AmerisourceBergen 2005 Annual Report Download - page 13

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We anticipate that following the remaining facility consolidations
scheduled to occur in fiscal years 2006 and 2007, our distribution
centers in the U.S. will number in the mid-twenties. The
Optimiz program has remained on schedule and on budget
since its inception in 2001, and it has yielded better than
expected productivity improvements and other efficiencies.
In fiscal year 2005, we rolled out our Transform
initiative, aimed at improving customer profitability. The
progress of this program has led us to invest further in related
initiatives in fiscal 2006. These initiatives include strengthening
customer programs and services, enhancing our sales force,
and improving contract compliance, as well as adopting some
of the most successful initiatives for the long term.
As we look ahead, there are important opportunities
on the horizon. In October 2005, AmerisourceBergen acquired
a Canadian pharmaceutical wholesaler, Trent Drugs (Wholesale)
Ltd., marking our first entrance
into a non-U.S. market. The Canadian
market represents approximately
US $13 billion in sales, and Trent
gives us a tremendous base upon
which to grow the Canadian business.
This acquisition is typical of the
type of company we want to add
to our portfolio — well-run companies
with solid revenues and earnings
growth that serve the pharmaceutical
supply channel.
In the pharmaceutical supply channel, we will continue
to use our scale in the market and our unique expertise
to provide our customers with market-leading solutions.
AmerisourceBergen has unprecedented financial flexibility,
which we will utilize to reinvest in our business and to return
value to shareholders. Our focus on our strengths allows our
manufacturer and healthcare provider customers to focus on
their strengths — improving the health and well-being of
people across the globe.
pharmacy automation technology into PharMerica, and
streamlining pharmacy and back office operations. As the
population of America ages, long-term care will continue
to grow and PharMerica will be well-positioned to participate
in that growth.
Specialty Pharmaceutical Services
AmerisourceBergen is unique in the size and scope
of its specialty pharmaceutical distribution business. With
revenues over $7 billion in fiscal 2005, the specialty business
continued to grow significantly faster than the market for
conventional therapies. We expect specialty distribution to
continue to outpace the overall drug market, driven by new
product introductions, especially in oncology. Our market
leading oncology business is the cornerstone of our specialty
distribution business, focusing on distributing products and
related services to physician offices.
The specialty drug pipeline is rich with innovative
therapies which fight cancer as well as other specific diseases
that have historically not benefited from more traditional
therapies. Our specialty business is not limited to the distribution
of highly specialized and difficult to handle products; we also
provide a host of support services to the physicians that
dispense these products in their offices and to the specialty
manufacturers alike. From drug commercialization services
and third party logistics to accredited physician education and
our market-leading reimbursement services, AmerisourceBergen
offers a complete and unparalleled solution to manufacturers
who want to get their products to market and physicians who
want to provide their patients with the best care.
The Future
AmerisourceBergen remains singularly focused on the
pharmaceutical supply channel. Within our drug corporation,
we have nearly completed our Optimiz® program of distribution
network consolidation and facility upgrades, with all but one
of our six new distribution centers completed. The final new
distribution center will be completed in the Spring of 2006.
Canadian Market Facts
Population
32 million
Rx Sales
US $13 billion
Number of Drugstores
7,544
Trent FY05 sales
US $500 million
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