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OTC industry has Suydam, CHPA to thank for impact on PSE, DXM

BY Wayne Bennett

For more than 125 years, the Consumer Healthcare Products Association has helped over-the-counter medicine providers make their products easier for consumers to access.

And yet, CHPA has never been more active in addressing the many regulatory and legislative hurdles required to accomplish its overall mission than it has over the past decade or so—particularly, the last eight years, under the very able leadership of CHPA president Linda Suydam, who retires at the end of this year. Having forged a highly successful 21-year career at the Food and Drug Administration prior to joining CHPA, Suydam came to the organization with an uncanny sense of what it would take to help CHPA and its member companies tell their story, successfully communicating the inherent value nonprescription medicines deliver to the American healthcare system, and during some of the most challenging times the OTC industry has ever had to face.

Without the influence of CHPA, we know what might have been:

Pseudoephedrine-based products would require physician prescriptions; and

The FDA advisory committees that recently voted to maintain consumer access to dextromethorphan may have leaned the other way, moving another highly popular class of cold remedies behind the pharmacy counter for reasons other than safety or efficacy.

These are critical issues that adversely impact consumer access to OTC medicines and lessen the value of self-care.

Another important element of CHPA’s DNA—and another that has grown in importance and sophistication under Suydam’s watch—is in the quality of its member relations programs. This was clearly demonstrated at CHPA’s recent Marketplace Exchange event in September, where former industry executives Barb Hartman and Kathy Steirly of Go Beyond Communications presented a workshop on “Nurturing the Value of Business Relationships.” The discussion provided an important backdrop and a bit of extra context for attendees of the annual event.

The Marketplace Exchange meeting, which CHPA created under Suydam’s leadership, brings together a host of large and small OTC manufacturers, media providers and other service providers of all types, who meet strategically to discuss the value of their collective relationships and examine ways to enhance the value of those relationships. The fact that CHPA has been able to endure through some of the most turbulent times in its history is in large part due to the importance CHPA—and its leader, Linda Suydam—has placed on these business relationships. Indeed, the OTC industry’s ability to mobilize quickly and communicate its story clearly and concisely in times of crisis—PSE and DXM, for instance—is a tribute to the close business relationships CHPA has fostered during the Suydam years.

As this issue went to press, the organization had just announced that Scott Melville had been selected to succeed Suydam, beginning Nov. 1. Melville, who had served as SVP government affairs and general counsel for the Healthcare Distribution and Management Association prior to the announcement, brings over two decades of healthcare, legislative, regulatory and association management experience to his new role. Prior to joining HDMA, Melville served as an attorney and head of government relations for Cephalon, and prior to that, he served in public policy and government affairs positions at Hoffmann-La Roche and Sterling Winthrop. A former chairman of the Pennsylvania Biotechnology Association, prior to joining the healthcare industry, Melville served as legislative counsel and Appropriations Committee associate on the staff of the U.S. Rep. Jerry Lewis, R-Calif.

While he may be stepping into some very big shoes, Drug Store News agrees with CHPA chairman Christopher DeWolf’s assessment that Melville’s “experience in public policy, coalition-building and working with government officials and key stakeholders will be invaluable in guiding the industry through the rapidly changing healthcare environment,” the L’il Drug Store Products president and CEO noted.

If you are an OTC manufacturer and have not yet connected to CHPA, do it now. You’ll be fostering some of the strongest business relationships in the industry.

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CVS’ future rests on front-end, private-label evolution

BY Antoinette Alexander

NEW YORK CVS Caremark has no doubt been a trailblazer in the healthcare arena, positioning itself along the front lines to leverage its various points of care to improve outcomes and lower healthcare costs. But with all that CVS Caremark has done and will continue to do in the healthcare space — and it is no doubt a lot — it still has more than 7,000 retail locations, and the front of the store continues to be a critical part of its business and a major growth driver for the company.

(THE NEWS: At his last analyst day, Ryan sets out course for future CVS Caremark. For the full story, click here)

The front end is an $18 billion business for CVS and to be sure the company continues to look for ways to drive even more productivity out of its stores. It comes as no surprise that one area it will target for additional growth is private label. Private-label penetration currently stands at 17%, and over the next two to three years, company executives expect that number to grow to more than 20%.

"Private-label brands continue to grow and evolve. In this economy, consumers have shown that they are much more willing to try private-label products," Mike Bloom, EVP merchandising and supply chain, told analysts during Friday’s 2010 analyst meeting in New York. He noted that by the end of 2010, CVS/pharmacy will have nearly 5,100 private-label items storewide, which is an increase of 900 items versus last year. Each year, the company adds about 900 new private-label items and leverages ExtraCare to encourage trials among cardholders.

What is news, particularly to suppliers, is that a key component of CVS’ private-label program is an entirely new line that the company plans to introduce in February 2011, called Just The Basics — named to clearly communicate its functional, value-priced, smart, simplicity positioning. What is significant is that the new line is not a national-brand-equivalent type execution, but rather, more of a basic entry-point, low-price alternative.

"Now, while many retailers are stuck in the brand-follower mode of the 1980s, we have evolved to a leadership role," Bloom said.

The company also is increasingly turning to "treasure hunt" items and is using its circulars to drive front-end sales. For example, it recently promoted a WiFi-capable Netbook for $99.99 on the front page of its circular. While a Netbook isn’t your traditional drug store product offering, it has proven to be a hit among shoppers. CVS sold $3 million worth of Netbooks in three weeks, and it will be a $15 million item at CVS, the company said.

Then there’s beauty. As the article states, CVS is piloting a mini format of its Healthy Skincare Centers (in 120 stores) and will launch in January an ExtraCare Beauty Club.

Clearly the front end continues to be a significant growth driver for CVS and that will continue to be the case for a long time to come.

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Natural rodent repellant Fresh Cab available at retail

BY Allison Cerra

BISMARCK, N.D. An all-natural rodent repellant continues to gain a stronger retail presence with more than 3 million pouches sold, which come in convenient four-pack boxes.

Earth-Kind’s Fresh Cab, created by gardener and environmentalist Warberg Block, uses ground corn cobs soaked in essential botanical oils and packaged in small biodegradable pouches.

Fresh Cab is sold at 15,000 home, garden, hardware and farm and ranch stores throughout the nation.

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