PHARMACY

NewsBytes on WAG’s Rx purchasing team, WMT’s Duncan Mac Naughton, CVS Q4 results and more

BY DSN STAFF

DEERFIELD, Ill. — Walgreens this month rounded out the pharmacy purchasing team led by Jeff Berkowitz, who joined the company in the fall as SVP pharmaceutical development and market access.


The team includes Frank DeStefano, promoted to group VP pharmacy purchasing and supply chain and responsible for all branded and generic pharmaceutical purchases and pharmacy inventory optimization across the company’s retail, mail, specialty, home infusion, on-site and work-site pharmacy units; Mike Bleser, promoted to divisional VP pharmacy supply chain and analytics and responsible for strategic management of pharmacy inventory across Walgreens; Mike Allen, promoted to divisional VP generic pharmacy purchasing and strategy and responsible for all generic drug purchasing; Jeff Foreman, who joins Walgreens from Cardinal Health as divisional VP brand pharmaceutical wholesaler and vaccine purchasing; and Gerry Gleeson, who joins Walgreens from Merck as divisional VP of pharmaceutical development responsible for optimizing Walgreens’ relationships with pharmaceutical manufacturers.


BENTONVILLE, Ark. — Walmart named Duncan Mac Naughton chief merchandising officer for the company’s U.S. division, less than three months after he was named EVP merchandising.


In other company news, Walmart named Cindy Davis EVP global consumer insights, a new business unit for the company. Davis previously served as EVP membership and marketing for Sam’s Club.



CAMBRIDGE, Mass. — Sanofi-Aventis has agreed to acquire U.S. biotech giant Genzyme for $20.1 billion. Sanofi plans to make Genzyme its “global center for excellence” in rare diseases.



WOONSOCKET, R.I. — CVS Caremark reported that fourth-quarter net revenues dipped 4.1% to $24.8 billion, with net income of $1.03 billion compared with $1.05 billion the prior year. Retail pharmacy revenues rose 3.1% to $14.9 billion during the three-month period ended Dec. 31, 2010. Same-store sales increased 1.7%, with front-end comps up 1% and pharmacy comps up 2%, driven by a 220 basis point improvement from 
Maintenance Choice.

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PHARMACY

THE MESSAGE: A ‘laser-like focus’ on consumers

BY Jim Frederick

Walgreens is ready for its closeup.


After a two-year, top-to-bottom makeover — and a relentless focus on its core customers and its broad mission as a health, wellness and convenient shopping destination — the company that wants to “own well” has honed its message to consumers: Walgreens is ready to be the nation’s top wellness destination.


“Our No. 1 goal as a marketing team is to drive demand and to make Walgreens a routine destination of choice,” VP and chief marketing officer Kim Feil told Drug Store News not long after she joined the company as its first chief marketing officer. That required “understanding our customers better,” she added, which “allows us to target them better.”


Under the rubric of its Customer Centric Retailing initiative, the company has drawn a bead on its customers via focus groups, internal and external sales and replenishment data, and other tools. Its goal, president and CEO Greg Wasson said, is to base its marketing and merchandising activities on a “laser-like focus” on its customers.


Early on in Walgreens’ companywide renewal effort, Feil helped drive a new, data-driven customer segmentation process aimed at aligning marketing and merchandising more closely with the needs of distinct customer groups. Along with her marketing team, VP merchandising Bryan Pugh, other Walgreens decision-makers and outside advertising consultants, Feil has worked to distill Walgreens’ image and its multichannel health and convenience offerings to a clearly defined message that resonates with the nearly 6 million Americans who walk through its doors every day.


Within its new image ads, Walgreens presents itself as America’s “first choice for health and daily living,” offering “innovative health services, exciting products, sound advice and thoughtful daily conveniences” that are “surprisingly easy to access across channels.” 


Walgreens now bills itself as the company that “sells well,” with “a trusted pharmacist” at the core of its retail offering, and a deep understanding of what its customers need “to manage well, get well, stay well and live well.”


In the stores, it means leveraging the company’s already strong reputation among consumers for convenience — and bringing all its resources to bear, including the health services at the pharmacy and all its front-end departments — to “reinvent the customer experience.”

“This is ‘Consumer Research 101,’ … to find out more what consumers would value that convenience for,” Wasson said.


In all its marketing efforts, Walgreens will pursue a comprehensive message that integrates the entire package of goods and services in its stores. “We’re looking at the total basket, the total purchase, the total customer,” Wasson said. “You’ve got to have that front-store offering, and the front-store offering has to have the pharmacy at the back of the store as well.”


One major focus of the new marketing drive is the company’s first loyalty card pilot program. For that, Walgreens is drawing heavily on the expertise of Duane Reade, the New York-based chain it acquired last year.


“With loyalty, we’re going to make sure we ‘crawl, walk, run’ on that,” Wasson told reporters in January. “The good thing is that in addition to what Kim Feil is doing, and the pilots we have in place — combined with the talent, the expertise and the data we have — we think we have the best of both companies” to move the loyalty program forward.


Feil also is deeply involved with the effort to boost Walgreens’ private-label opportunities. “We brought in a talented team of Bryan Pugh and Kim Feil to begin to look at our entire private-brand strategy a year and a half ago, and we are indeed looking at the entire strategy — everything from our OTC offering to our beauty offerings to our fresh-food offerings,” Wasson explained.


According to Feil, one priority was integrating the store-brand message and strategy with the entire Walgreens image. The company had more than 40 private brands in its stores, “but we weren’t treating them as a whole … or really organizing them around department categories, consumer needs, or around price tiers that would be relevant to them,” she said. “We’re still working through that strategy.”

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PHARMACY

THE CLINICS: Helping ‘Take Care’ of primary care shortage

BY Antoinette Alexander

With pharmaceutical and healthcare expenditures on the rise, a primary care shortage at hand and an expected upswing in patients diagnosed with chronic diseases, there’s no denying that the marketplace is in the midst of an evolution. Despite the challenges, Walgreens’ health-and-wellness division has positioned itself for such changes and, according to headquarter executives, has a winning strategy in place — broadening and deepening its payer relationships.


“One area that payer communities all have in common is the need to measure, deliver and improve outcomes, which encompass providing accessible, high-quality care at reduced costs,” Hal Rosenbluth, SVP and president of Walgreens Health and Wellness, told analysts during a presentation in late 2010. “If done properly, this will provide for a happier, more productive and healthier work force and 
member community.”


Walgreens defines payer communities as employers, health plans, health systems, PBMs, government and individual and small businesses. With about 360 retail-based Take Care Clinics stretched across 19 states, and some 368 employer-based health, pharmacy and fitness centers nationwide, Walgreens Health and Wellness offers an expanded scope of services that it says provide a solution to part — if not all — of the needs of different payer groups.


“Whether by helping hospitals reduce the cost of readmission, assisting employers in reducing pharmacy spend or providing greater access to specialty drugs and healthcare services, Walgreens has the solutions payers need for their constituents, whether at work, in their neighborhood or at home,” Rosenbluth said.


One example of this: Harrah’s Showboat casino in Atlantic City, N.J. The casino’s on-site Health and Wellness Center, operated by Walgreens’ Take Care Health Systems employer services group, opened in 2005. During its first year of operation, the facility was seeing about 26 patients a day, 
Emily Gaines, VP compensation, benefits and HRSS for Harrah’s Entertainment, told Drug Store News. By 2010, the center was seeing an average of 65 patients a day and was up to about 17,000 visits a year out of the facility.


Health systems also are facing their share of challenges, as many will be judged and, in some cases, reimbursed based on patient satisfaction, outcomes and the pooling of resources. Rosenbluth noted that, again, this is where Walgreens can step in. “Not a week goes by where we are not approached or approaching hospital systems with solutions, including our hospital on-site pharmacy, in-store Take Care Clinics, infusion centers, home care services and medication fulfillment choices to aid in their own micro-healthcare ecosystems,” Rosenbluth said. “As you can see by now, this is thematic in our approach to the needs of the healthcare marketplace. By helping others we, in turn, are helping ourselves.”


To better address the unique needs of each payer segment —whether it be employers, health systems, health plans, PBMs, government or individual and small businesses — Walgreens Health and Wellness recently revamped its sales and account management organization to better focus on bringing all of Walgreens’ healthcare assets to market. The revamped sales team is comprised of sales and client service executives with experience across all of the payer segments.


“Our approach is to bring all of Walgreens’ asset solutions to each segment, whether online, offline or in person,” Rosenbluth said. “Each payer has a unique set of capabilities and, combined with our solution set, they can each now go to market with a differentiated offering and, in turn, become an additional sales channel for Walgreens’ products and services. … Now, rather than primarily being a provider of pharmacy benefit services, we have developed a much broader set of strategic and consultative relationships in the marketplace.”

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