PHARMACY

NACDS to host 2011 Supply Chain and Logistics Conference

BY Allison Cerra

ALEXANDRIA, Va. — The National Association of Chain Drug Stores is gearing up to host a conference designed for retail and manufacturer supply chain executives and logistics professionals.

The 2011 NACDS Supply Chain & Logistics Conference will be held at the Manchester Grand Hyatt in San Diego from March 13 to March 15.

The NACDS conference will cover a wide range of cutting-edge and emerging business topics, and will feature one-on-one business meetings and education and business programs.

For more information and to register, click here.

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MedfusionRx acquisition boosts SXC’s 2010 sales

BY Alaric DeArment

LISLE, Ill. — Pharmacy benefit manager SXC Health Solutions had revenues of $1.95 billion in 2010, compared with $1.44 billion in 2009, according to an earnings report released Thursday.

Profit for the year was $64.7 million, compared with $46.1 million in 2009.

“Our 2010 results demonstrate how effectively we can compete in the PBM space with our high-performance technology platform coupled with our comprehensive clinical offering and focus on client service,” SXC president and CEO Mark Thierer said. “We have all the elements in place to continue to grow and to take SXC to the next level.”

Highlights for the year included the purchase of specialty pharmacy provider MedfusionRx, a move that the company said would enhance its capabilities in the specialty space.

“The acquisition of MedfusionRx is a great example of our approach to expanding our scale and skill in strategic areas, like specialty pharmacy, in order to support our continuing organic growth,” Thierer said.

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Basically, it’s a warning to vendors

BY Antoinette Alexander

WHAT IT MEANS AND WHY IT’S IMPORTANT — As Walgreens pays tribute to its store brand via hard-hitting ads that position its health-and-wellness products as the ones that its pharmacists recommend, CVS/pharmacy officially has unveiled its new Just the Basics private-label line — both developments that should serve as warning signs to vendors.

(THE NEWS: CVS/pharmacy’s Just the Basics line makes debut. For the full story, click here)

CVS’ Just the Basics is not just another private-label concept. What sets it apart is the fact that, unlike other private-label concepts that try their hand the national-brand-equivalent positioning, Just the Basics is a very clear price-value proposition. Just the Basics implies that it’s not the same quality as the leading brand — but it’s probably at least as good as the value-priced option the big brands market (i.e., Bounty vs. Plenty; Charmin vs. Charmin Basic). Clearly, CVS is saying that it wants to own that price point.

"Now, while many retailers are stuck in the brand-follower mode of the 1980s, we have evolved to a leadership role," Mike Bloom, CVS Caremark EVP merchandising and supply chain, told analysts during the 2010 analyst meeting in October in New York City.

Private-label penetration at CVS stands at about 17% and over the next two to three years that number is expected to grow to more than 20%. It is also interesting to note that Just the Basics targets the customer in categories where taste/flavor or even efficacy aren’t as critical as it might be in such categories as food or OTC.

It is no secret that retailers have been working to bolster their private-label offerings, but these latest moves by both CVS and Walgreens are clear indications that this trend is gaining significant steam.

The news certainly raises the stakes on vendors’ need to communicate back to the retailer and the consumer why their brands are important and why they belong on the shelf and in the basket.

The innovative vendor will use every means available to communicate that message or die trying.

If Walgreens’ new private-label ads were a wake-up call for vendors, then consider this the snooze bar going off for the first time. And, you can only hit snooze so many times, before you’ve officially overslept.

So … are you awake yet?

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