Fast, nimble Walgreens aims to own ‘well’
Walgreens, the kaleidoscopic company that wants to “own well,” is shuffling management and realigning operations as it works to knock down its remaining internal silos and create a seamless, broad-based retail health-and- wellness dynamo.
Any snapshot of Walgreens can only present a blurred portrait. At 110 years old, the company is moving so fast on so many fronts that Wall Street analysts and business journalists — not to mention drug, supermarket and mass merchandise competitors on all sides — constantly are trying to draw a complete picture of a shifting and multifaceted retail entity. Whatever picture emerges is likely to be outdated before you can say “8,000 points of care.”
Consider Walgreens’ strategic moves just since the start of this year. In the first four months of 2011, Walgreens has:
Moved to acquire online retailer Drugstore.com for about $409 million. The acquisition will add about 60,000 products to Walgreens’ online offering and “significantly accelerates our online strategy to leverage the best community store network in America,” asserted president and CEO Greg Wasson;
Agreed to sell its managed care division, Walgreens Health Initiatives, to Catalyst Health Solutions for $525 million in cash. Behind the decision to get out of the pharmacy benefit management business, Wasson said, was the need to focus on “delivering … high-quality pharmacy, health and wellness solutions … to become America’s first choice for health and daily living needs.” As part of the deal, Catalyst will provide PBM services for Walgreens’ employee and retiree drug plans, as well as other Walgreens programs, such as the Walgreens Prescription Savings Club. More to the point, Walgreens said it would retain and continue growing its specialty pharmacy and mail-service businesses in support of Walgreens, WHI and Catalyst patients. “Our specialty, infusion and mail pharmacy services are an important extension of our drug stores, retail clinics, worksite health centers and medical facility pharmacies,” Wasson said;
Restructured its health-and-wellness division in line with the retirement in April of health-and-wellness president Hal Rosenbluth, a cofounder of Take Care Health Systems, which Walgreens acquired in 2007. Wasson credited Rosenbluth with a big role in the expansion of “pharmacy, health and wellness services through our Take Care retail clinics and worksite health centers.” Henceforth, the Take Care retail and worksite division under Peter Hotz will report to Mark Wagner, president of a new community management division, while health-and-wellness sales and clinical services, led respectively by chief client officer Joe Terrion and chief medical officer Cheryl Pegus, will become part of the Walgreens pharmacy, health-and-wellness services and solutions division led by division president Kermit Crawford;
Piloted its first loyalty card program as it applies the expertise it acquired with its purchase of New York’s 258-store Duane Reade chain, a loyalty card innovator;
Unveiled, in early April, the first of a planned 18 rapid car-charging stations it said will open at Walgreens drug stores in the Dallas/Fort Worth market. Launched in partnership with NRG Energy, the eVgo Freedom Stations will comprise the nation’s first privately funded large-scale electric vehicle charging network;
Named Loblaw and Duane Reade veteran Joseph Magnacca president of daily living products and solutions, in charge of integrating and raising the profile of many front-end merchandising efforts; and
Launched a new ad campaign in early March to highlight its new Refill by Scan technology, which enables smartphone users to scan prescription label bar codes with their camera phones to order refills — and to obtain text alerts, browse Walgreens’ product selection and process photos.
Walgreens’ underlying goal, Wasson said, is to be the nation’s premier destination for retail health-and-wellness needs across a broad spectrum of American life, including the retail arena, the workplace, the home for patients with serious conditions in need of specialty medications and infusion, and the hospital and clinic setting. Increasingly, the 7,700-store retail and health giant also is staking out cyberspace with new online services and smartphone applications designed to reach customers and patients anywhere they happen to be.
85% — that’s more or less the combined market share for the companies that make up the 2011 DSN PoweRx50, approximately $185 billion of the total $218 billion retail pharmacy industry. Numbering almost 50,000 stores among them, or more than 8-of-10 of all the pharmacies in the United States — BAM! — the DSN PoweRx50 indisputably reflects the true titans of the retail pharmacy industry.
What makes the DSN PoweRx50 different? The DSN PoweRx50 is the ONLY truly CHANNEL-AGNOSTIC ranking of the retail pharmacy industry that truly measures all of retail pharmacy, including traditional drug chains, independents, supermarkets, mass and club stores — ALL of it. BA-BOOM!
Why do we do it that way? Because everybody sells everything everybody else sells, and everyone shops everywhere for everything. Traditional drug stores fighting for a share of that business no longer can afford to worry ONLY about competing with other drug stores. Vendors looking to maximize distribution for their products no longer can afford a myopic, single-channel view of the business. The lines that once defined the different classes of trade haven’t just blurred — they’re GONE.
The DSN PoweRx50 measures all of these very different companies by the one metric that matters — pharmacy sales — and the relative commitment of senior management to growing share of pharmacy, health and wellness. KA-POW!
For the full DSN PoweRx50 Annual Report 2011, click here.
Leaving a mark
Counterfeit drugs are a problem that won’t go away. In a recent segment on CBS’ “60 Minutes,” Sanjay Gupta explored the dark underworld of drug counterfeiting. While covering the bust of a counterfeiting operation in Lima, Peru, Gupta — himself a doctor — said he couldn’t tell the drugs were fake. But luckily, several technologies have been developed in recent years that allow quick detection of counterfeits. One company developing such a technology is Mobile Data Systems. Drug Store News recently spoke with Mobile Data Systems representative, and longtime retail pharmacy veteran, Mark de Bruin.
Drug Store News: In a nutshell, how does FadeMark work?
Mark de Bruin: Mobile Data Systems’ FadeMark watermarks are inserted into the original artwork of products during labeling and packaging, and do not affect production schedules. FadeMark watermarks are invisible to the eye and cannot be tampered with or reproduced. The watermarks are only readable using proprietary software and common scanning equipment, typically already in use by the supply chain. FadeMark thwarts the counterfeiters’ ability to duplicate packaging, inserts or labeling of products, and provides a complete track-and-trace solution.
DSN: How can it be integrated into an anticounterfeiting system in the supply chain?
De Bruin: Mobile Data Systems’ FadeMark technology uses hardware and scanning capabilities already in place, without additional costly purchases for all participants in the supply chain. FadeMark can inexpensively replace or supplement other technologies already available.
DSN: What advantages does it have over other anticounterfeiting technologies?
De Bruin: FadeMark invisible watermarks are only readable using proprietary software, which is included with the license, and scanning technologies already widely in use, thus eliminating the need for additional hardware and software purchases by the supply chain. FadeMark watermarks do not affect production schedules and are inexpensive to produce and read, compared with other anticounterfeiting solutions. Mobile Data Systems’ watermarking technologies can provide both anticounterfeiting and consumer interactivity on the same package. FadeMarkʼs back-end technologies are operational today, and Mobile Data Systems is the only company globally that can manage hundreds of thousands of products’ content while offering the ability for both anticounterfeiting and consumer interactivity.
DSN: How can it be of the most benefit to retail pharmacies?
De Bruin: FadeMark watermarks inexpensively can provide a complete track-and-trace solution to retail pharmacies using existing pharmacy technologies. They can provide brand assurance directly to the consumer, as well as interactivity for the consumer on any product. Mobile Data Systems provides complete watermarking and 2-D bar-coding solutions to afford retail pharmacies brand protection and consumer interactivity.