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AmerisourceBergen, Publix ink drug distribution pact

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VALLEY FORGE, Pa. — AmerisourceBergen Corp. has entered a long-term distribution deal with food and drug chain Publix Super Markets Inc. that includes branded, generic and over-the-counter pharmaceuticals.

AmerisourceBergen said Thursday that the agreement includes direct delivery to Publix’s more than 980 pharmacies across the Southeast as well as its warehouse and central-fill facilities. The pact also enables Publix to expand patient access to specialty medications, the distributor noted.

“Publix continues to push the boundaries of how our pharmacy business operates in order to improve the experience and health outcomes we create for our customers,” Publix vice president of pharmacy Fred Ottolino said in a statement. “With AmerisourceBergen, we’ve found a partner who shares our passion for patient care and who has the knowledge and capability we need to execute our ­strategies.”

Extending beyond traditional drug distribution, the agreement also brings Publix access to AmerisourceBergen’s Cubixx inventory management system. The radio frequency identification (RFID) enabled technology will be used by Publix to foster dispensing of a range of specialty medications, according to the distributor. Publix will also benefit from technologies designed to support overall inventory efficiency and access to consultative services from AmerisourceBergen as it continues to refine its specialty pharmacy services.

“Innovative pharmacy leaders are simplifying and improving the patient experience of getting needed medications,” stated Steve Collis, president and chief executive officer of AmerisourceBergen. “Publix is doing just that, and we are thrilled to have the solutions and expertise in place to support their mission and to help them unlock additional value in their pharmacy operation.”

Overall, Publix operates 1,111 supermarkets in Florida, Georgia, Alabama, Tennessee, North and South Carolina.

In a report after the AmerisourceBergen-Publix announcement, Fitch Ratings analyst Jacob Bostwick noted that the major drug distributors’ scale continues to win them the business of big pharmacy operators.

“The ABC-Publix deal is just one of many new contracts announced in recent years expanding the relationship between U.S. drug distributors and their downstream customers,” he stated. “The recent spate of expanded distribution contracts began with AmerisourceBergen’s long-term agreement with Walgreens in 2013, followed by McKesson with Rite Aid and Omnicare and Cardinal Health with Fred’s in 2014. Expanded contracts in 2015 included McKesson with Albertsons and Cardinal with PharMerica and UnitedHealth’s OptumRx.”

OTC product distribution stands out as a “unique facet” of the AmerisourceBergen-Publix pact, according to Bostwick.

“While most of the recently announced expanded distribution contracts have added the sourcing and distribution of generic drug products, Fitch is unaware of any other agreements that include a material volume of OTC health and beauty products,” he pointed out. “Still, this evolution is one that Fitch has expected since the beginning of ABC’s relationship with Walgreens, given the associated scale and emphasis of Walgreens and its Alliance Boots operations in Europe. We anticipate that the distribution of OTC health and beauty products — and perhaps even certain products commonly referred to as front-of-store — could be the next areas of evolution for U.S. health care distributors and pharmacies.”

*Editor’s Note: Article updated with analyst comment.


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