Independent Pharmacy Organization Names First-Ever CEO

February 7, 2019
Drew Boxler
Volume 163, Issue 4

Gerry Crocker talks with Drug Topics on his plans to grow the Association of Affiliated Pharmacies and Apothecaries (AAPArx).

The Association of Affiliated Pharmacies and Apothecaries (AAPA) has named Gerry Crocker as their first-ever CEO in December of 2018. The creation of this new position comes after a major organizational restructure for the group purchasing organization (GPO), to help grow and support independent pharmacies across the United States. DrugTopics talked with Crocker to learn more about the organization, its plans to expand, and what led him to the position in the first place.

 

DT: What attracted you to the position?

Crocker: This is my third role as a CEO for a GPO. I had worked with [one of the board members] in specialty pharmacy enterprise about 10 years ago, and we stayed in touch over the years. I was doing some consulting, and he asked me to come in and help them renegotiate their agreement with their wholesaler. Over that six-month process, I got to know the board really well. I learned a lot of encouraging things about the group and was quite impressed with them.

 

DT: What does the AAPA do for independent pharmacies?

Crocker: There’s a lot of components-payment terms, data sharing, supply-side, and buy-side. Primarily, all GPOs negotiate a prime vendor agreement with a wholesaler for their members, and the members all operate under the same purchase agreement with their wholesaler. There are some pharmacy systems that have unique services, sometimes a part of the agreement, training support, and better pricing. We have seminars, workshops, CEs (continuing education) around each market segment that [independent pharmacy members] can participate in to help them better understand the market around them and their best opportunities-these are all things they don’t get in pharmacy school but are very important as you try to grow your business.

We are introducing a platform that will allow them to monitor their compliance within our agreement and optimize it to get better rebates and greater discounts by ending their sales data by the end of the month. [Independent pharmacy members] will be able to see where they’re at, where the next threshold of compliance is, and how to get there. They can work proactively to manage their discounts and optimization as opposed to operating reactively, which is where most independent pharmacies find themselves these days.

Advocacy is a big part of pharmacy, and this group is firmly entrenched in it. The old company was a nonprofit organization-the Arab-American Pharmacist Association-and the previous owners retained that entity, but its sole purpose is legislative affairs, community service, and working with pharmacy schools to help pharmacy students with scholarships and loans.

We are engaged with the national associations to advocate for pharmacy in general, and CPAs specifically for independent pharmacies. We participate in all of the national initiatives and legislative affairs effecting pharmacies, and we ask our members to participate on their local levels as well.

The best thing we can do, on all levels for our independent pharmacy members, is to be their strongest advocate.

 

DT: You emphasize a “sustainable pharmacy business model,” could you explain how that looks to you?

Crocker: There’s only so much margin on the buy-side to protect yourself as an independent pharmacy. There’s constant downward pressure from the PBMs on reimbursement-independent pharmacies get deeper discounting by growing their groups. It seems like there’s an equal pressure from the other side to reduce the reimbursements, which minimizes the gains the independent pharmacies just achieved.

The only answer is being a more efficient operator, buying smarter, and expanding your business. The sell-side of your business is really important.

Some pharmacies can survive as a traditional retail pharmacy, but most pharmacies that are growing have learned to open up to new markets. Those might be long-term care, compounding, 340B, or specialty.

 

DT: How do you plan to grow the AAPA?

Crocker: Besides our past network and my network, we are bringing on business development representatives in different markets. These are individuals that know the markets, know the owners, and probably have a market of 200 to 300 pharmacies each.

The group, as we’re building it out, is going to be more interesting to independent pharmacy owners because of the capabilities that we’re layering into the offering.

We’re also looking at consolidation in all markets, especially in healthcare and pharmacy. You see it on the highest levels-the PBMs and chains, and then their distribution and customers, all teaming up. Now you’re seeing consolidation between GPOs because size is typically a positive thing. We are in the top third of GPOs from a size standpoint.

We’re looking downstream at affiliation agreements and potential acquisitions, and upstream to see who we might want to align with to better enhance our position as we move forward. That’s going to be a constant in our space, and it would be foolish not to pay attention.

The AAPA has a great history of building a name for itself, and now they’re retooling for the future. We’re rebranding the company; going national; and layering in new technology, tools, and pharmacy services to help our members grow their business. On the horizon, our continuing professional development is going to be a huge part. All the major wholesalers are looking to participate when it’s right to open the channel. There’ll be new revenue streams for pharmacy that will offset the losses in the transitional side of pharmacy.

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