Manufacturers

Improving Customer Experience and Driving Long-Term Value for Manufacturers

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Executive Q&A

Rich Tremonte, newly appointed President of Strategic Global Sourcing for AmerisourceBergen, talks with KnowledgeDriven about the current healthcare landscape, the role of the wholesaler and how the new organizational structure at AmerisourceBergen brings out the best in both.

Q: How has your background in the industry and at AmerisourceBergen prepared you for your new role? What challenges are you expecting?
A: Having spent the last 17 years in pharmaceuticals, I‘ve had the opportunity to really get to know and understand our customers and how we could best service them. At Teva, in supply chain and marketing analytics roles, I spent a lot of time working on bringing products to market in the United States. Then at Sandoz, I had the opportunity to work closely with customers like Express Scripts, Rite Aid, CVS, Walmart and Walgreens because we were selling direct to them. I also served as the primary liaison between the generics division of Sandoz and Novartis. I had the experience of working with many different brand teams on launching new, authorized generics into the market, which gave me insight into the brand world.

When I came to AmerisourceBergen over four years ago, it was right as our 10-year brand and generics distribution contract with Walgreens was announced. The Walgreens Boots Alliance Development joint venture accelerated AmerisourceBergen’s growth in specialty and manufacturer services and has given us a more global mindset. The partnership really put us on the map globally and many opportunities have snowballed from that, and we are in the process of evaluating many new opportunities with WBA.

AmerisourceBergen is a very large, complex organization. Thanks to great mentors, I’ve built a deep understanding of the organization and been well positioned to drive value moving forward with our manufacturer partners.

The challenges ahead are probably many of the same ones the industry as a whole faces. Generics aren’t growing the way they once were and as a result, we need to find a way to provide value in other areas—whether it’s brand, specialty or biosimilar pharmaceuticals.

Q: AmerisourceBergen recently made some internal organizational changes, with your new role being one result. What is different, and how does this allow the organization to better align to customer needs?
A: Our new organizational structure addresses a lot of the challenges we’ve had with internal silos in the past. Now, when we respond to a manufacturer, it’s a holistic, coordinated response that makes for a seamless, coordinated experience for our partners. Now we can deliver greater value and demand for manufacturer products to help them grow market share.

The other benefit is that now we can deliver greater value and demand for manufacturer products to help them grow market share. This will be a top priority in the coming months, with our team very focused on how we create more value and increase demand for our manufacturer partners.

Q: What are the greatest challenges you see in healthcare? What about for brand/specialty manufacturers specifically?
A: Each segment of healthcare has unique challenges to some extent. Proportionally, most of the innovation in pharmaceuticals will be in personalized medicine and injectable drugs. With all of these specialty drugs coming down the pike, pharmacies will need to find ways to compete successfully in the market. How will they dispense in that setting? How will they cost effectively access those medications for patients?

For hospitals and health systems, the challenge continues to be the transition from fee-for-service reimbursement to value-based care that rewards good clinical outcomes. This complete overhaul of reimbursement is taking place against a backdrop of uncertainty around healthcare reform.

Finally, the Food and Drug Administration’s efforts to expedite approval of generics and take a more active role in drug pricing have an interesting dynamic for both manufacturers and AmerisourceBergen.

Q: Why does the market shift that we’re seeing in generic pharmaceuticals affect AmerisourceBergen's interactions with brand and specialty manufacturers?
A: With market growth shifting away from generics, we need to examine how we create sustainable, predictable value with specialty and brand manufacturers, both on the buy side and the sell side of the business. Generic pharmaceuticals aren’t going away; the value is shifting to the difficult-to-make generics, such as products that have a device attached to them like Advair or are complex like Copaxone. Those products will require much more support to gain market share. Biosimilars also fit into that category, and this is an area where AmerisourceBergen needs to be a pioneer given our specialty presence.

Q: What are the greatest opportunities you see for AmerisourceBergen and our manufacturer partners to work together to address these challenges?
A: There are many opportunities to address these challenges with our key partners. The Walgreens Boots Alliance Development continues to grow with Express Scripts, Rite Aid and Econdisc joining the alliance. That buying entity represents more than one-third of the retail market space. That’s really large scale that ultimately benefits all of our customers and the manufacturers that want to reach them.

We also have the opportunity to continue to make progress in biosimilars. Our new organizational structure positions us to address market shift because we’re a stronger and more cohesive team that sits across from manufacturers. Our new organizational structure positions us to address market shift because we’re a stronger and more cohesive team that sits across from manufacturers. While our manufacturer partners recognized that ION Solutions, Besse, Lash Group, Xcenda and other entities were part of AmerisourceBergen, I think they felt they could be working with us more effectively. Our new structure enables us to deliver a more cohesive and unified partner experience.

Q: In what ways do manufactures need to gain a better understanding of the wholesaler/distributor business model? What stands in the way? What solutions could help?
A: We’ve already made a lot of headway with helping manufacturers understand that we don’t just ship boxes around. The other thing we’ve done very well on the generics side and we’re making great progress on the brand side is connecting our customers to our sourcing. We no longer have this wall where the sourcing team buys the product, then sends it off to the sales team who then talks to the customer. We’re at a point now where our manufacturer sourcing team is talking directly to our customers at the product level. That’s been very powerful because our associates sourcing the items often know a great deal about them, which customers appreciate. They feel like they are talking directly to the person who can provide insight into the manufacturer and explain the rationale for pricing, landscape, etc. 

Q: In what ways have wholesalers/distributors most significantly modernized and evolved in recent years? What investments have we made and why do they matter to manufacturers?
A: One way we’ve modernized is by making a significant investment in systems. ABC Order, our pharmacy ordering system, helps pharmacies order, control inventory, access data and information and resolve issues. ABC Order allows us to have very informed discussions with our pharmacy customers while only a year ago, we couldn’t do any of that. It is a great example of how we’re using technology to deliver value and improve everyday customer relationships while being able to translate what we learn back to our manufacturer partners.

Q: “We are united in our responsibility to create healthier futures.” That’s AmerisourceBergen’s stated purpose.  What does this mean to you, and how do you see that manifested in the work you do?
A: First and foremost, it feels good to work at a company that is helping to improve peoples’ lives and has a noble purpose. At AmerisourceBergen, we truly value our manufacturer and customer partnerships. We value the work we’re all doing together, and that culture is felt by everyone—both internally and externally. 

I often hear from manufacturers that AmerisourceBergen’s culture is something they value, which always makes me smile!

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