Walgreens shifts top merchant to oversee its pharmacy efforts
DEERFIELD, Ill. In a major shift of responsibilities, Walgreens has named its top merchant, George Riedl, to the new post of SVP pharmacy innovation and purchasing in the pharmacy services department.
The change — one of the most dramatic in an ongoing series of executive changes for the nation’s top drug chain — was effective March 1.
Riedl has led the company’s purchasing and merchandising departments since 2003, and saw his role expanded to EVP marketing and merchandising in late 2008 as part of a sweeping management shakeup that may still be underway. His shift to overseer of Walgreens’ efforts to overhaul its pharmacy operation makes it clear that shakeup may continue for some time; it also underscores the importance the big drug store chain attaches to both its pharmacy and front-end renewal projects.
Replacing Riedl in his old post is Bryan Pugh, a Walmart and Tesco USA veteran, who joined the company earlier this year as VP store format development. Pugh, 46, has been named VP merchandising and will retain his role as head of store development.
The changes thrust both men into high-profile, high-pressure positions, as Walgreens attempts a massive restructuring, asset-integration and store-renewal program. Pugh will take a lead role in the company’s remerchandising and SKU rationalization program, which is aimed to recharge excitement at the front of the store and boost per-customer transactions by at least one additional purchase per customer per visit.
Riedl, 48, will oversee all pharmaceutical purchasing, along with rollout of the POWER initiative, a project aimed at cutting pharmacy dispensing costs and enhancing patient-pharmacist interaction by offloading such dispensing duties as prescription and claims verification to centralized “hub” pharmacies. POWER currently is operational in more than 360 Florida stores, the company reports, and is on track for a statewide rollout in all 774 Florida stores by the end of August.
“During his 27 years with Walgreens, George has led several areas in pharmacy services, e-commerce and purchasing,” said Walgreens president and CEO Greg Wasson. “He brings vast knowledge of our entire company to his new role, and his pharmacy experience uniquely positions him for taking the implementation of POWER forward and driving our transformation of community pharmacy.”
Riedl joined Walgreens in 1982 as a pharmacy intern, and was a store pharmacist and district pharmacy supervisor until 1991 when he moved to company headquarters. There he held various positions in Walgreens’ pharmacy services and e-commerce departments before being named a general merchandise manager in purchasing in 2000.
Pugh, his merchandising replacement, spent three years with Tesco, the fast-growing European supermarket chain that has made big inroads in U.S. retailing in recent years. During that time, he designed the Fresh & Easy Neighborhood Market store operations model and launched the retail grocery chain on the West Coast, where it grew to 90 locations in less than a year.
“Bryan brings a quarter-century of terrific merchant expertise to Walgreens,” said Wasson.
In another management shift, Walgreens promoted Thomas Connolly, 49, to VP facilities development effective March 1, overseeing real estate, construction and facilities planning, design and engineering. Connolly, a 24-year Walgreens veteran, succeeds SVP facilities development Bill Shiel, who at age 58 has retired after a 38-year career with Walgreens.
“Bill spent most of his career building our retail store base into the powerhouse it is today, and we’re grateful to him for that accomplishment,” said Wasson. “Tom also is a top real estate person. He’s a creative thinker who will effectively manage our reduced organic store opening rate, while placing more focus on store redesigns.”
Walgreens set to expand distribution capacity
WOBORN, Mass. Walgreens is expanding the distribution capacity at its Mt. Vernon, Ill.-based distribution center by adding more portable robotic picking devices and upgrading many of its traditional conveyor-based systems into automated zones for sortation and movement of items to be shipped.
Walgreens uses the Kiva Mobile Fulfillment System from Kiva Systems in Mt. Vernon to store inventory and pick replenishment orders for its 6,700 stores and specialty pharmacies. Expanding the system in that distribution center puts nearly 1,000 mobile robots under a single roof, according to Kiva.
The upgrade marks the third expansion of the robotic picking system at the center since its initial deployment in 2007, Kiva noted. It also heralds a doubling of the throughput capacity at the center, the company reports.
“Productivity metrics from previous rollouts far exceeded Walgreens’ specifications for pick rate, accuracy, cycle time, tote utilization and installation time,” said Kiva CEO Mick Mountz. “By doubling capacity we expect Walgreens to quickly achieve an extraordinary new level of strategic competitive advantage and productivity.”
Congress takes up follow-on biologics bill
The long-awaited breakthrough for follow-on biologics may be close at hand.
Prompted by a far more supportive President and the growing crisis in healthcare funding, Congress has again taken up the call for a bill that would create a regulatory pathway for FDA approval of generic versions of biologically-engineered drugs. And with the strong affirmation of President Obama, who has campaigned for such an approval pathway, the newest iteration of the bill stands a far better chance of passage than previous attempts in the House and Senate.
The Promoting Innovation and Access to Life-Saving Medicine Act could mark the most significant change to the delicate balance of power between the branded and generic drug industries since passage of the landmark Hatch/Waxman compromise bill in 1984, which ushered in the modern era of me-too medicines. Tellingly, one of the new bill’s sponsors is an architect of that 1984 legislation, Democratic Rep. Henry Waxman of California.
The push for follow-on biologics augers well for both health plan payers and patients coping with the sometimes staggering costs of critically important but expensive pioneer biologics, and for the generic drug industry itself as it faces a critical shortage of new marketing opportunities as the number of blockbuster drugs facing patent expirations dries up. A new pipeline of me-too biologics could help fill the gap.
“With countless patients struggling to pay the high costs of brand biopharmaceuticals, an approval pathway for safe, effective and affordable biogeneric medicines that provides access sooner rather than later is desperately needed,” stated Kathleen Jaeger, president and CEO, Generic Pharmaceutical Association.
Cost-saving considerations aside, there’s no disputing the business potential follow-on biologics represent. Bio-engineered pharmaceuticals and specialized, highly targeted medications aimed at serious chronic or life-threatening diseases represent the only major bright spot right now in the global pharmaceutical market, with growth rates that far outpace the sluggish market for mainline meds. Indeed, most of the drugs that have reached blockbuster status in recent years have been biologically engineered specialty meds.