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Katz Group, Snyder’s exec Giancamilli begins early term as NACDS chairman

BY Jim Frederick

NEW YORK Assuming his role months before it was originally scheduled to begin, retail veteran Andy Giancamilli began his tenure today as chairman of the National Association of Chain Drug Stores.

Giancamilli, who is chief executive officer of both Canada-based Katz Group North America and its U.S. subsidiary, Snyder’s Drug Stores of Minnetonka, Minn., has served as vice chairman of NACDS since April 2008. His term as chairman will run until the NACDS Annual Meeting in April 2010.

The change came today at the NACDS Board of Directors meeting here. Giancamilli, trained as a pharmacist, succeeds Warren Bryant, who was president and chief executive of Longs Drug Stores until its acquisition by CVS Caremark. Bryant has been named to the NACDS Honorary Board of Directors.

Giancamilli brings to his role wide-ranging experience in U.S. and Canadian retailing. He began his career at Michigan-based Perry Drug Stores in 1975, rising to president and chief operating officer under Perry founder and chief executive Jack Robinson. After Perry’s sale to Rite Aid, Giancamilli joined Kmart Corp. in 1995, rising to president and chief operating officer before moving to Canadian Tire in 2001. He joined Katz Group, Canada’s largest integrated retail pharmacy network with some 1,800 stores across the country, in 2003.

“I’m very proud to serve NACDS and the industry in this critical role and look forward to working with the Board on progressive initiatives.” said Giancamilli. “Promoting and advocating on the value of pharmacy to primary care and prevention is essential to not only improving the overall health of patients but also in moving the industry forward.”

NACDS president and chief operating officer Steven Anderson praised the group’s new retail leader. “Andy enters the role of NACDS chairman at a time when healthcare reform is at the forefront of the new administration’s and Congress’ agendas. His leadership will be vital as we advocate for pharmacy’s role as a key component of that reform, for the good of patients.

“His first-hand expertise in pharmacy practice and his industry experience will be invaluable as we address the opportunities and challenges before pharmacy,” Anderson added. “I also would like to recognize the outstanding leadership of Warren Bryant. One lasting symbol of his chairmanship was his remarkable effectiveness in Capitol Hill meetings during Congress’ final pre-election legislative push.

“Making the case for pharmacy as the face of neighborhood healthcare, NACDS and its allies secured several key pro-pharmacy, pro-patient victories under Warren’s watch. Warren definitely leaves a legacy of leadership and results.”

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New studies reveal childhood vaccine costs are variable in private sector

BY Antoinette Alexander

ANN ARBOR, Mich. The high cost of some childhood vaccines is putting a significant financial strain on some physicians, according to research from the University of Michigan Health System. However, that burden could equate to an increase in business for retail-based clinics as some physicians may eventually opt to no longer provide all vaccines or may delay the purchase of some vaccines for financial reasons.

A pair of new studies from the University of Michigan Health System found that many physicians appear to be paying too much and receiving too little reimbursement for childhood vaccines.

The survey is of 1,280 U.S. pediatricians and family physicians engaged in direct patient care. Of the pediatricians, 70 percent responded, along with 60 percent of family physicians. They study of costs and reimbursements included data from 76 practices.

With vaccines for children enrolled in Medicaid funded by the public sector through the federal Vaccines for Children Program, prices are negotiated annually with vaccine manufacturers by the Centers for Disease Control and Prevention. But the data from the new studies support the belief that costs and reimbursements are widely variable in private practices.

“Until now, nobody knew what anyone was paying,” stated lead author Gary L. Freed, M.D., MPH, chief of the division of general pediatrics and director of the Child Health Evaluation and Research Unit at the U-M Health System’s Mott Children’s Hospital. “This information will change the way in which physicians negotiate prices.” The studies appear in the December issue of the journal Pediatrics.

The studies found that the price-per-dose of one brand of hepatitis B vaccine, for example, ranged from $4.26 to $13.06 at different medical practices. Reimbursements of the MMR (measles, mumps and rubella) vaccine ranged from $16.77 to $59.02. Many physicians in the survey expressed dissatisfaction with the price and reimbursement levels of vaccines.

While few physicians in the survey indicated that they had considered no longer providing all vaccines to privately insured children (11 percent overall; 5 percent of pediatricians and 21 percent of family physicians), about half of them reported that they had delayed the purchase of some vaccines for financial reasons and experienced a decline in profit margins from immunizations.

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Dismal economy stalks November sales as Walgreens closes out a bleak month

BY Jim Frederick

DEERFIELD, Ill. In a sure sign of the downward economic spiral plaguing the nation’s retailers, Walgreen Co. reported a nearly one-percent decline in same-store sales for the month of November.

Overall sales edged up 3.7 percent for the month over the same period last year, to $4.96 billion. But sales in stores open more than a year fell 0.9 percent. Comparable-store front-end and pharmacy sales also slid 0.9 percent, Walgreens announced today.

Black Friday and the following weekend saw stronger consumer traffic than a year ago, according to the company, but fewer items were purchased per transaction. Transactions in comparable stores rose 1.7 percent in November.

Pharmacy sales for the month were up an anemic 2.4 percent on a total-store basis, pulled down both by sagging consumer activity and by the increasing use of lower-priced generic drugs over their brand-name counterparts. Comp-store pharmacy sales, according to Walgreens, “were negatively impacted by 2.3 percentage points due to generic drug introductions in the last 12 months.”

The company also blamed a shift in the calendar for the comp-store decline in pharmacy business, “as pharmacy patients fill more prescriptions during the week than on weekends.

“This year, November had two fewer weekdays compared to November 2007,” Walgreens reported. “Calendar shifts, along with one less holiday shopping week in November this year, negatively impacted total comparable store sales by 2.5 percentage points, front-end sales by 0.8 percentage points, comparable pharmacy sales by 3.4 percentage points and prescriptions filled in comparable stores by 3.3 percentage points.”

The bad news extended to total prescriptions filled, which decreased 3.4 percent on a comp-store basis in November over the same period last year. The shift of Zyrtec from prescription to over-the-counter status was another factor in that decline.

Pharmacy sales accounted for 64.4 percent of total sales for the month, according to the chain.

Walgreens said strong sales of basic necessities, consumables and key beauty items gave some lift to front-end revenues, as did Zyrtec’s switch to OTC status.

“Consumers continued to shop our stores for the essentials throughout the holiday weekend,” explained Walgreens president and chief operating officer Greg Wasson. In a hopeful note, he added, “As we approach the last-minute Christmas rush, shoppers will take even greater advantage of our wide selection of products and convenient locations.”

Walgreens opened 94 stores in November, including 15 relocations, and acquired eight stores. As of Nov. 30, the chain operated 7,123 locations in 49 states, the District of Columbia, Puerto Rico and Guam. That includes 6,630 drug stores—an increase of 491 stores over a year ago—as well as worksite health centers, home care facilities and specialty, institutional and mail service pharmacies.

The company’s Take Care Health Systems subsidiary manages 293 walk-in clinics at Walgreens drug stores. That figure doesn’t include franchisees of Option Care, Inc., a wholly owned Walgreens subsidiary.

On Monday, Walgreens also announced it had completed its purchase of McKesson Corp.’s specialty pharmacy operations, adding to its fast-growing specialty division.

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