Vetting The Pharmacy: A Clean Bill Of Healthcare Supplier Diversity

Revamping a corporation as large as Express Scripts is like turning an ocean liner. It doesn’t happen instantly. And Express Scripts is huge. Headquartered in St. Louis, the company has more than 30,000 employees and clients like the U.S. Department of Defense, Lockheed and Ingersoll Rand. Number 22 on the Fortune 100 list, Express Scripts is the largest pharmacy benefit manager in the U.S. with revenues north of $1 billion. So, the challenge of change is particularly daunting. But Express Scripts Director of Supplier Diversity Kendra Burris-Austin is more than up to the task.

“In the past, our supplier diversity program was in more of a reporting and compliance space. We identified supplier diversity because we had to do it. But now, we’re trying to proactively and strategically engage diverse vendors for all of the different areas within the company. We have over 40 different locations throughout the U.S. Where we can, we’ll exercise economies of scale. But where it makes sense, we want to positively impact those areas where we have a footprint in an economic way. And one way to do that is by doing business with small and diverse companies. But the logistical challenges alone are considerable.

“Express Scripts grew largely through mergers and acquisitions (M&A). Supplier diversity where it existed was different in virtually each new firm added, but again, it was mostly about reporting and compliance. Because we grew through M&A, there have been a lot of integration initiatives. Now supplier diversity is one of them, so this is a perfect time to implement change. But people are always resistant to change. Trying to get people to move from a vendor they’ve used for years to a more diverse vendor can be a challenge. So, we work closely with them to help them adjust to that change and see its benefits.”

Burris-Austin also cites additional value for Express Scripts clients, entities that often have their own supplier diversity requirements as well.

“Being better partners enables us to create levers throughout our client base. And approximately 55 percent of our current revenue is from clients that have supplier diversity programs. Obviously, having client buy-in is very important to us. It creates greater competition. It spurs innovative ideas. And it’s just a good way to do business.”

Without question, Burris-Austin sees the moral high ground when it comes to supplier diversity. But she uses a different focus to implement her program.

“When I go and talk to people about supplier diversity, I always ask why should we do it. The common answer is that it’s the right thing to do. My answer to that is always that that’s not a good answer. That’s the 1980s answer. Everyone knows it’s the right thing to do, but that’s not the business case for it. We’re very conscious of making the business case, the bottom-line rationale for supplier diversity. For that reason, we work very closely with account management and sales to implement our program. If you can’t make the business case for supplier diversity, then people will only pay it lip service. And that doesn’t benefit anyone.”