Inside This Issue - Opinion
An era of unprecedented achievement
June 11th, 2012
by David Pinto
One of the most productive tenures in the annals of the National Association of Chain Drug Stores ended two months ago when H-E-B executive Bob Loeffler stepped down as chairman of the association.
Loeffler assumed the chairmanship at the 2011 NACDS Annual Meeting in Scottsdale, Ariz., and handed the gavel to Walgreens chief executive officer Greg Wasson at the just-concluded 2012 Annual Meeting in Palm Beach, Fla. The months between the two events were described by NACDS staffers and board members as an era of unprecedented achievement and unparalleled cooperation, a period during which a sometimes contentious NACDS board found ample cause for debate, cooperation and progress, while setting in motion some dramatic new programs and unprecedented initiatives.
Loeffler, more than any individual, has been credited with the recent success the association has enjoyed in setting and executing an ambitious agenda.
On a personal level, Loeffler acquitted himself as chairman as few before him have done, emerging from his yearlong assignment with an unprecedented degree of respect and affection in a role that often engenders only criticism and second-guessing.
For Loeffler, the year brought with it a degree of learning reserved for only the special few who recognize that each assignment is a learning opportunity. So it is that he has emerged from his year as NACDS chairman with a degree of respect for the organization that, simply put, didn’t exist a year ago.
“NACDS is the most effective trade association I’ve ever been associated with,” he said recently. “Working with the NACDS board and staff at this level has been fun. But at the same time I’ve recognized that the people here work very hard. As one example of NACDS’ efficiency in organizing meetings, the H-E-B staffers who attended the Annual Meeting met with some 80 vendors in five days. That’s a very efficient way to do business.
“I’ve worked with many trade associations through the years,” Loeffler continued. “At some, you come to an assignment feeling refreshed and leave feeling tired. That’s not the case here. The quality and commitment of the staff make NACDS special.”
Loeffler has also been impressed by the quality of the industry people with whom he’s been associated over the past year. “There are many smart people in this industry,” he said. “When we get together, I’ve been continually impressed by the collective brainpower in the room, and in our ability to come up with solutions to problems that initially appear beyond solution.”
Perhaps Loeffler’s most surprising discovery has been the realization that pharmacy is a very complex business. (He is not a pharmacist.) “No one who hasn’t worked in the pharmacy business is capable of thoroughly understanding it,” he said, “yet people with no understanding of pharmacy are charged with passing laws and regulations affecting the profession.”
Loeffler accurately pointed out that 30 states are in the red financially, while the federal government is in even worse shape. “Yet the very people and institutions that got us into this financial position are the ones who ultimately determine the fate of pharmacy.”
The former NACDS chairman is confounded by the inability of regulators and legislators to understand the role of prescription drugs in the health care community. “If you made prescription drugs more widely and economically available, you’d save billions of dollars in health care,” he said. “But we in the industry appear to be the only people who understand that fact.”
Loeffler sees the pharmacy business becoming increasingly difficult to manage, affected as it is by the predictably huge turnover in Congress at every election and by the diminishing margins with which pharmacy is forced to operate. He also believes that the role and importance of pharmacy is often misunderstood by mass retailers.
“At H-E-B we’ve succeeded with a promotion called Meal Deal, where we assemble a meat dish and group of sides and offer the meal to customers at a very low price, say $10. This promotion has worked in part because various department managers are willing to give up margin points in order to provide the customer with a value proposition — and equally willing to allow one department, the butcher, to profit from this promotion.
“I’ve found that many mass retailers are less willing to participate in a promotional activity in which they sacrifice margins for the benefit of the customer. This needs to change, especially as it relates to opportunities within the pharmacy department.”
Looking to the future of community pharmacy, Loeffler is certain of two things. “The industry must learn to use technology to dispense prescription drugs with pinpoint efficiency,” he said. “Only by doing so can we manage our costs effectively and produce the innovations we need to ensure that pharmacy remains an integral part of the health care equation.
“Second, we desperately need to expand the definition of pharmacy. It is more than the dispensing of medications, much more. For pharmacy to succeed going forward, it must come to include a range of fee-for-service initiatives — vaccinations, consultations — that, though provided by an increasing number of drug store retailers, are not now paid for. Providing these services and being remunerated for them is what the future of pharmacy must be if pharmacy is to have a future.”
Though Loeffler has stepped aside as NACDS chairman, he has no plans to leave the association. He will remain on the board, where he intends to continue to make a difference, and where, not surprisingly, his colleagues will continue to look to him to provide ideas, motivation and involvement. Which is just what Bob Loeffler wants. “This has been a lot of work,” he said candidly, “but I’ve enjoyed it immensely.”