Consumers still see value in drug makers’ ad campaigns
Despite increasing scrutiny from Congress and health and safety watchdog groups of pharmaceutical companies’ direct-to-consumer advertisements, consumers themselves still seem to accept the ads, and to see value in the information they contain.
A recent survey, called Consumer Reaction to DTC Advertising of Prescription Medicine, indicated ongoing consumer support still exists for direct messages from drug companies. A majority of consumers said that magazine DTC ads are “somewhat/very useful” in conveying a drug’s benefits (75 percent) and risks (76 percent). It also noted that consumers feel similarly about TV DTC ads in conveying a drug’s benefits (69 percent) and risks (78 percent).
Fifty-six percent of survey respondents also said that such ads are “done responsibly.”
Equally revealing, more than half of consumers (56 percent) say they do not follow news stories about pharmaceutical companies. In the same vein, negative attitudes toward pharmaceutical companies make no difference in consumer actions toward DTC ads. Whether they are favorable or not, the same number of consumers talked with a doctor about a specific medicine they saw advertised.
Another issue in the debate over DTC advertising is whether consumers understand how to report side effects. According to a Consumer Reports survey, most patients report side effects to their doctor, while only seven percent report them to the Food and Drug Administration.
CVS Caremark to expand headquarters, add positions
WOONSOCKET, R.I. CVS Caremark has announced expansion plans for its headquarters over the next two years, a move that will help support the company’s continued growth and current hiring expectations of more than 200 new positions on its corporate campus.
The nature of the new jobs was not disclosed. In Rhode Island, the company currently employs 5,800 associates.
The plans are to build two new 150,000-square-foot office facilities in the Highland Corporate Park in Cumberland, R.I. The company has been based in Highland Corporate Park, which is jointly located in Cumberland and Woonsocket, since 1982. The company significantly expanded its customer support center facilities in 1988 and again in 2000.
“Our company was founded in Rhode Island more than 40 years ago and we feel fortunate to be able to continually reinvest in our home state,” stated Tom Ryan, chairman, president and chief executive officer. “As the largest company in Rhode Island we are looking to further expand our base of operations to support our continued growth and, as a result, increase our workforce over the next few years.”
A&P announces fiscal Q1 improvements
MONTVALE, N.J. A&P, which operates 446 stores under such banners as A&P, Pathmark and Waldbaum’s, announced on Friday improved results for the first quarter as it nears the completion of the Pathmark integration.
“The first quarter of 2008 clearly demonstrates our continuing progression in operating improvement with the achievement of our fourth straight quarter of comparable store sales of over 3 percent,” stated Eric Claus, president and chief executive officer. “Further, Pathmark is already achieving positive results with comparable store sales climbing above 3 percent for the first time in many years. The company is also well underway with the completion of the Pathmark integration, as many of the planned milestones have been achieved. As of the end of the first quarter, our annualized run-rate of synergies is approximately $100 million.”
Sales for the quarter totaled $2.9 billion compared with $1.7 billion in the year-ago period. Same-store sales rose 3.2 percent, which excludes sales for Pathmark stores acquired in December 2007. Same-store sales for Pathmark, measured during the same period, rose 3.1 percent.
Net income from continuing operations was $3.8 million, with a net loss per diluted share of 48 cents after adjusting for non-operating income related to fair value adjustments. This compares with income of $61.4 million, or $1.45 per diluted share, in the year-ago period.
The company did not break out pharmacy sales results.
As previously reported by Drug Store News, the company announced during the quarter an integral step in its transformation—the conversion of the majority of SuperFresh stores in the Philadelphia market to the recently premiered Price Impact format under the Pathmark Sav-A-Center banner and a number of SuperFresh locations retaining the Fresh format with significant upgrades.
Also during the quarter, the supermarket chain completed the remodel of A&P Fresh in Holmdel, N.J., to the updated Fresh format and began remodeling additional stores. The company also premiered its Price Impact format in the Irvington and Edison Pathmark stores.
“The remainder of fiscal 2008 will be focused on progressing the company further toward operating profitability by: moving forward our operating and aggressive merchandising strategies; maintaining cost control and reduction disciplines throughout the business. Integral to our drive to profitability is the continued and ongoing execution of capital improvement projects all geared for maximum return, and particularly weighted to value propositions,” stated Claus.