Big 3 distribs hold big pharma survival clues

Speaking of business transformation [see related story], an op-ed writer in Forbes says that behavior of the big three drug distributors may model behavior that big pharma can adopt during these difficult times. The key is "the dual ways they react to business challenges and opportunities," writes Inder Sidhu.

McKesson, Cardinal Health and AmerisourceBergen are all riding high, despite traveling some of the same rough road as big pharma. They're doing it through "a coordinated series of efforts to optimize and reinvent their businesses simultaneously," writes Sidhu, senior strategy VP at Cisco, and author of Doing Both: Capturing Today's Profits and Driving Tomorrow's Growth.

It's simultaneous optimization and reinvention that's needed, not just one or the other--as we continue to hope that GSK CFO Dingemans realizes--nor is it one after the other.

Here's one of Sidhu's well-told examples: AmerisourceBergen has risen to big three status by growing through acquisitions. That in itself is hardly an outside-the-box tactic. But simultaneously, ABC "invested heavily in 'specialty drugs' for treating chronic or rare conditions and [that] require more sophistication to sell and more expertise to administer," Sidhu writes

The distributor expanded its capabilities through new training and education and it developed business models that "differ significantly" from its tradition.

- see the column

Special Report: The Big 3 Distributors