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AmerisourceBergen earlier this month unveiled plans to add three new facilities — in Olive Branch, Miss.; Shakopee, Minn.; and Newburgh, N.Y. — to its distribution network, which handles some 35% of the pharmaceutical products sold in the United States. The multimillion-dollar investment to build and equip the warehouses will bring the amount of money the company has spent over the past decade on enhancing its distribution and information technology infrastructure to more than $1 billion.
AmerisourceBergen’s Bob Mauch
As with AmerisourceBergen’s previous capital expenditures, the new distribution centers can be expected to bring about more efficient operation of the supply chain and improved access to medications.
“All of our investments are intended to increase our capabilities to provide the best customer experience in the industry,” says Bob Mauch, executive vice president and president of the AmerisourceBergen Drug Corp. division. “We’re very focused on a patient-minded supply chain, and we want to do everything we can to make the distribution part of our customers’ business invisible and seamless for them, do that in a very efficient way and, most important, ensure that patients get the products when they need them. What the new distribution centers will really do is increase in our ability to deliver that high quality to our customers every single day.”
Impressive as they are, the company’s plans for augmenting its physical plant are just one aspect of a drive to transform its business model and, in the process, raise expectations for drug wholesalers in the United States.
“Our strategy is really around aligning all of the resources of AmerisourceBergen with the emerging needs of community pharmacy operators,” Mauch explains. “When you think about what’s on their minds right now — pressure on profit margins, narrow networks, access to specialty products, outcomes-based reimbursement — we have a broad range of capabilities, which we spent a lot of years building, that can help them address those issues.”
He knows the process firsthand. Mauch came to AmerisourceBergen in 2007 when it acquired Xcenda, a consulting firm that works with pharmaceutical manufacturers on market research, brand strategy, outcomes research and health economics.
Other AmerisourceBergen assets that help extend its reach beyond traditional drug distribution include Besse Medical, a leading supplier of specialty pharmaceuticals and related products to physician practices; Lash Group, which develops and oversees comprehensive patient access and continuity of care services; and Oncology Supply, a major distributor of chemotherapy to cancer treatment practices.
“All of our capabilities and expertise have the potential to help our business partners flourish in a changing health care environment,” says Mauch. “If you think about our role, we should always be partnering with customers to unlock value. That could be a pharmacy or it could be a manufacturer. When we can find an opportunity to actually increase the efficiency in the supply chain, and therefore create value, that’s something that we want to be able to do.”
For AmerisourceBergen, which, like its major competitors, has the nuts and bolts of drug distribution down to a science, that process will increasingly involve helping its clients adapt to changes in the health care marketplace. Specialty pharmacy is one area where it is already making a difference.
“Specialty medications are critical to the future of community pharmacy operators,” asserts Mauch. “We are focusing our strategy on making sure that they can have access to products and access to patients, so that specialty pharmacy care is available in that setting. As specialty products become more important — and they comprise the fastest-growing part of the market — that’s where those businesses need to be in order to continue to be relevant to the needs of patients in the communities they serve.”
The company’s approach to specialty pharmacy is indicative of its overall strategic direction.
“The capabilities that we possess allow us to customize the solutions that we offer our partners,” Mauch says. “We always want to find the right solution for that particular pharmacy, whether it’s a big chain like Walgreens or an independent. Our objective is to help our customers execute the strategy that’s right for them.”
