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Jean Coutu reports increase for Q1

BY Michael Johnsen

LONGUEUIL, Quebec The Jean Coutu Group on Tuesday reported an 8.2 percent increase in operating income, which totaled $55.5 million (in U.S. currency) for the first quarter ending Sept. 1, and includes the company’s share of Rite Aid’s results.

The share of the loss in the Jean Coutu Group’s first quarter 2008 earnings amounted to $30.3 million.

“We are satisfied with our first quarter results,” stated Jean Coutu, the Group’s chairman. “We continued to improve sales growth and operating performance in our Canadian network while Rite Aid began the integration of the acquired Brooks Eckerd stores. As expected, this integration will require a lot of effort and resources initially, but will result in even stronger synergies than anticipated when the transaction was closed.”

The company also announced Tuesday that Francois Coutu will resume command of the Canadian operations as president aand chief executive officer of the company. Jean Coutu, who assumed control of the Jean Coutu Group shortly before talks between Rite Aid and the Canadian drug store chain commenced over the sale of Brooks and Eckerd, will continue as Jean Coutu Group chairman.

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Lewis fine tunes appeal to young women

BY Michael Johnsen

SIOUX FALLS, S.D. —Ever wonder where all those young people who graduate from college and move away to make their mark in the world are headed?

Sioux Falls has been named the No. 1 place for businesses and careers by Forbes magazine for five years running, so it may be no wonder that Mark Griffin and his team at Lewis Drug began noticing some subtle changes among their customer base a few years ago—more moms with kids in tow were walking their aisles.

Accordingly, Lewis Drug, which celebrates its 65th anniversary in February, earlier this month kicked off a new ad campaign targeting moms new to the area—a campaign that, for the first time, features some of Lewis’ homegrown pharmacists—complete with a new slogan, new store signage and even new uniforms for Lewis Drug associates. “We’ve got several new pharmacist [television] spots featuring our own pharmacists, human interest stories,” said Griffin, president and chief executive officer of Lewis Drug.

“We need to keep reinventing ourselves and keep our foundation fresh,” he said. “We’re targeting 25-to 45-year-old women. We found through research that the influx of younger people into our markets are moving into the Sioux Falls area familiar with national chains like Walgreens, but not as familiar with home-town pharmacies like Lewis. This has been about a year-and-a-half process starting with focus groups and surveying through store encounter groups. We basically went to the customers to find out what they thought of Lewis—what they liked and what we could do better.”

“A lot of our consumer base…are very loyal pharmacy customers, but we have a lot more to offer than your traditional drug store,” added Bob Meyer, Lewis general merchandise manager. Some of the in-store merchandising changes designed to entice mom include an enhanced infant and baby department and a change in focus in the sporting goods department from hunting and fishing to youth-oriented sporting goods—T-ball, baseball and soccer, for example.

Gone will be the Lewis slogan “the store next door,” replaced with a new slogan “feel good find” that emphasizes the bargain-hunting experience customers might find at Lewis Drug. Lewis Drug’s footprint reaches into the 40,000-square-foot range across much of its store base, and with that extra square footage is included a lot of categories typical of a department store—an extended lawn and garden offering, furniture and clothing.

The new campaign also will resurrect a Lewis slogan from the past—“Lewis. Your first stop.”

Television spots will appear throughout the day—morning talk shows, daytime soaps, evening news and even primetime. “But there also is some primetime cable…all the female-friendly channels, as well as primetime beginning the end of October through Christmas on network,” Meyer said, “where they have local breaks for shows like ‘Grey’s Anatomy’ or ‘Survivor.’”

With an estimated 148,000 residents now, Sioux Falls Development Foundation predicts an influx of 10,000 more residents by the end of the decade.

Lawrence & Schiller advertising agency is assisting with the research and the campaign.

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TRICARE bill a pending victory for Rx

BY Jim Frederick

WASHINGTON —Retail pharmacy came one big step closer to a key victory in its ongoing battle to level the playing field with mail-order pharmacy early this month.

That step came with passage by the U.S. Senate of the National Defense Authorization Act for Fiscal Year 2008. Among its many components, the bill includes the reauthorization of the TRICARE military health system and its prescription drug coverage program.

At press time, the bill still required negotiation of differences between the House of Representatives and Senate versions, followed by the signature of the President. But if signed into law as written, the legislation would continue allowing soldiers, military retirees and their families to continue using local community pharmacies for their prescriptions without penalty, rather than being forced to turn to mail-order pharmacies.

The Senate bill includes the “pro-soldier, pro-savings” approach to prescriptions filled through TRICARE that’s advocated by groups like the National Association of Chain Drug Stores and the National Community Pharmacists Association. It would extend the current freeze on increases in retail pharmacy out-of-pocket costs for TRICARE members and their families.

To that end, the defense funding bill includes language, offered by Senator Frank Lautenberg (D-NJ), that prohibits increased co-payments for military beneficiaries who choose to have their prescriptions filled by a retail pharmacy, instead of opting for medicines by mail.

The Senate bill also clarifies the ability of the Department of Defense to negotiate with drug manufacturers for federal pricing discounts for TRICARE prescriptions filled at retail, in the same manner as those filled at military bases or by mail order. Those price discounts could yield $300 million in savings in fiscal 2008, according to Congressional Budget Office estimates, and $1.8 billion in savings through the year 2012.

“In addition to leveling the playing field between mail order and retail pharmacies, these tremendous savings eliminate the need to penalize beneficiaries who choose to obtain their prescription medications and services from their local pharmacies,” NACDS noted in a statement.

“This bill is pro-soldier in that it protects the right of over 9 million TRICARE beneficiaries to benefit from their relationships with chain community pharmacists…which improve patient outcomes,” said NACDS president and chief executive officer Steven Anderson. “The bill also is prosavings for military families and for the Department of Defense alike.

“Now that these provisions have passed both the House and Senate, chain community pharmacy will remain vigilant to ensure this sound approach to public policy is enacted into law,” he added.

Through the Coalition for Community Pharmacy Action, NACDS and NCPA are lobbying for the quick enactment of the law.

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