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When John Standley was named chief executive officer of Rite Aid in June 2010 many industry observers thought that, saddled with the large debt load and other fallout from the mismanagement that had pushed the company to the verge of bankruptcy in the late 1990s, the best that could be hoped for was a continuation of the long, slow climb back from the brink that had characterized the preceding decade.
When John Standley was named chief executive officer of Rite Aid in June 2010 many industry observers thought that, saddled with the large debt load and other fallout from the mismanagement that had pushed the company to the verge of bankruptcy in the late 1990s, the best that could be hoped for was a continuation of the long, slow climb back from the brink that had characterized the preceding decade.
Standley and his team have greatly exceeded those expectations, not only bringing consistent comparable-store sales increases and profitability back to the drug chain, but making Rite Aid a notable innovator in retailing and health care.
Another significant step toward realizing Standley’s vision for positioning the company as an essential link in the health care system was taken earlier this month when Rite Aid agreed to acquire Envision Pharmaceutical Services, a pharmacy benefits manager with mail-order and specialty pharmacy capabilities, for some $2 billion. By significantly expanding the scope of the services it offers, the deal will enable Rite Aid to enhance patient care and help third-party payers maximize their return on investment.
The purchase of EnvisionRx, as the PBM is commonly referred to, is the culmination of a period of intense activity at Rite Aid. Almost a year ago it launched a health alliance program that provides comprehensive support for people with chronic conditions. The initiative harnesses the expertise of Rite Aid pharmacists and in-store health coaches to help people achieve goals set by their physicians. Shortly thereafter, the company bought Health Dialog Services, a firm specializing in health care coaching and analytics.
The drug chain added another component to its growing portfolio of assets last April, when it acquired RediClinic, an operator of in-store health clinics staffed by nurse practitioners who treat common ailments and provide preventive services. Rite Aid celebrated the establishment of the first 24 RediClinics within its stores earlier this month.
Not bad for a company that is still in the process of paying down a hefty debt load and making comparable innovations at the front end. Standley and his colleagues have a clear sense of how health care and retailing are changing and what Rite Aid needs to do to stay relevant. Their accomplishments to date have revitalized the company and helped raise the bar for the entire industry.
