BrightSpring Health Services (NASDAQ:BTSG) executives outlined expectations for another year of broad-based growth and margin expansion during a presentation at TD Cowen’s 46th Annual Health Care Conference, with CFO Jennifer Phipps highlighting volume growth, operational efficiency initiatives, and a shifting mix in both the company’s pharmacy and provider services businesses.
2026 outlook: volume growth and margin expansion
Phipps said the company expects “another year of broad-based growth” across both pharmacy and provider services, driven by strong volumes supported by what she described as high-quality services. She also pointed to multiple contributors to margin expansion, including ongoing operational efficiencies and process improvements, as well as favorable mix dynamics in provider services and drug mix on the pharmacy side.
Pharmacy: specialty growth, home-and-community headwinds, and generics
Within pharmacy, Phipps said specialty and infusion are expected to continue to have larger script growth opportunities, with 2026 anticipated to be at least consistent with 2025 in those areas. She added that BrightSpring remains focused on script growth in home and community pharmacy as well, though she noted the company will face year-over-year headwinds in that business as it laps customer profitability actions and divestitures that began in the third quarter of 2025.
On generics, Phipps said the company expects continued growth supported by new generic availability, including:
- Pomalyst expected to go generic in early Q2 2026
- Lenalidomide finishing its transition to generic in Q1
While she said generics will contribute to EBITDA growth, Phipps emphasized the company has not quantified the impact of specific products or product sets. She also cited additional drivers, including new limited distribution drug (LDD) launches. The company expects approximately 16 to 18 LDD launches in 2026, and Phipps noted that prior-year launch “classes” from 2023 through 2025 are expected to continue ramping into 2026, with scale supporting EBITDA margin leverage.
IRA headwinds and mitigation efforts with PBMs
Phipps addressed the Inflation Reduction Act (IRA) headwind previously discussed by the company, which had been characterized as a $35 million to $40 million unmitigated impact. She said the revenue impact spans both specialty/infusion and home and community pharmacy, but the EBITDA impact is concentrated in the home and community pharmacy business.
As of the conference discussion, Phipps said the company had mitigated the impact to approximately $15 million for 2026. She attributed the progress largely to negotiations with pharmacy benefit managers (PBMs) for enhanced dispensing fees, noting discussions were ongoing with additional PBMs and that the company has mitigation negotiated with the majority of PBMs, though not yet at a level that fully offsets the IRA effect.
Phipps also referenced CMS direction in the third quarter for PBMs to provide enhanced dispensing fees to help mitigate IRA impacts for pharmacies. She said BrightSpring’s scale helps it navigate the pressure, while describing the issue as significant for the broader home and community pharmacy industry. She added that the company is engaged with regulators through its government relations efforts and said the company could potentially gain share if industry pressure creates opportunities.
Looking beyond 2026, Phipps said the company expects the IRA impact to diminish over time based on drugs known through 2028, estimating 2027’s impact at about 50% of 2026’s impact (assuming no changes to mitigation). She also noted that some drugs on IRA lists may go generic shortly afterward and that specialty pharmacy mitigation can be easier to negotiate given direct manufacturer relationships and narrow channels.
Infusion focus: operational changes and LDD access
Phipps said BrightSpring is “very excited” about a new operational team in its home infusion business and is pursuing strategies across both acute and chronic markets. She highlighted changes including dedicated business development and sales teams for each market, reflecting different referral sources, and said the company has added leadership with prior experience launching LDDs in home infusion.
She also clarified that LDD networks in home infusion tend to be broader than in specialty oral or injectable markets, since home infusion is a more local business and manufacturers need wider provider coverage. Phipps said BrightSpring had access to certain LDDs within its portfolio but previously did not have the level of focus it is now bringing to those drugs.
Provider services, Amedisys assets, and capital allocation
On provider services, Phipps said the company was pleased to see “significant mitigation” from preliminary to final home health reimbursement rules for 2025, adding that CMS has recognized it cannot significantly cut an essential program. She cited home health outcome data as supporting reduced costs versus hospitalization and said BrightSpring will continue to work with industry efforts and government relations to reinforce the importance of home health.
Phipps also discussed the company’s acquisition of assets from Amedisys, saying BrightSpring expects opportunities to improve margins and drive growth as the branches are integrated into its in-home health platform. She described the acquisition as “hand in glove” strategically, including expanded presence in certain certificate-of-need (CON) states and geographies where the company previously lacked home health. She emphasized a deliberate integration approach in 2026, including resources for travel, meetings, and IT support, and said there could be potential upside later in the year but that the priority is ensuring a successful integration.
On portfolio actions, Phipps said BrightSpring “really like[s] the assets” it retains and described the Community Living divestiture as a move to streamline operations toward seniors and specialty drug populations.
Turning to the balance sheet, she highlighted deleveraging progress, noting leverage of 4.5x at its high point post-IPO, 2.99x at year-end, and 2.6x on a pro forma basis for the Community Living transaction as of 12/31/2025. She reiterated a long-term leverage target of about 2.5x or below and said that absent M&A the company would be under 2x levered by the end of 2026. Phipps said BrightSpring expects to pay down some debt with Community Living proceeds but is still evaluating the mix between debt reduction and other opportunities.
On capital deployment, she said the company continues to view M&A as an important driver of shareholder value and expects to keep pursuing it, including small “tuck-in” deals it views as highly accretive. However, she said she would not expect a broad share repurchase program at this time and noted that such a program has not been approved by the board.
Phipps also previewed an upcoming investor day, saying management plans to provide a framework for long-term targets and growth opportunities across business lines, with business leaders presenting directly and additional discussion of capital allocation, M&A opportunities, and cash flow deployment.
About BrightSpring Health Services (NASDAQ:BTSG)
BrightSpring Health Services (NASDAQ: BTSG) is a leading provider of home and community-based care and workforce solutions aimed at seniors, individuals with disabilities and those facing behavioral health challenges. The company’s operations encompass a broad spectrum of services, including personal care, skilled nursing, therapy, habilitation and supported living, as well as specialized behavioral health programs delivered through both clinical and non-clinical channels.
Through its network of subsidiary brands, BrightSpring offers integrated care in the patient’s home environment, fostering independence and improving quality of life.
