News

PSE restriction, OTCS in FSAs 
remain focus of legislation

BY Michael Johnsen

Currently there are two overarching legislative issues that either threaten to place greater restrictions on certain over-the-counter medicines or fail to restore access to an OTC benefit that once played a significant role in helping develop interest in the flexible spending account plans available today.


Regarding the cough-cold medicine sold from behind the pharmacy counter, no states embraced a prescription-only mandate on the sale of pseudoephedrine this year, representing a score for the 
OTC industry. As many as 23 states currently implement the industry-funded National Precursor Log Exchange, with six states having passed legislation in their current sessions. NPLEx bills still are very much active in three states — Hawaii, Ohio and New York — according to the Consumer Healthcare Products Association. Hawaii’s NPLEx legislation is waiting for a governor signature; Ohio’s legislation passed its House and now is before the Senate; and New York’s legislation recently came out of the Senate committee. NPLEx legislation also is still alive in California, though that legislation is not expected to come out of the current session.


In 2011, as many as 2 million grams of PSE that exceeded sales restrictions had been blocked by the NPLEx stop-sale system.


Earlier this month, the House of Representatives voted in favor of the Protect Medical Innovation Act of 2012, which would reinstate OTC medicines as eligible expenses under FSAs without the requisite prescription. The bill since has moved to the Senate for consideration.


“[With this bill] we are making it easier for Americans to be in charge of both their health care and their finances,” stated Rep. Tim Huelskamp, R-Kan., who co-sponsored the legislation.


While that industry-
supported bill is being debated on the Hill, the real question lay with the Supreme Court. If the Supreme Court nullifies the Patient Protection and Affordable Care Act in June, then OTCs should become eligible for FSA reimbursement again.

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International boost

BY Michael Johnsen

CARSON, Calif. — The energy shot business in the mass market still is dominated by one player — Living Essentials’ 5-Hour Energy has almost 90% dollar share — but Sato Pharmaceutical, which boasts its Yunker Energy as the No. 1 energy shot in Japan, is looking to challenge that domination with the launch and support behind its Yunker Energy product across the United States. The overall category was up 9.3% to $194.5 million across food, drug and mass (excluding Walmart), according to SymphonyIRI Group data.


In April, Sato made a big splash with Yunker Energy at Sakura-Con, an annual consumer trade show around Japanese anime held in Seattle.

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GNC, VSI are supplement success stories

BY Michael Johnsen

In what may be a bellwether for the dietary supplement industry, stock valuations of the two publicly traded retailers who practically sell nothing but dietary supplements are 
up significantly.


As of late May, GNC was trading up 94.5% as compared with its year-ago valuation of $20.33; Vitamin Shoppe (VSI) was up 22.9% from $40.73.


More and more, these specialty retailers are looking to evolve into the quintessential health-and-wellness destination — and it’s working. “I look at our numbers, and I know we have to be taking market share [from food, drug and mass],” GNC president and CEO Joe Fortunato recently told analysts. “It only makes sense with the industry growth 
where it’s at.”


If GNC is taking market share, then Vitamin Shoppe is hoarding it. Approximately one-sixth the size of GNC in terms of store count, sales at Vitamin Shoppe’s brick-and-click operations already are more than half those at GNC. 


This year, Vitamin Shoppe is test marketing smaller-footprint stores in smaller markets to increase the volume of markets in which that vitamin retailer can operate. GNC, meanwhile, is looking to transform its Gold Card discount program — already boasting more than 5 million members — into a loyalty card program.

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