Come April, the National Association of Chain Drug Stores will put in place the first chairman in its 78-year history who has not come from the chain drug store industry.


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Analysis: New kind of chairman coming to NACDS

February 25th, 2011
Robert Loeffler
by David Pinto

NAPLES, Fla. – Come April, the National Association of Chain Drug Stores will put in place the first chairman in its 78-year history who has not come from the chain drug store industry.

The NACDS chairman-in-waiting is Bob Loeffler. He is primarily a food retailer, having spent his retailing career with H.E. Butt Grocery Co. (H.E.B), a San Antonio-based supermarket chain that is generally recognized as among the very best America has to offer. Loeffler, in 31 years at the company, has been involved in virtually every initiative that has combined to bring H.E.B. to the first ranks of retailing in America.

Loeffler will be a new kind of chairman for NACDS — for several important reasons. For one, he is relatively new to the association, having spent just four years as an active board member. For another, he is not a pharmacist, which, ironically, is why he became engaged with the association in the first place.

“Though H.E.B. has been a member of NACDS for a long time, I had never been personally involved with the association,” he says. “But when the opportunity to join the NACDS board came my way, I grabbed it for a simple reason: Though pharmacy is an important part of H.E.B.’s business — it approaches 10% of the company’s total sales — I wanted to increase my understanding of the complex elements surrounding pharmacy.”

Today, he grasps the key issues surrounding pharmacy as clearly as any NACDS board member. He speaks easily about such issues as the costs surrounding Medicare Part D and the continuing debate over health care reform, and is concerned about the compression of gross margins, an issue that troubles all pharmacy retailers.

“Pharmacy is a very different business,” says Loeffler. “It’s different in terms of the regulations, laws and nomenclature that define it. I believe its complexity has kept H.E.B. executives from engaging in the issues surrounding it. Now that we’ve come to understand those issues, I believe we have developed a greater affinity for pharmacy — and for NACDS.

“My involvement, along with the continued involvement of our pharmacy team, has in turn helped our company by strengthening our knowledge, our teamwork, our Rx strategy and our recognition that pharmacy, once a slam-dunk for us, has become a very complex and challenging business.”

Incoming NACDS chairman Bob Loeffler (left) chats with the association's current chairman, Larry Merlo of CVS Caremark.

Loeffler believes, along with other NACDS board members, that the association’s primary role in today’s environment is to influence the legislative and regulatory communities in Washington. Moreover, he believes the association has come a long way in that direction during his tenure on the board.

“We’re more deeply involved in legislative and regulatory affairs than we had been,” he says. “We’ve become a player on the Hill — respected and highly regarded. We’ve developed meaningful and productive relationships with members of Congress and other government officials. Those relationships, in turn, are helping us influence legislation and regulations vital to our profession.”

Still, Loeffler believes the greatest challenges lie ahead.

“Our biggest hurdle going forward is expanding pharmacy coverage at acceptable cost,” he says. “The key issue surrounding health care reform involves balancing cost controls with the mandate to get the job done.

“Active diligence by the association is what’s required here. We have the ability to influence the legislative agenda in health care reform going forward because our grasp of the facts puts us in a unique position.”

Since health care reform has now become the law, the challenge that confronts community pharmacy is to work to insure that the regulations surrounding the law make sense.

“For now, I’m optimistic that health care reform will work to our advantage,” Loeffler says. “We’re committed to work with Congress and CMS [the Centers for Medicare and Medicaid Services] to ensure it does.”

Loeffler is clear on one point: The primary function of NACDS is to promote the reputation and influence public policy regarding pharmacy. He understands as well that influencing the legislative and regulatory communities, and the laws and rules that emanate from them that involve pharmacy, requires money. And that, he says, is where the association’s meeting and conference agenda comes in.

“NACDS conducts terrific meetings,” Loeffler says. “They’ve been of tremendous value to H.E.B.. But for the association the meetings and conferences are most valuable in that they provide the financial support to enable us to accomplish our primary mission, which is influencing events in Washington.”

Loeffler intends to take his tenure as NACDS chairman very seriously, as he does all his endeavors. To that end, he has stepped aside as H.E.B. president and is now primarily responsible for just a few of H.E.B.’s business units. In a year he will no longer be responsible for any major ­H.E.B. units or initiatives.

In its place will come a strong commitment to his duties at NACDS, which, he insists, will be aggressively translated to the retailer he has served so capably for so long.

“We’re committed to pharmacy at H.E.B.,” he explains. “We offer the basic services that every pharmacy retailer provides — vaccinations, patient counseling and medication therapy management. But we’re constantly looking to expand our range of pharmacy services. We understand the value of pharmacy in both the retail and health care communities — and we believe it will play a more important role going forward, primarily by keeping people out of the hospital. That’s the mission of NACDS as well.”

Clearly, Loeffler sees the association’s critical role in the near term as helping to shape the health care debate. Moreover, he believes NACDS is perfectly positioned to do so.

“We have a committed board, a very capable staff, a membership and associate membership who understand our collective financial future is closely tied to the health and viability of pharmacy and, more specifically, to such issues as medication adherence and medication therapy management,” he says. “Our challenge is to effectively communicate the value of the services we are capable of providing. We need to get the message out that paying the pharmacy profession for pharmacy services and medication therapy management would save untold billions of dollars in the end-to-end health care system.”

As chairman, Loeffler is prepared to tackle other issues as well. He intends to support the industry’s efforts to maintain strong front-end sales, to strengthen coalitions with other industry associations, address such subjects as the flexible spending account debate, and continue active involvement with the association’s Retail Advisory Board.

But at the heart of his commitment to NACDS is a commitment to pharmacy. At first glance this is a posture at odds with the new chairman’s life’s work. But nothing about this unassuming and hugely capable 61-year-old executive is as it first appears. As an example, he determined, while in his early teens, that he wanted to attend the U.S. Naval Academy at Annapolis, Md. To that end, he wrote his congressman each year, asking for an appointment to the school. Not only did he graduate from the academy, he went on to a successful naval career, including a tour in Vietnam.

Such is the determination of this apparently unassuming, unfailingly modest retailing executive. No one who has come to know him during his four years as an NACDS board member doubts that he will bring the same energy, effort, determination and intelligence to his role as the association’s new chairman.

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