Thinking globally: Will it work for WAG?
Is Walgreens’ decision to buy a major stake in European drug store giant Alliance Boots a good idea?
It could be — provided the combined entity, which would comprise the world’s biggest drug retailer and biggest purchaser of pharmaceuticals — successfully can leverage the unique strengths of each company, apply them to their respective markets and reap the billion dollars in synergistic savings Walgreens is predicting will occur by 2016. But for a company with no experience in European retailing and plenty of homefront headaches to deal with in mid-2012, spending $6.7 billion in cash and stock for a 45% stake in Boots is a big leap into the unknown.
Walgreens already operates drug stores in Puerto Rico and Guam. But ever since the company sold its Sanborns division in Mexico to Grupo Carso 30 years ago, its leaders have airily dismissed the notion — proposed by many retail analysts and reporters — of jumping outside the United States or its protectorates for new growth opportunities.
A succession of top company executives — from former chairman and CEO Cork Walgreen III to Fred Canning, Dan Jorndt, David Bernauer, Jeff Rein and current president and CEO Greg Wasson — traditionally have insisted there was no compelling need for the nation’s top drug chain to look beyond its own borders for growth. The rationale — that there still were too many rich veins of potential business to mine in too many cities and towns at “the corner of Main and Main” across the U.S. — made sense for a company able to open hundreds of fast-maturing new stores each year, notch more than 30 consecutive years of record profits, and reap same-store sales gains that were the envy of other retailers.
Those days are over. For Walgreens, which now competes against a slew of powerful national and local competitors with more than 7,800 pharmacies in all 50 states, much of the low-hanging expansion fruit has been picked, either by Walgreens or by its rivals. More pressing for the company is its costly divorce from pharmacy benefit management giant Express Scripts, many of whose millions of plan members are now getting their prescriptions filled elsewhere after the two companies failed to come to terms over reimbursement rates.
Add to that the still-tepid economic recovery and the serious challenge posed by its biggest rivals, CVS Caremark, Walmart and Rite Aid, all of which are making hay over the January termination of the Walgreens-Express Scripts contract by aggressively courting the drug store chain’s customers, and it’s perhaps no surprise that Walgreens’ leaders are thinking globally.
Wall Street investors clearly didn’t like the idea of a Walgreens-Alliance Boots merger, as seen by WAG’s falling stock price early last week. But don’t count the big guy out. Walgreens has more than a century of experience riding out tough economic times and competitive challenges. And it has plenty of weapons in its arsenal, with or without the addition of Boots: A rock-solid balance sheet, cash to invest, seasoned leadership, powerful economies of scale and a strategic determination to put its retail and specialty pharmacies, health clinics and employer-based health centers at the epicenter of a new, fully integrated healthcare system.
What do our readers think? Was WAG’s deal with Boots a bold and farsighted move to stake out a bigger piece of the world market for health, personal care and beauty products and services in the era of globalization, or a sign of desperation in the face of a challenging domestic market? We’d like to hear your views.
McKesson ideaShare 2012 kicks off with a bang
LAS VEGAS — Day one here at McKesson ideaShare 2012 and the thousands of independent pharmacists and pharmacy owners from all across the country who convened here Monday, at the Las Vegas’ Venetian Resort, looking for business-building solutions and industry to help them stay relevant and differentiate themselves with their customers and patients, were not disappointed.
“By bringing together owners and leaders from across the country to share ideas and best practices, McKesson is helping community pharmacy owners and pharmacists achieve better business health and better patient care, in addition to better connecting them with their communities” said Brian Tyler, president of McKesson U.S. Pharmaceutical. “McKesson fully believes in the future of community pharmacy, and ideaShare is one of the best opportunities for us to engage with our customers to understand their growth goals and specific needs.”
Indeed, McKesson ideaShare 2012 kicked off with a very BIG bang, with a heightened focus around several key areas, including:
• Growing the pharmacy patient base: Retail independent pharmacy owners who do not have the advertising budget of a chain drug store are implementing business tools such as the Physician Outreach Program (POP) that allow them to identify and promote their unique capabilities to prescribers and patients. POP — which launched last year to Health Mart pharmacies — is now available to all McKesson independent and regional retail customers. Independent pharmacies looking to connect with the broader healthcare team in their communities and seize new opportunities to attract new patients can now access more than 1 million prescriber records to tailor their marketing strategies.
“McKesson’s Physician Outreach Program gives our pharmacy a clear-cut approach for who we need to target and who we need to have a business relationship with in the community,” said Snehal Patel, PharmD, Health Shoppe Pharmacy, East Brunswick, N.J. “In the past we always worried about taking care of the patient, thinking the rest will follow. Now we know it isn’t just about the patient — we have to fit in the triad of care of physicians, patients and pharmacists. This program allows us to do that.”
• Growing the pharmacy future: According to the National Community Pharmacists Association, after decades of declining numbers, independently owned community pharmacies are on the rebound, and growing in strength. McKesson’s RxOwnership program, dedicated to providing independent pharmacy owners, prospective owners and pharmacy students with the tools to help them map out their future, supported 288 startups in its fiscal year 2012.
“Every pharmacist has a different future in mind when it comes to their business goals,” said Bob Graul, national VP McKesson RxOwnership. “From considering pharmacy ownership to expanding to multiple locations to exiting the market, pharmacists can benefit from our experienced advisers, in addition to our one-of-a-kind tools that help guide them through the ownership or succession planning process.”
• Growing the pharmacy business: Health Mart continues to invest in solutions that help its franchisees attract new customers, maximize the value of their existing customers and increase their efficiency so they can grow their businesses. Among the major advancements and new offerings it has introduced in the last 12 months, Health Mart has completed the roll out of its comprehensive line of private-label over-the-counter healthcare products; launched a consumer-facing online platform, Your Pharmacy Online; revamped its Health Mart Marketing Tool Kit; and modernized its pharmacy store design. Health Mart currently numbers 3,000 stores across the country, and is quickly becoming the franchise model of choice for independent pharmacy owners looking to complement their local identity with a national brand, McKesson noted.
For more information on all of McKesson’s announcements from McKesson ideaShare 2012, please visit McKesson’s online newsroom at www.mckesson.com/newsroom.
Q&A: Women in pharmacy
McKesson’s RxOwnership program helps independent pharmacy owners, prospective owners and pharmacy students develop a plan to buy or build their own pharmacy. Drug Store News recently caught up with Bob Graul, National VP, RxOwnership, McKesson, to talk about how the program has seen an increase in women pharmacists interested in ownership in recent years.
DSN: What are the opportunities for women in the retail pharmacy landscape?
Bob Graul: The face of pharmacy is changing as the percentage of women pharmacists and pharmacy owners has steadily increased over the past 20 years. We believe these bright, energetic healthcare providers can help propel the next generation of independent pharmacy forward at a time when the opportunities for retail pharmacy have never been greater. Today’s women pharmacy professionals, armed with business acumen and clinical knowledge, can help drive greater adoption of innovative technology and clinical services in the pharmacy, elevating the role of independent pharmacy within the healthcare system.
DSN: How is McKesson supporting women pharmacists who are interested in pharmacy ownership?
Graul: In 2008, McKesson launched the RxOwnership program, dedicated to providing independent pharmacy owners, prospective owners and pharmacy students with the tools to help them map out their future. In recent years, the program has seen an increase in women pharmacists interested in ownership, in addition to greater support for women pharmacists within the industry. For example, the APhA Foundation established a Women in Pharmacy Campaign that recognizes the outstanding contributions of all trailblazers, mentors, colleagues, wives, sisters and daughters who have paved the way for colleagues in the pharmacy profession, which McKesson supports.
At ideaShare 2012, McKesson will host its second Women in Pharmacy reception with the goal of increasing peer-to-peer interaction and the sharing of ideas and best practices among women pharmacy professionals. In the future, we plan to collaborate more closely with industry thought leaders to introduce even more social-networking opportunities and education sessions targeted at women pharmacists.
DSN: Can you share some of the unique challenges facing women pharmacists interested in ownership?
Graul: Some of the women pharmacists that we have helped with pharmacy ownership were challenged with learning to balance family life and work life. Not only were they already working full days counseling patients, they were leading full lives outside of the pharmacy, and yet they also needed to find time to plan for a successful path to ownership.
It was rewarding to hear from Nital Patel, owner and pharmacist of Chicago Plaza Health Mart, speak on our RxOwnership panel last year at ideaShare. She shared her experience with McKesson and highlighted the confidence and resources we were able to provide as she made the leap from pharmacist to pharmacy owner. McKesson understands that every pharmacist has different needs and business goals; it’s important that we help them address both.