Giant Eagle’s HBW format takes flight under Heiser’s watchful eye
PITTSBURGH — Giant Eagle may be a regional player, but the company’s willingness to experiment with its pharmacy formats — including its latest HBW/pharmacy store-within-a-store concept — proves that it can shake things up.
In fall 2009, Giant Eagle put into motion its health, beauty, wellness pilot tests — a new wellness format that helps bridge the prescription files of the pharmacy with the natural health-and-wellness opportunities across the front end.
Creating a “whole health” destination for Giant Eagle customers is a key focus for Randy Heiser, Giant Eagle VP pharmacy. For example, store pharmacists proactively consult with patients whenever they fill a prescription for a new-to-them medicine as part of the initiative. Looking forward, this concept will afford cross-referral opportunities across Giant Eagle’s team of healthcare professionals — the pharmacist, dietitians and on-site nutritionists and licensed aestheticians.
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Optimizing SKU lineup equals success with Curtis at Costco
ISSAQUAH, Wash. — Vic Curtis has come a long way since he began working for Costco Wholesale in 1991 as a pharmacy manager.
Recently, he was promoted to SVP pharmacy and has seen action in prescription and OTC merchandising, pharmacy operations, mail-order and Internet-based pharmacy, and pharmacy benefit management services, as part of Costco’s team led by Charlie Burnett, the “dean” of Costco’s pharmacy/health and beauty business.
With Costco’s limited SKU format, success hinges on being able to turn and optimize its SKU lineup, thus keeping the best performers, Curtis told Drug Store News. “Costco’s sales continue to be strong even in this tough economy,” he said. “We believe stepping up our efforts to increase the value and quality of the products we sell is resonating with our members,” he said. In his capacity and because of Costco’s unique “item management” approach to the business, Curtis and his team have the ability to make any single SKU an overnight sensation.
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Generics discounts ignite Medicare Rx competition
Just when you thought the low end of the generic drug price spectrum couldn’t get any more commoditized, the $2 price point debuted with a big splash in September 2010.
Walmart stores tossed the rock that made the splash when it partnered with insurance giant Humana to launch a new, steeply discounted Medicare Part D drug coverage plan for 2011. Four months after both companies announced the venture, the ripple effects are still washing over retail pharmacy. But its long-term impact — namely, its ability to wrest a big chunk of the huge prescription drug market for seniors away from Walmart’s competitors and move it to Bentonville, Ark. — remains to be seen.
The strategy behind the launch of the Humana Walmart-Preferred Rx Plan is almost stunning in its simplicity and its boldness. For a cut-rate monthly plan premium of $14.80, Medicare beneficiaries in all 50 states can gain access to basic Part D drug coverage costing less than half the average national monthly premium set by prescription drug plans serving Part D, according to Walmart and Humana. But the real market-moving potential comes from the plan’s ability to lure Medicare beneficiaries to Walmart’s own stores.
To wit: The Preferred Rx Plan gives favored status to seniors who fill the Part D prescriptions at Walmart stores’ own pharmacies. Medicare beneficiaries who enrolled in the plan get low co-payments when they fill their prescriptions at a Walmart, Neighborhood Market or Sam’s Club pharmacy, with in-store co-payments that start as low as $2 for generic prescriptions at the company’s own pharmacies.
In effect, the plan cuts in half the out-of-pocket costs many Americans pay for widely dispensed, multisource medicines.
“This new co-branded prescription drug plan,” the two companies asserted, “can save a typical Medicare Part D beneficiary who enrolls in the Humana Walmart-Preferred Rx Plan an estimated average of more than $450 in 2011 on plan premiums, prescription medication co-payments and cost-shares, when compared with the average total costs for a Part D prescription drug plan in 2010.”
It wasn’t long before Walmart’s competitors jumped into the $2 generic co-pay contest. In late November, Kroger and Safeway became the first big pharmacy operators to respond, announcing a new, low-price plan for Medicare beneficiaries, in partnership with UnitedHealth Group. Like Walmart/Humana, the plan is a game-changer.
Called Pharmacy Saver, the new program is a collaboration among Kroger, Safeway and United’s Prescription Solutions affiliate. It will allow members to purchase some generic scripts for $2 for 30-day and some 90-day supplies. It applies to hundreds of prescription drugs, including 8-of-the-10 generics most commonly used by UnitedHealthcare Medicare plan members.
Within a few weeks of that announcement, Target, H-E-B, Hy-Vee, Publix Super Markets, Food Lion, Bloom, Harveys and Sweetbay Supermarket all joined the insurance company’s Pharmacy Saver program, in time for the plan’s launch at the beginning of this year.
For millions of seniors, that means that the new price expectation for hundreds of commonly used generics is two bucks for a 30-day supply. For the nation’s pharmacy retailers, it means that the competition for the low end of the generic prescription market is tougher than ever.
Jim, Retail pharmacies are learning that generic drugs turn pharmaceutical channel economics upside down. The costs of distributing and dispensing a traditional (non-specialty) generic drug far exceed the actual cost of the medicine, which is the opposite of brand-name drugs. Thus, the generic market is starting to look like a cash-pay consumer product instead of a brand-name pharmacuetical. FYI, I wrote about the economics of the new plan in Walmart-Humana: An Inevitable Surprise for Pharmacies and PBMs (http://www.drugchannels.net/2010/10/walmart-humana-inevitable-surprise-for.html). Adam