Q&A: Jon Giacomin, Cardinal Health

With just about one week to go before the start of Cardinal Health Retail Business Conference 2015, DSN editor-in-chief Rob Eder caught up with Jon Giacomin, Cardinal Health CEO for the Pharmaceutical segment, to find out what’s new for the 25th anniversary of this important independent pharmacy meeting, his take on the current state of the pharmacy business and how it is impacting independent pharmacy owners — a major investment the company is making in its Medicine Shoppe and Medicap Pharmacy franchise system — opportunities in the Medicare Part D market and more.

Drug Store News: RBC draws a lot of repeat attendees. What’s new at RBC this year that may surprise attendees?



Jon Giacomin: This is our 25th anniversary, and it’s probably the largest show that we’ve had on record. We’re expecting record numbers of attendees this year, and I’m really excited about that. Relative to surprises, we’re going to emphasize the sharing of best practices among our customers. A number of them are doing some very unique things to respond to some of the needs within their own communities. We’re hosting a number of panel discussions to help facilitate peer-to-peer conversations, as well as highlight specific best practices that we think a number of our customers can learn from.



So, first and foremost, it’s going to be about sharing those best practices. Secondly, we’ve been focused on looking at the front-end of the store. In particular, how do customers get more out of their front-end? How do they optimize it? What products should they be carrying? How do they price those products? And really, how do they operate that part of their stores better? We’re going to be talking a lot about that, as well, as we think about how we improve the totality of their business.



DSN: Jon, when you talk to independent pharmacy owners, what are the biggest challenges they are facing, and what’s available at RBC to help address some of those concerns?



Giacomin: I think it’s been going on now for a number of years — and maybe it’s just getting to be more acute — but reimbursement is top of the list for every retail independent. The issue has shifted a bit over the last couple of years — so now it’s not only about reimbursement, but it’s also about access. So, we are focusing a lot in the managed care space. As you know, we administer a number of pharmacy service administration organizations (PSAOs), and we’ve been working to promote our network. We’ve invested in talent in that area, [along with] solutions around managed care to focus on understanding how our pharmacies are performing and giving them insight into their performance through dashboarding and then giving them the tools to really improve their performance.



As we look across the spectrum of challenges, [reimbursement and network access] are absolutely most critical to the retail independent community pharmacy. We’ve focused our time on creating new solutions and tools for our customers.



DSN: Jon, you talked before about “sharing best practices.” We know that a big draw for RBC has always been the opportunity for independent pharmacies to network and learn from their peers across the country. Talk about some of the opportunities pharmacy owners will have this year at RBC around peer-to-peer education?



Giacomin: First, we offer a complete set of continuing education courses, and we expect that pharmacists are going to attend a lot of those. Many see a great deal of value in those programs — not only for the peer education in terms of whoever is actually administering the course, but also the connections they make with their peers is an important element to RBC. We talked earlier about some of the customer panels that we have, and we’ve got great topics that we’re going to tee up, relative to best practices [around diversifying their businesses, developing new wellness programs and leveraging high-growth front-end categories to drive profits].



We will have networking opportunities throughout [RBC], and we have a number of other planned events where we are asking our customers to come together and share ideas and programs they are doing that might be applicable in other attendees’ stores.



DSN: This is a time of massive transformation in the pharmacy industry, and health care continues to change at a very rapid pace. Jon, from your vantage point, what are some of the most important changes you see occurring in the pharmaceutical industry happening right now?



Giacomin: Well, it really relates to our pharmacists and the customers that we serve, and what’s happening here is that [the business of pharmacy is] moving beyond just dispensing. Pharmacists are becoming more active in the delivery of care, and being asked to provide more clinical services — whether it’s Medication Therapy Management (MTM), whether it’s looking at generic dispensing rates, whether it’s patient adherence. … Pharmacists are being asked to do more relative to the delivery of care and really influence – positively - the quality and outcome of care. And  as a partner to our customers, we’re all about making sure they have the appropriate solutions to be successful in that type of environment.



So, things are changing very rapidly — certainly on the legislative front, you’re seeing more in the way of the expansion of MTM-type services. You’re also seeing legislation being introduced at the state level around prescribing and dispensing, and while it’s still somewhat limited today, you can see the possibility that they might expand [to include provider status for pharmacists]. Some states have already gone down that path — Washington state is an example of that. As momentum increases in these areas,  we want to make sure we’re there with our customers and supporting them.



DSN: More than 54 million Americans are enrolled in Medicare, with some 10,000 seniors aging into the program every day. What is Cardinal Health doing to help retail pharmacy independents capture share of this rapidly growing market?



Giacomin: What’s really happening right now in Medicare is an expansion of access. With the expansion of access, new cost-control models are emerging. And so the idea of narrow or limited networks has become more prevalent in the conversation. The question we keep asking ourselves is: How do we ensure that our pharmacies have access to those preferred and limited networks? And, as I was telling you earlier, one of the areas where we’ve invested heavily is in driving the performance of our networks, and promoting our networks. Today, we believe that we have the best-performing PSAO in the nation. We have more than four million lives that are in preferred Medicare networks, and we’re participating in 13 networks today. So, we feel really good about our progress, relative to gaining access and giving our customers insight into their performance. We will  continue to maintain and expand access for them because that’s obviously going to be critical for their ability to thrive going forward.



DSN: We’re hearing a lot about Medicine Shoppe and Medicap, and the co-branding initiative Cardinal Health launched last year. What can we expec