Russia’s largest Rx chain sells shares to repay debts
MOSCOW Pharmacy Chain 36.6, Russia’s largest pharmacy chain, is selling shares to fund expansion and repay debt in an effort to help ease the pain of the current economic crunch that has hampered retailers’ efforts to finance themselves, according to a local news report.
Citing a company spokeswoman, the report states that the company will sell 85.5 million common shares with the price to be determined by the board if shareholders approve the sale on Jan. 9. Proceeds will be used for purposes “including restructuring of the company’s debt.”
JPMorgan Chase analyst, Elena Jouronova, estimates that the company would need $150 million in “fresh capital” in 2009 to meet debt obligations, according to the report.
On Dec. 2 when the company released its most recent financial results president Jere Calmes said, “We achieved some noteworthy successes over last year in our Q3 results. In the latest reporting period, we have successfully sold a portion of our closed end real estate fund, which improved our Q3 net profit result and reduced our debt. In the retail unit, we were able to deliver a positive EBITDA on the back of a healthy recovery in our gross margin and a significant reduction of SG&A as a percentage of sales. However, the current business environment remains extraordinarily tenuous and operational results are being negatively impacted. The company’s management is working with the board of directors to find solutions for financing the business through these difficult times and will continue to focus on addressing working capital needs and streamlining operations.”
Named after the ideal body temperature in Centigrade for healthy adults and children, 36.6 broke the mold when it introduced the Western-style, open format pharmacy in Russia in 1997. During the Soviet era, pharmacists operated from behind glass and no beauty products were sold in pharmacies.
After six years of building the brand, the company, whose roots technically date back to 1991 when it was a small pharmaceutical wholesale company, made headlines in 2003 when it became the first retail company to do an initial public offering. The IPO raised $14.4 million, money that enabled 36.6 to expand its store base and fund new initiatives.
Today, the company has nearly 1,200 pharmacies in 29 Russian regions and employs more than 11,000 people. Consolidated sales in 2007 were about $872 million.
American Idol judge teams with AHA to promote diabetes awareness
PHILADELPHIA Music industry veteran and TV personality Randy Jackson (American Idol) will be teaming up with the American Heart Association for a second year to help people living with Type 2 diabetes understand the importance of properly managing their disease, and to encourage them to enroll in The Heart of Diabetes campaign on Jan. 8, the American Heart Association announced Tuesday.
Jackson, who lives with type 2 diabetes, is coming to Philadelphia to urge adults in the city with diabetes to get regular physical activity, make healthy food choices and work with their healthcare providers to develop a comprehensive treatment plan.
In addition, local chef Delilah Winder will host a free cooking demonstration to show how lifestyle changes, such as eating a healthy, well-balanced diet, can help individuals improve their management of Type 2 diabetes.
NACDS challenges report on DME rules
ALEXANDRIA, Va. Hitting back against what it argues is inadequate or biased coverage of a health care issue of concern to its members, the National Association of Chain Drug Stores today took the Wall Street Journal to task for a report on federal regulations for providers of durable medical equipment and supplies for Medicare beneficiaries.
The organization swung into action via its NACDS Rapid Response program in response to a recent Wall Street Journal Health Blog post. The posted article, NACDS president and chief executive Steven Anderson asserted today, correctly cited the need to combat Medicare fraud but ignored the harmful impact the new DME regulations would have on pharmacies.
Through the Department of Health & Human Services, the Bush Administration pushed through new rules established by the Centers for Medicare & Medicaid Services, for the sale of DME in retail outlets. Under the new regulations, retailers wishing to participate in the market for durable medical equipment will be required to gain accreditation to sell home health and other health supplies, and to bid in competition with other DME providers to obtain contracts to sell those products. The so-called Competitive Acquisition Program was originally launched in 10 markets as a demonstration project, with delayed plans for a phased national rollout.
NACDS and other pharmacy groups were instrumental in securing that delay through legislation to postpone and reform Medicare’s competitive bidding program for DME. The group reports it is now “engaged with Congress and CMS to ensure that policies intended to safeguard the Medicare program are implemented in a manner that minimizes disruption of care.”
Responding to the WSJ article, Anderson called attention to the importance of preserving patient access to medical equipment and supplies, such as diabetes testing products. The accreditation requirement and the recently issued rule requiring that pharmacy retailers be bonded to retain Medicare enrollment, said Anderson, “are unnecessary regulations imposed on state-licensed pharmacies that could limit patients’ ability to manage their diseases.
“While it is important to stop fraudulent claims and fly-by-night operations, CMS’ new regulations will make it much harder—even prohibitive—for legitimate suppliers to provide DME for patients,” added NACDS’ top executive. “Pharmacies play a crucial role in the management of diabetes and are an essential provider of diabetic supplies and Medicare Part B medications. These regulations will threaten patients’ access to the crucial supplies and equipment to manage their diseases effectively.”