The Business of Pharmacy Podcast™
Feb. 20, 2023

Primary & Secondary Pharmacy Wholesalers | Michael Solazzo, Capital Wholesale Drug Co.

Primary & Secondary Pharmacy Wholesalers | Michael Solazzo, Capital Wholesale Drug Co.

Podcast Show Notes:

  • Host Mike Koelzer interviews Michael Solazzo, Vice President of Sales and Marketing for Capital Wholesale Drug Company, on the relationships between primary and secondary wholesalers with independent pharmacies.
  • Solazzo discusses the difference between pharmacists and salespeople, highlighting the importance of maintaining relationships based on delivering value.
  • The conversation touches on unethical practices in the pharmaceutical industry, such as giving away gifts to customers, and how these practices have been scaled back due to scrutiny and regulation.
  • They discuss the challenges faced by salespeople on the road, the metrics used to evaluate their performance, and the need for establishing truthful relationships with customers.
  • Solazzo explains how secondary suppliers like his company are more flexible than primary suppliers in adjusting pricing and working with customers to understand their buy plans.
  • They discuss the emergence of new platforms that facilitate transactions and take into account the entire buy plan, as well as the challenges of the over-the-counter (OTC) business and the importance of pharmacists in the community.
  • The conversation then moves on to discussing the different types of pharmacists and customers, the prevalence of Prime Vendor Agreements (PVA) in the industry, and the importance of relationships and trust in the industry.
  • Solazzo talks about how companies like Capital Rx work with manufacturers and customers, and how the sales reps at his company make phone calls to existing customers, offer special deals, and provide information about product availability.
  • They discuss the upcoming DSESA compliance regulations and the importance of being compliant to prevent counterfeit drugs and diversion.
  • Finally, they touch on the potential impact of new technology on the industry, such as the use of third-party platforms to facilitate transactions and monitor compliance, and the history of drug safety regulations.

Overall, the podcast provides insight into the complex relationships that exist between primary and secondary wholesalers and independent pharmacies, and the strategies used to maintain these relationships in the pharmaceutical industry.

Connect with me:







Loved this episode? Leave us a review and rating here:

Please support The Business of Pharmacy Podcast™ by checking out our sponsors at


(Speech to Text)

Mike Koelzer, Host: [00:00:00] Mike, for those who haven't come across you online, introduce yourself and tell our listeners what we're talking about today.

Michael Solazzo: Hi, it's Mike Lazzo. Today I would like to just talk about relationships between primary, and secondary wholesalers with independent pharmacies.

Mike Koelzer, Host: Mike, you've worked for some bigger wholesalers and for some smaller wholesalers. Which ones have you woken up on Monday morning, feeling a little bit happier than the other one while you're not feeling so happy?

Michael Solazzo: So I started my career off with a regional wholesaler, in upstate New York. and then went to a larger wholesaler. I went to a company called Binley Western

Mike Koelzer, Host: May I recognize a name?

Michael Solazzo: yeah, grade company,they ended up selling to Cardinal. and I kind of flip flopped around a little bit for a few years.

And then, I ended up going back to Cardinal and worked for Cardinal for a good chunk of my career. And I was on a generic side of the business, at that point. and then I left Cardinal, I went to a secondary supplier, Anda. So I went to Anda for a while. had a nice experience there.

but quite honestly, I didn't wanna move to Florida. so I ended up going to Capital Drug in Columbus, Ohio. And that has been my best experience yet. It's a family owned business. Been around for, what, over 74 years. Super family. just straight shooters, and really cater to the independent pharmacy. 

Mike Koelzer, Host: When you talk about one of the wholesalers wanting you to move to Florida, would that have changed now after Covid? I mean, not because of Covid, but with the video chatting, all that, would it have been easier to do that? Or do you think some of these companies still want you at headquarters?

Michael Solazzo: Yeah, so the position that I was in at, at and, it, it was more of a headquarters role. There were some family dynamics going on, for me that just really, just didn't, it wasn't the right time for me to pick the family up and move to Florida. no ax to grind, good company.

They, so on and so forth. Love competing against them.

it just wasn't the right fit. So that's all.

Mike Koelzer, Host: I'm sure you've met a lot of pharmacists

Michael Solazzo: Oh yeah.

Mike Koelzer, Host: and you know, your salespeople,

Michael Solazzo: right?

Mike Koelzer, Host: are they two different sets of people?

are one of 'em gregarious and salesy, and the other ones more black and white? Can you tell the difference?

Michael Solazzo: Yeah. Yeah, that's a good question, Mike. A pharmacist goes to school to learn about medication and dealing with patients in disease states and so on and so forth.

Unfortunately, in pharmacy schools, to my knowledge, they're really not teaching anything about business, so, you're getting that business degree, so to speak, on the fly. And you're, you're leaning on your suppliers a lot of times.

Michael Solazzo: A common thread for the salespeople that I admire, is that they have a need to help. They want to help, and the better salespeople that I've come across, they want to maintain that relationship, based on delivering value, And a lot of the better sales reps,it's not always saying yes, it's sometimes saying no. For the right reasons. And,sometimes you have to just, bow out gracefully, if you have to,

Mike Koelzer, Host: Well, you hear about the sales people agreeing to too much and then, they're over promising, but then the wholesaler or the company, whatever it is, has to under-deliver because they promise too much.

And I'm sure there's just some tension there too, to say the least.

Michael Solazzo: Yeah, there is, I mean, as I think as you grow, like, like any business or any career, if you will, I mean, you learn, where the guardrails are. Okay? Unfortunately, the pharmacy business is really on both sides of the house, whether it's, you're in resale or you're in wholesale, the margins are thin. and so, you have to know where those guardrails, really lie.

Mike Koelzer, Host: How often is a typical salesperson? talking to somebody else in the company, for example, how often, on average, would your sales team check in with you? Is it daily, weekly, monthly. How often are they actually physically talking to a director?

Michael Solazzo: yeah, so in my role, there's a sales manager underneath me who the sales team actually reports to her. Okay. And so, my role is, I'm facilitating. Capital working with an either an individual pharmacy or a pharmacy buying group, or a coalition, 

And then the salespeople we're training them on, you know, hey, the who these people are and so on and so forth. What are contractual commitments to that group? And then they're establishing the relationship. But to answer your question, our sales manager is interacting with our sales people Every day.

, but we are telesales, so the capital is really [00:05:00] all telesales.

 Uh, but you know, when I worked for one of the larger wholesalers that there's, actually, salespeople on the road,they have teleconferences or conference calls, every two or three weeks. But the sales manager is accessible, for questions and or concerns.

Mike Koelzer, Host: If you have someone on the road, what would determine if they weren't a good fit any longer? and why wouldn't they be a good fit?

What metrics do you look at, if any, and how do you know they're not a good fit? And I imagine it's everything from just numbers to, maybe pharmacies calling you and saying, Hey, I gotta talk to you. And like, why aren't you talking to my guy? It's like, well, you figure it out. I need to go directly to you.

Michael Solazzo: right. Yeah. So there, there's a couple of ways of looking at things. I mean, to me, if a pharmacy calls and says, Hey, I don't want Mike calling. I'm any longer, well, you know that, okay, what's the issue? and so kind of dive into it. if the numbers are seriously, or steadily declining within that territory, you don't go from, 60 to zero, overnight.

I mean, there's a trend and so, my knee-jerk would be to talk to the salesperson first to see what's going on because there are a lot of dynamics that happen out in the field. Okay. but by and large, , at the, the primary wholesaler, I mean, the customers are signing contracts,with the primary and there's a commitment,

you know, so they're saying, Hey, I'll give you x, amount of brand a month.

I'll give you X amount of generics a month. And so when something falls off, there's typically, there's something bigger than, Hey, I just don't like my salesperson. but that's where the relationship comes in, where you have to get in front of the customer and say, Hey, you're not meeting your commitment.

You know what's going on.

Mike Koelzer, Host: I imagine there can be tension with the pharmacist and the salesperson that may not be fair, but the salesperson is a personification of somebody that can be the whipping horse. because the pharmacies don't have a face for a pbm, , and the drug manufacturer doesn't have a face. The only face that comes in that's not part of the pharmacy and not a customer is the sales rep. So I imagine they almost have to be like a boxer or a psychologist a lot of times.

 It's a very focused person that comes in and I'm sure gets an earful.

Michael Solazzo: Everybody has their own style, okay? there's no two people alike, but you know, the salespeople who, and this is, this comes over time. th this isn't, something, that, first day on the road, boom, the, Hey, here I am.

but you have to establish that relationship, with the customer and not so much that you know, Hey, I got a good relationship, so I have this widget and I can sell it to 'em. That's not the kind of relationship I think that is gonna be very long lasting. The kind of relationship I think that's really long lasting is you tell the truth,

and once the customer finds value in the truth, that's where they can really get into the details of what's going on in the industry.

Michael Solazzo: Hey, this isn't just happening at your location, there's an issue, if there's an item shortage, in the industry, we're on the same team. Because, the way that I've coached salespeople to be is that, Hey, this is your business.

 and so, if your business is generating X amount a month and one of your business partners decides to go outta business, you just lost part of your territory. You just lost part of your business. So it's incumbent upon you to keep them as healthy as possible,but it's an education piece, it is.

Michael Solazzo: And some people, quite honestly, it's like anything else. I mean, you have good auto mechanics and you have bad auto mechanics. when you as a sales manager or director, when you ride along with salespeople, you can tell very quickly,if they're bringing that value to the store or it's just a.

Mike Koelzer, Host: Hey, how are you doing? How's everything? You've been in the industry quite a while, Mike and I have too, and I imagine your memory runs the gamut of, Dr. Detailing and trips being one and all the stuff that's probably illegal now, you've seen that all condensed right 

Michael Solazzo: Oh, oh, yeah. Oh yeah. Absolutely. Well, I guess to put it in a nutshell, you can't find a golf ball at a trade show any longer,

Mike Koelzer, Host: I know there's different IRS rules, but there's 

probably other things that I'm not thinking of.

Michael Solazzo: Brand manufacturers, generic manufacturers, they were always the ones with the bigger giveaways and so on and so forth. And I, I think it led to a, Hey, you guys are making so much money.

You're the problem. I mean, you're giving away, all these golf balls and trips

Mike Koelzer, Host: It's not a good look. 

Michael Solazzo: [00:10:00] It's not a good look at all. So they have really backed it, way, way down, so to speak, in that area.

Mike Koelzer, Host: I think there's some industries like, I think that the insurance agents, you know, the life and the car and all that, I think they still have a lot of.

award, things like that. And I think the reason they can do that is the average customer, like if I'm a customer of my car insurance company, I don't see what those agents are doing.

I don't really know when they're going to Hawaii or a cruise, but I think that in the pharmacy world,

Michael Solazzo: It's 

so under the spotlight. 

Mike Koelzer, Host: It doesn't take long for me as a pharmacist to know that my rep is in Hawaii that week. 

It's kind of like, what cars do you drive? You probably want your lawyer to have a decent car, meaning that he wins some cases, but you don't want your plumber coming up in a, uh, you know, Mercedes or something like that. 

When you think of sales, Mike, in my mind there's always like two different types, and I know there's more, but I'm always thinking of cold calls and relationships or cold calls and an account kind of thing.

When you think of your history, you probably have done your share of, and I imagine still people have to do a good share of cold calling, especially with the competition.

Michael Solazzo: Oh, absolutely. Yeah. It's,it's gotten different, to me, the best, cold call is really a warm call where it's somebody that you know you're currently doing business with, where honestly, just say to them, Hey, look, one of my goals is to, bring on new customers and so on and so forth.

You say to your customer, do you have any relationships with guys that you think, if you're satisfied with what I'm doing for you in your store, can you just gimme a warm introduction? And, we use them, I've used them a lot, over my career.

So much in sales, I mean, is just finding out, it's asking the right questions, and it's finding out, what do you need, what are the problems, where are you missing, so on and so forth.

and then, just try to fill in those gaps if you will. The plan that the primary has is that I wouldn't say that it's a one size fits all program, but it's not really a customized plan. For, Mike's 

Michael Solazzo: pharmacy. It's,you have a few things to look at, and that's really it, and we're a secondary supplier, we're more flexible,where we can move, down to a specific item, if you will, that you're having an issue with, whether you're having a financial issue with that item.

that we can adjust pricing, right on the fly, for you where, the primaries, their go to market strategy is.

it's, it's based on the aggregate of all of the purchases and so on and so forth. But that's where the pharmacies really have to know, really what does that buy plan really do to them, so you know, what we try to do is to work into that equation. , where the customer has a commitment that they have to give X percentage or X dollars, a month to the primary to maximize, their rebates, their cost of goods, and so on and so forth.

Michael Solazzo: And so, that's where, a good secondary will try to work into that buy plan and work with the customer to find out some of the parameters of the buy plan. , but the industry is changing, and, especially, uh, and, and there's some good things that I believe that are really taking place today. there's some, what I would call platforms, out there that you are attached to this platform and. it is due your ordering, for you.

there's some of 'em that just facilitate transactions. Hey, I need Atorvastatin. Who's got the cheapest price? Did I hit the minimum? Place the order? and those are fine. there, there's other ones that are out there that take into consideration, which to me is very important.

Michael Solazzo: Take into consideration the entire buy plan that the pharmacy is contractually under,with the primary. 

 So let's just say, for argument's sake, your commitment is a hundred thousand dollars a month, to your primary.

you hit that hundred thousand, but there's another $15,000 worth of drugs that you still need to buy before the end of the month. That's 15,000. you might be able to save $5,000 by spending it away from the primary. And in my mind, the primary should be fine with that because they kept their commitment.

Michael Solazzo: and the pharmacy is making money, and that will keep the pharmacy in business. if someone came to you, Mike, and said, [00:15:00] we're sick of the big three, and I've. All the money in the world. I just want great service. Could somebody like, capital, could they be a primary or what would preclude them from being a primary, I'm guessing certain lines and certain medicine and things like that.

well, capital's a full line wholesaler, so we carry both brand and generic. Okay. We only buy from the manufacturers we're DS CSA compliant. we're very engaged already working towards the new regulations with DS csa. but the way that I kind of digest the primary is that the primary has more services than a secondary would have.

Okay. And that's why I consider capital more of a secondary than a primary wholesaler because we don't have those services. We don't have a third party reimbursement service.

 So when it comes to buying goods, sure. we can supply 'em that's not an issue.

But how are they gonna adjudicate their prescriptions?

And so that's where, more of the big three or, some of the other, you know, regional wholesalers, would come into play. It's really some of the services

Mike Koelzer, Host: We don't have a primary wholesaler because about two and a half years ago, we stopped selling all brand names,

Michael Solazzo: right. I 


Mike Koelzer, Host: so, the wholesalers, I guess by definition, we're not up to. Well, I guess we couldn't buy enough from 'em to make, they wouldn't want us without some of the brand names.

One area where we struggle with though, is over-the-counter items and it seems like maybe the, a lot of the secondary wholesalers don't have over-the-counter, and it makes me think that the over-the-counter business is maybe not good or it's a hassle if the big three are the only ones that have them.

Is that the reason it's kind of a pain 

Michael Solazzo: Yeah. yeah. No, I think you're directionally correct. How's that? I think that , with the OTC business, so, I mean, if you are one of the big OTC manufacturers, who are you gonna call first? You're gonna call 'em Walmart . You're gonna call, you're gonna call Walmart

first. And then, the pecking order goes down. and then, the big three would obviously be on that list. And so, so much of that business is just, shipping is crazy,

Mike Koelzer, Host: Cost, to profit and so on.

Michael Solazzo: right. 

So actually, I have a few friends that, that, Own pharmacies that they buy over the counter from a, a original grocery 

wholesaler,and go pick it up.

Mike Koelzer, Host: Yeah. They just go, they have a van and they place an order once a week and then they go pick it up. We have some friends in the business, you that'll help us out once in a while, as soon as we'll get some stuff from Amazon and that. But you're right, there's probably, Grocery wholesalers that have, the basics kind of

Michael Solazzo: right. 

right. And so, 

When you're talking about, otc, I mean, are you talking about, analgesics or, ibuprofens and things of that nature that those are easy to ship, but you know, when you're, when you're shipping a 64 ounce bottle of Tide,

you know, .

the supplier may be making a dollar on it, and it's costing em $15 to ship it, and 

Mike Koelzer, Host: yeah, 

Michael Solazzo: doesn't, it doesn't work.

  I've been doing this a long time, but 

you know, the pharmacist, by and large is still a very integral part of the community, and, fortunately, for independent pharmacy, they can really, they can impact the community , they're not running the, the chain model where it's like, more just push it through, we just gotta keep filling scripts, taking the time, talking to people, Hey, recommending just say, Hey, look, know, I just, you're taking this medication.

You may want to take a probiotic with it or, so on and so forth. The world is changing, but people still want to, they want to do business with people that they trust. That's where I've always come from, since I've been in this business.

And, and so, what's the saying? I mean, it's the most trusted profession,And so use it, use it, I mean, if you're an independent pharmacy and all of a sudden your script count goes from, one 50 to 200,first thing you're gonna do is hire another tech. If you're a chain, it's, Hey, tough it out,

we're eating lunch at the counter today. but that's who we are. That's what we do, because it's a different model,

you know, it's a.

Mike Koelzer, Host: From 2000. 15 to 2020. I just wasn't around the store very much. I didn't like it. We were losing money. We had too much staff. I didn't know where business was going, but I came back right just about when Covid hit. I came back and, let me say this part of that time, during that 2015 to 20, when all you're doing is looking at your reimbursement and stuff like that, and you start thinking like, [00:20:00] nobody needs us.

you kind of have this pity party. But when I came back in that time period right around Covid, and we weren't even doing vaccinations, it was amazing. It hit me in the face how much people needed us. And now when I think of it. Us not being there. I don't know how the hell these people would function with the services that we give to them.

Mike Koelzer, Host: I, I truly think their health would go down.

Michael Solazzo: I totally agree with you. I mean, I can't, I mean, I know as a kid, I mean, I grew up in upstate New York. It was pretty rural. my mother would God love her. I mean, we'd go to the pharmacist half the time before going to the doctor. Yeah. It's poison ivy. it, it's the, it's, you know what looks like measles to me.

Take 'em to the doctor. it, you know it Again, I mean, the, I think by and large again, is that, the pharmacist can really interact, with the 

Mike Koelzer, Host: Yeah. One of the biggest fights my dad and my dad was, my mentor business partner until he passed,

Michael Solazzo: Yeah. Sorry to hear that.

Mike Koelzer, Host: years ago, 15 years ago. Thank you. One of the biggest fights we had, when you bring up how people don't go to the doctor, they went to the pharmacist. Well, when you're a child of a pharmacist, especially an old timer, my dad would bring home antibiotics for us and stuff.

He's gonna be damned if he goes, pays, to go to a doctor's office, you know.So I was probably 18 or 19 and I was at the cottage with our big family and my now wife, but my girlfriend and. . I think I had something wrong with me and my dad said something like, we'll try this.

And I'm like, well dad, you never took us to the doctor. I kinda like putting him down like, you would never get the best for us with a doctor. And he said, you probably wouldn't be sick if you weren't staying out till 2:00 AM with Margaret every night . So I was so pissed. So Margaret and I walked down the beach at Lake Michigan and I was so pissed.

and now I'm thinking, what was I pissed about? It was true. I got my little jabbing and he got his little jabbing. I was fair , That's right. What did they say? The only thing that'll hurt is the truth.

Mike Koelzer, Host: Exactly. And if my dad said something absurd, it wouldn't get to you.

You'd say, dad, you're crazy. What the hell are you talking about? But when it's something that is close to true or is certainly true, those are the ones you get mad about, 

Michael Solazzo: right. That's right. 

Mike Koelzer, Host: Mike, what kind of pharmacist would you have to fire over the years? What kind of personality, and I'm imagining that you fired some customers, you or you strongly suggested they move on.

What kind of pharmacists were those? What was maybe their personality type that you didn't like?

Michael Solazzo: Yeah, sometimes, sometimes it's like anything else. I mean, we've talked a lot about the relationship. Sometimes it's just not a good fit, between two people and that's okay. I've handled, my fair share of credit issues, over 

the years

and,I think that,for me,if one of my customers, had a credit issue,I didn't walk away, I didn't just say to the credit manager, Hey, 

you handle it.

I'm not involved. you try to help those guys work it out, I had a customer, once, way back when that they're. as I kind of took my inventory so to speak, after it was all over, I was just, it just wasn't a good fit,

you know? Yeah. It wasn't worth it. And, and I, I gave up the account, to somebody else. I don't think he was happy with the new guy either, but That's okay. That's okay. So, it's funny, my grandfather used to say, just be yourself. Let people not like you from the start.

And there's a lot of wisdom in that,

Mike Koelzer, Host: That's really good. 

 Mike, two thoughts come to my mind. I think about how it's probably tough for,let's say when someone retires and then the pharmacist who's kind of maybe is the same age as a sales rep getting up there, and then this, person comes in, they're 25 years, they're junior, they don't know it, they don't have the relationship and so on.

And I know. , just like with Covid, COVID was a great time for people to change their hairdresser , maybe drop out of a service club or something because it's like, well it's covid, you don't feel bad about it. And I know a lot of pharmacies, me included, where I made some decisions.

Finally, when the sales rep quit, I can think of two times, where one of the guys quit and it's like, well I've been meaning to go with this guy and I'm going to now cause I don't have to look this guy in the face and say I'm leaving. Cuz they were about even. But [00:25:00] now when the new person comes in and I've known the person that's been trying to get my business for four or five years.

 I imagine that's a time where there's a lot of flip flopping.

Michael Solazzo: Yeah. So there, there is. So, I mean, if you're good, I shouldn't say good if you're on top of your business from, from both sides of it, from the retail to the wholesaler. I mean, if you're the wholesaler, if you're the supplier, let's just say, and, you know, Hey, my guy's getting ready to retire, you'll insert somebody in there while he's still there, you know,to learn about, Hey, here's, this guy's, he doesn't want to hear this, he doesn't like that.

He, blah, blah, you kind of, learn what's going on. If both sides of the equation are smart, they're gonna learn from each other. because, you know what happens is, I mean, you got some gray hair, I got some gray hair, there's some stuff out there we don't know anything about.

Mike Koelzer, Host: But a lot of these younger guys are coming up and saying, Hey, did you hear about, and I'm like, oh, what are you talking about? no matter how contemporary you think you are. So, there's always room to learn, There's times where some of the new people have come in and they say, well, we can do that. We've got this new computer handheld thing you could do. And you know that, Charlie who's 64 on his way out wasn't gonna learn that stuff.

And so you learn that stuff with a new group.

Michael Solazzo: Absolutely. Yeah. , you can't put a square peg in a round hole, that's for sure. 

Mike Koelzer, Host: Mike, you mentioned earlier about contracts, you and now that we don't have a wholesaler, a primary wholesaler, we obviously don't have a contract, but. We were just at the tail end of never doing a contract. We never signed a contract with our wholesalers and part of it, cause we had just been there so long and we didn't, we haven't touched this for the last, five, eight years. But I know that's a newer thing coming in.


Mike Koelzer, Host: Are those typically beneficial for both sides or where does that come into play?

Michael Solazzo: Yeah. So I mean, the PVAs or the Prime vendor agreements, I mean, they've been part of the business for quite a while. I mean, when I started it was a handshake. there was really nothing written. but they've been very prevalent, over, in the last 10 years or, really, and they're probably gonna continue, even's a double-edged sword, Mike. I mean, they, the,the primary, obviously, have to make money, and so, they're, they're putting their best foot forward. and, a snapshot in time when the PVA is delivered, it looks like it's a pretty attractive deal, unfortunately, what's happened for a lot of pharmacies today is that they're signing these deals that are, two, three year, deals. And it's all based on dollars. When you boil it down, the dollars are deteriorating because of the generic deflation. And so, at one point, let's just say for argument's sake, when they signed the PVA, they were committing to doing, $50,000 a month in generics, six months from the data signing that 50,000, they could be buying the same exact units,but it is 48,000.

Michael Solazzo: And so there's a lot of penalties. a lot of times, if they're not hitting, their commitments, what I've seen with some of, some of the more progressive, if you will, primaries, they're, flexing on the pharmacy side 

where they're not saying, Hey, look, you have to give us 98% of your entire business and we're gonna monitor it, do compliance and so on and so forth. We're, it's more fair, to the pharmacy to say, Hey, look, we want X amount. We know, especially on the generics, by and large, the brand cost of goods that they're getting from the primary is typically better than what they're gonna get somewhere else.

 They may be able to get an item or two at a

better price, but by and large, the brand is gonna go to the primary.

And so, what some of the more contemporary wholesalers are saying is that, we looked at your business, , you're telling me you have a hundred thousand dollars of generics that you're buying in a month. we're gonna require 85% of that to be compliant.

Okay. That's something, as a customer, putting my pharmacy hat on that I would consider, because what you're admitting to me by doing that is you don't have the best price on every generic, and I've told customers, time and time again, if somebody walks in here and says, I have the best price on every generic 

that's on a market, just throw 'em outta a store because nobody does.

It's such a moving target.

and so, an 85% compliant rate is probably pretty fair, 80 to 85. let the pharmacy, shop that other piece,

Michael Solazzo: because financially it's going to make a positive impact, to them.

And then, once that's done, then find a secondary, that you can work with, with, better payment terms that you're getting from the primary, typically the primary, wants a quicker pay, so to speak. find somebody who is, based on your credit [00:30:00] worthiness, which is so important in

today. to get those expended terms. And then, again, when you find that secondary, make sure that they hook you up with the right salesperson. if it's not a good fit, just say, I want a new salesperson. I wanna work with somebody who is working the way that I need them to work.

and the salesperson needs to be cognizant of the fact that these guys are busy, they're stretched, they're definitely stretched. Don't call 'em up every three hours and say, Hey, do you need anything? Can I do anything for you? get a scheduled appointment, it's, Hey, whatever works for you.

Michael Solazzo: You want me to call you every day at four 30? Done. But that's again, we talked a little bit about honesty, trust, and really just building that relationship, which is respect. , which is so important, I always work under the premise that everybody has to earn, but there's a line everybody knows.

The line 

is that I don't want you to earn too much, but, everybody has to, deliver to their own bottom line. and where the secondary can really create value is that they can move to the item. That is a pain point for a customer. And so, if they have a customer that's taking a specific, NDC that the doctor recommended, but that's not on the, pharmacy, formulary, 

the secondary can move to

 that particular item. And so that's where, it's that give and take, there's that relationship and respect with, all three, the primary, the secondary and the store 

Michael Solazzo: owner. And It's so important, the other piece , uh, you know, as the rebates, a lot of the primaries are still, they're doing the, Hey, if you buy X, I'll rebate you back Y and so on and so forth. it's. it's financially, unless that rebate check is coming in very timely, the pharmacies payments 

are being held up a lot of times by third parties. And so, you know, they need that positive cash flow. They can't say, well, hey, my wholesaler owes me.

Hey, your wholesaler should never owe 


I mean, it's, if it's due on a 10th, it's gotta be there on a 10th, and, you know, for us at Capital, by and large, I mean, we're a net bill vendor. I mean, if we tell you it's, $37 and 58 cents, we're invoicing it, $37 and 58 cents.

We can do rebates. I mean, if that's what you elect to do. but you know, the other piece that's out there, we touched on the platforms,There's, they're going to be a significant part of our business, going forward. I believe it's good and it's bad.

to me,the platforms, there's not a, there's not a big relationship there, 

Mike Koelzer, Host: this would be a company that says, we're gonna conglomerate 15 secondaries or something, and then find the best price and then work 

with their 

Michael Solazzo: absolutely. But like I said before, I mean, the ones that I'm attracted to, more so from, from a personal and a business, standpoint are the ones that look at the entire

business piece,not just 

facilitating one transaction,

you know?and those are the ones that , you're using that intelligence every day where it has your PVA loaded in.

It knows where you're at towards that PVA. It's telling you when to buy away and so on and so forth.

the only thing it really doesn't do, so to speak, some of 'em do it a little bit, but not really there, there's not a human touch, 

Michael Solazzo: that says, Hey, Mike, I'm really having an issue on 

Anin.can you help me out on the price? The price is the price, basically. and so, that's a big piece. I think that we're going to keep seeing evolve, in, in the marketplace. fortunately or unfortunately, I think it's unfortunate. I look at our sales reps.

 Our average tenure, doing, selling generics is probably, I don't know, close to 20 years. And so, our people get on the phone with customers and they drive value. I mean, there's no doubt about it. unfortunately, the pharmacists that are coming up are so, ingrained with the Amazon, model, so 

to speak, they don't value the relationship the 

way, we did,

you know, or we do.

And so, I would hate to see that piece really go away. But you know, like, like anything else, I mean, the business, whether you're in the automotive business or the pharmaceutical business, I mean, automation is going to keep progressing.

Mike Koelzer, Host: Let's say you had to give a job description to one of the phone sales people. What would that look like? what would you tell them in terms of how many different people they're talking to a day? What's the average phone call length, those kinds of things.

Michael Solazzo: So our folks, work an eight hour day. Okay. we have a staggered shift, so to speak. so, people on the West Coast, we're not leaving at four o'clock, and they're still going strong. Our folks [00:35:00] make about 80 to a hundred phone calls a day, 

Mike Koelzer, Host: not per person? Total. 

Michael Solazzo: per person. 

Yeah. We have seven. We have 17 

very seasoned sales reps. Okay. do the math. I mean, so that's like about 1700, phone calls a day that are being placed. and large, about 80% of those calls that are being made are to existing customers.

Okay. Various times of the day. And then, the call will be, you know, obviously there's some pleasantries, before you get into the business part of it . You know, Hey, Mike, you had asked about this item before, it is back, the manufacturer has released it and so on and so forth.

the other calls would be, and they're quite prevalent, is that, Hey, Mike, you just told me to order six of these for you. I only have three right now. Cause I believe there's gonna be a price drop coming because there's another manufacturer coming into the market. things of that nature.

If you are working with somebody, we work with a lot of customers where we know, they have shared with us, how much money they have to spend in a month to be compliant. We'll say to them, Hey, look, you're up to $5,000, you're kind of at the threshold right here, unless you're, I don't want to, impact your agreement with your primary, so to speak.

Michael Solazzo: So it, it's that those are the types of phone calls that we have. We have, obviously, put items on special,that, we know were hot in the marketplace. obviously, Tamiflu 

was,recently just, blowing off the shelves.

 I keep talking back to relationships, and we've been around for so long that the manufacturers know us and trust us. And so we have, from our purchasing side, purchasing and pricing, we have fantastic relationships with these manufacturers where, you know,they answer our questions when we're saying, Hey, this item, we're trying to get it, tell us, give us the skinny, what's going on here?

Mike Koelzer, Host: and we're communicating that down to our salespeople because the customers need to know, on the manufacturers, do they have reps that come into you or are they like on a phone 

system, like with their salespeoples to you? How does that work out and how many different,I'm trying to picture if you guys are dealing with like a bigger wholesaler or you're dealing directly with the manufacturers and how many different people are 

you working with that supply 

Michael Solazzo: Yeah. So that's a good question. So I couldn't tell you off the top of my head, Mike, we probably deal with, I'm gonna make up a number of Har heart and 50 different manufacturers.

Okay? Yes. Yeah. And so, we have reps that are assigned to the capital account. and we have communication with them, whether it's on a quarterly basis or whether it's on a need basis.

and so our purchasing folks really, have a very good rapport with those manufacturers where they're just picking up the phone, calling 'em, we do get manufacturers that do come in, and visit with us. we're able to negotiate specials with them and so on and so forth.

Mike Koelzer, Host: Some of these manufacturers, I imagine they're around the world, right? I mean, there's drugs made in, or are they all American? I imagine some are made in Taiwan and all these places. 

Michael Solazzo: Teva 

is a Israel based 

cus company. 

I mean, you have 

Mike Koelzer, Host: do they have an American thing or are you dealing with them 

in Israel?

Michael Solazzo: No, we, they have,

They have a presence in the US and so, yeah, and so we deal directly with all the manufacturers. as we gear up,obviously as I said before, we're Dse s a compliant.

The rules and regulations will be changing this November. We are way ahead of the curve, thank God to make sure that not only is Capitals compliant, but our customers are compliant. 

Mike Koelzer, Host: And that basically follows a drug all the way through main reason of counterfeit 

Michael Solazzo: It's counterfeit. It's the diversion of things of that nature. And so, but you know, the pharm, the pharmacies, will be getting audited by the third parties, and they'll have to produce documentation. and so, it, the onus is really on the pharmacy to make sure that they're dealing, obviously, the big three are going to be DSESA compliant.


Michael Solazzo: nobody knows what they're going to do for their 

customer base at this point, but, as the customers buy from secondary suppliers, those secondaries better be buttoned up. because there, there could be, they could be levied some, big fines at the pharmacy. 

Mike Koelzer, Host: And most of that is, down to the bottle, 

like a QR code kind of thing. 

Yeah, so it's, it's serialization. , it's another piece that the pharmacy is gonna have to sure that they're compliant, Right before I came on, I just saw uh, the news that they're gonna try to go after those Tylenol murders again with DNA N this is from when you and I were kids basically, and they're gonna try to open that up and, you know, find [00:40:00] DNA on the capsules or whatever.

But talking

about serial numbers and things like that 

Michael Solazzo: But yeah, it was crazy. It was very unfortunate, I lived through it on both sides. I was a re retailer when, there was the recall, and then I was a wholesaler when there 

was a recall, 

Mike Koelzer, Host: For our listeners that are a tad bit younger, you know, you remember Mike back in the day? none of the packages were safety sealed then they made all these seals on them. But if you were like me, you walked around with your friends and you're like, well, there's a salad bar.

I could put stuff in there it was kind of like they were doing it, you know, it's like there was still ways for cyanide loving 

Michael Solazzo: Right, right. 

right. Yeah. And I, I remember when they came out with the new safety seal caps that the seniors couldn't open 'em.

Mike Koelzer, Host: yeah. Exactly. 


Michael Solazzo: forbid you were, taking it because of arthritis, you couldn't get the 

Mike Koelzer, Host: Right. Yeah. And then they had all these things. Some had a pencil hole. You'd put a pencil in there and open it. Like a carjack kind of 


Michael Solazzo: Yeah. 

Mike Koelzer, Host: Mike, boy, thanks for sharing all that. It's kind of neat to peer behind the scenes on that stuff. Just as the independence kind of keeps theChains in line and mail order and lets people know there's something else out there, kind of a higher standard, at least in my opinion.

I think that the secondary wholesalers kind of do the same. You know, thankfully we're not just dealing with three people and there's people on the outside, keeping the profession aligned properly, which can easily get unaligned when we have an oligopoly of, uh, you know, just a few making all the calls.

In a way, we're all 

looking out for each 

other, and I think that's a nice thing. 

Michael Solazzo: Absolutely. And again, like we said before, I mean, if you're, if you. Of the mindset that, Hey, look, I don't want to take, phone calls, I don't 

have a pharmacy, I mean, look for one of these third party 

platforms that, that is, it is filling your need.

If you, if your need, like to, as you mentioned before, Mike, with your store, you don't have a 

contract. So, looking for transactions, either, if you don't want to take the phone calls and you find a third party platform that is facilitating a transaction for you, that's great.

use them. If you are under a pVA,you may wanna look for a third party platform that monitors your compliance. It's not easy, the pharmacies have a very tough job, and they really do. But,they're to be applauded, because, youthey, it's a balancing act, for them, 

Michael Solazzo: their primary, role is to take care of patients,

Mike Koelzer, Host: Well, Mike, thanks for your time. pleasure talking to you. And we'll look forward 

to keeping in 

Michael Solazzo: Sounds good. Thanks again, Mike. 

Mike Koelzer, Host: Thank you, Mike.