A Co-Op Owned by
Independent Pharmacists

"Much more than a buying co-op"
The History of American Pharmacies, Inc.

Luck in the business world can be defined as being prepared for the opportunity. That makes Mike Gohlke one of the luckiest guys in pharmacy.

Mike is president of American Pharmacies (APRx), a for-profit buying co-op and public affairs advocate for independent pharmacists. In fewer than 10 years, APRx is doing more than $800 million in purchases and is well on its way to meeting the goal of $1 billion in Texas.

The genesis of APRx was in 1999 when Mike left McKesson Corp. and signed on with Walsh Healthcare Solutions in Texarkana. Two years earlier, Walsh partnered with another distributor, Dohman out of Wisconsin. At the same time, Walsh entered into an agreement with Alabama-based American Pharmacy Cooperative, Inc. (APCI). APCI, founded in 1985, was a pioneer in the business model of combining independents’ purchasing power. By 1999, they serviced almost all of the independent pharmacies in Alabama and began reaching into other states. Hence their agreement with Walsh and Dohman.

Mike discussed joining the Walsh team with Walsh President Ron Nelson. “We both came away from our initial meeting confident that a successful model using APCI’s plan in Alabama could be repeated in San Antonio,” Mike said.

Ron Nelson became one of the most influential persons in Mike’s career. “Ron was quite the visionary and he taught me some valuable lessons about patience and staying the course. His guidance was instrumental in formulating the blueprint for the future success of American Pharmacies.”

“I recruited Craig Denton, also from McKesson, to come on board, too,” Mike said. “We shook hands on an agreement with Ron Nelson to start a distribution center in San Antonio. I recruited and directed the sales team and Craig managed operations.”

They ran the San Antonio operation together until Craig was called to Texarkana and Sandra Taylor Cashe took over the general manager’s role in San Antonio. Obviously, it was a good business plan because within a short period of time the San Antonio distribution center was doing $300 million a year in sales. About a year later another retail pharmacy co-op, Legend Pharmacies was looking to partner with another cooperative.

“Walsh and APCI had discussions with Legend Pharmacies and expected we would work together,” Mike said. “Regrettably, this did not happen and Legend chose to go with TrueCare instead.” TrueCare is a program of Pharmacy Buying Association in Kansas City, Mo., and their business model is closer to how Legend operated.

APCI Texas
Losing the Legend pharmacies was the impetus to create APCI Texas. “We immediately starting selling APCI stock in Texas in August, 2001,” Mike said, “and quickly sold approximately 200 shares to Texas independent pharmacies.” The parent APCI board of directors established a five-member council to help shepherd the new APCI Texas, which in turn directed Ron Nelson to ask Mike to serve as the executive.

The timing for APCI Texas was excellent. “We made monumental differences for independent pharmacies,” Mike said. “In the early years we changed the playing field for independents, not only from a purchasing standpoint, but political and advocacy, too.

American Pharmacies is born
About a year later, the parent APCI suggested APCI Texas become its own entity. Southwest Pharmacy Solutions, Inc., dba American Pharmacies, was created Sept. 25, 2002. Texas pharmacies holding APCI stock simply swapped one for the other.

The APRx uniqueness is its one member/one vote management and 100 percent member ownership. Whether a member has one or one dozen pharmacies, he or she has a single vote—applying the goal of creating a level playing field to the max. The board of directors is comprised of volunteers who submit their names for election by the membership.

“A lot of people took a lot of chances to create American Pharmacies,” Mike said. “Those first board members were visionaries willing to take a leap of faith to give independents an organization they could believe in and one that would fight to protect their interests.”

The original mission statement clearly describes their vision: “American Pharmacies, Inc. is an organization of community independent pharmacies committed to creating opportunities, promoting ownership, encouraging business development, improving political involvement, and enhancing the image of Pharmacy.”

Four of the original board members remain in service to APRx: Ray Carvajal, RPh, San Antonio; Buddy dela Rosa, RPh, Weslaco; Lynn Everett, RPh, Waco; and Bruce Rogers, RPh, Victoria. The other three original board members are Dennis Helbert, RPh, Brownwood; Gary Rice, RPh, Houston and Don Novak, RPh, of Longview.

Walsh was acquired by D&K Wholesale Drug, Inc. of St. Louis, Mo., in 2003. This led to APRx moving out of Walsh’s San Antonio distribution center and into its own facilities. A short time later, they added two more wholesale partners—Morris & Dickson out of Shreveport, La., and AmerisourceBergen in Valley Forge, Pa. In 2005, McKesson acquired D&K, and honored APRx’s contracts with Walsh and D&K. The McKesson partnership ended in 2009 when APRx negotiated agreements with two Premier Tier 1 providers: AmerisourceBergen and Morris & Dickson.

In 2003 the board called for the hiring of a government affairs specialist. Richard Beck, RPh, became vice president for pharmacy affairs. His experience, in addition to having owned an independent community pharmacy, included almost a decade with the Texas Pharmacy Association and another eight years as executive director and CEO of the Arkansas Pharmacists Association.

APRx’s success in the Texas Legislature led to formation of the Texas Pharmacy Business Council (TPBC) in 2009. TPBC is a fully owned subsidiary of American Pharmacies, and Richard Beck, RPh, is executive director. The Texas Academy of Independent Pharmacists-Texas is a supporting contributor of TPBC.

APRx also sponsors a political action committee to help support the election and re-election of lawmakers who understand the issues facing independent pharmacy.

Mike and the current APRx board of directors continue raising the bar for member services and, subsequently, increased membership. American Pharmacies has 375 stockholders and more than 600 member pharmacies. These pharmacists are leaders in their field, managing their businesses and participating in advocacy efforts to protect the profession for now and into the future.