Inside This Issue - Opinion
Gearing up for the industry’s main event
April 23rd, 2012
by David Pinto
The Annual Meeting of the National Association of Chain Drug Stores is invariably the chain drug industry’s signature event — though invariably for different reasons each year.
Last year it was notable for, among other things, the final appearance of both Tom Ryan and Mary Sammons, the outgoing CEOs of CVS Caremark and Rite Aid, respectively. (Ryan, it should be noted, plans to attend this year’s meeting, if only briefly.) It was noteworthy, as well, for the emergence of Larry Merlo, John Standley and Joe Magnacca in new and significant chain drug industry roles. Merlo journeyed to Scottsdale, Ariz., scene of last year’s meeting, as the new CEO of CVS Caremark, Standley as the recently named chief executive of Rite Aid, Magnacca as the newly named chief merchant at Walgreens.
In the year since the Scottsdale meeting, as the chain drug industry prepares to meet in Palm Beach, Fla., for the 2012 NACDS Annual Meeting, a new set of signature happenings will replace the old, again assuring that this event retains its position as chain drug retailing’s most prominent gathering.
Among this year’s anticipated highlights include the following:
• The debate over the pending merger of Express Scripts and Medco, two of the nation’s largest pharmacy benefits managers. Universal agreement exists within the world of retail pharmacy that the joining of these two PBMs is little short of a catastrophe for community pharmacy, placing unprecedented and unhealthy negotiating power in the hands of people who have already made clear their disdain for the corner drug store.
Further complicating the debate is the status, going forward, of Walgreens, which had the guts to challenge, and ultimately reject, the terms offered by Express Scripts while it was still a stand-alone PBM. What the merger with Medco will mean to Walgreens is anyone’s guess.
• The first appearance of Mark Cosby at an NACDS Annual Meeting. Cosby, in case anyone doesn’t already know, was named president of the CVS drug chain last fall. In the period since, he has worked to master the intricacies of chain drug retailing — he had most recently worked for Macy’s — while delaying his introduction to the supplier community. That introduction is now at hand — and, if initial reports of meetings already held are an accurate barometer, he will quickly prove to be an engaging and intelligent retailer whose acquired knowledge of both chain drug retailing and the supplier role in the chain drug equation will make him an immediate favorite within the supplier community.
• The reemergence of Rite Aid — and the emergence of John Standley. As some might recall, Standley replaced Mary Sammons as Rite Aid’s CEO about a year ago. In the period since, he has made a significant impact on a drug chain many had written off, primarily by rolling out a dramatic new “wellness” store concept that is among the two most compelling new chain drug formats — Walgreens’ daily living format is the other — introduced in recent years.
Withal, Standley remains a largely unknown figure in chain drug circles. That will certainly begin to change at this year’s Annual Meeting — as it rightly needs to.
• The emergence of Greg Wasson as the new NACDS chairman. Wasson has already made his mark for the way he has handled the job as chief executive of Walgreens, a drug chain that, as recently as three years ago, was accurately said to be struggling. Putting the current battle with Express Scripts aside for the moment — it is far to soon to predict the ultimate outcome — Walgreens is arguably the healthiest, most exciting and most innovative drug chain in the country today. And Wasson deserves much of the credit for the transformation.
• The reappearance of Joe Magnacca. Magnacca, Walgreens’ chief merchant, made his initial appearance in that capacity last year, having joined Walgreens with that chain’s Duane Reade acquisition. In the year since, he has emerged as the darling of chain drug merchants, known and admired for the breathtaking new store format he orchestrated with the launch of 40 Wall St. in New York City last July and the unveiling of State and Randolph in Chicago in February.
Magnacca has been equally appreciated for his ability to work with suppliers — even small and marginal ones — to develop new ideas, design new concepts and give new products a hearing when, in another time, these suppliers might have been ignored or overlooked.
This dual ability to move Walgreens forward and to solicit the contributions of suppliers to that end has made Magnacca the most admired merchant chain drug retailing has seen in some time — or, at the least, since Vern Brunner retired after occupying that same position more than a decade ago.