For AmerisourceBergen’s Bob Mauch, improving outcomes, supporting community pharmacy is in his blood
LAS VEGAS — At the ThoughtSpot 2015 general session, AmerisourceBergen Drug Corporation President Bob Mauch told attendees that “to say pharmacy is all in the family for me is an understatement.”
A pharmacist himself, Mauch grew up around community pharmacies as part of his father’s work as an independent pharmacist in Staten Island, N.Y., and Florida. His experience watching his father build businesses that served a vital role in the community is what drove Mauch’s — and his sister’s — interest in becoming a pharmacist.
“I got to watch him enjoy the impact that he made on people’s lives everyday, and as you can imagine that was a pretty big influence on me and my sister,” Mauch said. “It’s important for you to know that independent community pharmacy is in my blood, literally. I’ve lived your challenges, I feel the sense of urgency that you feel every single day. My dad was an entrepreneur … and he encouraged me to start and build a business of my own.”
Mauch’s business, Xcenda, which was acquired by AmerisourceBergen in 2007, focused on the research and analytics side of pharmacy and enabled Mauch to pursue his passion for improving outcomes both for patients and businesses.
“I use these experiences — both my community pharmacy upbringing and my health outcomes training — every day when I think about how we can be a better partner to you,” Mauch told attendees at his first ThoughtSpot as president of AmerisourceBergen Drug Corporation . “Your challenges in community pharmacy in terms of reimbursement and outcomes and pay for performance are passions of mine.”
Now at the reigns of AmerisourceBergen Drug Corporation, Mauch is looking to use his background to achieve three goals: providing the best customer experience to Good Neighbor Pharmacy customers, offering the right value to customers and increasing the company’s strategic relevance to customers’ businesses.
“Every day you are faced with pressures around reimbursement, inventory and cash flow. Instead of worrying about that, we want to help you focus your time and attention on improving patient outcomes,” Mauch told Good Neighbor Pharmacy members. “We want to be your strategic partner and put our muscle to work for you. … This means innovating, as well as being your advocate.”
Though he acknowledges that the healthcare landscape is entirely different than the one his father navigated, and even the one he navigated as a pharmacy student, Mauch is confident that his background, coupled with AmerisourceBergen Drug Corporation’s knowledge, reach and partnership, will be a boon to Good Neighbor Pharmacy members.
“The times and the challenges may have changed, but the call for solutions that improve a pharmacist’s ability to serve patients is more urgent than ever,” he said.
Now on Amazon’s menu: 1-hour food delivery
SEATTLE — Amazon is priming the appetites of customers in Seattle with a new feature of its Prime Now one-hour delivery service.
Members of the Amazon Prime paid loyalty program in Seattle can order delivery from participating local restaurants using the Prime Now mobile app.
Prime members can view participating restaurants, browse menus, place orders and track the status of their delivery in real time. Once an order is placed, Amazon delivery drivers pick up and deliver the food within an hour or less.
“Prime members can now enjoy food from the Seattle restaurants they love without having to drive all over the city,” said Gus Lopez, general manager, Amazon Restaurants. “For many of these restaurants, this is the first time they are offering delivery, and we are delighted they have chosen to work with us.”
Starting Tuesday, Sept. 8, restaurant delivery on Prime Now is available in select Seattle ZIP codes and will expand in the coming days. Prime members can download the Prime Now app and enter their ZIP code to see if Prime Now is available in their area.
Restaurant delivery on Prime Now offers customers transparent pricing, with no menu markups or hidden service fees, and delivery on all orders is free for a limited time. Customers pay using the information already stored in their Amazon account and orders are backed by Amazon’s customer service.
Amazon is satisfying the hunger of Seattle Prime members after quenching their thirst by recently adding wine, beer and spirits to its assortment of eligible products for Prime Now delivery in that metro area. The company has steadily expanded Prime Now since it launched the service in New York City in 2014.
Increasing profitability through the front-end and operations
LAS VEGAS — With the average independent generating 95% of their revenue through the pharmacy, and only 5% across the higher-margin front-end, diversifying revenue streams is one strategy to help pharmacists sustain their profitability in an environment that continues to be challenged by declining reimbursement models.
As an example of what a best-in-class front-end operation looks like, AmerisourceBergen featured a 5,000-sq.-ft. mock-up of Harry Race Pharmacy, the 2014 Good Neighbor Pharmacy’s Pharmacy of the Year winner, on the ThoughtSpot 2015 show floor. “What we want to do is to show our customers what a state of the art pharmacy looks like,” Christine Lane, Good Neighbor Pharmacy Vice President, told Drug Store News. “It’s really an effort to show [our independents] how we can help them.”
“It also ties really well into our pharmacy transformation services, where we look at a pharmacy holistically from their operations, their prescription business to the floor layout, the paint, their exterior signage, really every single detail about the pharmacy and work to improve on it. We completely overhaul the business and put a fresh face on it, but also maintain that pharmacy’s individuality,” Lane said. AmerisourceBergen is the first wholesaler to offer this kind of program in the marketplace.
Front-end can be a significant profit driver for independent pharmacies, especially across five key OTC categories — cough-cold-allergy, digestive, vitamins and supplements, pain relief and home health care, noted Greg Hanlon, Director of Client Engagement at Retail Insights, during a ThoughtSpot 2015 continuing education course titled “The Best Defense is a Good Offense: Making the Most of the Pharmacy Front-End.”
Creating synergistic adjacencies between front-end categories can be a significant component in driving front-end sales. “How do you get customers who are indexing high in food and beverage purchases to buy a pain reliever or vitamin?” Hanlon asked. “How do you get that incremental item in the basket to drive those additional sales?” he asked.
“We’ve done some focus groups lately where a consumer is walking through a store thinking about products, and which room in the house they fit into,” added Rick Bergin, Executive Vice President Retail Insights. “I need some soap. That goes into the bathroom. What else do I need that goes into the bathroom?”
Retail Insights provides performance dashboards that help Good Neighbor Pharmacy members ascertain their performance of any given category against a peer group. It’s a tool that can help operators better refine their front-end mix.
And Good Neighbor Pharmacy members can further help differentiate themselves by category through Good Neighbor Pharmacy’s Temporary Price Reduction program, which allows independent pharmacies to access manufacturer promotional dollars the chains do. Good Neighbor Pharmacy remains price competitive, as price reductions are subsidized by supplier partners. “Through TPR we’ve seen a 36% increase in unit sales last year to this year, so it’s a significant change,” Lane said.
Another tool Good Neighbor Pharmacy members have at their disposal to improve business performance across both the back-bench and front-end are business coaches — they’re like personal trainers in that they’re generally interested in seeing independent pharmacies succeed, but not afraid to push an owner/operator toward greater success, noted Jennifer Zilka, Director of AmerisourceBergen’s business coaching program. “Business coaching really was borne of the need that our pharmacists expressed to us,” she said. “Typically pharmacists are clinically focused, and anywhere Good Neighbor Pharmacy can help them focus on the health of their business, so they can focus on the health of their patients, we’ve learned that they’re quite appreciative of that.”
Inventory and labor are two of the greatest expenses for independent operators, Zilka noted. “Those are two huge expenses. A lot of pharmacies operate feeling that they’re fixed, but they’re actually variable,” she said. “Margins continue to decline and they have to operate as efficiently as possible.”
On average, coached stores realize a 5% increase in sales-per-employee and increase their inventory by 1.4 turns.