrent assets	5
Accounts payable	(372)
Accrued expenses - other	(101)
Total identifiable net assets	2,744
Goodwill	11,669
Total acquisition price	14,413
Physician relationships | Comfort Infusion, Inc.
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 1,200
Definite-lived intangible assets
Useful Life	7 years
Non-compete employment agreements | Comfort Infusion, Inc.
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 1,200
Definite-lived intangible assets
Useful Life	5 years

BUSINESS ACQUISITIONS - Affinit

BUSINESS ACQUISITIONS - Affinity Biotech, Inc. (Details) - USD ($) $ in Thousands	Feb. 01, 2017	Aug. 31, 2018	Jun. 30, 2018	Dec. 31, 2017	Dec. 31, 2018	May 08, 2017	Dec. 31, 2016	Dec. 31, 2014
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets						$ 7,730
Goodwill				$ 832,624	$ 609,592		$ 316,616	$ 256,318
Affinity Biotech, Inc.
BUSINESS ACQUISITIONS
Cash	$ 17,228
Contingent consideration at fair value	35		$ 2,269
Total	17,263
Maximum payout of contingent consideration	4,000
Fair value of contingent liability				2,600
Purchase consideration deposited into an escrow account	$ 2,000
Deposit term into an escrow account	18 months
Released from escrow to the sellers		$ 1,851
Released from escrow to the company		$ 149
Acquisition-related costs charged to Selling, general, and administrative expenses				$ 204
Summary of the preliminary fair value determination of the acquired assets and liabilities
Cash	$ 1,043
Accounts receivable	3,433
Inventories	79
Prepaid expenses and other current assets	74
Definite-lived intangible assets	5,100
Other noncurrent assets	5
Accounts payable	(1,075)
Accrued expenses - compensation and benefits	(144)
Accrued expenses - other	(25)
Total identifiable net assets	8,490
Goodwill	8,773
Total acquisition price	17,263
Patient relationships | Affinity Biotech, Inc.
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 4,000
Definite-lived intangible assets
Useful Life	7 years
Non-compete employment agreements | Affinity Biotech, Inc.
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 1,100
Definite-lived intangible assets
Useful Life	5 years

BUSINESS ACQUISITIONS - Valley

BUSINESS ACQUISITIONS - Valley Campus Pharmacy, Inc (Details) - USD ($) $ / shares in Units, $ in Thousands	Jun. 01, 2016	May 31, 2016	Jun. 30, 2018	Dec. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	May 08, 2017	Dec. 31, 2014
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets							$ 7,730
Goodwill				$ 316,616	$ 609,592	$ 832,624		$ 256,318
Valley Campus Pharmacy, Inc
BUSINESS ACQUISITIONS
Cash	$ 70,117
Restricted common shares	9,507
Total	$ 79,624
Restricted common shares (in shares)	324,244
Market price (in dollars per share)		$ 32.58
Market price multiplier to factor in restricted nature of the shares (as a percent)		90.00%
Purchase consideration deposited into an escrow account	$ 3,800
Deposit term into an escrow account	12 months
Released from escrow account to the sellers			$ 3,650
Released from escrow to the company			$ 150
Acquisition-related costs charged to Selling, general, and administrative expenses				$ 410
Summary of the preliminary fair value determination of the acquired assets and liabilities
Cash	$ 2,114
Accounts receivable	16,271
Inventories	4,740
Prepaid expenses and other current assets	46
Property and equipment	200
Capitalized software for internal use	14,000
Definite-lived intangible assets	13,890
Other noncurrent assets	21
Accounts payable	(29,773)
Accrued expenses - compensation and benefits	(400)
Accrued expenses - other	(1,962)
Total identifiable net assets	19,147
Goodwill	60,477
Total acquisition price	79,624
Physician relationships | Valley Campus Pharmacy, Inc
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 7,700
Definite-lived intangible assets
Useful Life	10 years
Non-compete employment agreements | Valley Campus Pharmacy, Inc
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 4,490
Definite-lived intangible assets
Useful Life	5 years
Trade names and trademarks | Valley Campus Pharmacy, Inc
Summary of the preliminary fair value determination of the acquired assets and liabilities
Definite-lived intangible assets	$ 1,700
Definite-lived intangible assets
Useful Life	1 year

BUSINESS ACQUISITIONS - Unaudit

BUSINESS ACQUISITIONS - Unaudited Pro Forma Operating Results (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017USD ($)$ / shares
Pro Forma Operating Results
Net sales	$ 4,954,494
Net income attributable to Diplomat Pharmacy, Inc.	$ 6,733
Income per common share - basic and diluted (in dollars per share) | $ / shares	$ 0.09

FAIR VALUE MEASUREMENTS - Recur

FAIR VALUE MEASUREMENTS - Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Contingent consideration
Fair value measurements
Asset (Liability)	$ (6,895)	$ (12,100)
Interest rate swaps
Fair value measurements
Asset (Liability)	(4,292)
Level 2 | Interest rate swaps
Fair value measurements
Asset (Liability)	(4,292)
Level 3 | Contingent consideration
Fair value measurements
Asset (Liability)	$ (6,895)	$ (12,100)

FAIR VALUE MEASUREMENTS - Roll

FAIR VALUE MEASUREMENTS - Roll forward of Level 3 Measurements (Details) - Contingent consideration - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Level 3 measurements
Balance at beginning of the period	$ (12,100)		$ (52,665)
Change in fair value	(3,364)	$ 3,675	8,922
Payments	8,569		$ 43,743
Balance at end of the period	$ (6,895)	(12,100)
Affinity Biotech, Inc.
Level 3 measurements
Acquisition		(35)
Comfort Infusion, Inc.
Level 3 measurements
Acquisition		(3,800)
WRB Communications, LLC
Level 3 measurements
Acquisition		(530)
Accurate Rx Pharmacy Consulting, LLC
Level 3 measurements
Acquisition		(1,980)
Focus Rx Pharmacy Services Inc. and Focus Rx Inc.
Level 3 measurements
Acquisition		$ (2,080)

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) $ in Thousands	1 Months Ended	12 Months Ended
	Nov. 30, 2018USD ($)item	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Property and equipment
Property and equipment, gross		$ 55,929	$ 54,365
Accumulated depreciation and amortization		(21,404)	(15,375)
Property and equipment, net		34,525	38,990
Depreciation expense		6,228	4,941	$ 3,075
Sale-leaseback of land and building
Property and equipment
Sale-lease back, net book value	$ 7,660
Net cash proceeds from sale-leaseback transaction	$ 14,300
Sale-leaseback, term of lease	12 years
Sale-leaseback, gross deferred gain	$ 5,725
Sale-leaseback, monthly base rental expense	$ 78
Sale-leaseback, percentage of increase in rental payments	2.00%
Sale-leaseback, number of renewal terms of lease | item	3
Sale-leaseback, renewal term of lease	5 years
Land
Property and equipment
Property and equipment, gross		$ 3,532	5,232
Buildings
Property and equipment
Useful Life		40 years
Property and equipment, gross		$ 12,945	18,818
Leasehold improvements
Property and equipment
Property and equipment, gross		$ 6,410	5,247
Leasehold improvements | Minimum
Property and equipment
Useful Life		5 years
Leasehold improvements | Maximum
Property and equipment
Useful Life		15 years
Equipment and fixtures
Property and equipment
Property and equipment, gross		$ 18,769	14,116
Equipment and fixtures | Minimum
Property and equipment
Useful Life		5 years
Equipment and fixtures | Maximum
Property and equipment
Useful Life		10 years
Computer equipment
Property and equipment
Property and equipment, gross		$ 11,999	8,527
Computer equipment | Minimum
Property and equipment
Useful Life		3 years
Computer equipment | Maximum
Property and equipment
Useful Life		5 years
Construction in progress
Property and equipment
Property and equipment, gross		$ 2,274	$ 2,425

CAPITALIZED SOFTWARE FOR INTE_3

CAPITALIZED SOFTWARE FOR INTERNAL USE (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Capitalized software for internal use
Capitalized software for internal use, gross	$ 98,866	$ 82,519
Accumulated amortization	(68,360)	(45,999)
Capitalized software for internal use, net	30,506	36,520
Amortization expense for capitalized software for internal use	22,361	19,781	$ 13,102
Capitalized software for internal use
Capitalized software for internal use
Capitalized software for internal use, gross	$ 88,356	82,017
Capitalized software for internal use | Minimum
Capitalized software for internal use
Useful Life	3 years
Capitalized software for internal use | Maximum
Capitalized software for internal use
Useful Life	7 years
Construction in progress
Capitalized software for internal use
Capitalized software for internal use, gross	$ 10,510	$ 502

GOODWILL AND DEFINITE-LIVED I_3

GOODWILL AND DEFINITE-LIVED INTANGIBLE ASSETS (Details) $ in Thousands	Aug. 28, 2014USD ($)entity	Dec. 31, 2018USD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)	Dec. 31, 2014USD ($)	Nov. 30, 2018	Feb. 28, 2017
Changes in the carrying amount of goodwill
Balance as of beginning of period			$ 832,624	$ 316,616		$ 256,318
Other measurement period adjustments			1,934
Impairments		$ (224,966)	(224,966)
Miscellaneous				3,317	$ 1,023
Balance as of end of period		609,592	609,592	832,624	316,616		$ 256,318
Goodwill impairments		224,966	224,966
Gross Carrying Amount		384,039	384,039	493,282
Accumulated Amortization Impairments		(143,229)	(143,229)	(101,271)
Net Carrying Amount		240,810	240,810	392,011
Impairments of definite-lived intangible assets		82,678	82,678		4,804
Aggregate amortization expense for amortizing intangible assets			68,523	$ 41,844	33,868
Estimated amortization expense
2019		53,944	53,944
2020		41,612	41,612
2021		33,781	33,781
2022		27,738	27,738
2022		25,911	25,911
Thereafter		57,824	57,824
Total		$ 240,810	$ 240,810
Ownership percentage (as a percent)		22.00%	22.00%					4.70%	22.00%
DSP
Changes in the carrying amount of goodwill
Balance as of end of period		$ 68,218	$ 68,218
Discount rate used in annual reporting unit valuations			10.50%
PBM
Changes in the carrying amount of goodwill
Discount rate used in annual reporting unit valuations			12.25%
Customer relationships
Changes in the carrying amount of goodwill
Weighted Average Amortization Period (in years)			9 years 9 months 18 days	9 years 10 months 24 days
Gross Carrying Amount		100,200	$ 100,200	$ 196,073
Accumulated Amortization Impairments		(1,238)	(1,238)	(1,141)
Net Carrying Amount		98,962	98,962	$ 194,932
Residual balance		95,000	$ 95,000
Patient relationships
Changes in the carrying amount of goodwill
Weighted Average Amortization Period (in years)			5 years 10 months 24 days	6 years 9 months 18 days
Gross Carrying Amount		170,100	$ 170,100	$ 170,100
Accumulated Amortization Impairments		(67,964)	(67,964)	(49,643)
Net Carrying Amount		102,136	$ 102,136	$ 120,457
Trade names and trademarks
Changes in the carrying amount of goodwill
Weighted Average Amortization Period (in years)			1 year 9 months 18 days	3 years 8 months 12 days
Gross Carrying Amount		30,650	$ 30,650	$ 44,020
Accumulated Amortization Impairments		(20,270)	(20,270)	(13,624)
Net Carrying Amount		10,380	10,380	$ 30,396
Residual balance		4,000	$ 4,000
Non-compete employment agreements
Changes in the carrying amount of goodwill
Weighted Average Amortization Period (in years)			1 year 7 months 6 days	3 years 1 month 6 days
Gross Carrying Amount		61,389	$ 61,389	$ 61,389
Accumulated Amortization Impairments		(44,100)	(44,100)	(30,560)
Net Carrying Amount		17,289	$ 17,289	$ 30,829
Physician relationships
Changes in the carrying amount of goodwill
Weighted Average Amortization Period (in years)			4 years 9 months 18 days	5 years 8 months 12 days
Gross Carrying Amount		21,700	$ 21,700	$ 21,700
Accumulated Amortization Impairments		(9,657)	(9,657)	(6,303)
Net Carrying Amount		12,043	12,043	15,397
Primrose
Changes in the carrying amount of goodwill
Impairments of definite-lived intangible assets					4,804
Estimated amortization expense
Number of unrelated third party entities (in entities) | entity	2
Committed contribution	$ 5,000
Ownership percentage (as a percent)	51.00%
Amount contributed						2,000	$ 3,000
Primrose | Software licensing agreement
Estimated amortization expense
Amount contributed by unrelated third party entities	$ 2,647
Primrose | Intellectual property
Estimated amortization expense
Amount contributed by unrelated third party entities	$ 2,157
Specialty
Changes in the carrying amount of goodwill
Balance as of beginning of period			385,884	316,616	256,318
Other measurement period adjustments			552
Impairments		(45,776)	(45,776)
Miscellaneous				3,317	1,023
Balance as of end of period		340,660	340,660	385,884	316,616	$ 256,318
Goodwill impairments			45,776
PBM
Changes in the carrying amount of goodwill
Balance as of beginning of period			446,740
Other measurement period adjustments			1,382
Impairments		(179,190)	(179,190)
Balance as of end of period		$ 268,932	268,932	446,740
Goodwill impairments			$ 179,190
Valley Campus Pharmacy, Inc
Changes in the carrying amount of goodwill
Acquired during the period				1,351	59,275
Valley Campus Pharmacy, Inc | Specialty
Changes in the carrying amount of goodwill
Acquired during the period				1,351	$ 59,275
Affinity Biotech, Inc.
Changes in the carrying amount of goodwill
Acquired during the period				8,772
Affinity Biotech, Inc. | Specialty
Changes in the carrying amount of goodwill
Acquired during the period				8,772
Comfort Infusion, Inc.
Changes in the carrying amount of goodwill
Acquired during the period				11,669
Comfort Infusion, Inc. | Specialty
Changes in the carrying amount of goodwill
Acquired during the period				11,669
WRB Communications, LLC
Changes in the carrying amount of goodwill
Acquired during the period				20,181
WRB Communications, LLC | Specialty
Changes in the carrying amount of goodwill
Acquired during the period				20,181
Accurate Rx Pharmacy Consulting, LLC
Changes in the carrying amount of goodwill
Acquired during the period				8,741
Accurate Rx Pharmacy Consulting, LLC | Specialty
Changes in the carrying amount of goodwill
Acquired during the period				8,741
Focus Rx Pharmacy Services Inc. and Focus Rx Inc.
Changes in the carrying amount of goodwill
Acquired during the period				15,237
Focus Rx Pharmacy Services Inc. and Focus Rx Inc. | Specialty
Changes in the carrying amount of goodwill
Acquired during the period				15,237
Pharmaceutical Technologies, Inc.
Changes in the carrying amount of goodwill
Acquired during the period				20,735
Pharmaceutical Technologies, Inc. | PBM
Changes in the carrying amount of goodwill
Acquired during the period				20,735
LDI Holding Company LLC
Changes in the carrying amount of goodwill
Acquired during the period				426,005
LDI Holding Company LLC | PBM
Changes in the carrying amount of goodwill
Acquired during the period				$ 426,005

INVESTMENT IN NON-CONSOLIDATE_2

INVESTMENT IN NON-CONSOLIDATED ENTITIES (Details) - USD ($) $ in Thousands	1 Months Ended			12 Months Ended
	Feb. 28, 2017	Oct. 31, 2015	Dec. 31, 2014	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Nov. 30, 2018	Oct. 31, 2011
Schedule of Equity Method Investments
Ownership percentage (as a percent)	22.00%			22.00%			4.70%
Conversion of outstanding loans in to equity	$ 2,500
Cash paid for investment					$ 100
Affiliated entity | Chief Executive Officer
Schedule of Equity Method Investments
Ownership percentage (as a percent)	43.00%
Ageology
Schedule of Equity Method Investments
Ownership percentage (as a percent)								25.00%
Physician Resource Management, Inc.
Schedule of Equity Method Investments
Ownership percentage (as a percent)		19.90%	15.00%
Cash paid for investment		$ 1,459	$ 3,500
Impairment of non-consolidated entities				$ 286		$ 4,659
Physician Resource Management, Inc. | Chief Executive Officer
Schedule of Equity Method Investments
Cash paid for investment						$ 250

DEBT - Outstanding debt (Detail

DEBT - Outstanding debt (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Long Term and Short Term Debt [Line Items]
Short-term debt, borrowings on line of credit	$ 176,300	$ 188,250
Long-term debt	464,500	550,000
Unamortized debt issuance costs	(14,631)	(17,402)
Total long-term debt	449,869	532,598
Less: current portion	11,500	11,500
Long-term debt, less current portion	438,369	521,098
Term Loan A
Long Term and Short Term Debt [Line Items]
Long-term debt	142,500	150,000
Term Loan B
Long Term and Short Term Debt [Line Items]
Long-term debt	$ 322,000	$ 400,000

DEBT - Summary (Details)

DEBT - Summary (Details) - USD ($) $ in Thousands	Dec. 20, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Apr. 01, 2015	Mar. 31, 2015
Debt
Unamortized debt issuance costs		$ 14,631	$ 17,402
Amortization of debt issuance costs		$ 4,733	2,655	$ 1,176
Letters of credit
Debt
Maximum borrowing capacity	$ 10,000
Swingline loans
Debt
Maximum borrowing capacity	20,000
JPMorgan Chase Bank N.A. And Capital One National Association
Debt
Unamortized debt issuance costs			2,079
JPMorgan Chase Bank N.A. And Capital One National Association | Credit facility
Debt
Debt issuance costs			21,507
Capitalized debt issuance costs			$ 744
JPMorgan Chase Bank N.A. And Capital One National Association | Revolving line of credit
Debt
Amount of borrowing	250,000
Maximum borrowing capacity					$ 175,000	$ 120,000
Interest rate (as a percent)		5.19%	4.04%
Weighted average borrowings		$ 164,301	$ 28,238
Maximum borrowings		231,200	188,250
Amount of borrowings available under the credit agreement		$ 73,700	61,750
JPMorgan Chase Bank N.A. And Capital One National Association | Revolving line of credit | Minimum
Debt
Monthly unused commitment fee (as a percent)		0.30%
JPMorgan Chase Bank N.A. And Capital One National Association | Revolving line of credit | Maximum
Debt
Monthly unused commitment fee (as a percent)		0.40%
JPMorgan Chase Bank N.A. And Capital One National Association | Revolving line of credit | Other noncurrent assets
Debt
Unamortized debt issuance costs		$ 4,246	$ 5,316
JPMorgan Chase Bank N.A. And Capital One National Association | Term Loan A and Term Loan B
Contractual debt obligations
2019		11,500
2020		11,500
2021		11,500
2022		124,000
2023		$ 4,000
JPMorgan Chase Bank N.A. And Capital One National Association | Term Loan A
Debt
Amount of borrowing	150,000
Interest rate (as a percent)		4.78%	4.04%
Quarterly principal payments		$ 1,875
JPMorgan Chase Bank N.A. And Capital One National Association | Term Loan B
Debt
Amount of borrowing	$ 400,000
Interest rate (as a percent)		7.03%	6.04%
Quarterly principal payments		$ 1,000
Voluntary prepayment of debt		$ 74,000
JPMorgan Chase Bank N.A. And Capital One National Association | Term Loan B | LIBOR
Debt
Interest rate margin (as a percent)		4.50%
JPMorgan Chase Bank N.A. And Capital One National Association | Term Loan B | Base Rate
Debt
Interest rate margin (as a percent)		3.50%
JPMorgan Chase Bank N.A. And Capital One National Association | Revolving line of credit and Term loan A | LIBOR
Debt
Interest rate margin (as a percent)	1.00%	2.25%
JPMorgan Chase Bank N.A. And Capital One National Association | Revolving line of credit and Term loan A | Base Rate
Debt
Interest rate margin (as a percent)	0.50%	1.25%
JPMorgan Chase Bank N.A. And Capital One National Association | DDTL
Debt
Maximum borrowing capacity					25,000
Amortization of debt issuance costs			$ 636
Drawn amount			$ 25,000
JPMorgan Chase Bank N.A. And Capital One National Association | Term Loan
Debt
Maximum borrowing capacity					$ 120,000

INTEREST RATE SWAPS (Details)

INTEREST RATE SWAPS (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018USD ($)item	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Other comprehensive loss, net of tax	$ (4,292)
Deferred tax benefit	$ (11,847)	$ (10,795)	$ 8,779
Interest rate swaps
Number of interest rate swap agreements | item	2
Notional amount	$ 290,600
Derivative liability	4,292
Other comprehensive loss, net of tax	(4,292)
Deferred tax benefit	$ (1,099)

SHARE-BASED COMPENSATION - Stoc

SHARE-BASED COMPENSATION - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Jan. 02, 2018	Jan. 01, 2016	Oct. 31, 2014
Additional disclosures
Deferred tax asset	$ 7,850	$ 13,100
(Accumulated deficit) retained earnings	(210,579)	91,816			$ 91,690
Income tax benefit (expense)	$ 5,039	7,126	$ (11,195)
2007 Stock Option Plan
Additional disclosures
Number of shares reserved for issuance (in shares)	0
Number of anniversary dates upon which options become exercisable	3 years
Percentage of options exercisable in installments beginning on the first anniversary of the grant date and each of the three anniversaries thereafter	25.00%
2014 Plan
Additional disclosures
Number of shares reserved for issuance (in shares)							4,000,000
Increase to number of shares available for issuance (as a percent)							2.00%
ASU 2016-09
Additional disclosures
Deferred tax asset						$ 16,903
(Accumulated deficit) retained earnings						$ 16,903
Income tax benefit (expense)	$ 80	$ 3,003	$ 4,148
Stock Options
Number of Options
Outstanding at beginning of period (in shares)	6,108,292	4,413,341	4,114,685
Granted (in shares)	411,486	4,066,735	1,546,532
Exercised (in shares)	(379,194)	(1,217,320)	(564,844)
Cancelled/expired (in shares)	(954,559)	(1,154,464)	(683,032)
Outstanding at end of period (in shares)	5,186,025	6,108,292	4,413,341	4,114,685
Exercisable at end of period (in shares)	2,011,169
Weighted Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 18.62	$ 19.02	$ 17.53
Granted (in dollars per share)	21.39	16.43	22.64
Exercised (in dollars per share)	10.81	6.47	7.87
Cancelled/expired (in dollars per share)	24.13	25.25	27.41
Outstanding at end of period (in dollars per share)	18.42	$ 18.62	$ 19.02	$ 17.53
Exercisable at end of period (in dollars per share)	$ 18.35
Weighted Average Remaining Contractual Life
Outstanding (in years)	8 years	8 years 6 months	7 years	7 years 8 months 12 days
Exercisable (in years)	7 years 1 month 6 days
Aggregate Intrinsic Value
Outstanding at end of period	$ 2,910	$ 25,777	$ 11,558	$ 76,567
Exercisable at end of period	$ 2,910

SHARE-BASED COMPENSATION - Info

SHARE-BASED COMPENSATION - Information and Valuation Assumptions (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Oct. 31, 2014	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Mar. 31, 2018
Share-based compensation
Total compensation expense		$ 7,895	$ 6,628	$ 5,073
Assumptions used to determine the valuation of granted options
Expected dividend yield (as a percent)		0.00%	0.00%	0.00%
Expected term (in years)				6 years 3 months
Additional disclosures
Total compensation cost related to non-vested options not yet recognized		$ 15,677
Weighted average period to recognize compensation cost related to non-vested options not yet recognized		2 years 5 months 9 days
2007 Stock Option Plan
Share-based compensation
Percentage of options exercisable in installments beginning on the first anniversary of the grant date and each of the three anniversaries thereafter		25.00%
Number of anniversary dates upon which options become exercisable		3 years
Maximum term of stock option plan		10 years
Minimum
Assumptions used to determine the valuation of granted options
Exercise price		$ 20.52	$ 14.36	$ 14.40
Expected volatility (as a percent)		36.06%	33.44%	23.90%
Risk-free rate for expected term (as a percent)		2.33%	1.88%	1.23%
Expected term (in years)		6 years	5 years
Maximum
Assumptions used to determine the valuation of granted options
Exercise price		$ 24.29	$ 20.87	$ 36.60
Expected volatility (as a percent)		38.36%	36.38%	24.76%
Risk-free rate for expected term (as a percent)		2.84%	2.34%	2.06%
Expected term (in years)		6 years 3 months	6 years 3 months
Service-based awards | 2014 Plan
Share-based compensation
Maximum term of stock option plan		10 years	10 years
Service-based awards | 2014 Plan | Tranche One
Share-based compensation
Granted (in shares)		105,000
Percentage of options exercisable in installments beginning on the first anniversary of the grant date and each of the three anniversaries thereafter	25.00%
Number of anniversary dates upon which options become exercisable		3 years
Service-based awards | 2014 Plan | Tranche Two
Share-based compensation
Granted (in shares)		225,135
Percentage of options exercisable in installments beginning on the first anniversary of the grant date and each of the three anniversaries thereafter		33.30%
Number of anniversary dates upon which options become exercisable		2 years
Service-based awards | 2014 Plan | Key employees
Additional disclosures
Number of shares issued during the period (in shares)		330,135	2,805,976	1,165,000
Vested and issued (in shares)			(200,000)
Make-whole inducement award
Share-based compensation
Number of anniversary dates upon which options become exercisable		2 years
Maximum term of stock option plan		10 years
Make-whole inducement award | Executive
Share-based compensation
Granted (in shares)		81,351
Percentage of options exercisable in installments beginning on the first anniversary of the grant date and each of the three anniversaries thereafter		33.30%
Stock Options
Share-based compensation
Granted (in shares)		411,486	4,066,735	1,546,532
Weighted average grant-date fair value of options granted (in dollars per share)		$ 8.75	$ 6.23	$ 6.34
Additional disclosures
Intrinsic value of options exercised		$ 4,560	$ 11,973	$ 13,048
Stock Options | Key employees
Share-based compensation
Maximum term of stock option plan		10 years
Assumptions used to determine the valuation of granted options
Expected dividend yield (as a percent)		0.00%
Stock Options | Key employees | Tranche One
Share-based compensation
Percentage of options exercisable in installments beginning on the first anniversary of the grant date and each of the three anniversaries thereafter		25.00%
Number of anniversary dates upon which options become exercisable		3 years
Stock Options | Key employees | Tranche Two
Share-based compensation
Percentage of options exercisable in installments beginning on the first anniversary of the grant date and each of the three anniversaries thereafter		33.00%
Number of anniversary dates upon which options become exercisable		2 years
Performance-based RSUs | 2014 Plan
Share-based compensation
Maximum term of stock option plan		10 years
Additional disclosures
Incremental compensation expense			$ 0	$ 0
Performance-based RSUs | 2014 Plan | Key employees
Share-based compensation
Granted (in shares)		800,000
Number of shares options vested at time of grant (in shares)					225,862
Additional disclosures
Number of shares issued during the period (in shares)			260,759	381,532

SHARE-BASED COMPENSATION - RSUs

SHARE-BASED COMPENSATION - RSUs and RSAs (Details) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Jun. 30, 2018shares	Dec. 31, 2018USD ($)installment$ / sharesshares	Dec. 31, 2017USD ($)$ / sharesshares	Dec. 31, 2016USD ($)$ / sharesshares
Additional disclosures
Share-based compensation expense | $		$ 7,895	$ 6,628	$ 5,073
Weighted average period to recognize compensation cost related to non-vested options not yet recognized		2 years 5 months 9 days
Restricted Stock Units
Number of Shares Subject to Restriction
Outstanding at the beginning of the period (in shares)		66,639
Granted (in shares)		2,059,066	90,718
Vested and issued (in shares)		(183,263)
Cancelled/expired (in shares)		(73,413)	(24,079)
Outstanding at the end of the period (in shares)		1,869,029	66,639
Weighted Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share) | $ / shares		$ 14.65
Granted (in dollars per share) | $ / shares		22	$ 14.65
Vested and issued (in dollars per share) | $ / shares		23.46
Cancelled/expired (in dollars per share) | $ / shares		20.21	14.65
Outstanding at the end of the period (in dollars per share) | $ / shares		$ 21.67	$ 14.65
Additional disclosures
Vesting period		3 years
Share-based compensation expense | $		$ 9,634	$ 203
Total compensation cost not yet recognized | $		$ 17,791
Weighted average period to recognize compensation cost related to non-vested options not yet recognized		2 years 2 months 12 days
Restricted Stock Units | Key employees
Additional disclosures
Vesting period		3 years
Service-based awards, RSUs | Key employees
Number of Shares Subject to Restriction
Granted (in shares)		1,131,591	90,718
Sign-on inducement award, RSUs | Executive
Number of Shares Subject to Restriction
Granted (in shares)	124,875
Make-whole inducement award, RSUs | Executive
Number of Shares Subject to Restriction
Granted (in shares)	33,716
Performance-based RSUs
Additional disclosures
Percentage of performance-based RSUs granted shares accounted will be earned		37.50%
Percentage of performance-based RSUs granted shares accounted will be forfeited		62.50%
Performance-based RSUs | Certain executives
Number of Shares Subject to Restriction
Granted (in shares)		139,512
Additional disclosures
Number of installments in which the award vest | installment		3
Make-whole inducement award, performance-based RSUs | Executive
Number of Shares Subject to Restriction
Granted (in shares)		629,372
Additional disclosures
Number of installments in which the award vest | installment		3
Sign-on inducement award, performance-based RSUs | Executive
Additional disclosures
Number of installments in which the award vest | installment		3
Number of performance-based RSUs additional granted shares		1,498,500
Restricted Stock Awards
Number of Shares Subject to Restriction
Outstanding at the beginning of the period (in shares)		34,291	5,765	10,805
Granted (in shares)		40,796	36,814	5,765
Vested and issued (in shares)		(31,732)	(8,288)	(10,805)
Outstanding at the end of the period (in shares)		43,355	34,291	5,765
Weighted Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share) | $ / shares		$ 17.45	$ 32.97	$ 26.60
Granted (in dollars per share) | $ / shares		21.30	17.13	32.97
Vested and issued (in dollars per share) | $ / shares		17.68	26.80	26.60
Outstanding at the end of the period (in dollars per share) | $ / shares		$ 20.91	$ 17.45	$ 32.97
Additional disclosures
Vesting period		1 year
Share-based compensation expense | $		$ 643	$ 450	$ 339
Total compensation cost not yet recognized | $		$ 485

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current:
Federal	$ (4,304)	$ (1,748)	$ (703)
State and local	(2,504)	(1,921)	(1,713)
Total current	(6,808)	(3,669)	(2,416)
Deferred:
Federal	10,461	10,343	(7,989)
State and local	1,386	452	(790)
Total deferred	11,847	10,795	(8,779)
Income tax benefit (expense)	5,039	7,126	(11,195)
Reconciliation of income taxes computed at the United States federal statutory tax rate to income tax benefit (expense)
Income tax benefit (expense) at U.S. statutory rate	64,535	(2,822)	(12,675)
State income taxes, net of federal benefit	12,547	(418)	(1,904)
State income taxes, valuation allowance	(13,140)
Share-based compensation	80	3,003	4,148
Valuation allowance	(48,677)
Loss on noncontrolling interest		(113)	(1,138)
Change in tax laws	1,104	7,828
Changes in uncertain tax positions	(636)
Disallowed compensation	(678)
Impairment losses	(9,674)
Other	(422)	(352)	374
Income tax benefit (expense)	5,039	7,126	(11,195)
Deferred tax assets:
Intangible assets	50,630
Allowance for doubtful accounts	6,501	5,696
Net operating loss and credit carryforwards	4,064	2,114
Compensation and benefits	7,407	4,611
Other temporary differences	2,164	679
Total deferred tax assets	70,766	13,100
Valuation allowance	(62,916)
Total net deferred tax assets	7,850	13,100
Deferred tax liabilities:
Property and equipment	(9,358)	(8,221)
Intangibles assets		(18,185)
Prepaid expenses and other current assets	(1,158)	(740)
Investments	(115)	(321)
Total deferred tax liabilities	(10,631)	(27,467)
Net deferred tax liabilities	(2,781)	$ (14,367)
Net operating loss carry-forwards, state and local	$ 40,970
U.S. federal corporate tax rate	21.00%	35.00%
Additional income tax benefit	$ 1,104	$ 7,828
Change in unrecognized tax benefits
Balance, January 1,	268	268	0
Additions based on tax positions of prior years	783	0	268
Additions based on tax positions of the current year	1,302	0	0
Reductions due to lapse in statute of limitations	(268)	0	0
Balance, December 31,	2,085	$ 268	$ 268
Impact on the effective tax rate, if unrecognized tax benefits were recognized	816
Decrease in unrecognized tax benefits in the next twelve months primarily due to the progression of federal audits and filing of various change in accounting methods	$ 723

(LOSS) INCOME PER COMMON SHAR_2

(LOSS) INCOME PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Numerator:
Net (loss) income attributable to Diplomat Pharmacy, Inc.	$ (298,025)	$ 169	$ (3,964)	$ (450)	$ 6,536	$ 1,016	$ 3,591	$ 4,367	$ (302,269)	$ 15,510	$ 28,273
Denominator:
Weighted average common shares outstanding, basic (in shares)									74,244,520	68,130,322	65,970,396
Weighted average dilutive effect of stock options, RSAs and RSUs									399,522	649,731	1,739,750
Weighted average dilutive effect of contingent consideration (in shares)											337,577
Weighted average common shares outstanding, diluted (in shares)									74,244,520	68,780,053	68,047,723
Net (loss) income per common share:
Basic (in dollars per share)	$ (4)	$ 0	$ (0.05)	$ (0.01)	$ 0.09	$ 0.01	$ 0.05	$ 0.07	$ (4.07)	$ 0.23	$ 0.43
Diluted (in dollars per share)	$ (4)	$ 0	$ (0.05)	$ (0.01)	$ 0.09	$ 0.01	$ 0.05	$ 0.06	$ (4.07)	$ 0.23	$ 0.42

(LOSS) INCOME PER COMMON SHAR_3

(LOSS) INCOME PER COMMON SHARE - Shares excluded from the computation of weighted average diluted shares outstanding (Details) - shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Anti-dilutive securities excluded
Anti-dilutive securities excluded (in shares)	6,439,954	4,045,083	1,833,816
Service-based and Performance-based stock options
Anti-dilutive securities excluded
Anti-dilutive securities excluded (in shares)	4,147,027	3,242,919	1,542,064
Performance-based stock options
Anti-dilutive securities excluded
Anti-dilutive securities excluded (in shares)	574,138	770,503	291,277
Service-based RSUs
Anti-dilutive securities excluded
Anti-dilutive securities excluded (in shares)	325,469	21,623
Performance-based RSUs
Anti-dilutive securities excluded
Anti-dilutive securities excluded (in shares)	1,372,927
RSAs
Anti-dilutive securities excluded
Anti-dilutive securities excluded (in shares)	20,393	10,038	475

RELATED PARTY TRANSACTION (Deta

RELATED PARTY TRANSACTION (Details) - ReactiveCore - USD ($) $ in Thousands	1 Months Ended
	Dec. 31, 2018	Jan. 01, 2019
RELATED PARTY TRANSACTION
Definitive agreement term	3 years
Base fee payable		$ 2,400

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Purchase commitments
Cost of products sold	$ 5,116,515	$ 4,211,085	$ 4,144,802
Operating lease obligations and future minimum operating lease payments
Total rental expense under operating leases	8,416	4,215	4,179
2019	5,961
2020	5,377
2021	4,831
2022	4,203
2023	3,356
Thereafter	14,406
Total	$ 38,134
Purchase Commitments | AmerisourceBergen
Purchase commitments
Purchase obligations period	3 years
Purchase obligation	$ 1,300
Cost of products sold	$ 1,294,000	$ 1,485,000	$ 1,864,000
Previous purchase commitment
Purchase commitments
Purchase obligations period	4 years
Previous purchase commitment | Minimum
Purchase commitments
Purchase obligation	$ 1,800
Previous purchase commitment | Maximum
Purchase commitments
Purchase obligation	$ 2,000

SEGMENT REPORTING (Details)

SEGMENT REPORTING (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018USD ($)	Sep. 30, 2018USD ($)	Jun. 30, 2018USD ($)	Mar. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Sep. 30, 2017USD ($)	Jun. 30, 2017USD ($)	Mar. 31, 2017USD ($)	Dec. 31, 2018USD ($)segment	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Segment reporting information
Number of reportable segments | segment									2
Net Sales									$ 5,492,524	$ 4,485,230	$ 4,410,388
Cost of Sales									(5,116,515)	(4,211,085)	(4,144,802)
Gross Profit	$ 93,856	$ 93,358	$ 98,416	$ 90,378	$ 72,579	$ 65,090	$ 66,714	$ 69,762	376,009	274,145	265,586
Inter-segment eliminations
Segment reporting information
Net Sales									(27,768)
Cost of Sales									27,768
Specialty | Operating Segments
Segment reporting information
Net Sales									4,790,837	4,472,857	4,410,388
Cost of Sales									(4,510,262)	(4,202,766)	(4,144,802)
Gross Profit									280,575	270,091	$ 265,586
PBM | Operating Segments
Segment reporting information
Net Sales									729,455	12,373
Cost of Sales									(634,021)	(8,319)
Gross Profit									$ 95,434	$ 4,054

SEGMENT REPORTING - Total Asset

SEGMENT REPORTING - Total Assets by Segment (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Jan. 02, 2018	Dec. 31, 2017
Segment reporting information
Total assets	$ 1,476,359	$ 1,940,253	$ 1,940,423
Specialty
Segment reporting information
Total assets	1,045,174		1,190,188
PBM
Segment reporting information
Total assets	$ 431,185		$ 750,235

SELECTED QUARTERLY FINANCIAL _3

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Selected Quarterly Financial Information
Net sales	$ 1,360,628	$ 1,373,334	$ 1,416,078	$ 1,342,484	$ 1,155,069	$ 1,124,957	$ 1,126,464	$ 1,078,740	$ 5,492,524	$ 4,485,230	$ 4,410,388
Gross profit	93,856	93,358	98,416	90,378	72,579	65,090	66,714	69,762	376,009	274,145	265,586
(Loss) income before income taxes	(303,814)	48	(2,224)	(1,318)	(1,714)	299	2,946	6,532	(307,308)	8,062	36,215
Net income (loss)	(298,025)	169	(3,964)	(450)	6,513	961	3,490	4,225	(302,269)	15,188	25,020
Net (loss) income attributable to Diplomat Pharmacy, Inc.	$ (298,025)	$ 169	$ (3,964)	$ (450)	$ 6,536	$ 1,016	$ 3,591	$ 4,367	$ (302,269)	$ 15,510	$ 28,273
Basic income per common share	$ (4)	$ 0	$ (0.05)	$ (0.01)	$ 0.09	$ 0.01	$ 0.05	$ 0.07	$ (4.07)	$ 0.23	$ 0.43
Diluted income per common share	$ (4)	$ 0	$ (0.05)	$ (0.01)	$ 0.09	$ 0.01	$ 0.05	$ 0.06	$ (4.07)	$ 0.23	$ 0.42
Change in fair value of contingent consideration					$ 1,710	$ 1,965			$ 3,364	$ 3,675	$ (8,922)
Income tax benefit					(7,828)
Goodwill impairments	$ 224,966								224,966
Impairments of definite-lived intangible assets	$ 82,678								$ 82,678		$ 4,804
Reclassification of shipping and handling costs from selling, general and administrative expenses to cost of sales
Selected Quarterly Financial Information
Gross profit				$ (15,139)	(15,642)	(15,408)	$ (13,286)	$ (11,100)
Reclassification of nursing support services from selling, general and administrative expenses to cost of sales
Selected Quarterly Financial Information
Gross profit				$ (5,095)	$ (5,282)	$ (4,805)	$ (4,834)	$ (4,187)