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Reporters: Notebook

BY DSN STAFF

San Ramon, Calif.-based Storus Corp. has unveiled its new Smart Money Clip Lite, a clear, nonmetallic version of its Smart Money Clip. The transparent material allows users to show their IDs without removing them from the clip, and the double-sided design features springs that hold cards and IDs on one side and money on the other.

The Smart Money Clip Lite weighs just 1 ounce and is small enough to slide into any pocket. “We’ve been completely overwhelmed by the response Smart Money Clip Lite has received,” said David Kaminski, vice president of sales at Storus. “Our initial production run was sold out within two weeks on our Storus.com Web site.”

An estimated 90 percent of Americans don’t eat the recommended daily allowance of vegetables each day, but Glad Products is hoping to help change that with its new Microwave Steaming Bags. The newest product in its SimplyCooking line specifically is designed to steam vegetables in a microwave in a safe and easy way.

Consumers just need to fill a bag with pre-washed vegetables, seal the zipper lock on top and follow the timetable on the bag that recommends cooking times for different vegetables. The bags arrived at stores in mid-July at a suggested retail price of $2.99

A survey from Glade Flameless Candles showed that 76 percent of women would be willing to sacrifice their favorite purses or even their cell phones in exchange for a quiet “Me Zone” where they can relax and unwind. The study, conducted in advance of the debut of Glade’s new clean linen and French vanilla flameless candles this summer, found that 30 percent of mothers surveyed identified the bathroom as the only place they can be by themselves, and named pleasant scents (56 percent) and the glow of candles (40 percent) as the things they want most to create ambiance in their “Me Zone.”

“A ‘Me Zone’ is something we fantasize about as we stare at the back end of a grocery cart,” said author Lisa Earle McLeod, author of the book “Finding Grace when you can’t Even Find Clean Underwear.” Glade’s new clean linen and French vanilla flameless candles retail for $9.99 and complement a lineup that already includes such scents as apple cinnamon, rain shower and suddenly spring.

Disney and Target have entered a deal that will give Target exclusive rights to a full line of new Little Einstein merchandise from Disney. The company did not say how long Target would retain the exclusive rights to the line, but said the staggered rollout would start in late summer with apparel and include toys, games, DVDs, books and other products in the Little Einstein lineup. “Little Einstein products have always sold exceptionally well at Target stores, so there seems to be a natural affinity,” said Simon Waters, vice president of global franchise management for infant, toddler and preschool for Disney Consumer Products.

Warner Home Video will release a slice of film history on Oct. 16 when the 80th anniversary edition of “The Jazz Singer” arrives on DVD. The first “talkie” feature film that officially ended the silent era was released in 1927, and is hailed as the one of the most groundbreaking films in history. The three-disc collector’s edition of “The Jazz Singer” will include the film, a full-length documentary called “The Dawn of Sound” and four hours of historic shorts and outtakes from the early days of films with sound in the 1930s. “The Jazz Singer” set will retail for a suggested price of $39.92.

Moonjar announced that its Classic Moonjar Money-box toy and Conversations to Go game have earned top honors from the 2007 Creative Child Awards. The Classic Moonjar Moneybox was honored as toy of the year and Conversations to Go earned the top award as game of the year. The awards are based on Creative Child magazine’s annual studies of new toys and games that rates them on their educational value and creative nurturing. The Moonjar Money-box is a piggy bank with individual compartments, while Conversations to Go is designed to stimulate discussions among family members about life, travel and money.

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Grocer sings new tune in community involvement

BY DSN STAFF

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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