In a wide-ranging and open interview, AAH Pharmaceuticals’ senior leaders Brian Chambers, Harvey Headley and David McNicol, speak to Sarwar Alam about their business transformation and how becoming an independent wholesaler has empowered them to focus on community pharmacy…
Community pharmacists can look forward to sustained investment in digital solutions that makes it easier for them to locate products, keep track of deliveries, and receive customer service support, as AAH Pharmaceuticals builds on its promise to “prioritise customers – their service and their growth”.
It’s been just over two years since former AAH owners McKesson sold its UK businesses, which also included LloydsPharmacy, to private equity firm Aurelius Group.
Brian Chambers, AAH Chief Commercial Officer, revealed that the change in business now allows the organisation to put their entire focus on their wholesale customers.
“We were an organisation that was dominated by the retail business. What independence means is that we have separated from McKesson, and all the other group businesses that we were part of. We now exist for one reason, to be a wholesaler for our wholesale customers,” Chambers told Pharmacy Business.
“We were always in a position to prioritise customers, but the reality of the situation was, with the retail business, which was over 1200 pharmacies at the core of our group function, it’s clear that the group had mixed-priorities throughout the business – and now that’s gone.
“If you work in our AAH business today, whether it’s me and my team in the commercial function, whether it’s John Clark our chief operating officer and his function, or whether it’s Adrian Stubbings the chief financial officer and his function, everyone that works in these teams only works for the customer.”
Chambers lives in Scotland, but works in the AAH office in Coventry. He explains that this allows him to regularly visit AAH customers, including community pharmacists, and build stronger relationships.
“Independence matters,” he said. From my experience of the last year, it has resonated with our customers.
“We are trying to demonstrate that by being independent as a point of difference in the market is good for us, it’s good for our customers because we cannot be prioritising anything else other than their service and their growth. What we do for them, if we do a good job or not, will determine if we have a good business or not.”
Strengthening relationships with pharmacists
Harvey Headley, AAH Head of Digital and Marketing believes that the change in business structure has already led to a more open relationship with community pharmacists.
“One of the exciting things about being independent is that previously when we were engaging with customers, there was probably a reticence for them to fully engage because we owned Lloyds. They may have been concerned by sharing of information, is there a conflict of interest. The fact that we’re independent now has taken that wall away,” said Headley.
“When we’re engaging with customers, they know we don’t have an interest in trying to build up our own retail chain. Customers are probably sharing more and they’re more transparent, something that would’ve been unlikely before independence.”
AAH delivers over ten million items per week to more than 14,000 dispensing locations from their 11 distribution centres and 23 strategically located bases to fulfil customer orders.
Chambers explains that whilst the business has lost share in the market in terms of the volume of medicine it supplies with the loss of LloydsPharmacy, he believes it has led to a stronger business model.
“I stress that we have grown our business for the last few years since 2019-2020. If you compare our volume today versus our volume three or four years ago, it’s up.”
He added: “What’s our mantra? Value for money, a reliable core service and product availability. We’ve not lost buying power because we’re providing value for money and growing our share. We’re fighting on price, in fact, we’re fighting harder on price than we ever have before.
“I’d like to think that if you interview AAH customers, you would get feedback that AAH from a pricing perspective and a value for money perspective is more competitive than it’s been in years gone by.”
David McNicol, AAH Customer Director, felt that the company’s buying power is “as strong as it has ever been”.
“Ultimately, the changes over the last 12 months, the internal feeling is that as an independent we have been empowered,” he said.
“Our absolute focus is on the customer – about loving the customer. What we’ve recognised is by actually simplifying an awful lot, what we can do is concentrate on our customers and prices are super important in this marketplace, whether that is full-line or short-line.
“We are a leader when it comes to market share and we share this benefit with our customers. Those customers who have been with us for a fair number of years will know this, regardless of who owns the company.”
Investment in digital solutions
One of the areas where there has been substantial development has been on digital solutions which Headley said is geared to “alleviate the pressure on pharmacists time which enables them to execute the shifting pattern of what they’re being asked to do in community pharmacy which is work harder”.
Headley added: “For example, Track My Van allowing pharmacists to check what’s arriving in their next delivery; the number of totes, contents of each tote, and number of stops away.
Most importantly, in relations to tote contents, they will also know what items are not inside a tote.
“From a communications point of view, we have information visible on the website, social media content, email sent to customers to make them aware of new launches as and when they are available. And we brief all our customer facing teams, to ensure that our customers are clear on where they can find solutions and how they work.”
AAH have also developed their PMR system – AAH Connect+, which is compatible with our independent portal AAH Cascade that allows pharmacists to source medicines more efficiently.
“AAH Cascade is completely PMR agnostic so it will work with our competitors PMRs. What this allows our customers to do is source product electronically. And we go one step further because not only do we place great pricing into the platform, if someone is cheaper than us somewhere else, the platform allows customers to buy that product,” said Headley.
“In a shortage environment, we’re trying to help customers on two-fold, one on price and two is on time. Don’t spend time shopping across ten different suppliers over the phone we can give you the software to do that for you.
“And we’re going one better than that and are actually saying bring your own suppliers. We’re not telling you who the suppliers have to be, we need to be one of them which I think is fair given we’re supplying it, but if you want to bring five of our biggest competitors into the platform, we invite you to do that – this is absolutely about giving them time efficiency.”
The communication process has been advanced with AAH introducing a WhatsApp service for customers last month.
“If you think about the way pharmacies engaged with wholesalers in the past, it’s been on a sort of 9-5 basis hasn’t it? It’s typically when they’re at their busiest when they’ve been forced to contact us,” said Headley.
“A lot of the digital tools and solutions we have introduced lets them service their own account at a time that’s convenient for them. Rather than at 10 am when they’re queued at the door with Pharmacy First patients waiting to be seen, warehouse drivers turning up, they can now service their account and talk to us when it suits them and chat to us through WhatsApp.
“We’ve given power back to the pharmacists and said communicate with us, talk to us, engage with when it suits you and not when it suits the wholesaler.
“This really sets us apart from our competitors because we recognise that the optimal time for you to talk about returns is not when you’ve got to shop floor full of patients, it’s when your patients aren’t in the business. What we’re building on the digital front really talks to that.”
Chambers is quick to stress that whilst digital solutions are improving the business, in a sector like pharmacy, “human interaction, human relationships and human instinct is crucial”.
“It’s not trying to do digital over human being – it’s digital to complement human beings. For example, if customers need help at 11 o’clock at night, they can log into the AAH website, log a query via our “contact us” form and leverage the automation features in WhatsApp messaging at this time, and our agents will engage first thing the next day, but customers can be confident they have logged their query or self-served via automation.” Headley said.
“Our personal relationships with our customers remain very important because we might know the needs of a pharmacist that owns seven pharmacies because we visit them in person. It’s integral our digital tools complement the human process to support our customers.”
From daily interactions with pharmacists, the team hear first-hand accounts of the difficulties the sector faces with a consistent shortage in funding and recently trying to implement the Pharmacy First strategy.
Chambers said: “When I first joined 16 years ago, MURs had just started and there was talk of a service-led pharmacy contract.
“This narrative of a move towards a service contract feels different now. Pharmacy needs to embrace this, it needs to deliver a good track record and demonstrate that we can do this, and I have no doubt about it, if it’s funded properly, and then more services will come.
“Our role in Pharmacy First or other service-led projects is simple, it’s to try and create efficiencies in the dispensing process for our customers to give them time to be able to spend that time doing services with patients.”
Future Prospects
Despite the progression made by AAH over the last 18 months, Chambers feels that there remains a gap in the market for a “great wholesaler”, referencing to the fact that there is always room for improvement.
“We’ve got some experience amongst us and therefore we think we know some of the stuff that we need to do, to give our customers the best possible service,” he said.
“We’re certainly not patting ourselves on the back every day saying ‘aren’t we all great because we’ve launched WhatsApp, we’ve launched Track My Van’. We know we’ve got a lot to do. The point about a gap in the market for a brilliant wholesaler, there’s a lot of work that needs to be done across the entire sector if anyone wants to fill the that gap and that’s what we’re desperately trying to do.”
In regards to any concerns customers may have about AAH being owned by private equity, the team stressed that the company’s strength lies in its people and work ethic.
McNicol said: “We’ve been owned by numerous folks over numerous years, ultimately AAH is culturally about the people.
“A phenomenal number of people that work here average a high number of years. I’ve been here 17 years. I’ve been employed by a number of owners as it were. But it’s always been AAH and that’s the beautiful thing about the company.
“The culture is the people who work here are interested in doing a great job for customers.”.”
Headley said the AAH identity is clearer now than it has ever been which is a positive for customers.
“We now have a dedicated AAH executive team. Private equity or not, we’ve now got a business set up to operate and build on the needs of both manufacturers on the upstream, focused on AAH being a great distributor, but also downstream for customers. Whether you are a hospital pharmacy, independent pharmacy or a multiple national chain, at its core, we now have a business that’s focused on execution through AAH as a single business.
“The AAH identity has never been clearer. We know what the strategic focus is and who our priority is – the customer. That’s more steadfast than it ever has been.”
