AmerisourceBergen (AmerisourceBergen Corp.) is one of the largest pharmaceuticals companies in the world. It is engaged in the distribution of generic pharmaceuticals, over-the-counter healthcare products, and home healthcare supplies and equipment. A Pennsylvania-based company formed by the merger of Bergen Brunswig and Ameri-Source companies in 2001, AmerisourceBergen now employs around 10,000 people (as of January 1, 2008). The company is traded on the New York Stock Exchange with the ticker symbol of ABC. It has approximately 4,600 shareholders (as of January 1, 2008).
AmerisourceBergen generates revenues mainly through its pharmaceutical distribution business division (98 percent of its revenues in 2007). The pharmaceutical distribution division provides drug distribution and related services. The pharmaceutical distribution division includes the operations of AmerisourceBergen Drug Corporation, AmerisourceBergen Specialty Group, and AmerisourceBergen Packaging Group. AmerisourceBergen Drug Corporation distributes brand name and generic pharmaceuticals, over-the-counter healthcare products, and home healthcare supplies and equipment to a range of healthcare providers.
AmerisourceBergen Specialty Group provides distribution and other services, including group purchasing services to physicians. It also distributes vaccines, plasma, and other blood products. AmerisourceBergen Packaging Group is one of the leading providers of contracted packaging services for pharmaceutical manufacturers. The company also owns Amerisource Heritage Corporation and PMSI, Inc., as subsidiaries.
AmerisourceBergen’s products include generic pharmaceuticals, over-the-counter medicines, home healthcare supplies and equipment, medication, and supply dispensing cabinets. Its services include pharmacy healthcare solutions, pharmaceutical distribution, pharmaceutical consulting, packaging services, inventory management services, pharmacy automation, bedside medication safety software and information services, skilled nursing facilities, assisted living facilities, mail order pharmacy services, consulting services, staffing solutions, and scalable automated pharmacy dispensing equipment.
AmerisourceBergen was incorporated in 1988 as AmeriSource Distribution Corp. The name changed to AmeriSource Health Corporation in 1995. AmerisourceBergen adopted its current name in 2001. AmerisourceBergen preferred to grow by acquiring other companies. As a result, it acquired AutoMed Technologies in 2002; US Bioservices Corporation in 2003; MedSelect, Inc., and Imedex Inc., in 2004; Brecon Pharmaceuticals and Access M.D., Inc., in 2006; Xcenda LLC and Bellco Health in 2007.
As of February 2009, the executive team of AmerisourceBergen includes R. David Yost (President and Chief Executive Officer), Michael D. DiCandilo (Executive Vice President and Chief Financial Officer), Steven H. Collis (Executive Vice President and President, AmerisourceBergen Specialty Group), and the Senior Vice Presidents Antonio Pera, Jeanne Fisher, David W. Neu, John Palumbo, Thomas H. Murphy, John G. Chou, David M. Senior and Denise Shane. Tim G. Guttman and J. F. Quinn are Vice-Presidents. The board of directors includes Richard C. Gozon (Chairman of the Board), Charles H. Cotros, Edward E. Hagenlocker, Jane E. Henney, M.D., J. Lawrence Wilson, R. David Yost, Henry W. McGee, Michael J. Long, and Richard W. Gochnauer.
The success of AmerisourceBergen comes from its position in the U.S. pharmaceutical market. It maintains leading market positions, especially in drug distribution, specialty pharmaceuticals, and packaging. It is also the second largest pharmaceutical distributor in the Canadian market. Its well positioned strategy of service and support to new biotech companies promises more profits in the future. AmerisourceBergen Packaging Group is one of the leading providers of contract packaging services for pharmaceuticals manufacturers. Therefore, the company is seen as a partner to both suppliers (manufacturers) and dispensers (hospitals or pharmacies). Another reason for its success is its continuous growth, which results in more profits to provide future growth. One important aspect may be the successful financial management of the company. By returning profits into assets efficiently, AmerisourceBergen favors profitable business, resulting in better investor confidence.
On the other hand, one of the major weaknesses of AmerisourceBergen is its high dependence on the operations concentrated in the United States. Any downturn in the demand for its products from the United States will pose significant risks, with severe impacts on the earnings. Another setback for AmerisourceBergen is its single business concentration. It has heavily invested in drug distribution, which is generally regarded as low-margin business. The company’s acquisitions are relatively small transactions and concentrated into closely related pharmaceutical distribution. Its competitors, such as Cardinal Health, have diversified into businesses unrelated to drug distribution, such as manufacturing information systems for hospitals. This may have a disadvantageous impact on AmerisourceBergen in the future. Also, AmerisourceBergen may be regarded as a risky company with respect to its dependence on few customers with very large budgets going to AmerisourceBergen. Facing any possible problems with these key clients may result in significant negative impacts on AmerisourceBergen.
- AmerisourceBergen, www.AmerisourceBergen.com (cited March 2009);
- SEC-EDGAR, sec.gov (cited March 2009).
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