Drug distribution group elects new leaders
WHITE SULPHUR SPRINGS, W.Va. Kicking off a new leadership era for its top industry trade group, pharmaceutical wholesalers elected a new slate of officers at the Healthcare Distribution Management Association’s inaugural Annual Board and Membership Meeting here.
Named chairman of the HDMA was David Moody Jr., CEO of N.C. Mutual Wholesale Drug Co. The organization’s new vice chairman is Steven Collis, AmerisourceBergen EVP and president of AmerisourceBergen Drug Corp.
The group also welcomed new directors Gayle Johnston of CuraScript SD Specialty Distribution, an Express Scripts company; John Dillman of VaxServe, a Sanofi Pasteur company; Louis Ferraro of Henry Schein Inc.; and Walter R. Shikany of Health Coalition Inc. Dillman, Ferraro and Shikany were named to the association’s board of directors at its June meeting.
“I want to thank Paul Julian of McKesson Corp. for his outstanding leadership and commitment to the association during his two years as chairman, and welcome Dave and Steve in their new positions,” said HDMA president and CEO John Gray. “I look forward to working with them and our four new board members as we continue to take on the critical issues affecting the healthcare distribution industry and make strides in enhancing patient safety, increasing supply chain efficiency and adding business value.”
NACDS conference eyes impact of health reform
SAN DIEGO —If the retail industry’s premier pharmacy gathering gave any clear signal about the state of chain pharmacy in mid-2010, it may have come from conference chairman Bob Egeland when he quoted singer-songwriter Jimmy Buffett.
Egeland, VP pharmacy for Iowa supermarket chain Hy-Vee, kicked off the opening of the National Association of Chain Drug Stores’ annual Pharmacy and Technology Conference by recalling the words to a Buffett song and admonishing hundreds of pharmacy and supplier executives to prepare—both for a productive meeting and a fast-changing healthcare environment.
“Jimmy sings, ‘My ship she has a rudder, but I don’t know where to steer,’” Egeland told conference-goers at the opening business session here Aug. 28. “So my advice is this: If you haven’t set your course—your top priority for this conference—set it now. And then go and get it.”
The four-day gathering was a showcase of how-to business content, idea brainstorming and talks from prominent policy-making, business and healthcare experts. But dominating the discussion was the uncertainty, opportunity and potential challenge spawned by the massive health-reform legislation signed into law earlier this year.
Egeland, along with NACDS chairman Larry Merlo and organization president and CEO Steve Anderson, spoke of the sweeping impact the new law will have on retail pharmacy—and the fundamental changes already transforming the practice of community pharmacy. “Think about the evolution of the role of the pharmacist, from emphasizing the dispensing of a product to more of a clinician providing a service,” Egeland urged attendees. “You can see the factors that helped to bring that about. They include changes in the education of pharmacists, including the length and scope of their study. There’s also the technology, the changing business models, and the new life-saving and life-improving medications, both prescription and over-the-counter.”
The industry urgently needs to define and assert its expanding role in a health system undergoing major reform, said Merlo, who is president and COO of CVS Caremark. He called health reform “a good thing for the country and for our industry,” but warned that the overhaul would pose challenges for pharmacy operators. For instance, he told conference attendees, “as the government grows as a payer, we can expect to see further margin pressure on reimbursement rates.”
“We’re positioned to help control the costs of health care by advocating for the value…of pharmacy care,” Merlo said. “Pharmacy has the opportunity to be a key contributor to lowering healthcare costs over the long term. If we agree that expansion of access makes sense, we need to begin the work on the cost and quality side of the equation.”
Summing up the state of NACDS in an Aug. 30 speech, Anderson asserted that pharmacy is going through a “historic paradigm change” as pharmacists and pharmacy leaders expand their patient care and clinical capabilities, and provide new solutions to a “broken” healthcare system undergoing rapid change. “We need to build a case for a modern and viable reimbursement system” that takes into account pharmacy’s contributions to health and cost-effectiveness, he told attendees.
Among the other conference highlights: the annual summation of pharmaceutical industry trends by IMS Health VP industry relations Doug Long; an entertaining talk on “The Mood of America: What’s Next?” by Dana Perino, political commentator and former White House press secretary in President George W. Bush’s administration; and a perspective on health care and the economy from David Cutler, Harvard University professor of applied economics and an adviser to President Barack Obama’s presidential campaign.
The four-day powwow kicked off Aug. 28 with two day-long sets of meetings. The Meet the Retailer program gave suppliers a perspective from their retailer counterparts on the most effective ways for them to market their product or service. The annual Meet the Rx Market event was an all-day series of short tabletop meetings designed to bring together retailers and suppliers to focus on new products and services.
Despite the exhaustive nature of the Meet the Rx Market event, retailers and suppliers almost unanimously praised this year’s format, which featured a slightly longer meeting time of 10 minutes and, retailers agreed, a more targeted approach to the individual meetings. Thanks to a more thorough vetting and planning process in advance of the meeting, several participants noted, NACDS was able to pair the right kinds of retail buyers with the right vendors within each supplier company, making the meeting schedule more productive than in past years.
“It’s better this year,” said Glen Santos, director of pharmacy systems development at Rite Aid. “I’ve done this before where the meetings weren’t targeted in advance as much for people with the right expertise. This year it’s a lot more focused; it isn’t just generic sorts of sit-downs between retailers and suppliers.”
Dan Steiber, principal with D2 Pharma Consulting, agreed. “We were able to pick up…meetings we wouldn’t have been able to schedule otherwise,” he told Drug Store News. “You can have a substantial number of meetings in a very concentrated amount of time, and that broadens your opportunities to do more later on the [show] exhibit floor.”
Larry Lotridge, who helps coordinate the Meet the Rx Market meeting schedules for retailers and suppliers as VP conference services for NACDS, said the organization is growing increasingly adept at matching the right pharmacy buyers with the right vendors, thanks to sophisticated computer algorithms and a detailed questionnaire filled out by all participants in advance of the pharmacy conference.
“When we started Meet the Rx Market a few years ago, we basically broke the meetings down into three categories,” he said. “Now we’ve brought it down more to the specific product or service level,…and we organize the meetings around a total of 131 categories. It makes it much more productive for both sides.”
This year’s Meet the Rx Market drew 74 buyers from 42 retail companies, along with representatives of 134 supplier and service companies, Lotridge said, and generated a total of roughly 1,700 10-minute meetings during the day-long event. “For the retailers, all but seven had a completely full schedule,” he added.
Indies rated tops in satisfaction survey
WESTLAKE VILLAGE, Calif. —U.S. consumers are paying more heed to the cost of medicines, health-and-beauty aids and other drug store products in an era of economic uncertainty and joblessness. But in the perennial battle for customer loyalty, service still is king, and independent, owner-operated community pharmacies still rule.
That’s the fundamental lesson retailers can take from the latest customer satisfaction survey from J.D. Power and Associates. The big research and consulting firm unveiled the results of its 2010 U.S. National Pharmacy Study Sept. 21.
The study includes chain drug stores, supermarkets and mass merchandisers. Researchers polled customers about five key factors that contribute to customer satisfaction with brick-and-mortar pharmacies: prescription ordering and pickup process, the store shopping experience, cost competitiveness, nonpharmacist staff and pharmacists.
The study, based on a poll of more than 12,300 pharmacy customers in May and June, underscored the growing concerns Americans have with the cost of their pharmaceuticals and other health products. “As consumers shoulder more healthcare expenses, cost increasingly drives overall customer satisfaction with pharmacies,” noted the company in its report.
Nevertheless, added the report, personalized, above-and-beyond service still outweighs price for a majority of consumers. “Customer service still trumps price, even in an environment where cost has become increasingly important,” said Jim Dougherty, J.D. Power’s director of the healthcare practice. “Pharmacies that are focused on service garner the highest levels of satisfaction.”
That’s good news for small-scale, owner-operated independent pharmacies. It’s also good news for the Big Three drug wholesale giants that operate the three major networks of independents, franchised and otherwise, that scored top rankings in the poll.
Again this year, survey respondents ranked independents tops in overall satisfaction. “The independents and those companies that are focused on service are considerably higher [in customer satisfaction rates] than the larger stores,” Dougherty said.
Customers gave their highest scores to Good Neighbor Pharmacy, the 3,700-store group of independents that operate under the buying, merchandising and store-support umbrella provided by distribution and health services giant AmerisourceBergen. “That’s the first year that they have been a ranked brand in the study,” Dougherty said in a conference call with reporters.
The two largest groups of independent-owned franchises, McKesson Corp.’s Health Mart and Cardinal Health’s Medicine Shoppe Pharmacy, ranked second and third, respectively, in overall satisfaction rankings. But Walgreens rated a strong fourth, making it tops among corporate-owned drug store chains in customer rankings.
“One of the things that jumps out at us this year is we see a 31-point increase in Walgreens, and a drop of 8 points in Duane Reade,” Dougherty said, referring to the New York-based regional drug store chain purchased earlier this year by Walgreens. “It is not uncommon when there is a merger or acquisition in place that there would be some negative impact in customer satisfaction, even with the acquiring company. So this is unusual and a positive that Walgreens is seeing that increase.”
Among mass merchants, Target’s pharmacy operation got highest satisfcation marks for the fourth year in a row, while Publix rated tops among supermarket pharmacies. Supermarkets in general have seen steady improvements in satisfaction scores, Dougherty said.
Efforts to give the best possible service pay off, both in additional revenues and in measurable customer loyalty. Highly satisfied customers can bring in an additional $227 each year in prescription business, researchers found. What’s more, J.D. Powers reported, “brick-and-mortar pharmacy customers who are highly satisfied…are more than three times more likely to say they ‘definitely will’ return to their pharmacy, and 10 times more likely to say they ‘definitely will’ recommend their pharmacy to others, compared [with] customers with low satisfaction levels.”