Fred’s looks to unload specialty pharmacy business
Fred’s is looking to sell its specialty pharmacy business, according to a form filed with the Securities and Exchange Commission Wednesday, the day it was meant to file its earnings for fiscal year 2017. The Memphis-based company said in the filing that its board of directors has approved the plan to sell the specialty pharmacy business, which includes three specialty-only locations. It has rescheduled its earnings report for May 4.
The filing notes that Fred’s “requires additional time to complete the accounting and reporting processes necessary to satisfy the requirement to reflect the discontinuation of its specialty pharmacy operations.” Fred’s CEO Mike Bloom, as part of the company’s December 2017 third-quarter earnings call, told analysts and investors that the company was in the midst of “a review of alternatives for the noncore assets of real estate and the specialty pharmacy business.” A spokesman for the company said the delay of its earnings report has nothing to do with the ongoing business operations. He declined to comment on whether the company has any potential suitors lined up.
Fred’s has been in the midst of a turnaround strategy in the aftermath of the scrapped acquisition of Rite Aid by Walgreens. Fred’s had been set to acquire enough divested stores to make it the third-largest drug chain in the country — but the recently completed Walgreens acquisition of 1,932 Rite Aid stores didn’t necessitate a divestment. As a result, in the first eight months of its fiscal year ended Oct. 28, 2017, the company reported a $37.3 million contribution to its $117.8 million net loss from costs associated with bank fees, financing termination fees, and professional and legal and advisory fees associated with the Rite Aid store acquisition. The company also canceled its third-quarter dividend. Since last June, Fred’s also has added two members to its board, including new chairman Heath Freeman and had two CFOs. Anto joined in February, succeeding Jason Jenne, who was appointed last July and now is CFO at True Temper Sports.
“We are aggressively executing our turnaround strategy, and we are seeing traction in both front store and pharmacy,” Bloom said on the third-quarter call. “We are not yet at the point of presenting positive quarterly comp sales and traffic improvement. However, I can tell you that we are improving month-by-month as our initiatives are yielding results.” Efforts undertaken to reduce costs included reducing its workforce and reduction of excess inventory that it leveraged into a clearance sale to drive foot traffic.
When the Rite Aid acquisition fell through last June, Bloom listed specialty pharmacy as one of the areas that would help optimize its business model alongside growing comparable-store prescriptions and driving front-store traffic. In December, Fred’s COO of pharmacy and executive vice president Timothy Liebmann noted that the evaluation was intended to assess whether to invest in it to grow or seek alternatives to capitalize on its value.
“We’re in the middle of that evaluation right now, and I think that we’re excited about the path we’re going down with this,” Liebmann said in December. “I think that if we do nothing, you run the risk of being irrelevant in the space.”
CVS Health marks 1 year of Arizona VA, TriWest program
CVS Health has offered an update on its joint initiative between the Phoenix Veterans Affairs Healthcare System and TriWest Healthcare Alliance as it marks the first year of the collaboration. In the past year, the company said 1,500 veterans have been treated at the 25 participating Phoenix-area MinuteClinic locations.
“We are thrilled with the success of the partnership between VA and MinuteClinic,” said RimaAnn Nelson, Phoenix VA Health Care System director. “To give the veteran the ability to seek care for minor conditions and illnesses at a MinuteClinic means increased access, not only for those going to MinuteClinic, but also for those with more serious illnesses and injuries who need a higher level of care in our Emergency Department. Feedback we have received from veterans who have taken advantage of this partnership has been extremely and consistently positive.”
Through the partnership, VAHCS nurses can connect veterans to MinuteClinic for treatment of minor illnesses or injuries, if they deem it clinically appropriate, through the Veterans Choice program. Veterans have been treated for such ailments as bronchitis, the flu and minor skin conditions, with them waiting roughly 30 minutes on average, CVS Health said.
“We are pleased to have been able to introduce Phoenix-area veterans to MinuteClinic this past year,” MinuteClinic vice president of clinical transformation and medical oversight Tobias Barker said. “At MinuteClinic, we are committed to ensuring that the veterans we serve receive high-quality and convenient health care when they need it and where they want it.”
MinuteClinic shares veterans’ visit summaries with their primary care physician in an effort to better coordinate care, CVS Health said, noting that it offers up-to-date clinical information for potential follow-up appointments. Patients are able to call the Phoenix VA Healthcare System’s Help Line to refer them to a MinuteClinic location, with the system noting that it expanded the hours of the line to offer more access for patients on evenings and weekends.
CVS Health expands West Virginia opioid disposal
CVS Health is bringing medication disposal kiosks to 19 CVS Pharmacy locations in West Virginia. The kiosks, the first in CVS Pharmacy stores, join the five that CVS Health has donated to police departments in the state, and accompany a $20,000 CVS Health Foundation grant to Westbrook Health Services in Parkersburg, W. Va., to support opioid addiction recovery.
“CVS Health is dedicated to addressing and preventing opioid abuse and misuse in the communities we serve,” CVS Health vice president of professional services Thomas Davis said. “We are expanding our safe medication disposal efforts to provide more locations where people can safely dispose of unwanted medications, getting them out of medicine cabinets where they could be abused. Our safe medication disposal initiative, and our funding for community organizations supporting addiction recovery in West Virginia, are an extension of CVS Health’s purpose of helping people on their path to better health.”
Through the more than 850 units that CVS Health has donated to police departments nationwide, it has collected more than 140 metric tons of unwanted medication, the company said.
Grant recipient Westbrook Health Services offer behavioral health services in eight West Virginia counties. CVS Health said the grant will support the organization’s Community Partner Outreach Initiative for Healthy Outcomes, through which it educates and connects people struggling with substance use disorder to community programs and services. The grant will improve training, which will benefit 3,000 patients in Westbrook’s treatment center and 5,000 local students through community outreach, CVS Health said.
“The funding Westbrook Health Services received from CVS Health allows us to provide valuable training in substance use disorder for Westbrook staff and the community at large,” Westbrook marketing coordinator Liz Ford said. “Through this support, we are better able address the opioid epidemic throughout West Virginia, which is critical to delivering a healthier community.”