The way chief executive R. David Yost sees it, AmerisourceBergen Corp.’s Good Neighbor Pharmacy program is a bulwark for independent pharmacists against the pressures of a brutally competitive pharmacy market and an unforgiving economy.
Now numbering more than 3,700 independent pharmacies across the United States and Puerto Rico, GNP has become one of the largest drug store brands in the United States. By leveraging the best qualities of the owner-operated pharmacy — a strong community presence, personalized service and the flexibility and willingness to cater to the individual needs of patients — and blending them with the economies of scale, marketing expertise and buying power available to the big retail chains, AmerisourceBergen has built GNP into a powerful national brand.
Consumers appear to be taking notice. For the first time last year, J.D. Power & Associates ranked GNP No. 1 in customer satisfaction among all pharmacy retailers, based on a nationwide survey of more than 12,300 pharmacy customers. What’s more, GNP’s selection as best in service and personal care by consumers came in “the first year that they have been a ranked brand in the study,” said Jim Dougherty, J.D. Power’s director of healthcare practice.
In a recent report, ABC succinctly described its relationship with its huge network of GNP-affiliated independent drug stores. “We deliver prescription pharmaceuticals, private-label [over-the-counter] drugs and other health-related items daily, and we provide business coaching services, marketing support and access to managed care networks,” the company noted.
Key to its relationship with GNP stores, ABC said, is its full-service approach to supplying its customers. “We serve the vast majority of our customers on a prime vendor basis, which means that we provide all of the products that a pharmacy needs to serve its patients on any given day. Due to the high cost of pharmaceuticals, providers do not hold large amounts of inventory on hand; rather, they rely on ... just-in-time delivery of the products they need,” ABC said.
ABC brings “tremendous scale” and “operating efficiency” to its independents via this model, the company reported. Through the GNP Premier program, launched three years ago, members also get expertise in managing their business and pricing their merchandise more profitably, and targeting their best customers. Participating independents also can benchmark their operation and business performance against a peer group of similar pharmacies through the GNP InSite market database.
GNP pharmacies also participate in their parent firm’s massive generic purchasing and pricing program, PRxO Generics, for “competitive pricing and new generic products from [more than] 100 manufacturers as soon as they are launched. We provide our customers the financing they need to buy the products. We then use our own purchasing power to secure the best possible value,” ABC reported.
The 3,700 GNP stores also benefit from centrally developed ABC programs “designed to drive continuous improvement, compliance and market penetration,” the company noted. Among those programs: the GNP Provider Network, which links the 3,700 GNP independent operators together with “small and regional chain drug stores and food-and-drug combination stores” served by ABC, according to the company. Together, that national group of independents, small chains and supermarket pharmacies comprise “the fourth-largest managed care provider network in the United States,” according to ABC.
Meanwhile, changes are afoot in ABC’s executive suite with the pending departure of its top executive. Yost announced in March he would retire July 1 after nearly 37 years, the last 14 of them as CEO. Succeeding Yost is COO Steven Collis, and moving up to president of AmerisourceBergen Drug Co. is David Neu, who last served as SVP operations.
GNP also is under relatively new management. Last August, ABC promoted Mike Cantrell to president of GNP, a new position, and group VP retail business development. Cantrell, who was VP professional services at Longs Drug Stores before joining ABC as VP central fill business development in 2009, reports to Jerry Cline, SVP retail sales and marketing. One primary role for GNP, Cantrell said, will be “helping our pharmacists develop their role in healthcare reform, with the understanding that they are a significant component of the solution.”