CVS Caremark attributes Q1 success to Maintenance Choice program
WOONSOCKET, R.I. CVS Caremark’s first-quarter pharmacy services revenues increased more than 7% thanks in part to the success of its Maintenance Choice program.
“Maintenance Choice offering is really taking off. The number of scripts being filled at retail for 90-day is well over our plan,” Tom Ryan, chairman, president and CEO, told analysts during Tuesday’s conference call.
As of April 1 there were more than 200 clients taking advantage of Maintenance Choice and the feedback has been “extremely positive,” Ryan noted.
Launched in 2008, Maintenance Choice allows consumers to purchase chronic 90-day prescriptions at CVS stores for the same price as at mail.
“Maintenance Choice is profitable to our overall enterprise,” Ryan said.
Revenues in the pharmacy services segment rose 7.2% to $11.5 billion. Adjusting the growth rate for the impact of new generics, net revenues would have grown 11.4% in the pharmacy services segment.
Revenues in the retail pharmacy segment increased 13.9% to $13.5 million. Same-store sales increased 3.3%, while pharmacy same-store sales rose 4.6%. Front-end same-store sales, which were negatively impacted by the shift of the Easter holiday, increased 0.7%.
Net earnings were $738.4 million, or 50 cents per diluted share, compared with $748.5 million, or 51 cents per share, in the year-ago period. Expenses related to the Longs acquisition and the PBM business impacted results.
At the front of the store, the retailer continues to gain share and is strengthening its focus on private label as cash-strapped shoppers look to save money. Private label currently stands at 15.4% of front-end sales, up about 60 basis points.
To further bolster private label sales and attract new shoppers to the segment, Ryan said the company is introducing a new store brand proprietary “try me” section in more than 4,500 stores and is adding more private label product to the mix. The company has introduced 200 new products in the first quarter alone and it expects private label to be about 20% of front-end sales over the next few years.
Within the company’s MinuteClinic, traffic was up 42% on an overall basis during the first quarter, reflecting the company’s efforts to raise awareness by leveraging its retail advertising spend to put messaging in its circulars, implement in-store signage and spread the word through its ExtraCare communications.
The company is also working to bolster third-party insurance coverage and expand service offerings for MinuteClinic. During the first quarter, MinuteClinic added 17 million additional lives to its network. There are now more than 100 million lives in MinuteClinic?s third-party network.
New details emerge on NACDS realignment
ALEXANDRIA, Va. The National Association of Chain Drug Stores Monday revealed further details of a sweeping management realignment and staff reduction. The announcement followed the organization’s first revelation on Thursday, April 30, that it was undertaking a streamlining and consolidation to shed operating costs in a difficult economy, and to respond more effectively to member needs in a shifting political and healthcare environment.
The overhaul includes the consolidation of some departments and a reduction of 15 filled full-time positions, from 92 to 77, or 16%.
Among the NACDS staff members leaving under the reorganization are Fitz Elder, VP of member relations and chief member relations officer; Phil Schneider, VP external relations and president of the NACDS Foundation; and membership coordinator Conchi Vallecillo. All three are taking voluntary retirement, NACDS revealed, and their positions “will not be refilled.”
A dozen other staff members are also headed for the exits, and their positions are being eliminated, according to the organization. They include Kate Crummett, manager of meetings and special events; senior graphic designer Kerrin Cuison; director of technology standards Michele Davidson; IT support specialist David Dorsey and Dan Faoro, VP communications production and strategic marketing.
Also leaving are Resource Center coordinator Marcy Gascoine; Ashley Matthews, coordinator of conference services and exhibits; membership coordinator Teresa Muldrow; Steve Poston, director of IT and facility services; web/database applications specialist Bikrum Saluja, director of policy and programs Christina Thompson; and Lisa White, manager of meetings and international affairs.
On Thursday, NACDS termed the staff cutbacks “very difficult” but necessary in the current economic downturn. The changes, noted the group, are “part of a comprehensive, multi-year plan to refocus and realign…activities and programs” to make NACDS more responsive to its members’ goals and current market realities.
In line with the streamlining effort, NACDS has grouped its 77-member team and its activities under six senior executives, all of who report to president and CEO Steven Anderson. They include:
- Finance and Accounting, human resources and administration and information services, headed by EVP and CFO Jim Huber;
- Membership, meetings and exhibits and international affairs, under the direction of Jim Whitman, SVP meetings and exhibits;
- Federal and state policy and programs, headed by Carol Kelly, SVP government affairs and public policy;
- Legal affairs, under SVP legal affairs and general counsel Don Bell;
- Pharmacy affairs, pharmacy education and the NACDS Foundation, headed by Edith Rosato, SVP pharmacy affairs;
- Media relations, member communications and Internet activities, under Chris Krese, SVP marketing, communications and media relations.
Antibiotic voluntarily recalled by Ranbaxy
PRINCETON, N.J. All supplies of an antibiotic will be recalled amid concerns that it could cause nausea and vomiting.
Ranbaxy Pharmaceuticals announced last week that it would voluntarily recall all lots of the drug Nitrofurantoin (monohydrate and macrocrystals) capsules in the 100-mg strength.
The company said some lots were defective, but decided to recall all lots as a precaution. The company, based in Gurgaon, India, said it is conducting the recall in coordination with the Food and Drug Administration at the retail level. Recalled lots of the drug are unlikely to produce serious adverse effects, Ranbaxy said, but a remote possibility exists of nausea and vomiting. The company said patients using the drug should consult their physicians about alternative medication options.