Rite Aid to focus on 6 key areas, CEO says
CAMP HILL, Pa. — Rite Aid's CEO John Standley on Thursday morning outlined the six important areas on which Rite Aid will focus to rebuild its momentum and grow its business.
"These six areas represent important opportunities for our business. Now that the amended agreement has received regulatory clearance, we can move forward with a clear sense of purpose," Standley said. "This is an especially important time for Rite Aid as we move forward as a stand-alone company. ... [But] it's important to note that our team has done a tremendous job in continuing to provide great service. In fact, our internal metrics for overall satisfaction are higher year-over-year in both the front-end and the pharmacy."
1. Build a management team for the future.
Rite Aid picked up a seasoned pharmacy veteran in Kermit Crawford, well known across the industry as a sharp operator and progressive pharmacy mind, to serve as president and COO. "He [has] very deep pharmacy experience, not just pharmacy operations," Standley said. "He played a key role in the pharmacy benefit management business for a number of years, during a period of time they grew very rapidly, so he understands the third-party side of [pharmacy]. He was responsible for Walgreens' third-party contracting for many years, so he has deep experience there. He was also an innovator at Walgreens ... they were the leader in flu shots, and Kermit has a key role in bringing the whole flu shot concept to market. And he drove a lot of their healthcare innovation."
Crawford joins Standley in leading a seasoned operations team with Bryan Everett in charge of the front-end as COO of Rite Aid Stores and Jocelyn Konrad, EVP pharmacy, Rite Aid.
2. Redefine and enhance the customer and patient experience.
Rite Aid hopes to build upon its strong health-and-wellness platform, which already includes the company's Wellness store format, to redefine and enhance the customer experience. Following the divestiture of stores to Walgreens Boots Alliance, more than 70% of Rite Aid's legacy store base will feature the Wellness format, Standley said. "Our highly-popular Wellness+ customer loyalty program continues to be key differentiator for Rite Aid. We've proven to be an innovator in the customer loyalty space and we will continue to build upon our successful loyalty program by adding new features and benefits in the months to come."
In addition, Rite Aid is planning to leverage its capabilities through subsidiaries Health Dialog and RediClinic.
3. Engage with payer partners in creating a sustainable business model.
"There's no doubt that reimbursement pressure has created challenges for our business," Standley said. Standley noted that with the Walgreens Boots Alliance deal behind them, they're in a better position to negotiate better reimbursement terms.
4. Evaluate pharmacy purchasing options to ensure a competitive drug cost.
The amended agreement with Walgreens Boots Alliance gives Rite Aid the option to source generic medicines through Walgreens Boots Alliance Development for a period of 10 years.
"This aspect of the agreement gives us an attractive option to consider as we explore our other strategic alternatives for the future," Standley said. Dates to keep in mind - Rite Aid has until May 2019 to execute its access to WBAD and its sourcing contract with McKesson expires in March 2019.
5. Streamline operations.
"Another important aspect of our plan is continuing our efforts to aggressively control costs," Standley said. Rite Aid is currently looking to generate an additional $50 million in savings for fiscal 2019.
6. Grow Rite Aid's pharmacy benefit manager EnvisionRx.
"Now that we're beyond the regulatory review process [regarding Walgreens], there is a significant opportunity to refocus and invest in the growth potential of this important business," Standley said.