McKesson scrambles Canadian market with buyout bid for Uniprix drug group
SAN FRANCISCO The planned takeover of Quebec’s Uniprix drug store group by drug distribution and health services giant McKesson Corp. would add new muscle to McKesson’s aggressive bid for more of Canada’s pharmacy market and scramble the competitive landscape for rivals Shoppers Drug Mart, Jean Coutu Group and Katz Group Canada.
McKesson revealed Monday its offer to buy Uniprix Inc., which owns the Uniprix, Unipharm and Uniclinique store banners and comprises Quebec’s second-largest drug store group. The deal, which is subject to regulatory and shareholder approval, would add some 400 independent drug stores in Quebec that are serviced by Uniprix to McKesson’s fast-growing distribution network in Canada, and pose new challenges to Katz, Jean Coutu and Shoppers.
Under terms of McKesson’s offer, pharmacy owners under the Uniprix service umbrella would retain ownership in their stores. “McKesson Canada is enthusiastic about the prospect of this transaction, which will strengthen our longstanding business relationship with the Uniprix Group for the distribution of pharmaceutical products, over-the-counter medications and consumer products,” said McKesson Canada president Domenic Pilla yesterday. “We believe that if our offer is supported by the shareholders and approved by the regulatory bodies it will benefit the Uniprix Group’s independent member-pharmacists through enhanced product and service offerings to customers, while bringing increased financial flexibility to the banners and sustaining its network of independent pharmacy owners.”
Noting the nearly three-decade business relationship between the two companies, Uniprix president and CEO Francois Castonguay endorsed the merger, calling it “a natural partnership.”
The purchase of Uniprix would be the second major acquisition for McKesson Canada in recent months. Last June, the company bought Quebec-based Groupe PharmEssor, which serviced some 270 independent drug stores under the Proxim and ProxiMed banners.
McKesson now supplies pharmaceuticals and other products to 6,300 retail pharmacies in Canada, as well as 1,350 hospitals, long-term care centers and other institutions in the country. The company also provides automation services for some 2,500 retail pharmacies, according to a McKesson report.
Countdown begins for HIT legislation
T-minus 10 – 9 – 8…
That’s more or less where federal lawmakers are at right now on a new economic stimulus bill that could have wide-sweeping implications on retail pharmacy; and not the kind where consumers wind up with a few extra bucks and spend some of it at the drug store, either. This could cost retail pharmacy big time.
Figure by the time you read this, the clock will be at about 8-and-counting. Well, maybe 9, depending on whom you’re talking to. And that’s a good thing. Because at least now there is time to do something about it.
On Tuesday, Jan. 6, members of the 111th U.S. Congress met for the first day of a new session in Washington, and as has been widely anticipated, its first official act of business is to come to a speedy resolution on a quick solution to turn around our failing economy, in time to make signing this potentially groundbreaking new piece of legislation the first official act of our 44th president. Sen. Robert Menendez, D-N.J., came in calling it Congress’ “first, second and third priority,” and he certainly was not alone in his sense of urgency.
But as they got a bit further into it, others, including Senate majority leader Harry Reid, D-Nev., began to realize that, the bigger and more complex this thing becomes—and more expensive—the less likely that Congress will come back with a plan in time for Inauguration Day; President’s Day may be more realistic.
One thing that has been loaded into this in the name of economic stimulus is a healthcare information technology component. And as much as Drug Store News favors the widespread adoption of HIT—as it is a fundamental component of what will be required to evolve health care in this country from its highly fragmented present state to a system where providers actually communicate with each other, patients actually get better and payers actually get what they paid for—it needs to be part of a separate discussion. It’s not quite so simple as flipping the switch on a new road somewhere. HIT is far from “shovel ready” as they say.
As bad as America needs the help right now, it needs to get this right even more. Democrats understand this fully well; they know that in many ways the future success of every plan and every reform they have may be hanging in the balance. A screwup here easily can derail any spirit of nonpartisanship that might exist across the aisle right now, to say nothing of the buy-in of the American public.
The point of economic stimulus must be to stimulate the economy and create the 3-million-or-so jobs Obama’s team has said it can deliver over the next couple of years.
HIT is far too big, too important and too complicated to be a part of this economic stimulus plan. Not if the goal here is to come up with something to get the economy jumpstarted any time soon.
Right now, discussion among lawmakers of how to proceed with HIT has been mired in concerns about patient privacy, and there is a very real fear that any HIT legislation that could come as a result would most definitely mean a whole new round of privacy rules and regulations above and beyond what has already been mandated under HIPAA.
That brings a very logical question from retail pharmacy and other key healthcare stakeholders: So, what’s wrong with the HIPAA regulations? And that’s a good question, not just because HIPAA has cost millions of dollars and countless manpower hours to implement, but more simply because HIPAA seems to be working just fine as it is.
Champions for greater privacy safeguards have talked about measures, such as a new prior consent regulation, that would require any healthcare provider to receive a patient’s consent before he or she could use that information to improve that patient’s life considerably. That means, for instance, even if a doctor were to transmit a new electronic prescription for a newly diagnosed patient with heart disease or diabetes, the pharmacy could not use that information to try to determine if that patient might benefit from some sort of disease management program. You’d need the patient’s consent just to send him or her a lousy refill reminder. Otherwise, you’d be violating that patient’s privacy.
Then there’s the accounting of disclosures provision that’s being tossed around, which would require healthcare providers to keep detailed records going back several years, tracking each time a patient’s information was accessed and why.
In the meantime, HIPAA seems to work just fine, and last year, noncompliance and poor drug adherence cost this country an estimated $177 billion.
And so, retail pharmacy, the clock is ticking; T-minus 10 – 9 – 8…OK, maybe the clock’s still at 9. That’s a good thing. Because you still have time to tell your Congressmen to leave healthcare IT out of the present economic stimulus package.
New technology pushes battery category to change
The holidays prompted many drug chains to link batteries with seasonal and emerging product categories, but taking advantage of those opportunities throughout the year may require more expansive merchandising.
Battery centers remain the real focal point of battery merchandising. Walgreens spokesman Robert Elfinger noted that the company provides a specific place where consumers can go and conveniently find exactly the battery they need. “The space allotted has grown, but it’s all centralized and labeled well in the battery center,” Elfinger said.
Yet, as the battery category changes, drug chains are reconsidering their presentations. Rite Aid has reworked planograms as consumer preferences have evolved, developing secondary displays and considering ways to accommodate emerging product preferences for such items as environmentally friendly batteries.
Duracell, for one, supports seasonal sales in a multifaceted promotional approach. “We think it’s important to drive consistent touch points that the consumer will recognize through TV, media and PR events,” said brand spokesman Kurt Iverson. “Our point-of-sale information, on-pack tags and sweepstakes opportunities in-pack help the retailer play a part in the excitement.”
The holidays provide a kind of template for seasonal battery promotions going forward, Iverson said. “It’s great to have extra battery displays near the items where batteries are the heart of the device. Making batteries visible at the check-out also can jog the consumer’s memory.”
Energizer emphasizes end-cap sets as the best place to remind consumers of their battery needs. “Energizer Batteries are a prompted purchase, meaning shoppers are reminded of their need for them when they see the product or the product cues like the Energizer Bunny,” said Lou Martire, VP trade development.
The battery market has changed as rechargeable devices such as the iPod have eclipsed some high-drain devices, such as the Walkman.
“As items become more and more high-tech, consumers require more batteries. This is why our brand and messaging about delivering ‘More Power for Your Money’ has been so successful,” said Rayovac spokeswoman Melissa Layton.