Reporters Notebook


Supplier News

Santé active, the U.S. subsidiary of Laboratories Pierre Fabre, France, has announced it will begin distributing the French toothpaste brand Elgydium in the United States to major drug store chains and independent pharmacies.

Previously available in the United States on a limited basis, Elgydium sold only in select boutique pharmacies. The products hold a 45 percent share in France, according to the company.

The line includes whitening and anticavity toothpastes. Both products are packaged in classic apothecary-style aluminum tubes.

Along with the toothpastes, there are four models of toothbrushes that will be released in the U.S. market: the creation toothbrush, whitening toothbrush, supreme toothbrush and luminous toothbrush. Also in the line is the alcohol-free Elgydium mouthwash.

Procter & Gamble marketing veteran Ted Woehrle has joined Newell Rubber-maid in the newly created role of senior vice president of marketing and brand management.

Woehrle held several pivotal marketing and general management leadership positions in a 24-year career at P&G. Most recently, he was vice president of marketing for North America, where he led the communication planning, media buying and direct marketing efforts for P&G’s $32 billion portfolio of North American brands. In a previous assignment, Woehrle led the development and expansion of P&G’s word-of-mouth marketing group, Tremor.

At Newell Rubbermaid, Woehrle will partner with the company’s global business units to build consumer-inspired new product innovation and brand management capabilities across the organization.

To commemorate the sale of more than 2 million ToothTunes toothbrushes, Hasbro’s chief operating officer Brian Goldner presented of the Black Eyed Peas with a “multi-platinum” award at The International Licensing Show in New York.

The award recognizes the Black Eyed Peas’ “Let’s Get It Started” ToothTunes as the No. 1 selling toothbrush in the line. The toothbrush is from Tiger Electronics, a division of Hasbro.

Launched last fall, ToothTunes features patented Denta-Mandibular Sound Transmission technology that transmits songs and music vibrations from the bristles through the teeth to the inner ear. Users will hear two minutes of music, the length of brushing time recommended by dentists.

The toothbrushes use a microchip that provides music from such artists as Black Eyed Peas, Hilary Duff and KISS. ToothTunes are available at retailers nationwide and retail for $9.99.

The nail and hand treatment line Poshé has developed a nail kit featuring its Food and Drug Administration-registered antimicrobial basecoat, antimicrobial cuticle oil and super-fast drying topcoat.

“Most products on the market only protect from fungus, so Poshé created the FDA-registered antimicrobial products to combat fungus, mold, yeast and bacteria,” stated Lynn Beaurline, chief operating officer of Almell Products, maker of Poshé.

In addition to protecting against infections, the products are free of potentially harmful formaldehyde and toluene. Formaldehyde has been classified as a human carcinogen by the International Agency for Research on Cancer.

The Estee Lauder Cos., a manufacturer and marketer of skin care, makeup, fragrance and hair care products, has agreed to acquire the Ojon Corp., a privately held prestige hair care company based in Canada. Terms of the deal were not disclosed.

Ojon markets and sells products made with ingredients collected by the Tawira, an indigenous community living in the Central American rain forest. Ojon, incorporated in 2003, markets its naturally-derived shampoos, conditioners, styling products and treatments through QVC; specialty retailers, including Sephora, Ulta and Nordstrom; and approximately 300 high-end salons. The Ojon products also are available in limited distribution overseas.

Ojon has earmarked a portion of profits from the sale of Ojon products to help the Tawira preserve its traditional lifestyle and protect and sustain the rain forest.

Founder Denis Simioni will remain as president of Ojon. The Estee Lauder Cos. will appoint a general manager to the brand and plans to keep the company’s existing management team and headquarters in Canada and continue to operate Ojon as a stand-alone business. Ojon is expected to maintain its relationship with its current manufacturer, Originitalia.

Looking to inspire people to grow, cut and donate their hair to make real-hair wigs for women who have lost their hair due to cancer treatments, Academy Award-winner Hilary Swank is participating in Pantene Beautiful Lengths.

The donation will be part of a year-long association between Swank and Pantene’s charitable campaign. She also will star in a Pantene Beautiful Lengths print public service announcement encouraging people to follow her example.

“I have lost multiple family members to cancer and witnessed their struggle firsthand. I’ve never heard of anything quite like Pantene Beautiful Lengths, and I’m proud to be asked to promote the goals of such a unique and heartfelt program,” Swank stated.

Since its launch in July 2006, the campaign has resulted in more than 17,000 ponytail donations overall—a Guinness World Record—and the distribution of 2,000 free, real-hair wigs.

Beauty shoppers who were eager to snap up the sought-after No7 Restore and Renew Serum by U.K. retailer Boots wasted no time in stopping by one CVS store in Manhattan that, on July 18, offered one bottle per customer beginning at 8 a.m.

More than half of the stock was sold within the first 30 minutes, and all 500 tubes were sold by noon.

The CVS store at 630 Lexington Ave. in Manhattan offered the serum for $21.99 per tube, with a limit of one bottle per customer.

Boots has seen such success with the skin-firming and complexion-brightening serum that it has been sold out for weeks.

The serum was expected to be available on and by the end of July, and in Target and select CVS stores in August. Boots is offering a waiting list at, enabling shoppers to be the first to be notified when shipments arrive in-store and online.

The Starmaker skin care line, developed by Anson Williams, a star of the “Happy Days” TV show and a director/producer of numerous television shows, and JoAnna Connell, a makeup artist and Hollywood beauty product developer, will be sold at CVS beginning in August.

CVS will carry three proprietary lines to include micro-pearl resurfacing, Hollywood hands and pearl moisturizing anti-wrinkle mist.

The partners project that the combined total annual retail sales will average $10 million to $15 million.

Starmaker products are in use on several shows, including “Grey’s Anatomy” and “Desperate Housewives.”


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Grocer sings new tune in community involvement


Meijer is taking another step in community relations, to the tune of promoting and selling CDs of local musicians.

The Michigan-based 176-unit grocery chain launched the Outside the Mainstream promotion in February with a solo CD from Josh Davis, a singer from Lansing, Mich., whose Fool Rooster CD was recognized by Performing Songwriter magazine for its lyric.

Each month, the chain is featuring a new performer in its circulars, which are sent weekly to 7 million households in Ohio, Michigan, Illinois, Indiana and Kentucky, according to company vice president of public affairs Stacie Behler. Meijer purchases 1,000 of the artist’s CDs and offers them for sale in all the chain’s stores for $7.49.

“The goal of the program is to bring some of the talent that we find in our own backyards to a wider audience than they can normally reach by themselves,” Behler said. “And by supporting this with a low price and a feature in our circular, hopefully it will lead people to gamble on the purchase of music that is worthy of discovery.”

Meijer, according to Behler, is trying to create regional loyalty to its stores by promoting local talent.

CDs chosen for promotion, according to the chain, must have a UPC and be professionally duplicated. Submitted CDs are sorted according to state and chosen on the basis of whatever state will be featured that month and how different the music is from the previous month.

Featured in April is Michigan-based Potato Moon with its CD “The Life of The Lonely Jones.”


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CVS wins Caremark battles

BY Antoinette Alexander

WOONSOCKET, R.I. —The battle for Caremark Rx has finally come to an end. And, to the dismay of Express Scripts, CVS has emerged the winner, creating a $75 billion pharmacy benefit management powerhouse that is likely to serve as a benchmark for additional mergers within the industry.

“CVS/Caremark will offer end-to-end services, from plan design to prescription fulfillment, as well as the opportunity to improve clinical outcomes, which will result in better control over health care costs for employers and plan providers,” stated Tom Ryan, president and chief executive officer of CVS/Caremark, late last month when the deal closed. “The company will improve the delivery of pharmacy services and health care decision-making, enabling consumers to benefit from unparalleled access, greater convenience and more choice.”

With the close of the transaction—ultimately valued at $27 billion—CVS/Caremark has moved into a strong, competitive position. The combined company will be No. 1 in pharmacy sales, PBM-managed lives, specialty pharmacy sales and retail-based health clinics. It will be No. 2 in mail services.

That adds up to a lot of extra leverage for the retail health care juggernaut with suppliers, as well as insurers and payers.

In terms of synergies, CVS expects to realize between $800 million to $1 billion in revenue synergies in 2008, and significantly more thereafter. The company expects about $500 million in cost savings, largely related to better purchasing.

“We would like to note that every deal that both CVS and Caremark have done historically has yielded synergies significantly in excess of original guidance,” stated Citigroup analyst Deborah Weinswig in a recent research note. “We believe this deal will be no exception.”

Charles Boorady, also of Citigroup, believes that if the company achieves cost savings from the drug-procurement process, it likely will come from a combination of the following: manufacturers accepting the lower price or offering greater rebates, the wholesalers and distributors accepting lower prices and manufacturers bypassing the wholesalers and selling directly to the combined CVS/Caremark entity.

While many industry observers view the merger as a boon for the companies, it undoubtedly will have major implications on the industry, in general, as vertical integration is a new paradigm that—if successful—could clear the way for more mergers moving forward, with Medco and Express Scripts likely being the next targets.

“The fragmentation in the past may be the reason why vertical integration did not work, but the sheer scale of the CVS/Caremark company may be able to make it work,” Boorady said. “The only test will be whether customers buy into the concept or the concerns over the perceived channel conflict will outweigh it.”

Either way, Boorady sees it as a win-win for rival PBMs. “I see Medco and Express Scripts winning either way. If this integration works, they are likely to be the ones that are acquired next. If it doesn’t work then they could stand to gain customers that prefer a standalone [PBM] instead of a vertically integrated model.”

Another issue such a deal brings to the forefront is network restriction. If customers are willing to restrict the retail pharmacy so that employees can get their prescriptions filled at a single chain, or just a few chains in the market, then it will make the synergy from a vertical integration more obvious, according to Boorady.

However, this has been a concern for several years and has yet to materialize.

“I think most employers have concluded, and will continue to conclude, that the sheer hassle factor that you are putting on your employees by making them go to a CVS instead of a Walgreens, or vice versa, isn’t really worth what little savings you can get relative to other things you can do that present less of a hassle to the employee but can save a lot more money,” Boorady said.

However, prior to the deal, CVS Pharmacare controlled a provider network of more than 56,000 retail pharmacies. Meanwhile, Caremark’s network numbered more than 60,000 retail pharmacies, so it is unlikely that the combined company, post-merger, would suddenly pull back the size of its network—particularly, if the end goal is to remain attractive to insurers and payers and competitive with stand-alone PBMs.

According to William Blair & Co. analyst Mark Miller, the combined company is facing its first big test as it expects an announcement on the large Federal Employee Program contract—currently up for negotiation—as early as May. Three years ago, Caremark won this contract from Medco and it is likely that the two PBMs, among others, will bid for this business aggressively.

“While there are many moving parts to these types of negotiations, this will be the first big test for the new CVS/Caremark, and may provide some incremental perspective on the current state of the competitive environment,” Miller stated in a research note.

In related news, CVS/Caremark has announced the members of the company’s board of directors. As previously disclosed, the 14-member board was evenly split among designees from CVS and Caremark.

Former Caremark chairman and chief executive officer Mac Crawford has been elected chairman of the board of the combined company. Ryan will continue to serve as president and chief executive officer.

The following individuals named to the board from CVS are:

Ryan, president and chief executive officer of CVS/Caremark Corp.

David W. Dorman, senior advisor and partner, Warburg Pincus LLC.

Marian L. Heard, president and chief executive officer, Oxen Hill Partners.

William H. Joyce, chairman and chief executive officer, Nalco Co.

Terrence Murray, former chairman and chief executive officer, FleetBoston Financial Corp.

Sheli Z. Rosenberg, former vice chairman, president and chief executive officer, Equity Group Investments LLC.

Richard J. Swift, former chairman, president and chief executive officer, Foster Wheeler Ltd.

The following individuals named to the board from Caremark are:

Mac Crawford, chairman of CVS/Caremark Corp.

Edwin M. Banks, founder, Washington Corner Capital Management LLC.

C. David Brown II, chairman, Broad and Cassel.

Kristen E. Gibney Williams, former executive of Caremark’s Prescription Benefits Management division.

Roger L. Headrick, managing general partner, HMCH Ventures; president and chief executive officer, ProtaTek International

Jean-Pierre Millon, former president and chief executive officer, PCS Health Systems

C.A. Lance Piccolo, chief executive officer of HealthPic Consultants


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Which area of the industry do you think Amazon's entry would shake up the most?