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Global Pharmacy Inc

Every day, Cardinal Health delivers more than 2.5 million pharmaceutical products to more than 30,000 locations in the United States. But its massive distribution capability is only the visible tip of a very large iceberg.

"An important step we've taken is to accelerate our move beyond the traditional role of wholesaler," said executive vice president Mark Parrish, who is responsible for Cardinal Health's pharmaceutical and specialty distribution businesses as group president of pharmaceutical distribution. The focus of that move, Parrish said, has been to "create programs and services that enable us to serve [the retailer] as more of a true business partner."

Most retail pharmacy operators would agree with that approach. "Strategic partnerships with pharmacists are not just about wholesale drug purchasing," said Kim Swiger, manager of pharmacy operations at Richmond, Va.-based Ukrop's Super Markets and a long-term Cardinal Health customer.

Cardinal Health's pharmaceutical distribution division offers a broad range of products and services to support community pharmacies. Among those solutions is a generic pharmaceutical program that offers contract pricing and incentives on more than 2,400 single-source items with a high, consistent service level called CardinalSOURCE. Also available are:

* a comprehensive purchasing program with contract pricing and incentives from leading manufacturers on branded and generic pharmaceuticals.

* a cost-reducing program that features repackaged, high-volume pharmaceuticals.

* an auto-ship program, called First Script, that gives pharmacies immediate access to newly released brand and generic pharmaceuticals.

Cardinal Health also is leveraging its increasingly powerful health care and pharmaceutical database to create a series of analytical tools to help pharmacy retailers better manage their businesses. Indeed, spending on information technology across the company rose 15 percent last year to nearly $400 million. And much of that money went into new information technology.

"This global initiative, which improves efficiency and customer access to vital information under one platform, further strengthens our ability to go to market as one company," said Bob Walter, Cardinal Health chairman and chief executive officer. The integration of IT, he added, also "enhances our ability to leverage our suite of offerings to provide solutions resulting in more effective cross-selling initiatives."

Under Lori Davis, Cardinal Health's vice president of marketing, Cardinal Health also has developed and recently has expanded a slew of retail marketing programs to put stores in touch with hot new product offerings and to tailor their merchandising efforts to specific patient needs. A highlight is the company's Patient Destination in-store merchandising program, now consisting of nine specific planograms that provide products, patient educational materials and signage tailored to disease states and prevention.

Those front-of-store product displays are designed around customer needs, such as The Asthma Place, The Diabetes Place, The Wellness Place and The Stop Smoking Place.

Said Parrish, "These actions are all designed to create a Cardinal Health that can leverage its strength and resources as a large company, but at the same time provide ... the attention and responsiveness you would expect from a smaller organization."

Given Cardinal Health's scale and expertise in all facets of health care and retail pharmacy support--and its determination to integrate those capabilities on behalf of its customers--the field marketing and service teams within Parrish's pharmaceutical distribution division now wield considerable clout. Increasingly, they are able to bring to their chain, independent, institutional and hospital pharmacy customers a combined arsenal of services to improve purchasing, decision-making and profitability, according to company executives.

A prime focus, added Lori Davis, is to strengthen and reaffirm retail pharmacy's role in health care. "Retail pharmacies play an essential role in the development and delivery of health care," she said. "Every decision they make has the potential to affect the quality, cost of efficiency and delivery of care to patients. They need new ideas, products and systems that can help them make better, faster and more cost-effective choices on behalf of the people they serve.

"Our goal," Davis continued, "is to strengthen the position of the retail pharmacy by providing cost-effective buying opportunities, high-quality continuing education sessions and other programs focused on improving overall patient care."

To boost its ability to bring together all its components for its retail pharmacy customers, Parrish said, the company has realigned its operating structure. "We recently completed a series of organizational changes at Cardinal Health with the goal of creating a structure that enables us to provide [pharmacy operators] with enhanced service and support," he explained.

The overhaul included an expansion of the field support and marketing teams, to rive groups from three. "By creating two new field group organizations, we can provide more individual attention to our customers and more time and energy to the task of using our programs and services" to help drug chains and independents run their business more profitably, Parrish said. "We are also moving more resources into the field, so the knowledge and expertise of our people can be more readily available."

In line with the effort, Cardinal Health also created a new retail product development department, headed by vice president Jeff Thomas. Thomas' team, Parrish said, will partner with pharmacy customers in such areas as reconciliation and store financial improvement, advanced retail technologies systems that consolidate and integrate information flow within the pharmacy and programs to help chains and independents tap new markets, new customers and new sources of revenue.

Cardinal Health's support programs appear to be paying off. Said Bob Storch, president of Cardinal Health's Medicine Shoppe division: "The collaborative effort with all the Cardinal [Health] Groups is really an enabler for us to get insight into programs that are working on the hospital side that we can segue over to the Medicine Shoppe retail stores. And it enhances our ability on the purchasing side to be put in touch with the major drug manufacturers who want to initiate programs at store level."

The more than 1,000 U.S. Medicine Shoppe stores also draw on "other Cardinal Health divisions that deal with product information [and] dissemination of information from drug manufacturers to retail pharmacies, hospitals and doctors," Storch added. "So we utilize that collaborative effort among the Cardinal [Health] businesses. It's a distinct advantage to us."

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