Mark J. Zilner spent his time in pharmacy school learning how to fill a doctor’s prescription. But when Zilner finished college and joined the family business, Diamond Pharmacy Services, in 1991, he wrote a prescription of his own.
Rather than merely help maintain the successful Indiana, Pennsylvania-based business Zilner’s parents, Gilbert “Gib” and Joan Zilner had taken over in 1970, Zilner — now owner, president and CEO — had ambitious plans for how Diamond Pharmacy Services could improve its process, expand its reach and become a market disrupter.
“My father always taught me that if you’re not moving ahead, you’re moving behind,” the 55-year-old Zilner says. “If you’re not constantly trying to grow and improve your business, your competitors will take that business from you.”
In 1991, Diamond had about 20 employees and filled about 15,000 prescriptions per year. Today, the company has more than 1,000 employees and fills more than 16 million prescriptions each year.
Diamond is the largest independently owned long-term care pharmacy provider in Pennsylvania and the largest pharmacy provider to correctional institutions in the United States, servicing roughly one-third of the nation’s inmates. The company goes above and beyond traditional medication dispensing with a robust retail mail-order pharmacy business, an FDA-certified drug repacking business and a health care software company, among other offerings.
All of that has developed because Zilner embraced his parents’ values and inherited their work ethic, while adding his own energy and ideas to the equation. He is proof that, with a combination of innovation, diversification and nimbleness, one can join the family business and then push the family forward.
The family pharm
Zilner was born into a pharmaceutical family. His grandmother, Lena Gatti (nee Raimondo), was the first female pharmacist in Indiana County. She opened Gatti Pharmacy, which serviced customers in downtown Indiana for more than 80 years. Zilner’s parents were both pharmacists, and in 1970, purchased Diamond Drug Store, which had been in operation on the corner next to the Indiana Theater since 1937.
“Diamond was a very busy retail store,” says Zilner, “and my parents were innovative. Customer service was their cornerstone.”
Their chief innovation, from the beginning, was serving nursing homes directly, rather than relying solely on walk-in traffic. Later, in 1983, they began servicing prisons, thanks to a helpful tip from an extended family member.
“It was at a big Thanksgiving celebration, and it was my father’s sister-in-law’s sister’s husband,” Zilner recalls. “He was a warden at a facility in Greensburg, Pennsylvania, and he said, ‘Hey, we have an in-house pharmacy we’re bidding out. You should bid on it.’”
To that point, it was unheard of for a private pharmacy to submit such a bid, as this work was traditionally run by the state. But Diamond put a bid together and won. Soon, it began working with other prisons and then with a correctional health care group that serviced several states.
Zilner has three siblings, and none of them got into the pharmacy field. But Zilner had grown up working around the family pharmacy, delivering prescriptions, cleaning and delivering equipment, etc., and saw how his parents’ work positively impacted others.
“A lot of times, the doctor wouldn’t tell you everything, and, in that age, there was no internet to look up different things,” Zilner says. “Your pharmacist was really the person who managed your health, to a degree, or at least managed your medication.”
So Zilner set off to school at Northeastern University with an eye on joining the family business and, eventually, improving it.
Dispensing ideas
When Zilner formally became a Diamond employee as director of operations in 1991, the company’s management methods were becoming antiquated. Business proposals were still being tapped out on typewriters, so Zilner suggested the use of word processors — an innovation that sounds obvious now but was a huge step forward at the time.
“There was a lot of low-hanging fruit to change,” Zilner says.
The company took an even bigger step forward in the early 2000s with its creation of Sapphire, an electronic health records system.
“We wanted online ordering and an online charting of the medications,” Zilner says. “There were companies that had products out. We researched them and found the best. But we had issues with it. Our patients couldn’t get their medications when they were due, and we didn’t want to put our patients’ health in someone else’s hands. So we decided to build Sapphire.”
Sapphire was built specifically for the corrections space and has been tweaked many times over the years as needs evolve and more features are required.
“We’re growing with it,” Zilner says. “We listen to our clients and what they need and then find the best solutions for them. Now we’ve got a product that can compete with what some of the giant companies put out. We’re geared toward corrections, so we have more features than they do in that market.”
On Sept. 18, 2001, Diamond won a bid for a correctional facilities group in Nashville that made the company the largest correctional pharmaceutical provider in the country. And the growth and expansion has only continued from there.
In addition to its correctional and nursing home specialties, Diamond has recently begun to put more of its efforts into the retail mail-order space, servicing self-insured patients with low-cost pharmacy supplies delivered to their homes. Diamond has also invested heavily in a pill-packaging warehouse retrieval system.
“It’s a two-story facility, almost the size of a football field,” Zilner says. “It brings the products to our employees to label. They’ll verify it with a barcode, and then a pharmacist checks everything. It’s a three-step process, and since we’ve implemented that machine, we have not made any dispensing errors. It adds efficiency and allows us to add volume.”
Pharmacies are, by nature, high-volume, low-margin businesses. When Zilner’s parents started with Diamond, one bad month could have put them out of business. But by continually seeking out growth and market opportunities, the company thrived, without losing sight of its core beliefs about customer service.
“We’ve always been able to identify opportunities and embrace them — even if it wasn’t in our field or comfort zone — to try to find a way to do it,” Zilner says. “And we are pretty automated. We’ve used that to be able to continue to grow and not have to increase our price. It really allows us to stay in the game and be a big player, and we’ve always invested the money right back into the business.”
Besides a line of credit, Diamond has never had outside investors. Even amid substantial growth, it remains 100 percent family owned and operated.
“We’re growing steadily, but growing in a way in which we don’t sacrifice service,” Zilner says. “We’re a better solution for the patients because we’re checking drug interactions or putting them on to the electronic health record to best manage their meds. We feel we’re making an impact in giving them better service than they would get elsewhere. Ultimately, our main goal is to be the best we can be in taking care of those patients. The growth is the fun part of it.”
Managed care
The legacy that comes from a service-oriented approach struck Zilner recently, when his father passed away at age 84 after a battle with cancer.
“The outpouring from the community was overwhelming,” Zilner says. “The funeral was packed, and there were so many employees there who said, ‘He was like a father to me.’ We had a funeral procession that drove by our locations, and our employees were out there with signs and weeping. It was emotional. It was fitting, because my father would always spend time with the employees and make them laugh, even when he was going through chemo. He and my mom really set the tone for the business.”
Gib Zilner taught his son that growth is one thing, but sustainable growth is another.
“It’s easy to expand,” Gib once said, “but you can collapse very quickly if you don’t have a good foundation.”
Zilner, who was inducted into the Indiana County Chamber of Commerce Hall of Fame in 2022, has taken that lesson to heart, not just in building up the business but in making sure that Diamond is the kind of company that gives back and benefits the surrounding community.
“The area we live in used to be a big coal-mining industry,” Zilner says. “That has changed, and there was a lot of unemployment. But we’ve helped people stay here. There are car dealers and restaurants that say, ‘We’re happy you’re here,’ because people are buying cars and going out to eat. It feels good.”
Through a program called Angel’s Wings, Diamond collects and wraps gifts for the less fortunate around the holidays. And its employees regularly volunteer with the local food bank and homeless shelters. These initiatives harken back to what drew Zilner to the family business in the first place — the ability to help people.
Like his parents, Zilner puts a tremendous amount of time and attention into the family business. Diamond’s growth, however, has also taught him how to delegate responsibilities to others.
“My employees have been great, and most of our leaders have grown organically within the company,” he says. “They have the process down, and they handle the customers properly.”
The employees who are made to feel like family are helping the family business thrive. And one day, Zilner hopes to hand off leadership to his son, Hayden, who recently began his collegiate career at Indiana University of Pennsylvania.
“He’s going into business to take over the business,” says Zilner. “My son would shadow my father at work, and he learned so much from him.”
The goal for Hayden Zilner will be the same was it once was for Mark — to join the family business and to push it forward. ●
TAKEAWAYS
- If you’re not moving ahead, you’re moving behind.
- Treat employees like family.
- Grow steadily, but don’t sacrifice service.
