Bob Mauch started his career as a pharmacist and then moved from the front lines to the business side until he became the president and CEO of Cencora, a global pharmaceutical solutions company that uses its logistics, inventory management, and specialty-pharmaceutical expertise to deliver life-saving medications to physicians, health systems, and pharmacies around the world to support patient care.
In healthcare, distributors have always had an important role in delivering medicines where and when they’re needed. The past decade has seen not only advancements in medicines that require more specialized handling but also the emergence of new viruses and conditions that require healthcare organizations to mobilize in different ways.
Informed by his experiences in healthcare, Mauch sees opportunity at Cencora to infuse innovative solutions, including AI, machine learning, and automation, into the distribution process to create a more resilient and efficient supply chain and ensure patients have timely access to their prescribed medications. In this episode of McKinsey on Healthcare, Drew Ungerman, McKinsey senior partner and co-leader of its work for social, healthcare, and public entities, spoke with Mauch about these advancements and the potential for them to improve patient outcomes—as well as the leadership lessons he’s learned throughout his career.
A condensed version of their conversation follows.
The evolving, vital role of the distributor in healthcare
Drew Ungerman: Cencora’s role as a distributor is central to its heritage. During the COVID-19 pandemic, Cencora played a vital role for the United States and the world as the distributor of COVID-19 therapies. As therapies become more complex, how do you see distributors evolving beyond logistics?
Bob Mauch: I think it’s a different kind of logistics. I’ll give you an example: Right now, even the most complex biologic specialty therapies are still something we’re going to buy from the manufacturer and bring into one of our warehouses. Then, when the time is right, we get it to a hospital and a patient’s bedside. I think as you get more personalized therapies, the part of the process where it goes to a warehouse and sits there for some period of time will go away, but the logistics and orchestration will remain. If you think about CAR-T cell therapy, for example, we’re going to need to get those cells from the patient, get them to a lab for processing, and then get them back to the patient. All of that requires precise timing. There’s a role for us in that, and we have the capabilities and the technology such as real-time monitoring to help. That’s the highest end of distribution and logistics.
Drew Ungerman: The next decade will bring more specialty therapies such as cell and gene treatments, which require highly specialized handling. How can stakeholders in the healthcare industry respond to these new needs and address challenges?
Bob Mauch: It’s important to continuously innovate on the service side, including by investing in infrastructure and technology. For example, we have significantly expanded our cold-chain and cryogenic logistics capabilities in the United States to support the secure storage and transport of cell and gene therapies. Our specialty logistics business—which delivers more than 12,000 cryogenic shipments annually—leverages technology solutions to manage inventory and monitor shipments in real time, ensuring products are delivered on time and in the right conditions.
Drew Ungerman: How is AI helping to improve patient outcomes?
Bob Mauch: I became CEO about a year ago, and digital capabilities, including AI, was one of the biggest opportunities I saw. We’re on a journey to have enterprise-level AI capabilities, but in the meantime, there are a lot of point solutions we’re focused on, such as back-office capabilities and finance.
One of the most practical, high-value use cases for AI is in inventory management. Using a combination of large language model AI and predictive analytics, such as machine learning, we can better understand exactly where a product needs to go when it enters our network so patients can receive treatment within a day or two. That creates service-level improvements, which ultimately result in patient outcome improvements and help us manage our working capital in the most efficient way.
Drew Ungerman: Patient stories are critical to how you approach your day-to-day. How do you keep patients at the center of everything you do?
Bob Mauch: Our role in the supply chain allows us to support manufacturers and clinicians in facilitating efficient, high-quality care. At the end of the day, the impact our work has on a patient is what drives us. Every day, thousands of people go to a hospital or clinic to receive cancer treatment, and we’re the reason the cancer treatment is there when they show up. That’s the level of accountability we have. We want patients and clinicians to have confidence that those medications will be available. It’s all about that patient access for us.
The steady hand in the storm
Drew Ungerman: You started your career as a pharmacist and a health economist. How have these perspectives influenced your leadership philosophy and your approach now as the CEO of one of the largest health organizations in the world?
Bob Mauch: I’ve had an opportunity to see the value of appropriate pharmaceutical utilization on people’s lives and the value patients get from interacting with a healthcare professional during that process. In the time I’ve been in this business, the complexity has changed dramatically, but the end game hasn’t: It’s all about making sure the patient gets access to a medication. You should always be listening and learning to bring value within a business.
Drew Ungerman: What kinds of leadership traits do you think are important for navigating uncertainty?
Bob Mauch: You can easily become overwhelmed as an individual, as a team, and as an organization. My job is to be the calming voice and not the added energy in an already difficult situation. That entails supporting the team, being clear about priorities, making sure we’re focusing on what we can control, and coming up with mitigation plans for things we can’t control.
I understand that we will never know all the answers, but I’m confident that we can figure out the opportunities and risks and that we’re prepared to react quickly in either case. To me, that’s a mindset and a capability. If we can assess four or five outcomes that could happen in the next five years and understand how to react to those outcomes, then we can take some pressure off the organization, especially when things are as complicated and complex as they are right now.
For example, in 2016, when our market switched from being a generic growth market to a specialty growth market, our pricing model broke. That was the same year I became the president of our distribution business, which was affected the most by this switch. I had the opportunity to go through a difficult time in the biggest job I ever had. I learned how to move fast, and I learned the value of a calm leader. Steve Collis, the CEO at the time, was a calm hand throughout that tough time. His message to me was, “We’re going to get through this together and be successful together, so let’s stay calm and get through it.” It was exactly the right advice.
Leaving a purpose-driven legacy
Drew Ungerman: Looking forward, what are some of the critical values or principles that guide you personally as you lead Cencora into the future?
Bob Mauch: I want to make sure we have the strongest team possible to support our organization, which then supports the healthcare practitioners, the patients, and the pharma manufacturers. Being a high integrity leader is important to me, as is gaining an outside perspective from frontline workers, customers, manufacturers, health systems, and other experts.
Drew Ungerman: I know you’re only one year into your role, but do you have a sense already of the legacy you hope to leave after your tenure?
Bob Mauch: When my tenure ends, I hope Cencora remains a purpose-driven organization that is united in its responsibility to create healthier futures and that continues to expand its capabilities and leadership in the specialty marketplace, including for the most advanced therapies. I also believe we will be a world-class digital organization that uses AI and analytics, we will be a top destination for talent, and we will be good at driving continuous improvement in healthcare.
It comes back to capabilities, because capabilities are strength. And strength, the way I’m describing it, is the ability to understand opportunities and risks and monitor those to act quickly.
