DSN, CVS breakfast an opportunity to share focus
PALM BEACH, Fla. — The Drug Store News Group on Sunday co-hosted a breakfast with CVS Caremark to celebrate DSN’s March 12 “Category of One” issue. Larry Merlo, CVS Caremark president and CEO, shared with attendees CVS’ focus on leveraging personalization opportunities, through both marketing and assortment, to engender loyalty. Suppliers also were introduced to new CVS/pharmacy president Mark Cosby.
For pictures of the event, click here.
NACDS aims at disruptive innovation
PALM BEACH, Fla. — Steve Anderson recalled during Sunday morning’s State of the Association address how when he started as the president and CEO of the National Association of Chain Drug Stores five years ago, people were interested to see what his eyes would discover at NACDS and within community pharmacy that might help make a difference for the future. Anderson said that today he answers that question in the same way he did back then: “Every day my eyes see something fresh in what you do — in the innovative offerings of community pharmacy.”
In fact, innovation — rather, disruptive innovation — was a key theme within Anderson’s State of the Association address Sunday morning. His comments followed the State of the Industry speech by outgoing NACDS chairman and chief administrative officer of H-E-B Bob Loeffler. Jack Bailey, SVP policy, payers and vaccines at GlaxoSmithKline, made the opening remarks.
Drawing from the writings of author and Harvard Business School professor Clayton Christensen, Anderson discussed how Christensen’s theory of disruptive innovation — the process by which complicated, expensive products and services are transformed into simple, affordable ones — is important for community pharmacy.
Innovation is something that pharmacy cannot just wait for government to do, or wait for the government to let the industry do, Anderson said. “Those of you here from NACDS chain members, your capabilities have the power to transform health care. And those of you here who are suppliers, your products and services are vital to that transformational promise,” Anderson said. “That is why chains and suppliers alike are here at this extremely successful NACDS Annual Meeting and why you attend other NACDS meetings and conferences. Through your business interactions and discussions at this meeting, you are providing that innovation that our country so desperately needs.”
Anderson also highlighted the growing partnership with pharmacy in government and elsewhere, and also stressed his confidence that the 2013 NACDS Total Store Expo will “emerge as a true laboratory for innovation.”
Loeffler, during his remarks, discussed the achievements of the past year, which includes NACDS’ lawmaker outreach via NACDS RxImpact Day. However, he stressed that the work of NACDS will never be done, as “for every feat we accomplish, another will call our name.”
“I can look you in the eye and say that NACDS has made progress as an advocate, as a champion for pharmacy’s amazing story and as a conduit for doing business in retail,” Loeffler said. “We are going to have a very interesting and challenging election year at the same time that many key healthcare issues will be debated and resolved — not the least of which is the Supreme Court ruling on the new healthcare law. We will be in very capable hands with Greg Wasson as our new chairman and with your active involvement in NACDS.”
The Business Program wrapped up with a keynote address by Larry Sabato, election analyst and founder and head of the University of Virginia’s Center for Politics, who offered his analysis on what he thinks is coming down the pike this election year.
Q&A: Chairman’s insight
Bob Loeffler, NACDS chairman and chief administrative officer of H-E-B, reflects on his time as chairman and shares his insights on the issues facing retail pharmacy today and tomorrow.
DSN: Last year, you emphasized the “new normal,” which seemed to refer to the need to proactively position the benefits of retail pharmacy. How has the “new normal” played out?
Loeffler: My point last April was that [the National Association of Chain Drug Stores] had become a much more focused and effective trade association, and that its new and higher level of performance defined the “new normal.” My point was that we needed to be careful to not just pat ourselves on the back because we got better at what we do. Rather, I wanted to encourage NACDS to use our “new normal” as the new baseline for building on our progress. This new normal has played out in several ways. We have taken the new NACDS Total Store Expo from a concept to a planned event, which we are confident will usher in the next generation of trade shows for the benefit of suppliers and retailers alike. On the proactive issue of medication therapy management, we have seen the Center for Medicare and Medicaid Services boost its promotion of MTM in Medicare, while private plans are learning from their experience in Medicare Part D and expanding MTM to their entire book of business. On reimbursement, we have seen NACDS and our allies take an important and successful stand against Medicaid cuts in California, and we have maintained our strong backbone when it comes to the government’s continued work on the new Medicaid AMP rule. We have done all of this while taking an important stand on pharmacy benefit manager issues. As the saying goes, you’re either moving forward or you’re moving backward, and there is no standing still. Over the past year, NACDS has succeeded in further raising the bar of the “new normal” as it refers to the focus and effectiveness of the organization.
DSN: When you think about your time as NACDS chairman, what are you most proud of?
Loeffler: That’s easy. I’m most proud of the people in NACDS member companies. NACDS has the privilege of advocating for, and telling the story of, the good work that community pharmacies do every day across the nation. From medication counseling to immunizations to screenings to health education, I can’t think of an industry that has more to talk about than community pharmacy, and the thanks goes to those on the front lines making it happen. I also want to emphasize that this positive impact is magnified when you take into consideration the products of NACDS associate members and the front-end operations of NACDS chain members. A close look at NACDS reveals an organization that represents health, wellness, patient health and consumer satisfaction — that is something very powerful to stand for. I also want to commend the people of community pharmacy, not only for proving the value of what they do every day in their stores, but also for showing it in the halls of Congress. Take NACDS RxImpact Day on Capitol Hill, for example. Pharmacy advocates held 350 Congressional meetings this year during our event, and that is up from 275 meetings the year before. We had 41 states represented — an increase from 37 states in 2011. It is a credit to the people of this industry that going to Washington, D.C., and to state capitals no longer is seen as an interruption of one’s business but rather as a necessary part of fighting for pharmacy patient care. As I always say, our opponents will be all too happy to take the meetings that we otherwise would have had, and they will be telling legislators exactly the opposite of what we are telling them.
DSN: If you had another year to serve as chairman, what else would you add to your to-do list?
Loeffler: The great thing about NACDS is that it really is not about any one chairman’s agenda. The NACDS board has set a very solid course of focusing on three priorities: government advocacy, communicating pharmacy’s value, and fostering business community and solutions through our conferences and other member programs. Each year, we need to maintain an aggressive offense and a tough defense to keep making progress on those three priorities. So, if I were serving for one more year, I would remain focused on advancing those priorities given the current operating environment, just like Larry Merlo of CVS Caremark did during his chairmanship just prior to mine, and just like Greg Wasson of Walgreens will do over the next 12 months.
DSN: What advice do you have for the incoming chairman?
Loeffler: First of all, Greg Wasson is going to be an excellent chairman for NACDS. It is a responsibility of the vice chairman to serve as chairman of the NACDS Political Action Committee. When I served in that role, I was pleased that donors helped equip NACDS-PAC with excellent resources to support the campaigns of real friends of pharmacy running for the U.S. Congress. We set a record for contributions the year I was chairman of the NACDS-PAC. Well, Greg blew that record out of the water and set a new standard for NACDS-PAC. Greg is a smart and hard-charging leader in whom we all have a lot of faith, and NACDS is in great hands. As for advice, the good news is that Greg already knows my thoughts. NACDS is very organized and is very much a member-driven trade association. We have talked extensively throughout the year. In short, Greg knows that NACDS is a good horse that can be ridden hard. He also knows we are all right there behind him on every issue to be faced.
DSN: What do you see as the three biggest challenges facing the industry, and what are three things you are most optimistic about?
Loeffler: I’ll give you some top-of-mind challenges:
- People in general — and the federal and state governments in particular — don’t yet fully understand the pharmacy industry and what it has to offer. That is a big challenge. NACDS has ramped up this education effort big time, promoting pharmacies as the face of neighborhood health care, and we have gotten the education ball rolling. But there is a lot of turnover in Congress and the state legislatures, and the education hurdle we have ahead of us continues to be a tall one. Because they don’t understand pharmacy, pharmacy programs are not fully understood as programs that keep people healthy and out of operating and emergency rooms — at a huge savings to payers. Instead, pharmacy is seen as an expensive piece of the healthcare system that needs to be cost optimized.
- That leads to the second challenge: Compensation from government and even private payers is declining. Gross margin pressures will continue for the foreseeable future unless we are able to effectively get our message across.
- Both of the above further challenge our industry to innovate and become as deadly efficient as possible. Providing patients with the right medication [and] the right counseling to go along with it will always remain the core of our industry, but through innovation we also need to make the practice of pharmacy bigger than it has been in the past by expanding the services and products we provide. Deadly efficiency in the practice of pharmacy will be required to thrive in the future.