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Neuman a full-service distributor.

MOONACHIE, N.J. -- Some aim to be the biggest, others focus on being the best.

The latter is one way of describing the successful business philosophy of Neuman Distributors Inc., a pharmaceutical wholesaler that a spokesman says has secured its premier standing in the Northeast by establishing a solid business relationship with chain drug stores, independent pharmacies, hospitals and other health care organizations.

From the custom business solutions that it offers to the advanced, Y2K-compliant technology it has developed, Neuman's initiatives helped it generate about $2.5 billion in sales last year. The wholesaler ranks sixth in the industry nationally and No. 1 in its Northeast market, which extends from Delaware to Maine and west to Michigan, according to the spokesman.

He says that Neuman's contract purchasing programs for pharmacy operations, and expansive product offerings and strategic merchandising programs for the front-end of stores are among the reasons it has garnered a 25% share in the New York tristate region.

The company's dominance in the Northeast recently became even greater as a result of an agreement with Duane Reade. The wholesaler. signed a contract to assume control of the drug chain's pharmacy inventory, which it is managing through an alliance that Neuman has established with PDX Inc., a major provider of integrated software and disease management solutions.

Neuman's customers benefit from a 24-hour-a-day distribution facility that the wholesaler operates in Teterboro, N.J. The 330,000 square-foot complex is one the largest in the industry, according to the spokesman, housing about 40,000 SKUs that are shipped to Duane Reade stores and other Neuman customers, including Community Distributors, a New Jersey-based chain that signed a contract with Neuman late last year for its 30 Drug Fair and 17 Cost Cutter outlets.

Through its paperless system the distribution center not only provides same-day deliveries but also gives retailers vital information on drug recalls and manufacturers' statements. Such information, along with product stickers, is provided to pharmacists at the same time as products are delivered.

Besides taking steps to ensure that its own systems are Y2K compliant, Neuman is working to make certain that so-called millennium bug problems with its partners are avoided.

And it isn't just the wholesale and retail industries that are taking note of Neuman's efforts. Information Week last year cited the company as being among the nation's top innovators in technology with its electronic data interchange capabilities and similar services that assist its customers with price catalogs, invoices, ordering, reporting and inventory management.

Beyond technology Neuman has recognized the major trends that have evolved throughout the retail arena, according to the spokesman. For example, earlier this year it debuted a store-within-a-store herbal and homeopathic department to help drug stores meet the demands of customers looking for natural health care products.

And two years ago Neuman purchased a majority interest in Strategic Health Outcomes (SHO), developer of an innovative disease management network. One of SHO's success stories is a contract with Aetna Health Care, which resulted in cognitive reimbursement for pharmacies that participated in a diabetes self-management program for patients.

Although that initiative is limited to New Jersey, SHO is striving to see that pharmacists across the country are compensated for disease management programs as well as similar health care services, the spokesman says.

Such acquisitions as the SHO purchase have been a key component in Neuman's expansion. For example, five years ago the company bought OCP-America and in the process became the largest privately held distributor of pharmaceuticals and health and beauty care products in the country. Two years later it acquired Advantage Pharmacy (which had been a retail buying cooperative of the New Jersey Hospital Association and Purchasing Agency). That deal was followed in 1996 with the purchase of the Legend co-op of about 650 independent pharmacies nationwide, including approximately 250 in the tristate area.

In addition, 1996 was the year Neuman purchased an interest in Universal Benefits Systems, a pharmacy benefits management company.

And in 1997 Neuman brought Drug Guild under its umbrella. Drug Guild had been one of the oldest regional pharmaceutical distributors in the United States. The purchase helped give Neuman not only an expanded customer base but a name trusted and valued throughout the industry.

In fact, the spokesman notes, Neuman is hoping to place the Drug Guild label on a private label line that it expects to advertise in the near future.

Neuman Distributors Inc.

250 Moonachie Rd. Moonachie, N.J. 07074

Web site:

Phone: (201) 931-0022

Fax: (201) 931-0023
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Publication:Chain Drug Review
Geographic Code:1USA
Date:Jun 7, 1999
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