As Cardinal Health gets bigger, focus on independent operator intensifies

SEATTLE — As Cardinal Health has grown into the healthcare services powerhouse it is today — No. 19 on the Fortune 500 list, with annual sales topping $108 billion, and an integral linchpin of the nation’s healthcare supply chain — the company has maintained a strong focus on serving and expanding its reach among independent pharmacy operators. That commitment has only been heightened in recent years by three key acquisitions: Borschow Hospital and Medical Supplies in 2008 (Borschow formally changed its name to Cardinal Health Puerto Rico in November 2012), Kinray Inc., in 2010, and Dik Drug in 2012. Together, these deals brought more than 2,500 new independent customers into the Cardinal Health universe.

But even as Cardinal Health has grown, it has remained laser-focused on providing all of its customers with cutting-edge offerings and solutions that enable them to compete against the large national chains. It has remained equally committed to helping its customers maintain and leverage their own identity. Having Cardinal Health as a partner has been a boon for Borschow’s customers, Cardinal Health SVP and general manager for Puerto Rico Debbie Weitzman told DSN. “One thing welcomed by Borschow customers is access to Leader brand products,” she said. “In Puerto Rico, as in the United States, community pharmacies have a lot of competition from national chains, and now they have a private label they can call their own with competitive pricing, attractive packaging and quality.”

This year, Cardinal Health Puerto Rico expects nearly 60 customers at the RBC show in Seattle, with a total of 130 participants from the island. That’s a pretty big commitment in time and travel — a 12 hour trip from Puerto Rico to Seattle — but the Borschow contingent plans to make the most of their time, as they always do, Weitzman said. “On the Cardinal [Health] internal website last year, when they put up the photos from RBC, out of 40 pictures, clients from Puerto Rico were in 32 of them.”

However, the isolation from the U.S. mainland creates challenges beyond travel.

For one, while Puerto Rico is subject to federal laws, its Medicaid system and reimbursement structure work differently and can present challenges. Shipping also can be an issue as longer distances add to costs, and inclement weather and other obstacles can delay the arrival of shipments. “We have a significantly higher cost of doing business, [and] reimbursements are less,” Weitzman said, “Obviously, that creates much slimmer margins for our clients to operate.”

Since becoming part of Cardinal Health, the company has been working to ensure that customers in Puerto Rico have access to the same services as their mainland counterparts. One new service Cardinal Health is rolling out to its customers in Puerto Rico is its Order Express online ordering system, which Cardinal Health first introduced a few years ago. Order Express will be available to customers there beginning in September. “Now, there’s very little difference between a client in Puerto Rico and a client in the United States in terms of what Cardinal Health offers,” Weitzman said.

As Cardinal Health works to bring its offerings and solutions to its customers and broaden its reach among independent pharmacists, helping them leverage the identity and strength of their own individual brands has remained a major focus. According to Cardinal Health SVP and general manager for Kinray Inc, Steve Mason, Kinray customers will have the opportunity to take advantage of all the benefits RBC 2013 provides. “We’re all about helping the independent pharmacy market themselves, brand themselves and build their business, and we offer them the tools and services to help them do that,” Mason said.

The acquisitions have made this a lot easier for Cardinal Health. “You look at Kinray; you look at Dik; and you look at Borschow — these have all been acquisitions that reinforce that we are very committed to the retail independent market and keeping them independent,” Mason said.

As for the RBC show itself, Mason touted the many educational and business opportunities for independents.

“It’s a great place to be able to network with peers across the country,” Mason said. “It’s got an outstanding offering of continuing education courses. And then, very importantly, it’s a forum in which they can learn about our solutions that empower them to run an operation that’s efficient, while maximizing profitability.”

Another purpose is to provide networking opportunities.

“I’ve been going to RBC since the early ’90s, and a lot of these pharmacists, they come every year, and they get to know someone from one year, and then they keep in touch throughout the year, and they meet up at RBC [every year],” Mason said. “You develop relationships [that last throughout] the years.”

For more details on Cardinal Health RBC 2013, including the complete program agenda, visit cardinalhealth.com/rbc.

And to keep up with all the news from Cardinal Health RBC 2013, visit DrugStoreNews.com/Cardinal-Health-Retail-Business-Conference-2013.

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