PHARMACY

Independent pharmacy representative urges delay in California pedigree rule

BY Jim Frederick

SACRAMENTO, Calif. In urgent tones, a Fresno, Calif.-based independent pharmacy owner urged the California Board of Pharmacy today to delay for at least two years the state’s controversial plan to adopt a new electronic pedigree mandate.

That plan—which has spawned a backlash among concerned chain and independent pharmacy operators and some distributors in the state—will force all pharmacy retailers and wholesalers in California to document the origin and movement of every prescription drug they sell or distribute.

Dave Wilcox, owner of Northwest Medical Pharmacy in Fresno, testified before the pharmacy board’s Enforcement Committee on behalf of the National Community Pharmacists Association and its members. Addressing a hearing on the state’s plan to implement an e-pedigree and track-and-trace system by Jan. 1, 2009, Wilcox asked the board to postpone the requirement until at least Jan. 1, 2011, to give pharmacy operators time to adapt to what could be a costly undertaking in new technology.

“To get right to the point, the Jan. 1, 2009, deadline is impossible for independent pharmacy to achieve,” Wilcox warned in his testimony. “This is largely due to circumstances far beyond our control, such as lack of standardization, cost considerations and pending Federal proposals. For e-pedigree to be a success, the implementation deadline must be extended at least 24 months.”

As was made clear in the National Association of Chain Drug Stores’ RFID/Track and Trace technology summit in October, Wilcox’s view is shared by other sectors of the pharmaceutical community, including drug manufacturers, wholesalers and retailers. Their consensus, in the words of an NCPA spokesperson, is that “logistical challenges require more time to be successfully overcome.”

Wilcox told California pharmacy board members that upgrading to the track-and-trace technology required for an e-pedigree system will cost a retail pharmacy from $10,000 to $40,000 per store, and time to put the system into seamless practice. “Without a uniform technology standard, pharmacists will be forced to purchase and maintain multiple track and trace technologies—readers, scanners, software and the like,” he said. “Chain pharmacies have stated that once the plans of upstream trading partners are known, it will take an additional 15 to 18 months to implement E-pedigree. For the small businesses in the independent pharmacy sector lacking the resources of larger chains, the consequences will be even worse.”

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Part D subscribers likely to see drug choices diminish

BY Adam Kraemer

WASHINGTON Beneficiaries of Medicare Part D are likely to see their drug choices drop next year, as the government has culled hundreds of products from a list of approved drugs.

On average, the number of drugs offered by the 10 insurers with the largest enrollment shrank by 26 percent from this year to next, according to data analyzed by Washington consulting firm Avalere Health. Four of the top five plans have seen their drug coverage cut by at least 30 percent.

UnitedHealth and Humana both saw drops from more than 3,750 drugs to just more than 2,620, Avalere’s analysis shows. Even so, the two insurers still have among the largest drug lists of the 10 biggest insurers. UnitedHealth spokesman Daryl Richard pointed out that even with the drop, the company’s Medicare Rx Preferred plan covers “100 percent of the drugs” on Medicare’s approved list.

The drop came mainly because of changes made by Medicare, which shrank the list of drugs it will pay for, culling those that have been pulled by the FDA, are no longer being made, had duplicative billing codes or were drugs deemed “less than effective” by the FDA.

Medicare officials and the insurers say most beneficiaries are unlikely to be affected. Enrollees taking drugs that were pulled will usually be able to find alternates or can go through an appeals process to try to stay on their current drugs, they said.

“Most of those [removed] drugs were not used,” said Jeff Kelman, chief medical officer for Medicare’s Center for Beneficiary Choices, in a USA Today article.

“As the Part D program develops, the size of the formulary is becoming more aligned with utilization patterns, consumer preferences, health outcomes and value for consumers,” Humana spokesman Tom Noland said.

Avalere’s Jon Glaudemans said the enrollees should check the drug lists of plans they are considering before signing up, to see if the medications they take are included. The deadline for enrolling is Dec. 31. “Every year, insurers revise their formularies, and every year, beneficiaries should reassess their choices,” he said.

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Walgreens releases November sales data

BY Jim Frederick

DEERFIELD, Ill. A weak start to the holiday sales season, a rise in lower-price generic drug introductions, pressures on children’s cough-cold products and other factors combined to slow the growth momentum at Walgreen Co. in November, but the company still eked out modest same-store sales gains amid the uncertainty.

Walgreens reported November sales of $4.77 billion, marking a 9.5 percent increase over the same month in 2006. But sales in comparable stores rose just 4.4 percent.

Pharmacy sales rose 10.6 percent, but the replacement of some big-selling brand name drugs with lower-price generics this year held comp-store pharmacy sales to a 5.5 percent gain—modest by Walgreens standards. “Comparable pharmacy sales were negatively impacted by 4.3 percentage points due to generic drug introductions in the last 12 months,” the company reported today.

Total prescriptions filled at stores open more than a year increased 3.1 percent, Walgreens noted, and pharmacy sales accounted for 65.1 percent of total sales for the month.

At the front end, comp-store sales rose a relatively meager 2.6 percent in November. Walgreens attributed the growth slowdown to “weakness in seasonal categories; aggressive pricing on digital photo prints; the withdrawal from the market and cautions on the use of cough and cold products for children 6 and under; and a mild early flu season compared to last year.”

Among the bright spots at the front end: consumables and everyday electronics, the company reported.

“Although the weak economic environment may have impacted early holiday sales, we believe the economy will benefit drug stores late in the Christmas season as customers take advantage of our wide selection of products and our convenient locations,” said Walgreens chairman and chief executive officer Jeff Rein. “That’s typical of our past experience.”

Rein also pointed out that the specials offered in Walgreens’ circular advertising in November “didn’t offer the deep discounts that other retailers promoted.”

Calendar year-to-date sales were $49.95 billion, an increase of 11.7 percent over the same period last year. For the first quarter of fiscal 2008 ended Nov. 30, Walgreens’ same-store sales rose 5.4 percent, with total sales up 10.2 percent from first-quarter 2006, to $14.0 billion.

Walgreens said it opened 95 stores in November, including eight relocations. The company also acquired three stores and closed eight, ending the month with 6,141 drug stores (including 93 home care division locations, 10 specialty pharmacies and three mail service facilities) in 49 states and Puerto Rico, versus 5,580 a year ago. Franchisees of Option Care, a wholly owned subsidiary of Walgreens, are not included in Walgreens’ store count.

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