Chief executive officer, AmerisourceBergen Corporation
Education: United States Air Force Academy, BS, 1969; University of California at Los Angeles, MBA, 1970.
Family: Married (wife's name unknown).
Career: United States Air Force, 1969–1974, captain; Kauffman-Lattimer Company, 1974–1989, a variety of operational, sales, and executive positions including cochief operating officer, executive vice president of operations, and president; Alco Health Systems Corporation, 1989–1995, group vice president and group president of central region; AmeriSource Health Corporation, 1995–1997, executive vice president of operations; 1997–2000, president and chief executive officer; 2000–2001, chief executive officer and chairman; AmerisourceBergen Corporation, August 2001–October 2002, president; August 2001–, chief executive officer.
Address: AmerisourceBergen Corporation, 1300 Morris Drive, Suite 100, Chesterbrook, Pennsylvania 19087-5594; http://www.amerisourcebergen.com.
■ Healthcare manufacturing administrator R. David "Dave" Yost was the chief executive officer and a member of the board of directors of the healthcare, biotechnology, and drug company AmerisourceBergen Corporation, an organization based in Chesterbrook, Pennsylvania. With 30 years of experience in various sales, operations, and management positions within the pharmaceutical distribution field, Yost in the early 2000s was one of the country's most respected leaders in the health-care services industry.
AmerisourceBergen was the world's leading wholesale distributor of pharmaceutical products and one of the country's
largest pharmaceutical services companies, along with associated services to pharmaceutical manufacturers and healthcare providers, in the early 2000s. Specifically, the company provided pharmaceutical distribution and other services throughout the United States to managed-care facilities, hospitals, drugstores and chain retail pharmacies, nursing homes and assisted-living centers, mail-order facilities, physicians, super-markets, clinics, and mass merchandisers from about 38 distribution centers. It also provided pharmaceuticals to long-term care, workers' compensation, and specialty drug patients. The company distributed primarily generic, branded, biotechnology and specialty drugs and over-the-counter pharmaceuticals, but it also offered beauty and health aids, medical supplies, toiletries, and sundries. AmerisourceBergen had 14,800 employees as of September 2003.
PharMerica, the company's subsidiary, was one of the largest U.S. providers of pharmaceuticals, infusion therapy (the practice of administering liquids through a drip feed), and other services to long-term and residential facilities. It also delivered pharmaceuticals and provided services through 125 institutional pharmacies that served 300,000 patients in 40 states.
Yost graduated from the U.S. Air Force Academy in 1969. He served as an active-duty member of the United States Air Force from 1969 to 1974 and eventually attained the rank of captain. In 1970 Yost earned his MBA degree from the University of California at Los Angeles. After leaving the Air Force in 1974, Yost joined the Columbus, Ohio-based Kauffman-Lattimer Company—an AmeriSource predecessor firm—in a variety of operational, sales, and executive positions including cochief operating officer, executive vice president of operations, and president. In 1989 Yost began working for Alco Health Systems Corporation, formerly associated with Kauffman-Lattimer, that was based in Malvern, Pennsylvania. In 1989 Alco Standard spun off Alco Health Services; the newly formed company increased its sales dramatically through key acquisitions and expanded product lines and went public as AmeriSource Health Corporation in 1995. During this period of expansion, Yost held the positions of group vice president and group president of the central region.
In 1995 Yost became executive vice president of operations for Malvern, Pennsylvania-based AmeriSource Health Corporation. Two years later, in May 1997, Yost was promoted to president and CEO and remained as president until December 2000, at which time he added the position of chairman. During this period (1998) he led a reorganization of AmeriSource after the U.S. Federal Trade Commission blocked a proposed merger with McKesson Corporation.
AmeriSource Health Corporation and Orange, California-based Bergen Brunswig Corporation merged on August 29, 2001, in a $7 billion deal. Yost became the president, CEO, and a member of the board of directors of the new company, which was called AmerisourceBergen Corporation. At the time of the merger, Yost felt that the coming together of the two service-oriented companies would provide many new kinds of services and programs for its customers along with saving the new company about $125 million to $150 million annually in synergies, or combined efforts, mostly from a consolidation of its distribution centers. He remained as AmerisourceBergen's president until October 2002, then continued as CEO and director.
As the new head of the largest purchaser of generic drugs in the United States, Yost began to concentrate on improving AmerisourceBergen's position in the pharmaceutical supply sector by bringing new and innovative products and services to its customers and increasing efficiencies throughout its giant distribution network. Yost committed himself to the company's only agenda: dedicating itself to the distribution business within the healthcare and pharmaceutical industry. In fact, Yost believed AmericsourceBergen differentiated itself from its competitors (such as Cardinal Health, McKesson, and Owens & Minor) by not competing with its customers in services to the end user. And with this simple focus, Yost promoted the idea throughout his organization about how to make its retailers more competitive in the market, how to increase their revenues, cut their costs, and improve their margins.
With $36 billion in projected annual revenues in 2001 and operations in almost every U.S. state, Yost was given the job of improving the company's overall efficiency while focusing on customer service throughout its 25,000 chain and independent pharmacies, as well as thousands of hospitals, nursing homes, and mail-order pharmacies. Yost began this strenuous task in a number of different key areas.
Yost used a unique, decentralized organizational structure that dealt with national sales at the distribution-center level. In fact, Yost made sure that customer service was handled at the operating-unit level, the level closest to the customer, which was managed by Yost's team of regional vice presidents and general managers. This management team had final decision-making authority to handle most customer situations that arose within its region. While Yost talked with these vice presidents on a weekly basis, his chief operating officer talked with them every business day. While this was happening, the vice presidents, who had years of experience at their jobs, were talking with the customers on a daily basis.
Although Yost dealt with customers in a decentralized arrangement, he implemented a technology-based program for centralized procurement, data processing, and other administrative functions throughout his operational structure in order to achieve greater efficiencies. Yost integrated this technology so that tens of thousands of customers could easily and effort-lessly submit millions of daily transactions into its nationwide system. Such technology included order-entry platforms, automated receivables accounting systems, and warehouse management systems. With such an infrastructure, Yost wanted to respond rapidly to deliveries, improve warehouse efficiencies to a just-in-time model (where products are left in warehouses for a minimal amount of time), and provide greater forecasting of product demands, all without sacrificing customer service.
Yost also dealt with the two well-established drugstore membership buying and marketing programs—Bergen's Good Neighbor Pharmacy and AmeriSource's Family Pharmacy—that together had about 4,000 independently owned drug stores. He combined the two programs into one unified, data-driven package that reduced the increasingly heavy workloads of its pharmacists. Yost also expanded many of the services offered by its pharmacies, including a diabetic-care business.
Yost reduced the number of the company's distribution centers from 52 in 2001 (at the time of the company's merger) to 38 in 2003, and projected to reduce them further to 30 by 2007 in an effort to become as efficient as possible. The average AmeriSource center, according to Yost, handled about $700 million a year in products in 2001, but, now in 2003, took care of more than $2 billion per year. These increased levels of activities were also enhanced with the use of new robotic machines and computer systems that could handle many more products involving advanced, state-of-the-art automation; paperless ordering, picking up, and tracking; and faster turnaround. Yost also predicted at that time that errors would be greatly reduced with such efficiency efforts.
In 2002 Yost directed AmerisourceBergen through several major acquisitions. He began to acquire smaller drug companies related to, but outside, its core business area in order to strengthen the company's position in the pharmaceutical supply chain with regards to both customers and suppliers. Yost specifically stayed away from billion-dollar purchases, but instead concentrated on acquisitions in the $100 million to $200 million range that he thought would help earnings in the most efficient way possible.
In July 2002 Yost acquired the Chicago, Illinois-based AutoMed Technologies for $120 million. Yost bought the company in order to use its automated drug dispensing system to lower AmerisourceBergen's costs for dispensing drugs in pharmacies. With only about 10 percent of retail pharmacies and fewer than 50 percent of outpatient hospital pharmacies using automation, Yost planned to employ AutoMed's software, equipment, and workflow design to automate pharmacy dispensing equipment throughout AmeriSource.
Yost signed an order for his intent to purchase Bridge Medical, a company based in Solana Beach, California, in December 2002. He intended to take advantage of the company's barcode-enabled, point-of-care software, a bedside scanning system that coordinated the correct medication with a patient's bar-coded wristband. The base price for the acquisition of Bridge Medical was $27 million, with an incentive option of up to $55 million depending on future earnings. Yost liked the company because its products helped to reduce medication errors and, as a result, decreased the costs of the company's healthcare facilities while increasing their operating efficiencies.
The third purchase brokered by Yost was of the Washington, D.C.-based U.S. Bioservices Corporation, a $160 million-plus deal made in January 2003. Bioservices, with 2002 revenues of about $125 million, was a specialty pharmaceutical services company that distributed complicated medications for such diseases as AIDS (acquired immune deficiency syndrome), cancer, multiple sclerosis, and hepatitis C to patients across the country. The reason that Yost purchased Bioservices was to expand AmerisourceBergen's ability to support pharmaceutical manufacturers with complicated products that targeted small markets, such as in the biotechnology arena.
Yost continued his acquisition activities with the June 2003 agreement to purchase Anderson Packaging, a privately held, contract pharmaceutical packaging company headquartered in Rockford, Illinois. The complete purchase amount totaled $100 million, including assumed debt of about $18 million. In the early part of 2004, Yost brokered a deal to buy Alpharetta, Georgia-based MedSelect, a privately held provider of automated medication and supply dispensing cabinets, for $13.4 million, including assumed debt.
Within a year of taking the helm, Yost proudly declared that AmerisourceBergen's management team had progressed greatly with integrating its service programs, establishing a common technology platform in many of its pharmacies, and raising the amount of use of its programs among its customers. After about two years of streamlining activities, acquisitions, and improved technology within its services, Yost reported total revenues for AmerisourceBergen of $49.7 billion in 2003, a 10 percent increase over 2002, and a net income of $441.2 million, a 27.9 percent increase over 2002. With a 25 percent share of the U.S. drug-distribution market, Yost positioned AmerisourceBergen as a major player in the healthcare, biotechnology, and drug industry.
See also entry on AmeriSource Health Corporation in International Directory of Company Histories .
"CEO Portrait: David Yost," Philadelphia Business Journal, April 28, 2000, p. 16.
Moukheiber, Zina, "Easy Pill to Swallow," Forbes, October 29, 2001, p. 74.
Teosoriero, Heather Won, "Big Drug Wholesaler Fights Charges of Fakes, Price Fixing," Wall Street Journal, October 7, 2003.
—William Arthur Atkins