Inside This Issue - Opinion
CVS looking to Cosby as source of new ideas
September 5th, 2011
On the surface at least, the appointment of Mark Cosby to head CVS Caremark’s drug store business comes as something of a surprise. The former Macy’s executive has extensive experience in retailing, but none of it relates to community pharmacy.
As president of stores at Macy’s since February 2009 the 52-year-old Cosby was in charge of retail operations and support functions across the country, as well as overseeing stores in the Northeast and Mid-Atlantic states. That background, together with previous assignments as a division president and senior vice president of property development at the department store chain, and president of Sears Roebuck & Co.’s full-line stores, make him well equipped for many aspects of his duties at CVS/pharmacy, which he will assume on October 1.
Cosby will be responsible for the company’s extensive retail business, which encompasses more than 7,200 drug stores, an e-commerce site and 19 distribution centers. He will oversee merchandising, marketing, the supply chain, real estate, front-end initiatives and pharmacy operations.
The only item on the list that offers reason to pause is the last, since Cosby’s career hasn’t involved pharmacy or related health care sectors. Why would CVS Caremark entrust its retail operation — which derives roughly 68% of $57.35 billion in annual sales from prescription medications and another 10% or so from over-the-counter health care products — to anyone without previous exposure to the profession?
In his comments about Cosby’s appointment, CVS Caremark president and chief executive officer Larry Merlo hints at what lies behind the decision. In addition to praising Cosby’s obvious strengths in operations and strategic planning, Merlo said, "I am confident that Mark will bring a strong vision, great energy and new ideas to CVS/pharmacy."
When considered in light of the desire to inject a shot of innovation into the drug chain, the thinking that led to Cosby’s selection is understandable. Other chain drug retailers, including Walgreens, Duane Reade and Rite Aid, have benefited from the addition of outsiders to their management ranks. CVS should as well.
Merlo is no doubt confident that the company has pharmacy personnel in place who will help Cosby quickly master that part of the operation, even as he provides a fresh perspective on other aspects of the business.