State of the Industry Report p2

Legislative/Regulatory Report p8
Tech Report p 16
Retail Clinic Report p 20
Branded Pharmaceutical Report p 24
Generics Pharmaceutical Report p 29

Drug Store News www.drugstorenews.com August 18, 2008 • 1

 Rx 2.0
THE FUTURE IS NOW
Pharmacy on the verge of a new healthcare paradigm
BY JIM FREDERICK
First, take a moment to celebrate a
hard-won victory. OK, time’s up. Now
comes the really tough part.
After a monumental effort to edu-
cate lawmakers about the value of
community pharmacy and the dangers
the industry faces from new Medicaid
reimbursement rules and other regula-
tory threats, the nation’s pharmacy
leaders won a landmark victory last
month when the Medicare Improve-
ments for Patients and Providers Act of
2008 became law, despite opposition
from the Bush White House.
Chain and independent pharmacy
leaders deserve to pat themselves on
the back. The bill delays imposition of
Medicaid average manufacturer price
reimbursement rules, speeds up
Medicare prescription claim reim-
bursements, postpones competitive-
bidding requirements for the sale of
Medicare Part B durable medical
equipment and encourages doctors to
prescribe electronically.
Coming on the heels of other recent
victories—including the passage earli-
er this year of a military funding bill
that preserves the right of military per-
sonnel and their families to use a retail
pharmacy without penalty for their
prescriptions under the TRICARE pro-
gram—the new Medicare legislation
marked a dramatic turnaround for a
Drug retailers move beyond dispensing to a broader business model
It isn’t your father’s pharmacy any-
more.
Retail pharmacy operators in all
channels have grappled for two
decades with the relentless decline of
profit margins at the hands of public
and private managed care plans and
the cost-cutting imperatives of health
care. They’ve seen prescription drug
dispensing—the traditional core of the
community pharmacy industry—turn
increasingly into a low-margin com-
modity business amid rampant com-
petition and rising generic utilization.
And they’ve seen mail-order pharma-
cies, pharmacy benefit managers and
specialty pharmacy operators take an
increasing chunk of the business by
catering to millions of health-plan
members, the homebound elderly and
patients with special needs.
These forces have triggered a funda-
Drug Store
Drug News
Store News
beleaguered pharmacy industry and,
perhaps, the dawn of a new era.
Other recent developments, like the
merger of e-prescribing solutions
providers SureScripts and RxHub, also
could hasten the advance of paperless
prescribing and health information
technology—both pluses for the busi-
ness of community pharmacy. And, in
another positive development, retail
pharmacies appeared to digest new
requirements for tamper-proof pre-
scription pads with little disruption to
daily routines.
Nevertheless, there’s not much
time for celebration. New challenges
are waiting.
Perhaps the most fundamental of
those challenges is the nagging realiza-
tion among pharmacy leaders that the
profession—and the industry it
drives—is at an epic crossroads. Unless
community pharmacy can break away
from the stranglehold of diminishing
prescription-dispensing margins and
establish a new benchmark for patient
care, with a standardized reimburse-
ment model for such pharmacy servic-
es as medication therapy management
and clinical interventions, it may face a
bleak future of diminishing returns.
“We must promote an accurate per-
ception of this industry that promotes
the value of pharmacy, our impor-
tance to the local community and the
CONTINUED ON PAGE 110 33
mental reordering of the community
pharmacy business and a high-priority
search among pharmacy chains and
independents for a new, broader mod-
el for community pharmacy practice.
Proponents of this new model—
beginning with pioneering chains like
Kerr Drug in North Carolina and
extending now to virtually every retail
company dispensing prescriptions—
are in a desperate scramble to build a
foundation for the future of pharmacy
by developing—or acquiring—new
sources of revenue and profitability.
They’re adding new clinical services,
more programs in patient education
and disease management, and more
credentialing programs in diabetes ed-
ucation and other areas. They’re build-
ing closer ties to the PBMs that repre-
sent most patients and to local physi-
cian groups and healthcare agencies.
www.drugstorenews.com
www.drugstorenews.com
STATE OF THE
INDUSTRY REPORT
The U.S. market exceeded 3.8 billion prescriptions
in 2007, but growth is slowing
MAT Dec 2007
Total % market %
Channels Rxs* share growth
Retail 3,515 92.2% 2.8%
Chain 2,012 52.8 3.4
Independents 783 20.6 2.3
Mail service 242 6.4 4.2
Food stores 478 12.5 0.5
Non-retail channels 295 7.8 2.9
LTC 295 7.8 2.9
Total 3,811 100.0% 2.8%
*In millions Source: IMS Health, National Prescription Audit, December 2007
U.S. prescription growth slowing
Source: IMS Health, National Prescription Audit Plus, Nov 2007
Some are ramping up their own the value of our efforts through tangi-
mail-order capabilities and PBMs. ble, measurable outcomes,” said Bruce
Others are moving into the rarified Roberts, National Community Phar-
arena of specialty pharmacy, offering macists Association executive vice
home infusion and very expensive president and chief executive officer.
medications to treat high-risk patients Buoyed by the success of collabora-
for transplant rejection, AIDS/HIV, tive-practice models like the Asheville
infertility, cancer and other conditions. Project that clearly demonstrate the
At the heart of these efforts is one cost-saving benefits of patient educa-
overriding imperative. Pharmacists, tion and disease management by phar-
say industry advocates, must establish macists to health-plan payers, thou-
themselves as the crucial link between sands of chain and independent phar-
physicians and patients. They must macies are now participating in dozens
gain recognition—and reimburse- of programs nationwide to bring cost-
ment—as community health profes- effective care and preventive health
sionals, not just as dispensers of drugs programs to patients. The list includes
and basic counseling. publicly and privately funded out-
“If pharmacists want to be recog- reach programs for diabetics, screening
nized for the value we bring to health programs for a wide variety of condi-
care … we’d better find a way to en- tions, smoking-cessation efforts, a
gage pharmacists in a consistent way growing number of large-scale med-
and to be able to clearly demonstrate CONTINUED ON PAGE 60 7
August 18,18,
August 2008
2008 •2
• 51
 Rx 2.0 STATE OF THE
INDUSTRY REPORT
THE FUTURE IS NOW

Mass Rx outlook: Wal-Mart eyes bigger role in healthcare

BY MIKE TROY

Throughout most of its decades-

long involvement in the pharmacy
business, Wal-Mart was content with
the solid growth that resulted from
rapid store expansion and a hard-
fought reputation for low prices.
Not anymore. The formula for
market-share growth that worked so
well in the past has experienced a
major overhaul in the past few years,
and the future promises even more
changes. Wal-Mart is intent on
becoming a larger force in health
care, and as the nation’s largest
employer and one of the highest-vol-
ume pharmacy retailers, it has
stepped up in recent years.
To date, the company has relied on
its familiar modus operandi of seek-
ing efficiencies as a means to reduce
expenses and then lower prices to Wal-Mart, which strengthened its pharmacy business with its $4 generics program, recently
increase volume. That was the strat- expanded the initiative to include $4 OTC products and a 90-day supply of generics for $10.
egy at the heart of the $4 generics
program introduced in fall 2006 and seemed unusual at the time, given pricing program was launched, it former Democratic strategist whose
its subsequent expansion. However, his background in the U.S. Navy, quickly became a hit with customers involvement in the 2000 and 2004
beyond pricing initiatives, the other state government and restaurant and was widely replicated by com- presidential campaigns gave Wal-
side of Wal-Mart’s efforts to become industry, it may have been what petitors. Mart unique insight into its reputa-
a healthcare player has centered on Wal-Mart was looking for. It was It also helped that in July 2006, tion challenges and the important
technology, supply chain and forg- Simon who came up with the unusu- Wal-Mart hired Leslie Dach as exec- role corporate communications
ing alliances with other companies al idea of offering a large group of utive vice president of corporate could play when properly integrat-
that recognize that improving effi- generic drugs at a single price point. affairs and government relations. ed into merchandising and market-
ciency is the key to reducing costs. The concept hadn’t been tried The Harvard MBA was more than a ing strategies. The company did
However, to understand where before, and when the $4 generics public relations executive. He was a CONTINUED ON PAGE 544
Wal-Mart is headed next requires
understanding the motivation
behind the numerous steps the com-
pany has taken in recent years. ‘Big-boxers’ go toe-to-toe on $4 generics
Health care in general, and pharma- It’s been relatively quiet on the suade the company from going toe- climate to increase the focus on the
cy especially, began to emerge as mass market pharmacy front of late, to-toe on price. That was the case latter half of its, “Expect more, pay
priorities for the company in late but don’t expect the silence to last when Wal-Mart launched $4 gener- less,” brand promise and by more
2005 when Wal-Mart unveiled a long. Since Wal-Mart introduced its ics two years ago, and again more aggressively featuring those cate-
three-year transformation plan for $4 generic pricing program nearly recently when the flat rate pricing gories that generate shopper traffic.
its U.S. stores division, where deteri- two years ago, and expanded it earli- philosophy was applied to a 90-day “Our pharmacy business contin-
orating returns were a drain on the er this year to include a 90-day sup- supply for $10 and a 1,000 OTC ues to be very healthy,” Target pres-
company’s stock price. Senior execu- ply of many of the same drugs for products, predominantly private ident and chief executive officer
tives were placed in new roles, and $10, the competitive landscape has brands and vitamins. Target quick- Gregg Steinhafel, said earlier this
Eduardo Castro-Wright, the former been in turmoil. Other mass pharma- ly lowered its prices on comparable year when the company announced
president and chief executive officer cy retailers either quickly matched items to remain competitive. its first quarter results. “It has
of Wal-Mart de Mexico, was tapped Wal-Mart’s efforts, developed alter- “We understand the economic grown at double-digit, same-store
to lead the stores division. He quick- native value-pricing schemes and challenges our guests are facing sales for a number of years, and this
ly moved to restructure the entire service offerings or pursued both. and remain committed, as always, year is no exception.”
division and its operations, mer- In the case of Target, which now to meeting their health and well- Kmart, although now consider-
chandising and marketing organiza- operates 1,648 stores nationwide, ness needs at a great value,” said ably smaller than Wal-Mart and
tions. One key move involved the roughly 1,500 of which contain a Kathee Tesija, Target’s executive Target with roughly 1,100 pharma-
March 2006 appointment of Bill pharmacy, the response has been vice president of merchandising. cies, nonetheless could be consid-
Simon, an executive with no prior swift. Although it operates roughly The company calls out its value ered one of the more innovative
pharmacy experience, to the posi- half the number of stores and num- pricing message on red endcap signs operators since it launched a flat
tion of executive vice president of ber of pharmacies as Wal-Mart, its near the pharmacy as part of an over- rate generic drug pricing program in
professional services and new-busi- relative lack of scale did not dis- all strategy in the current economic CONTINUED ON PAGE 58 6
ness development. If Simon’s hiring

52 Store
Drug • August 18, 2008
News www.drugstorenews.com
www.drugstorenews.com Drug18,
August Store News
2008 • 3
 Rx 2.0 STATE OF THE
INDUSTRY REPORT
THE FUTURE IS NOW

Supermarket Rx outlook: Leveraging food-drug connection

BY DOUG DESJARDINS kets increased in 2007, but just slightly. It esti-
mated that median weekly prescription sales
Supermarket-drug combo stores are always rose to $46,000 last year from $42,000 in 2006
looking for ways to make the two businesses and that supermarket pharmacies dispensed
mesh seamlessly, and Supervalu has found a an average of 126 prescriptions a day, com-
way to do so with a new program launched last pared with 125 in 2006.
month at its Jewel-Osco stores in the Midwest. Although prescription sales as a percent-
The Prescription Plus plan, now offered at age of total sales dipped slightly to 9.4 per-
184 Jewel-Osco stores in Illinois, Indiana and cent from 9.5 percent in 2006, they were still
Iowa, gives customers a 10 percent discount well above the 9.0 percent reported in 2005.
coupon for every five prescriptions they fill at That trend was linked to the influx of gener-
an in-store pharmacy. The coupons can be ics, which grabbed 63.5 percent of the mar-
redeemed at the checkout stand for purchases ket in 2007, compared with just 58 percent
made in the supermarket. in 2006.
“Prescription Plus is Jewel-Osco pharmacy’s “Pharmacies are strategically essential to
way of responding to tough economic challenges food retailers,” said Catherine Polley, FMI vice
many of our customers face today,” said Tom president of pharmacy services. “The health
Rousonelos, vice president of Osco pharmacy and wellness initiatives that many supermar-
operations. “Jewel-Osco aims to offer the most kets emphasize are anchored in the pharmacy.”
Supervalu is testing a new format with pharmacies at the front of the store like
value-added pharmacy experience available.” this one at an Albertson’s/Sav-on in downtown San Diego. Kroger and Safeway are two supermarket
The plan also will count transferred prescrip- chains using their pharmacies as centers for
tions and refills toward the five prescriptions need- The Prescription Plus program is the first of its health management. They’re among the 48.1 per-
ed for the coupon. In addition to prescriptions, the kind to offer discounts on food and other prod- cent of food retailers, according to the FMI study,
purchase of other services offered at Jewel-Osco ucts in direct return for pharmacy patronage. that offer health seminars, disease management
pharmacies, including immunizations and screen- And with sales flattening, it’s something other programs and health-focused shelf tags in stores.
ings, will apply to Prescription Plus discounts. food-drug retailers will probably copy now that “That’s what makes pharmacies in supermar-
Supervalu is also testing a new store format that things like $4 generics and walk-in clinics have kets so unique,” said Polley. “In addition to writ-
places pharmacies near the front entrance rather become commonplace. ing prescriptions, the pharmacist has become a
than at the back of stores. The format is being used According to the “Supermarket Pharmacy sort of health manager in helping customers
at several Jewel-Osco stores in the Chicago area Trends 2008” study released in July by the Food maneuver through stores and choose the foods
and in Albertsons/Sav-on stores in California. Marketing Institute, pharmacy sales at supermar- and other products that are right for them.”

Mass Rx ensure that all Americans have high-quality,

CONTINUED FROM PAGE 352
exactly that with the launch of the $4 program
and reaped tremendously favorable publicity as
a company that was doing something about the
high cost of health care.
The experience gave Wal-Mart a taste of the dif-
ference its pursuit of healthcare initiatives could
have on its bottom line and its reputation, and
more actions quickly followed. In January 2007,
Simon was named chief operating officer of Wal-
Mart’s $240 billion stores division, clearing the
way for the company to make another unusual
personnel choice. In August 2007, Wal-Mart
named Dr. John Agwunobi, the former assistant
secretary for health with the Department of
Health and Human Services, president of its pro-
fessional services division with oversight of Wal-
Mart’s health and wellness efforts involving phar-
macies, vision centers and in-store clinics.
Agwunobi arrived at Wal-Mart shortly after a
flurry of related healthcare activities, all of which
enabled the company to play a proactive role in
shaping certain aspects of the nation’s healthcare
future. In late 2006, Wal-Mart became involved
with an electronic medical records initiative called
Dossia that also included several other major cor-
porations and aimed to leverage their collective
In his first several weeks on the job as president of Wal-Mart’s profes-
sional services division, Dr. John Agwunobi helped introduce the com-
pany’s $4 OTC program.
information-technology expertise to build a
framework for secure and portable electronic
medical records. Wal-Mart has said it will provide
its associates and their families, including retirees,
with personal, private and portable electronic
health records by the end of 2010.
In February 2007, Wal-Mart became an inaugu-
ral member of the group Better Health Care
Together, which includes AT&T, the Howard
Baker Jr. Center for Public Policy, the Center for
American Progress, the Committee for Economic
Development, the Communications Workers of
America, Intel, Kelly Services and one of the
retailer’s harshest critics, the Service Employees
International Union. The organization wants to
affordable and accessible health care by 2012.
The following month, Wal-Mart and Blue Cross
Blue Shield of Arkansas, Illinois and Alabama
each contributed $1 million to establish the Center
for Innovation in Healthcare Logistics at the
University of Arkansas. Plans call for the center to
conduct research into how technology can be
used and how information can be better shared
throughout the system. Then in April, Wal-Mart
said it would open 400 in-store clinics during the
next several years, and suggested it would even-
tually operate as many as 2,000 clinics over the
next five to seven years.
In fall 2007, Wal-Mart launched its “Save money.
Live better,” advertising campaign and has since
featured pharmacy as an example to illustrate the
brand promise. More recently, the company revis-
ited its $4 generics program to introduce $4 OTC
products and a three-month supply of generics for
$10. Along the way, as the company announced
quarterly financial results and saw its share price
significantly outperform the broader market dur-
ing the fourth quarter of last year and through the
first half of this year, much credit has been given to
the health and wellness businesses.
So where does the company go from here?
Involvement in such organizations as Dossia, Better
CONTINUED ON PAGE 56 5

54 •Store
Drug August 18, 2008
News www.drugstorenews.com
www.drugstorenews.com Drug18,
August Store News
2008 • 4
 Rx 2.0 STATE OF THE
INDUSTRY REPORT
THE FUTURE IS NOW

Mass Rx seat at the table in a way it has

never had before. And even-
CONTINUED FROM PAGE 544 tually, those organizations are
Health Care Together and the likely to produce important
Center for Healthcare results and recommendations
Logistics gives Wal-Mart a that could shape national pol-
icy by yielding recommenda-
tions that accelerate the adop-
tion of efficiency measures,
such as e-prescribing and
electronic medical records.
More immediately, though,
Wal-Mart’s bigger opportuni-
ties appear to be in the accel-
erated rollout of in-store clin-
ics, the creation of a PBM-
type organization that works
with corporations on ways to
reduce costs associated with
employees’ prescription drug
use and perhaps additional
pricing initiatives. Wal-Mart
historically uses price roll-
backs on categories of mer-
chandise throughout its
stores as a means to demon-
strate value, so it is conceiv-
able that at some point a
select group of existing $4
generic products could be
offered at a lower, single-digit
price point, thereby enabling
the retailer to reignite con-
sumer and media interest in
its pharmacy offering.
Wal-Mart’s biggest oppor-
tunity in pharmacy, however,
is simply to convert a larger
percentage of people who are
already shopping its stores to
pharmacy customers. The last
time Wal-Mart disclosed its

Wal-Mart’s biggest
opportunity in
pharmacy is simply
to convert a larger
percentage of
people who are
already shopping its
stores to pharmacy
Come November 15, your customers will look to you for guidance in selecting a Medicare Part D
plan that best Àts their needs. What tools do you have to ensure stellar customer service while customers.
avoiding lost productivity in your pharmacies?
conversion rate, the figure
OnFormulary, the online formulary reference tool was 17 percent. The company
has since said the number is
Click into OnFormulary to look up current, comprehensive Medicare Part D coverage higher, but hasn’t offered a
information and generate personalized printable plan comparison reports, including your specific figure. However, even
company logo and location. if that number has doubled,
• Decrease drug costs, coverage confusion and wait times for your customers the majority of Wal-Mart’s
customers still leave the store
• Gain a competitive edge with staying power; grow your market share and loyalty among
to have their prescriptions
seniors by exceeding their expectations for service
filled elsewhere.
• Maintain workÁow and productivity in your pharmacies This issue of conversion will
• Be ready by November 15! No programming or training is required take on increased importance
for the company over the next
• Brought to you by Gold Standard, the providers of Clinical Pharmacology several years, as the easy mar-
ket share gains of the past no
longer exist. Wal-Mart’s rate of
domestic store expansion has
For a free demonstration of OnFormulary, call 800-375-0943 slowed and will slow further
an Elsevier company or email sales@goldstandard.com. Visit on-formulary.com as increased resources are de-
ployed overseas and cash is
used for dividends and share
repurchase activity.

56 Store
Drug News
• August 18, 2008 www.drugstorenews.com
www.drugstorenews.com August
Drug18, 2008
Store •
News 5
 Rx 2.0 STATE OF THE
INDUSTRY REPORT
THE FUTURE IS NOW

‘Big-boxers’
3
CONTINUED FROM PAGE 52
May 2006 involving a 90-day
supply for $15. Wal-Mart
launched its $4 program in
September 2006. Kmart
matched that program, but it
also became more aggressive
with its 90-day program,
which was expanded last
summer to include 300 items
at $15. Wal-Mart launched its
90-day, $10 program earlier
more than 500 products.
“By expanding the Kmart
this year, and Kmart respond- pharmacy generic prescrip-
ed by lowering its price and tion drug savings program,
also expanding the list of eligi- we want to help moms who,
ble medications to include by and large, are making
• Va l i d a t e s t h a t c o r r e c t
medication is dispensed.
• Easy to clean and maintain
• Identifies foreign matter
and broken pills.
• Prevents cross-contamination
with Penicillin and Sulfa trays.
• Reduces time to perform
physical inventory by 50%
most of the family’s health-
care decisions, save money
and do their best to protect
their family’s health,” said
Mark Doerr, vice president of
Kmart pharmacy.
In addition, it is conceivable
that Wal-Mart got its idea for
flat-rate pricing on OTC prod-
ucts from Kmart, since the
company earlier this year cre-
ated a program that allows
customers who have a pre-
scription filled to buy one of
Kmart’s American Fare pri-
vate-label OTC items for $1.
The company also has an on-
time guarantee, which pro-
vides customers a $20 gift card
if a prescription isn’t ready
when promised.
For other mass-market
retailers, matching Wal-Mart’s
$4 and $10 generic drug pro-
grams wasn’t good enough.
Meijer, for example, went the
route of offering free antibiotic
prescriptions in October 2006
in a move clearly targeted at
families with young kids.
Now that concept has been
extended to prenatal vitamins.
“Just as our free antibiotic
program was designed to help
our customers get healthy
during these tough economic
times, offering free prenatal vi-

Speed and Accuracy

tamins will help our custom-
Unparalleled ers stay healthy during a very
important time in their lives,”
said Nat Love, vice president
of Meijer’s drug stores.
The program was launched
June 1 and comes on the heels
of the company filling more
than 2 million free antibiotic
prescriptions, which it said
has saved customers more
than $33 million.
Now you have a choice. For its part, ShopKo, has
focused on new formats, last
month opening two new
The Eyecon is the latest in prescription dispensing ShopKo Express Rx stores
near Appleton, Wis. It now
technology. Counts tablets and capsules in less than operates five of the small-for-
200 milliseconds with field-tested 100% accuracy. mat stores—a sixth is slated to
open this fall in Green Bay.
Visit www.EyeconVPC.com to learn more. ShopKo operates a total of 133
conventional discount stores.
“ShopKo’s historical roots
Toll Free: 866.260.6540 EMail: gsesales@spx.com are in providing exceptional
SPX GSE 1525 Fairlane Circle Allen Park, Michigan USA 48101 pharmacy services to our cus-
AN SPX BRAND tomers,” said Mike Bettiga,
executive vice president of
retail health. “We know this
business very well.”

58 Store
Drug 18, 2008
News
• August www.drugstorenews.com
www.drugstorenews.com August
Drug18, 2008
Store •
News 6
 Rx 2.0 STATE OF THE
INDUSTRY REPORT
THE FUTURE IS NOW

Drug retailers treatments of patients with

CONTINUED FROM PAGE 512
ication therapy management
pilot projects and outcomes
studies for pharmacy-based
asthma, diabetes and other
conditions.
As they work to broaden
the scope of pharmacy prac-
tice and their own healthcare
capabilities, some pharmacy
chains also are embracing a
new, more integrated ap-
proach to the managed care
industry—an industry that
has had a profound impact on
pharmacy retailing over the
past two decades. It’s a ques-
tion of leverage.
CVS essentially built a new
model for retail pharmacy
with the purchase last year of
PBM giant Caremark. The
merger of Caremark with
CVS’ own managed care
operation, PharmaCare, cre-
ated the industry’s largest
PBM and altered, in some
ways yet to be clearly under-
stood, the balance of power
both within the managed care
industry and between PBMs

Vi A h #
and retail pharmacy.

si C 14
Bo
N
tu D 0
If the merger of CVS and

ot
Caremark proves to be a com-

s S 4
at
plete success, it will mark the
integration of two huge mar-
ket forces in pharmacy: the
reach and marketing power of
thousands of drug store out-
lets and detailed patient
records with the network
We help you move in the right direction. capabilities and employer
health plan relationships built
by Caremark.
The result could be a phar-
macy delivery behemoth
that is greater than the sum
of its parts.
The full impact of that
merger isn’t yet known. “The
[CVS Caremark] operating
Central Reporting model is not yet proven, but
with every passing quarter,
we are moving closer to its
acceptance, by payers, com-
petitors and investors alike, as
a viable alternative to the pure
play approach,” noted John
Heinbockel, Goldman Sachs
retail analyst.
QS/1® makes managing multiple locations easier and more pro¿table. With The vertically integrated
true data warehousing, you have the Àexibility to track, analyze and report approach to PBM and retail
on the latest store data however you choose: individually, in groups or pharmacy marketing has won
organization-wide. Then, you can make store-level changes from a central over some other converts on
Wall Street, too. Among them
location, even while the pharmacy is open. QS/1 helps you eliminate the
are Citi Investment Research
inef¿ciencies of managing multiple locations so you can keep your business analyst Deborah Weinswig.
moving in the right direction. “We believe CVS Care-
mark’s scale has been allow-
Our business is helping your business. ing the company to compete
more effectively on price and
also gain prescriptions at retail
as it steers customers into its
stores,” Weinswig noted in a
Learn how QS/1 helps pharmacies like yours at www.chainef¿ciency.qs1.com today. recent report. “It will likely be
difficult for other large chain
drug stores and PBMs to com-
pete without merging.”
However, she added, CVS’
chain and independent com-
petitors “may be able to con-
tractually mimic what CVS is
1-800-231-7776 doing by driving traffic to the
www.qs1.com
stores by allowing customers
© 2008, J M SMITH CORPORATION. QS/1 is a registered trademark of the J M Smith Corporation.
to pick up drugs at retail,
offering rebates at retail to
CONTINUED ON PAGE 110 33

60 •Store
Drug 18, 2008
News
August www.drugstorenews.com
www.drugstorenews.com August
Drug18, 2008
Store •
News 7
7
 Rx 2.0 LEGISLATIVE/
REGULATORY REPORT
THE FUTURE IS NOW

New Medicare overhaul gives industry breathing room

BY JIM FREDERICK
National Association of Chain Drug Stores
president and chief executive officer Steve
Anderson called it “a watershed day for pharma-
cies and patients.”
Bruce Roberts, executive vice president and chief
executive officer of the National Community
Pharmacists Association, termed it “probably the
biggest win pharmacy has ever had.”
To John Gans, executive vice president and chief
executive officer of the American Pharmacists
Association, passage of H.R. 6331 will “better
ensure patient access to pharmacist services and to
vital medications.”
All three pharmacy leaders, and many others in
chain and independent settings nationwide, are
basking in the passage of the Medicare
Improvements for Patients and Providers Act of
2008. The bill, opposed by the Bush White House,
became law in mid-July when both houses of
Congress voted overwhelmingly to override the
president’s veto.
Congress’ support for the Medicare overhaul
bill was a stunning victory for community phar-
macy. For years, the industry has fought to win
the ear of lawmakers and obtain legislative relief
from the incessant rounds of prescription pay-
ment reductions to pharmacies at the hands of
public and private healthcare plans.
“By enacting not one, but four top pharmacy
priorities, Congress has demonstrated that it
understands the value of patient-pharmacy rela-
tionships and the importance of maintaining
access to medications and pharmacy services,”
Anderson said after the override.
The most critical pro-pharmacy provision of H.R.
6331, he noted, “is one that delays implementation of
drastic Medicaid pharmacy reimbursement cuts
until September 2009.”
That provision delays a controversial plan by the
Centers for Medicare and Medicaid Services to
shift to a new reimbursement policy for generic
drugs dispensed under Medicaid. Under the new
plan, pharmacies would only be
paid based on an average manu-
facturer price, formula for gener-
ics—a reimbursement model that
would severely undercut pharma-
cy profitability and force many
operators to dispense generics to
low-income patients at a loss,
pharmacy leaders asserted.
The postponement of AMP isn’t
a final victory for pharmacy, but it
does give the industry time to
lobby for a permanent fix, and to
work with a new presidential
administration on a more equitable
Medicaid payment plan for gener- The Medicare Improvements Act is a strong demonstration that Congress “understands the
ics. And while the postponement is value of patient-pharmacy relations,” NACDS chief executive officer Steve Anderson said.
in effect, NACDS estimated, retail
pharmacies will save a total of $5.5 million a day in understand the program and that there are a suffi-
payment cuts. cient number of suppliers to ensure that access to
“Without legislation to overhaul the AMP formu- durable medical equipment, such as diabetes sup-
la, pharmacies will face devastating cuts,” NACDS plies, is not disrupted.”
said. “As a result, 11,000 pharmacies could close. H.R. 6331 also provided financial incentives to
Because this is a temporary delay, Congress must spur the adoption by physicians of electronic pre-
now seize the opportunity to pass a permanent fix scribing for Medicare and forestalls reimbursement
for the AMP formula.” cuts to physicians for services to Medicare patients.
Among the bill’s other key provisions is some- Passage of the Medicare overhaul bill “didn’t hap-
thing independent pharmacists have fought for since pen by chance,” Roberts said. “Members of Congress
the rollout of the Medicare Part D drug coverage didn’t just wake up one day and say, ‘You know
plan in January 2006: a prompt pay rule to force pre- what? We’re going to support pharmacy now.’ Every
scription drug plans to speed up payment of healthcare player in the equation was in that bill, and
Medicare prescription claims. Under the new law, we’re one of the very few that made it to the end with
PDPs will have to turn around prescription claims every piece of our legislation in that bill.”
within 14 days—easing the cash flow crunch that has Among critical industry communications efforts,
put some smaller pharmacy operators under severe earlier this year, NACDS targeted Beltway insiders,
financial pressure. including lawmakers, policy advisers, White House
Other elements of the bill also have far-reaching officials and the media with a special Capitol-area ad
and immediate effects on retail pharmacy. The new blitz. The campaign, which focused on the valuable
law postpones for 18 months the rollout of round one role community pharmacy plays in the American
of the new competitive bidding requirement for healthcare system, featured the tagline, “Pharmacies.
durable medical equipment and other health sup- The face of neighborhood healthcare,” and aimed to
plies sold by pharmacies under Medicare Part B. The influence the debate on such matters as the shift to
delay, noted NACDS, “will provide the time neces- AMP-based pricing and other issues critical to the
sary to ensure that Medicare beneficiaries fully future of the industry.

Differences in drug store regulations by state create rifts, holdups

BY ALARIC DEARMENT
NEW YORK — Any retail pharmacy in the United States
must traverse a rugged landscape of legal, regulato-
ry and political obstacles to do its business.
But challenges at the federal level are only part of
the story. Drug stores must also contend with similar
challenges in 50 different states. Following is a look
at the five most pressing state-level challenges:
No. 1: Budget crunch
Key states: New York, Florida, Rhode Island, New
Jersey, Mississippi, Illinois, Minnesota and others
“It seems we are always having concerns with
state budget issues,” said Kevin Nicholson, vice pres-
Drug
DrugStore News
Store News
ident of pharmacy regulatory affairs for the National
Association of Chain Drug Stores.
California recently instituted a 10 percent cut in
reimbursements to healthcare professionals through
the state’s Medicaid program, known locally as
Medi-Cal. A group of healthcare providers won a
court injunction against the cuts in a court of appeals
in mid-July, but a Los Angeles Superior Court threw
it out, determining that the federal government
should address the matter.
No. 2: Medicaid cuts
Key states: Arkansas, Louisiana, South Carolina,
Texas, Maine, Maryland, Michigan, Nebraska,
Virginia and Washington
www.drugstorenews.com
www.drugstorenews.com
California isn’t the only state that has had to
cut Medicaid reimbursements. Several states
have had to do the same to comply with the
Deficit Reduction Act of 2005.
NACDS and the National Community
Pharmacists Association filed a lawsuit last year
over the average manufacturer’s price rule, which
cuts reimbursements to pharmacies serving
Medicaid recipients. The Centers for Medicare and
Medicaid Services has estimated that the cuts will
reduce reimbursements to community pharmacies
by more than $8 billion over five years.
NACDS also released a report in June which said
that up to 15 percent of pharmacies in New
CONTINUED ON PAGE 66 10
August
August 18,18, 2008
2008 •8
• 63
 Rx 2.0
THE FUTURE IS NOW
DME bidding rule delayed, but Part B still faces pressure
BY JIM FREDERICK
The Centers for Medicare
and Medicaid Services and
pharmacy retailers have
wrangled for more than a year
over a plan by CMS to require
retailers to submit to a com-
petitive bidding process for
the right to sell or distribute
durable medical equipment
and other health supplies
under Medicare Part B. But
with Congress as a newfound
ally, industry leaders have
won a key round in that fight.
At issue is a new program
from CMS, developed in
response to new cost-cutting
rules in the Medicare
Prescription Drug, Improv-
ement, and Modernization
Act of 2003. Under the new
rules, retailers wishing to
participate in the Medicare
Part B program for durable
medical equipment, pro-
sthetics, orthotics and supplies
would have to bid for a
provider contract against
other suppliers.
The so-called Compet-
itive Acquisition Program
was launched in 10 markets
as a demonstration project.
But passage last month of
the landmark Medicare Im-
provements for Patients
and Providers Act delayed
plans for a phased national
rollout for 18 months, giv-
ing pharmacy retailers
some much-needed breath-
ing room in their fight to
It’s About Staying Negotiable.
Ranked Number One In Building Customer Relationships.1
1Based on a survey by Retail Pharmacy Management, 2006.
64 •Store
Drug 18, 2008
News
August
overturn the requirement.
Pharmacy operators can
credit their own massive lob-
bying efforts for the victory in
Congress, which was sealed
with a decisive vote in both
houses to override President
Bush’s veto of the Medicare
bill. Over the next two or
three years, community phar-
macies may yet be forced to
submit to a bidding process to
sell DMEPOS to Medicare
beneficiaries. But the 18-
month moratorium gives the
industry time to retool its lob-
bying efforts and work with
CMS to alter the plan.
Laurence Wilson, director of
the chronic care policy group
at the Department of Health
and Human Services, testified
before a House subcommittee
earlier this year about the ben-
efits competitive bidding
would bring to Medicare and
the U.S. Treasury. The new
program, he said, “will reduce
beneficiary out-of-pocket
costs, improve the accuracy
of Medicare’s DMEPOS
payments, help combat sup-
plier fraud, ensure benefici-
ary access to high quality
DMEPOS items and servic-
es, and save taxpayers bil-
lions of dollars.”
Pharmacy leaders don’t dis-
pute the need to save costs,
but they fear the competitive-
bidding mandate would put
them at a critical disadvantage
against large-scale DME sup-
pliers, and make participating
LEGISLATIVE/
REGULATORY REPORT
Retail pharmacy’s lobbying efforts resulted in a major victory recently when Congress
delayed for 18 months a phased-in national rollout of the competitive-bidding pro-
gram for retailers to sell durable medical equipment in the Medicare Part B program.
Pharmacy leaders don’t dispute the
need to save costs, but they fear the
competitive-bidding mandate would …
make participating in the Part B pro-
gram so cost-prohibitive it would force
them out of the DME and home health
supplies business altogether.
in the Part B program so cost-
prohibitive it would force
them out of the DME and
health supplies business alto-
gether. And if glucose test
strips and other basic diabetic
First In Service Because
We Put Service First SM
For more information, visit: www.watson.com
© 2008 Watson Pharma, Inc., Morristown, NJ 07962
www.drugstorenews.com
www.drugstorenews.com
supplies were included in the
new bidding requirements—
as was originally proposed—
the impact could be devastat-
ing, they asserted.
Their reasons for trepidation
04334 July 2008
are clear enough: a competi-
tive bidding program could
force them into an administra-
tive and contractual tangle,
and could freeze many phar-
macy providers out of the mar-
ket for several key categories
of health supplies they already
sell in their stores.
Bruce Roberts, executive
vice president and chief exec-
utive officer of the National
Community Pharmacists
Association, has dubbed the
competitive bidding program
“flawed” and “unworkable”
because it would impose too
many hurdles on community
pharmacies trying to compete
in the market for DME and
other supplies.
Retailers also are con-
cerned about the possibility
that diabetic supplies could
be added back onto the list of
products under the bidding
requirement if and when the
new rules do go into effect.
Last year, CMS handed retail
pharmacies a partial victory
by exempting them from hav-
ing to bid for the ability to
deliver diabetes supplies. The
agency also ruled that dia-
betes drugs sold at retail
could continue to be reim-
bursed based on the standard
Medicare fee schedule, rather
than at the lowest-price bid.
In a subsequent develop-
ment, however, some congres-
sional lawmakers indicated
that they’d consider broaden-
CONTINUED ON PAGE 66 10
August
Drug18, 2008
Store •
News 9
 DME
CONTINUED FROM PAGE 64 9
ing the government’s compet-
itive-bidding requirements to
include the kinds of everyday

diabetic care products sold at
retail, including blood-glucose
Wiesner, senior director of pri-
vacy, regulatory, government
in May before a congressional
panel that the plan would like-
testing kits.
Steve Anderson, president
testing supplies. and industry affairs and phar- ly reduce the number of avail- and chief executive officer of
Among the industry leaders macy managed care for the able providers and hamper the National Association of
who have spoken out against Texas-based supermarket seniors’ access to vital medical Chain Drug Stores, also urged
the bidding plan is Dennis chain H-E-B. Wiesner testified supplies—including diabetic lawmakers to exempt diabetic
supplies, at least, from com-
petitive-bidding rules. “Unlike
other DME products, the
  4920>?0/
27@.,2:9
4?
B:@7/
-0
@974607D
?:
3,A0
,9D
0110.?
:9
?30
491,9? //4?4:9,77D
7@.,09
3,>
,
>3:=?
;7,>8,
3,717410
?3@>
7484?492
,8:@9?>
,A,47,-70
?:
?30
.347/ effects of the competitive bid-



 



 *).&86.(
7*
For the treatment of hypoglycemia: &30
@>0
:1
27@.,2:9
49
;0/4,?=4.
;,?409?>
3,>
-009
ding program on diabetic sup-
19(&*3 ,19(&,43
$6
46.,.3%
+46
.3/*(8.43
=
=0;:=?0/
?:
-0
>,10
,9/
0110.?4A0

plies and patients were never
:
# For use as a diagnostic aid: %,10?D
,9/
0110.?4A090>>
49
;0/4,?=4.
;,?409?>
3,A0
9:?

 # 1*&7*
7**
5&(0&,*
.37*68
+46
+911
56*7(6.'.3,
.3+462&8.43 -009
0>?,-74>30/
evaluated during the competi-


 !
 tive bidding demonstration
46
8-*
6*&82*38
4+
;54,1;(*2.&
%0A0=0
>4/0
0110.?>
,=0
A0=D
=,=0 ,7?3:@23
9,@>0,
,9/
A:84?492
8,D
:..@=
:..,>4:9,77D projects,” he said. “Treatment
7@.,09
4>
@>0/
?:
?=0,?
>0A0=0
3D;:27D.084.
7:B
-7::/
>@2,=
=0,.?4:9>
B34.3
8,D 0>;0.4,77D
B4?3
/:>0>
,-:A0

82
:=
B4?3
=,;4/
4950.?4:9
70>>
?3,9

849@?0 D;:?09>4:9
:..@=
49
;,?409?>
B4?3
/4,-0?0>
?=0,?0/
B4?3
49>@749 0.,@>0
7@.,09
/0;70?0>
27D.:209 3,>
-009
=0;:=?0/
@;
?:


3:@=>
,1?0=
,/8494>?=,?4:9
49
;,?409?>
=0.04A492
7@.,09
,> of diabetes requires very
>?:=0> ?30
;,?409?
>3:@7/
-0
24A09
>@;;70809?,7
.,=-:3D/=,?0>
,>
>::9
,>
30>30
,B,609> ;=080/4.,?4:9
1:=
@;;0=

09/:>.:;D
;=:.0/@=0> 7@.,2:9
0C0=?>
;:>4?4A0
49:?=:;4.
,9/ careful management of blood
,9/
4>
,-70
?:
>B,77:B 0>;0.4,77D
.347/=09
:=
,/:70>.09?> 0/4.,7
0A,7@,?4:9
4> .3=:9:?=:;4.
0110.?
,9/
8,D ?30=01:=0 .,@>0
?,.3D.,=/4,
,9/
3D;0=?09>4:9 /A0=>0
=0.:8809/0/
1:=
,77
;,?409?>
B3:
0C;0=409.0
>0A0=0
3D;:27D.084, =0,.?4:9>
49/4.,?492
?:C4.4?D
:1
7@.,09
3,A0
9:?
-009
=0;:=?0/ 
?=,9>409?
49.=0,>0
49 glucose, and pharmacists
-:?3
-7::/
;=0>>@=0
,9/
;@7>0
=,?0
8,D
:..@=
1:77:B492
?30
,/8494>?=,?4:9
:1
27@.,2:9
46
7*
&7
&
.&,3478.(
.)
serve on a team with doctors,
7@.,09
4>
49/4.,?0/
1:=
@>0
/@=492
=,/4:7:24.
0C,849,?4:9>
?:
?08;:=,=47D
4934-4? #,?409?>
?,6492
L-7:.60=>
8423?
-0
0C;0.?0/
?:
3,A0
,
2=0,?0=
49.=0,>0
49
-:?3
;@7>0
,9/
8:A0809?
:1
?30
2,>?=:49?0>?49,7
?=,.? 7@.,2:9
4>
,>
0110.?4A0
1:=
?34>
0C,849,?4:9
,>
,=0 -7::/
;=0>>@=0 ,9
49.=0,>0
:1
B34.3
B477
-0
?=,9>409?
-0.,@>0
:1
27@.,2:9I>
>3:=?
3,717410 patients and diabetes educa-
?30
,9?4.3:7490=24.
/=@2> :B0A0= ?30
,//4?4:9
:1
?30
,9?4.3:7490=24.
,209?
8,D
=0>@7?
49 &30
49.=0,>0
49
-7::/
;=0>>@=0
,9/
;@7>0
=,?0
8,D
=0<@4=0
?30=,;D
49
;,?409?>
B4?3 tors to help patients manage
49.=0,>0/
>4/0
0110.?> 0.,@>0
7@.,09
/0;70?0>
27D.:209
>?:=0> ?30
;,?409?
>3:@7/
-0 ;30:.3=:8:.D?:8,
:=
.:=:9,=D
,=?0=D
/4>0,>0
>00
"($"% 770=24.
=0,.?4:9>
8,D
24A09
:=,7
.,=-:3D/=,?0>
,>
>::9
,>
?30
;=:.0/@=0
4>
.:8;70?0/ :..@=
49
=,=0
.,>0>
>00
)$!!% their diabetes.”
 !

Regulations
7@.,2:9
4>
.:9?=,49/4.,?0/
49
;,?409?>
B4?3
69:B9
3D;0=>09>4?4A4?D
?:
27@.,2:9
:=
,9D .,37
&3)
;258427
.:9>?4?@09?
49
7@.,09
,9/
49
;,?409?>
B4?3
;30:.3=:8:.D?:8,
:=
B4?3
49>@749:8, !:
=0;:=?>
:1
:A0=/:>,20
B4?3
7@.,09
3,A0
-009
=0;:=?0/ ?
4>
0C;0.?0/ 41
:A0=/:>,20
" :..@==0/ ?3,?
?30
;,?409?
8,D
0C;0=409.0
9,@>0, A:84?492 4934-4?4:9
:1

?=,.?
8:?474?D
49.=0,>0
49
-7::/
;=0>>@=0
,9/
;@7>0
=,?0 9
.,>0
:1
>@>;0.?0/
:A0=/:>492 ?30
>0=@8
7@.,09
>3:@7/
-0
,/8494>?0=0/
.,@?4:@>7D
?:
;,?409?>
>@>;0.?0/
:1
3,A492 ;:?,>>4@8
8,D
/0.=0,>0
,9/
>3:@7/
-0
8:94?:=0/
,9/
.:==0.?0/
41
900/0/ 8
CONTINUED FROM PAGE 63
;30:.3=:8:.D?:8,
:=
49>@749:8, %0.:9/,=D
3D;:27D.084,
8,D
:..@=
,9/
>3:@7/
-0
.:@9?0=0/
-D
,/0<@,?0
.,=-:3D/=,?0
49?,60
1:77:B492
27@.,2:9
?=0,?809? &30
(
,9/
%
  1:=
7@.,09K 49
=,?>
,9/
84.0
=,920>
1=:8

?:
2=0,?0=
?3,9


8262 Hampshire could close
7@.,2:9
8,D
=070,>0
.,?0.3:7,8490>
1=:8
;30:.3=:8:.D?:8,>
,9/
4>
.:9?=,49/4.,?0/
-:/D
B0423?
49
;,?409?>
B4?3
?34>
.:9/4?4:9 6*&82*38 because of reimbursement
770=24.
=0,.?4:9>
8,D
:..@=
,9/
49.7@/0
2090=,74E0/
=,>3 ,9/
49
=,=0
.,>0> %?,9/,=/
>D8;?:8,?4.
?=0,?809?
8,D
-0
@9/0=?,609
41
:A0=/:>,20
:..@=> cuts. In New York, where a
,9,;3D7,.?4.
>3:.6
B4?3
-=0,?3492
/4114.@7?40> ,9/
3D;:?09>4:9 &30 1
?30
;,?409?
/0A07:;>
,
/=,8,?4.
49.=0,>0
49
-7::/
;=0>>@=0
?:

82
,9,;3D7,.?4.
=0,.?4:9>
3,A0
2090=,77D
:..@==0/
49
,>>:.4,?4:9
B4?3 :1
;309?:7,8490
80>D7,?0
3,>
-009
>3:B9
?:
-0
0110.?4A0
49 2.25 percent cut in reimburse-
09/:>.:;4.
0C,849,?4:9
/@=492
B34.3
;,?409?>
:1?09
=0.04A0/
:?30= 7:B0=492
-7::/
;=0>>@=0
1:=
?30
>3:=?
?480
?3,?
.:9?=:7
B:@7/
-0 ments took effect at the begin-
,209?>
49.7@/492
.:9?=,>?
80/4,
,9/
7:.,7
,90>?30?4.> &30 900/0/ ?
4>
@969:B9
B30?30=
7@.,09
4>
/4,7DE,-70 -@?
;,?409?>
>3:@7/
-0
24A09
>?,9/,=/
?=0,?809?
1:=
,9,;3D7,C4> >@.3
,
;=:.0/@=0
4>
@974607D
?:
;=:A4/0
,9D
-09014?
24A09
?30 ning of July, The New York Sun
49.7@/492
,9
4950.?4:9
:1
0;490;3=490
41
?30D
09.:@9?0= >3:=?
3,717410
,9/
9,?@=0
:1
?30
>D8;?:8>
:1
:A0=/:>0
=0>;4=,?:=D
/4114.@7?40>
,1?0=
7@.,09
4950.?4:9 reported that some pharmacies
"
 
  19(&*3= ;54.8= .3(19)*7
had stopped filling Medicaid
*3*6&1
A4,7
.:9?,49492

82

@94?
7@.,09
prescriptions in recent years.
9
:=/0=
1:=
7@.,09
?=0,?809?
?:
=0A0=>0
3D;:27D.084, 27@.,2:9
*=!
:=4249+
1:=
4950.?4:9

,/0<@,?0
,8:@9?>
:1
27@.:>0
8@>?
-0
>?:=0/
49
?30
74A0=
,>
/4>;:>,-70
>D=4920
.:9?,49492

87
%?0=470
),?0=

27D.:209&30=01:=0 7@.,09
>3:@7/
-0
@>0/
B4?3
.,@?4:9 1:=
$0.:9>?4?@?4:9 No. 3: Generic carve-outs
49
;,?409?>
B4?3
.:9/4?4:9>
>@.3
,>
;=:7:920/
1,>?492
>?,=A,?4:9 ,/=09,7
49>@114.409.D
:=
.3=:94.
3D;:27D.084, !
   Key states: Washington,
-0.,@>0
?30>0
.:9/4?4:9>
=0>@7?
49
7:B
70A07>
:1
=070,>,-70 "$
27@.:>0
49
?30
74A0=
,9/
,9
49,/0<@,?0
=0A0=>,7
:1
3D;:27D.084, Colorado, Oklahoma, New
19(&*3= .&,3478.(
.8
.3(19)*7
-D
7@.,09
?=0,?809? ,@?4:9
>3:@7/
-0
:->0=A0/
B309

A4,7
.:9?,49492

82

@94?
7@.,09
York, Pennsylvania, Ohio
27@.,2:9
4>
@>0/
49
/4,-0?4.
;,?409?>
:=
49
07/0=7D
;,?409?>
B4?3
69:B9
.,=/4,.
/4>0,>0
?:
4934-4?
2,>?=:49?0>?49,7
8:?474?D 27@.,2:9
*=!
:=4249+
1:=
4950.?4:9
and Georgia

A4,7
.:9?,49492
87
%?0=470
),?0=
1:=
$0.:9>?4?@?4:9
3+462&8.43
+46
&8.*387
!

Bills have been introduced
$010=
;,?409?>
,9/
1,847D
808-0=>
?:
?30
G!"$ &"!
"$
#&!&%H 49

?30
;,.6,20
49>0=?
1:=
49>?=@.?4:9>
/0>.=4-492
?30
80?3:/
:1
;=0;,=492
,9/
4950.?492
7@.,09 "$ in 26 states that would inhibit
/A4>0
?30
;,?409?
,9/
1,847D
808-0=>
?:
-0.:80
1,8474,=
B4?3
?30
?0.394<@0
:1
;=0;,=492 -*
19(&*3= 5&(0
.3(19)*7 pharmacists’ ability to substi-
27@.,2:9
-01:=0
,9
080=209.D
,=4>0> 9>?=@.?
;,?409?>
?:
@>0

82
1:=
,/@7?>
:=
F
?30
,/@7? 
C

82
A4,7
.:9?,49492

82

@94?
7@.,09
27@.,2:9
*=!
:=4249+
1:=
4950.?4:9

/:>0

82
1:=
.347/=09
B0423492
70>>
?3,9

7-


62 &:
;=0A09?
>0A0=0
3D;:27D.084, tute generic drugs for patients,
;,?409?>
,9/
1,847D
808-0=>
>3:@7/
-0
491:=80/
:1
?30
>D8;?:8>
:1
847/
3D;:27D.084,
,9/ !


  particularly immunosuppres-
3:B
?:
?=0,?
4?
,;;=:;=4,?07D ,847D
808-0=>
>3:@7/
-0
491:=80/
?:
,=:@>0
?30
;,?409?
,> 
<@4.67D
,>
;:>>4-70
-0.,@>0
;=:7:920/
3D;:27D.084,
8,D
=0>@7?
49
/,8,20
?:
?30
.09?=,7  Drug Information for the Health Care Professional ?3
0/ $:.6A4770 ,=D7,9/ &30 sants and drugs to treat epilep-
90=A:@>
>D>?08 #,?409?>
>3:@7/
-0
,/A4>0/
?:
491:=8
?304=
;3D>4.4,9
B309
3D;:27D.084. '94?0/
%?,?0>
#3,=8,.:;04,7
:9A09?4:9 9.  (:7  

  4--> 0?
,7
=0,.?4:9>
:..@=
>:
?3,?
?30
?=0,?809?
=024809
8,D
-0
,/5@>?0/
41
90.0>>,=D '>0
:1
27@.,2:9
?:
?0=849,?0
49>@749
=0,.?4:9>
49
/4,-0?4.
.347/=09 Nebr Med J
tic seizures, as well as mental
&'46&846;
*787 



 ,=>:9
 :.3
$ 7494.,7
>?@/40>
B4?3
27@.,2:9
49
.347/=09 J Pediatr health medications.
7::/
27@.:>0
80,>@=0809?>
8,D
-0
.:9>4/0=0/
?:
8:94?:=
?30
;,?409?I>
=0>;:9>0 

     %34;;
 0?
,7 &=0,?809?
:1
49>@749
3D;:27D.084,
49
/4,-0?4.
.,8;0=> Diabetes  
  8,9
 )=,990
 D;:27D.084,
49
.347/3::/ The Epilepsy Foundation
&6(.34,*3*7.7 98&,*3*7.7 25&.62*38
4+
*68.1.8;
/4,-0?0>
 110.?
:1
>@-.@?,90:@>
:=
49?=,8@>.@7,=
4950.?4:9
:1
/4110=09?
/:>0>
:1
:92
?0=8
>?@/40>
49
,948,7>
?:
0A,7@,?0
.,=.49:2094.
;:?09?4,7
3,A0
9:?
-009
;0=1:=80/ 27@.,2:9 Acta Pediatr Scand 


 cited anecdotal reports from
%0A0=,7
>?@/40>
3,A0
-009
.:9/@.?0/
?:
0A,7@,?0
?30
8@?,2094.
;:?09?4,7
:1
27@.,2:9 &30 physicians of unexpected
8@?,2094.
;:?09?4,7
?0>?0/
49
?30
80>
,9/
3@8,9
7D8;3:.D?0
,>>,D> B,>
-:=/0=7490 :=
491:=8,?4:9
.:9?,.?
;:>4?4A0
@9/0=
.0=?,49
.:9/4?4:9>
1:=
-:?3
27@.,2:9
;,9.=0,?4.
,9/
27@.,2:9
=! !:A:
!:=/4>6
9. “breakthrough” seizures in
:=4249 In vivo A0=D
3423
/:>0>
 
,9/


8262
:1
27@.,2:9
-:?3
:=4249>
2,A0
, #=49.0?:9 !0B
0=>0D


>7423?7D
34230=
49.4/09.0
:1
84.=:9@.70@>
1:=8,?4:9
49
8,70
84.0
-@?
?30=0
B,>
9:
0110.? 

 epilepsy patients who have
49
108,70> &30
B0423?
:1
0A4/09.0
49/4.,?0>
?3,?
7@.,09
4>
9:?
/4110=09?
1=:8
27@.,2:9 BBB9:A:9:=/4>6@>.:8 switched from brand-name to
;,9.=0,?4.
:=4249
,9/
/:0>
9:?
;:>0
,
209:?:C4.
=4>6
?:
3@8,9>
7@.,09
B,>
9:?
?0>?0/
49
,948,7
10=?474?D
>?@/40> %?@/40>
49
=,?>
3,A0
>3:B9
?3,?
;,9.=0,?4. ,9@1,.?@=0/
-D generic drugs. The Wall Street
!:A:
!:=/4>6
%
27@.,2:9
/:0>
9:?
.,@>0
48;,4=0/
10=?474?D


,2>A,0=/ 098,=6 Journal reported last July that
6*,3&3(;
<
6*,3&3(;
&8*,46;
 the foundation had been cam-
$0;=:/@.?4:9
>?@/40>
B0=0
;0=1:=80/
49
=,?>
,9/
=,--4?>
,?
7@.,09
/:>0>
:1

 ,?0
:1
>>@0 ;=47


,9/

8262 &30>0
/:>0>
=0;=0>09?
0C;:>@=0>
:1
@;
?:

,9/


?480>
?30
3@8,9 paigning across the country
/:>0
-,>0/
:9
828
1:=
=,?>
,9/
=,--4?> =0>;0.?4A07D ,9/
=0A0,70/
9:
0A4/09.0
:1
3,=8
?:
?30
10?@> &30=0
,=0 3:B0A0= 9:
,/0<@,?0
,9/
B077.:9?=:770/
>?@/40>
49
;=029,9? for carve-out bills.
B:809 0.,@>0
,948,7
=0;=:/@.?4:9
>?@/40>
,=0
9:?
,7B,D>
;=0/4.?4A0
:1
3@8,9 Meanwhile, such groups as
=0>;:9>0 ?34>
/=@2
>3:@7/
-0
@>0/
/@=492
;=029,9.D
:97D
41
.70,=7D
900/0/
967.3,
48-*67 the Generic Pharmaceutical
?
4>
9:?
69:B9
B30?30=
?34>
/=@2
4>
0C.=0?0/
49
3@8,9
8476 0.,@>0
8,9D
/=@2>
,=0
0C.=0?0/ !:A:
!:=/4>6K 7@.,09K ,9/
D;:4?K ,=0
Association maintain that
49
3@8,9
8476 .,@?4:9
>3:@7/
-0
0C0=.4>0/
B309
7@.,09
4>
,/8494>?0=0/
?:
,
9@=>492
B:8,9 =024>?0=0/
?=,/08,=6>
:1
!:A:
!:=/4>6
%
!:
.7494.,7
>?@/40>
3,A0
-009
;0=1:=80/
49
9@=>492
8:?30=> 3:B0A0= 7@.,09
4>
, J


!:A:
!:=/4>6
9.
the Food and Drug Ad-
;0;?4/0
,9/
49?,.?
27@.,2:9
4>
9:?
,->:=-0/
1=:8
?30

?=,.? &30=01:=0 0A09
41
?30
491,9? #=49?0/
49
?30
'%


$ ;=47

 ministration has determined
CONTINUED ON PAGE 108 32
66 •Store
Drug August 18, 2008
News www.drugstorenews.com
www.drugstorenews.com Drug
August 18,Store 10
2008 News
•
 Rx 2.0
THE FUTURE IS NOW
One sure election outcome: change in healthcare system
BY JIM FREDERICK
Whether the next U.S.
president is a Democrat
or Republican, pharmacy
leaders can count on one
thing: change is coming to
the U.S. healthcare system.
Given the public outcry
over the rising costs of
health coverage and the
number of Americans with
no insurance—and cost-
shifting by many employ-
ers stung by the steep rise
in their own health
expenses for workers—
change is inevitable. But
don’t expect immediate or
dramatic changes, policy
experts warned.
The presumptive nomi-
nees, Sens. Barack Obama, D-
Ill., and John McCain, R.-
Ariz., differ in fundamental
ways over the role of govern-
ment in health care. But on
issues like the greater use of
generic drugs, more trans-
parency in healthcare deci-
sions and the adoption of
health information technolo-
gy, however, their views
aren’t that far apart.
Both candidates favor
“safe” re-importation of
drugs from Canada and other
68 Store
Drug • August 18, 2008
News
LEGISLATIVE/
REGULATORY REPORT
established markets, Heldman, a director
arguing it will lower and senior health
drug prices despite policy analyst at Citi
widespread belief Investment Research.
among pharmacy and However, he said,
drug policy analysts “Government nego-
that importation won’t tiating leverage with
have a major impact the pharmaceutic-
on the U.S. drug sup- al industry would
ply. Both also promote require politicians to
the faster approval and agree to deny sen-
introduction of generic iors access to drugs
drugs—and their in- if companies refuse
creased use by to negotiate.”
Medicare and Medi- For that reason,
caid—and both sup- he said, “I think the
port direct govern- government would
ment negotiations use that authority
with drug makers for sparingly at first.”
lower prices for drugs Whichever candi-
purchased under the date reaches the
Medicare Part D drug White House in
Though prospective presidential candidates Sens. John McCain, R-
benefit program. 2009, the outcome
Ariz., and Barack Obama, D-Ill., hold fundamentally different atti-
“Obama will al- tudes on health care coverage, they both support embracing e-pre- of the election
low Americans to scribing programs and expanding access to generic drugs. could be positive
buy their medicines for the generic drug
from other developed coun- $30 billion.” industry. Given the cost
tries if the drugs are safe Direct negotiations with pressures on drug utiliza-
and prices are lower out- drug makers could be a neg- tion, Heldman predicted
side the United States,” ative for drug retailers and the “continued and possi-
noted a policy statement PBMs “to the extent that it ble acceleration of generic
from the candidate. “Obama could put pressure on prices drug usage trends.”
will also repeal the ban that throughout the drug distri- Both candidates also said
prevents the government bution chain, and reduce they would try to speed the
from negotiating with drug PBM leverage on drug pric- adoption of information
companies, which could ing under the Medicare drug technology. Obama prom-
result in savings as high as benefit,” observed Paul ised to invest $10 billion a
year over the next five
years “to move the U.S.
healthcare system to broad
adoption of standards-
based electronic health
information systems, in-
cluding electronic health
records,” and to phase in
requirements for full
implementation of health
information technology.
“We should promote the
rapid deployment of 21st
century information sys-
tems and technology,”
noted the McCain camp.
In addition, argued Mc-
Cain, “We must make pub-
lic more information on
treatment options and doc-
tor records, and require
transparency regarding
medical outcomes, quality
of care, costs and prices. We
must also facilitate the
www.drugstorenews.com
www.drugstorenews.com
development of national
standards for measuring
and recording treatments
and outcomes.”
According to Heldman,
“Both Senators McCain
and Obama want a greater
… investment in health
information technology.”
The result, he said, could
be “a positive for pharma-
cy, to the extent that
through initiatives like e-
prescribing, there’s greater
generic drug substitution,
a higher-margin business
for them and for the PBM.”
One fundamental differ-
ence between the two can-
didates: McCain favors a
plan to tax employer-paid
healthcare benefits, an idea
opposed by Obama. The
estimated $200 billion in
annual funds generated by
the new tax would pay for
tax credits to help Americans
pay for health coverage.
Supporters said the plan
could expand coverage to
more of the uninsured, but
opponents feared the
health benefit tax could
lead many employers to
drop coverage altogether.
“While still having the
option of employer-spon-
sored coverage, every fami-
ly will receive a direct
refundable tax credit—
effectively cash—of $2,500
for individuals and $5,000
for families to offset the cost
of insurance,” noted a
McCain policy statement.
“Those obtaining innova-
tive insurance that costs less
than the credit can deposit
the remainder in expanded
health savings accounts.”
McCain also promoted a
Guaranteed Access Plan to
ensure coverage for hard-to-
insure patients with preex-
isting conditions, and said
he would work with
Congress, the states and
industry to encourage dis-
ease management, health
and wellness programs, and
other approaches to reduc-
CONTINUED ON PAGE 70 12
Drug
August 18, Store 11
2008 News
•
 Rx 2.0 LEGISLATIVE/
REGULATORY REPORT
THE FUTURE IS NOW

Candidates Taking a populist line,

Obama promised to rein in
11
CONTINUED FROM PAGE 68 what he said are monopo-
ing health costs. listic tendencies of major
insurers. “The insurance
business today is dominat-
been gobbling up their
rivals,” he stated. After
years, Obama said, “premi-
ums have skyrocketed by
ed by a small group of more than 400 healthcare over 87 percent.”
large companies that have mergers in the last 10 Obama has proposed a
National Health Exchange
to “force insurers to pay out
a reasonable share of their
premiums for patient care
instead of keeping exorbi-
tant amounts for profits and
administration.”
Obama made no bones
about his vision for univer-
sal coverage. “My plan
begins by covering every
American,” he said in Iowa
last year. “If you already
have health insurance, the
only thing that will change
for you under this plan is the
amount of money you will
spend on premiums. That
will be less. If you are one of
the 45 million Americans
who don’t have health insur-
ance, you will have it after
this plan becomes law. No
one will be turned away
because of a preexisting con-
dition or illness.”
Some of Obama’s policies
could spur the develop-
ment of fee-for-service
patient-care initiatives and
preventive-health services
at community pharmacies.
“Too little is spent on pre-
vention and public health,”
he argued. “The nation
faces epidemics of obesity
and chronic diseases, as
well as new threats of pan-
demic flu and bioterrorism.
Yet despite all of this, less
than 4 cents of every health-
care dollar is spent on pre-
vention and public health.”
Obama’s rival also saw
much greater potential to
lower costs through pre-
ventive-health efforts. “We
must reform the payment
systems in Medicaid and
Medicare to compensate
providers for diagnosis,
prevention and care coordi-
nation,” McCain noted. He
goes further: “Medicaid
and Medicare should not
pay for preventable medical
errors or mismanagement.”
McCain also favored
expanding smoking cessa-
tion programs.

70 Store
Drug News
• August 18, 2008 www.drugstorenews.com
www.drugstorenews.com AugustDrug
18, Store 12
2008 News
•

LEGISLATIVE/
REGULATORY REPORT
Import drug safety under scrutiny Candidates: Open
BY MICHAEL JOHNSEN
News of the contami-
nated blood-thinner hep-
arin, which was manufac-
tured in China, was res-
ponsible for some 81
deaths in the United
States, raised plenty of
concern over the Food and
Drug Administration’s
ability to protect American
consumers from foreign-
made drugs.
That’s a pretty big con-
cern, considering a large
portion of drugs distrib-
uted in the United States
are sourced from over-
seas. Concern over drug
safety was a key factor
contributing to the slow-
down in pharmaceutical
growth in 2007, according
to IMS Health. It is a fac-
tor that promises to play
out going forward.
Department of Health
and Human Services sec-
retary Michael Leavitt has
been crisscrossing the
globe this summer negoti-
Canada’s Big Pharma fails to stand by promises
BY AMANDA BALTAZAR
For seven consecutive
years, brand-name phar-
maceutical companies in
Canada have broken
their promise to invest
10 percent of their
Canadian sales in re-
search and development
in that country.
Reinvesting this money
was a commitment made
by branded drug compa-
nies when the government
increased their patent pro-
tection in 1987. Last year
these companies spent just
8.3 percent, or 1.325 billion
in Canadian dollars (US
$1.311 billion).
In contrast, the generic
industry, which consti-
tutes just 21 percent of
sales in the Canadian mar-
ket, spends approximately
C$615 million annually on
72 Store
Drug 18, 2008
News
• August
Rx 2.0
THE FUTURE IS NOW
ating a number of new
safety protocols in every
drug borders
region worldwide. This year, both presidential candidates
Last month, HHS an- are proposing to allow European and
nounced a pilot project, in Canadian pharmaceutical competition
partnership with its gov- into the United States as one way to com-
ernment counterparts in bat the rising costs of prescription medi-
the European Union and cines in this country.
Australia, to jointly plan, The campaign Web site for Sen.
allocate for and conduct Barack Obama, D-Ill., charges that phar-
inspections of drug-man- Rep. Burt Stupak, D-Mich., above,
maceutical manufacturers “are selling
ufacturing facilities. co-sponsored the bill, known as the the exact same drugs in Europe and
That agreement marks Food and Drug Import Safety Act of Canada but charging Americans more
a move toward extending 1997, which continues to be than double the price.” Obama promis-
the U. S. border beyond its debated in Congress. es to open U.S. borders to cheaper
ports-of-entry—where the in China, Mexico and European drugs as long as “the drugs
interception of unsafe Vietnam. are safe and prices are lower.”
goods had historically These collaborations HHS Secretary Rep. John Dingell Presidential candidate Sen. John
been held—by potentially will lessen the burden on Michael Leavitt D-Mich. McCain, R-Ariz., also has promised to
stopping a shipment of HHS and the FDA to access to those products look into re-importation as a way to
unsafe pharmaceuticals physically inspect phar- shown to meet our stan- lessen the expenses associated with pre-
before it ever leaves its maceutical manufacturers. dards and to focus more of scription drugs.
country of origin. “These programs will our resources on those However, if recent history provides
But Europe and Aus- significantly increase our products that present any guidance, those proposals may very
tralia are only the latest collaboration with interna- higher risks.” well fade away as the candidates
governments to sign on- tional and private-sector HHS earlier this sum- attempt to address the two issues that
to a more comprehen- partners to enhance the mer signed a Joint Pro- have scuttled every past attempt at
sive screening process safety of imported food gress Statement with Li legalizing re-importation—counterfeit-
for drugs shipped to the and medical products,” Changjiang, China’s min- ing and border control.
United States. This Leavitt recently said. ister of the general admin- Drug counterfeiting already is big busi-
summer, Leavitt has al- “Working together, we istration of quality super- ness. The United Kingdom medical jour-
so visited with officials intend to offer expedited CONTINUED ON PAGE 15 76 nal The Lance recently forecasted that
worldwide sales of counterfiet drugs
would reach $75 billion by 2010, and that’s
without the U.S. market. That estimate
research and devel- may be fair, as counterfeiting is quite
opment in Canada. R&D expenditure by type of research prevalent in Europe, where a wholesaler
In fact, Apotex, in one country will resell drugs to a whole-
manufacturer of saler in another country. As much as 13
generic Plavix and percent of all pharmaceuticals in the
Paxil, is the largest European drug supply chain are believed
R&D spender to be counterfeit.
among all pharma- Europe currently is debating whether to
ceutical companies dicsontinue the current system, commonly
in Canada. Last referred to as a parallel trade model, in part
year the Toronto- because of the prevalence of counterfeits in
based company the system, noted Jim Thomson, chairman
spent C$179 million of the European Alliance for Access to Safe
on R&D, or 17.6 Source: Patented Medicine Prices Review Board – Annual Report 2007 Medicines.
percent of its sales. “In the United Kingdom, 20 percent of
Given the proximity of Patented Medicine Prices percent spent is being our medicines are parallel traded, so they
the United States, Can- Review Board, which used to find new cures, come from other parts of Europe … via arbi-
adian companies could monitors the prices of new molecules, etc., ex- trage from cheaper markets,” Thomson
easily import drugs from patented medicines and plained Jim Keon, presi- said. “So this concept, and it’s a concept
their southern neighbor, R&D spending in dent of the Canadian held by politicians here in the United States,
but Canadian govern- Canada by brand-name Generic Pharmaceutical that you can import safe drugs from the
ment officials welcome drug companies, also Association—the remain- United Kingdom is gossamer thin.”
the branded companies shows that the drug com- der is spent on applied The second roadblock to re-importation
because they see them as panies are not spending research, including clini- is the cost associated with trying to prevent
essential to driving R&D their money in satisfacto- cal trials, bioavailability counterfeits from crossing into the United
in the country. ry avenues. studies and drug regula- States. In 2004, the Health and Human
A recent report, from Just 2 percent of the 8.3 CONTINUED ON PAGE 14
74 CONTINUED ON PAGE 15 76
www.drugstorenews.com
www.drugstorenews.com August 18, Store
Drug 13
2008 News
•
 Rx 2.0 LEGISLATIVE/
REGULATORY REPORT
THE FUTURE IS NOW

Big Pharma made. When you break it

CONTINUED FROM PAGE 7213
tion submissions.
“Canadians should be leery
of the deal the government
down, only a very small per-
centage of that money is
going into basic research,
[such as] finding cures for dis-
eases,” Keon said.
“The data is very clear,”
he added. “Twenty years of
government concessions to
Big Pharma have not re-
sulted in the investments
that Canadians were prom-
ised when the Mulroney
government first increased
Big Pharma monopolies
in 1987.”
According to the CGPA,
last year Canada’s 8.3 per-
cent R&D spending rela-
tive to its sales ratio was
one of the lowest in the
developed world, with
only Italy (6.8 percent) com-
ing in lower. Ratios in other
countries were well above
Canada’s, with the United
States at 18.6 percent.

Confused
Compounding the dis-
pleasure of the CGPA and
PMPRB, of 20 new active
substances introduced by
branded pharmaceutical

by changes in the companies in 2007, only

three were classed as Cat-
egory 2, which the PMPRB

Hydrocodone market? defines as “one that provides

a breakthrough or substan-
tial improvement.” Most, in
fact, were Category 3, which
it defines as providing
“moderate, little or no thera-
peutic advantage over com-
parable medicines.”
The pharmaceuticals situa-
tion in Canada is not looking
rosy. Earlier this summer, the
government finalized and
passed regulations to extend
patent protection for branded
drugs, which will further

Hi-Tech
delay the approval of generic

Count on drugs here—bad

for generic manufacturers,
news

for what you need. Canadians needing access to

drugs and the provinces that
pay for them.
The changes mean that
brand-name drug companies
can reinstate drug patents and
hold multiple patents on each
Due to recent regulatory action, there are now fewer of their products. This practice
of “evergreening” is, however,
products containing Hydrocodone on the market – which considered mostly a delaying
means you’re probably getting scripts for drugs that are no longer tactic against lower-priced
available. The good news is Hi-Tech Pharmacal continues to offer a generic drugs.
Consequently, CGPA and
proven and FDA-approved Hydrocodone Bitartrate and Homatropine its member companies are
Methylbromide Syrup you can dispense with confidence. examining whether they can
challenge the regulations
For over 25 years, the Hi-Tech name has been synonymous with and take the government to
Hydrocodone Bitartrate court, something that’s
high-quality liquid and semi-solid products and our proven expected to be decided by
and Homatropine
manufacturing, sourcing and supply systems mean we don’t Methylbromide Syrup the end of August.
“I think the brand-name
experience lags in production or availability. NDC 50383-043-16
pharmaceutical companies are
a juggernaut everywhere,”
Trust the partner you’ve trusted for years. Hi-Tech Pharmacal. Keon said. “What we’re trying
to do is stem the tide. We think
ultimately people will realize
that you can’t allow everlast-
1-800-262-9010 hitechpharm.com ing patent protection, and
people will ultimately come to
realize this is a big issue.”

74 •Store
Drug August 18, 2008
News www.drugstorenews.com
www.drugstorenews.com Drug
August 18,Store 14
2008 News
•
 Rx 2.0
THE FUTURE IS NOW
Import the 2007 Memorandum of
Agreement on food and feed
CONTINUED FROM PAGE 72 13 safety.
vision, inspection and quaran- The statement describes
tine that outlines steps taken progress in:
by both nations to implement • Establishing a mech-
Flector® Patch (diclofenac epolamine topical patch) 1.3%
Brief Summary Rx only
Cardiovascular Risk: • NSAIDs may cause an increased risk of serious cardiovas-
cular thrombotic events, myocardial infarction, and stroke, which can be fatal. This
risk may increase with duration of use. Patients with cardiovascular disease or risk
factors for cardiovascular disease may be at greater risk (See WARNINGS and Full
Prescribing Information, CLINICAL TRIALS). • Flector® Patch is contraindicated for
the treatment of peri-operative pain in the setting of coronary artery bypass graft
(CABG) surgery (see WARNINGS).
Gastrointestinal Risk: • NSAIDs cause an increased risk of serious gastrointesti-
nal adverse events including bleeding, ulceration, and perforation of the stomach or
intestines, which can be fatal. These events can occur at any time during use and
without warning symptoms. Elderly patients are at greater risk for serious gastroin-
testinal events (See WARNINGS).
INDICATION AND USAGE: Carefully consider the potential benefits and risks of
Flector® Patch and other treatment options before deciding to use Flector® Patch. Use
the lowest effective dose for the shortest duration consistent with individual patient
treatment goals (see WARNINGS).
Flector® Patch is indicated for the topical treatment of acute pain due to minor strains,
sprains, and contusions.
CONTRAINDICATIONS: Flector® Patch is contraindicated in patients with known
hypersensitivity to diclofenac.
Flector® Patch should not be given to patients who have experienced asthma, urticaria,
or allergic-type reactions after taking aspirin or other NSAIDs. Severe, rarely fatal, ana-
phylactic-like reactions to NSAIDs have been reported in such patients (see WARN-
INGS - Anaphylactoid Reactions, and PRECAUTIONS - Preexisting Asthma).
Flector® Patch is contraindicated for the treatment of peri-operative pain in the setting
of coronary artery bypass graft (CABG) surgery (see WARNINGS).
Flector® Patch should not be applied to non-intact or damaged skin resulting from any
etiology e.g. exudative dermatitis, eczema, infected lesion, burns or wounds.
WARNINGS: CARDIOVASCULAR EFFECTS: Cardiovascular Thrombotic Events:
Clinical trials of several COX-2 selective and nonselective NSAIDs of up to three years
duration have shown an increased risk of serious cardiovascular (CV) thrombotic
events, myocardial infarction, and stroke, which can be fatal. All NSAIDs, both COX-2
selective and nonselective, may have a similar risk. Patients with known CV disease or
risk factors for CV disease may be at greater risk. To minimize the potential risk for an
adverse CV event in patients treated with an NSAID, the lowest effective dose should
be used for the shortest duration possible. Physicians and patients should remain alert
for the development of such events, even in the absence of previous CV symptoms.
Patients should be informed about the signs and/or symptoms of serious CV events
and the steps to take if they occur.
There is no consistent evidence that concurrent use of aspirin mitigates the increased
risk of serious CV thrombotic events associated with NSAID use. The concurrent use of
aspirin and an NSAID does increase the risk of serious GI events (see GI WARNINGS).
Two large, controlled, clinical trials of a COX-2 selective NSAID for the treatment of pain
in the first 10-14 days following CABG surgery found an increased incidence of
myocardial infarction and stroke (see CONTRAINDICATIONS).
Hypertension: NSAIDs, including Flector® Patch, can lead to onset of new hyperten-
sion or worsening of preexisting hypertension, either of which may contribute to the
increased incidence of CV events. Patients taking thiazides or loop diuretics may have
impaired response to these therapies when taking NSAIDs. NSAIDs, including Flector®
Patch, should be used with caution in patients with hypertension. Blood pressure (BP)
should be monitored closely during the initiation of NSAID treatment and throughout
the course of therapy.
Congestive Heart Failure and Edema: Fluid retention and edema have been
observed in some patients taking NSAIDs. Flector® Patch should be used with caution
in patients with fluid retention or heart failure.
Gastrointestinal Effects- Risk of Ulceration, Bleeding, and Perforation: NSAIDs,
including Flector® Patch, can cause serious gastrointestinal (GI) adverse events includ-
ing inflammation, bleeding, ulceration, and perforation of the stomach, small intestine,
or large intestine, which can be fatal. These serious adverse events can occur at any
time, with or without warning symptoms, in patients treated with NSAIDs. Only one in
five patients, who develop a serious upper GI adverse event on NSAID therapy, is
symptomatic. Upper GI ulcers, gross bleeding, or perforation caused by NSAIDs occur
in approximately 1% of patients treated for 3-6 months, and in about 2-4% of patients
treated for one year. These trends continue with longer duration of use, increasing the
likelihood of developing a serious GI event at some time during the course of therapy.
However, even short-term therapy is not without risk.
NSAIDs should be prescribed with extreme caution in those with a prior history of ulcer
disease or gastrointestinal bleeding. Patients with a prior history of peptic ulcer dis-
ease and/or gastrointestinal bleeding who use NSAIDs have a greater than 10-fold
increased risk for developing a GI bleed compared to patients with neither of these risk
factors. Other factors that increase the risk for GI bleeding in patients treated with
NSAIDs include concomitant use of oral corticosteroids or anticoagulants, longer dura-
tion of NSAID therapy, smoking, use of alcohol, older age, and poor general health sta-
tus. Most spontaneous reports of fatal GI events are in elderly or debilitated patients
and therefore, special care should be taken in treating this population.
To minimize the potential risk for an adverse GI event in patients treated with an
NSAID, the lowest effective dose should be used for the shortest possible duration.
Patients and physicians should remain alert for signs and symptoms of GI ulceration
and bleeding during NSAID therapy and promptly initiate additional evaluation and
treatment if a serious GI adverse event is suspected. This should include discontinua-
tion of the NSAID until a serious GI adverse event is ruled out. For high risk patients,
alternate therapies that do not involve NSAIDs should be considered.
Renal Effects: Long-term administration of NSAIDs has resulted in renal papillary
necrosis and other renal injury. Renal toxicity has also been seen in patients in whom
renal prostaglandins have a compensatory role in the maintenance of renal perfusion.
In these patients, administration of a nonsteroidal anti-inflammatory drug may cause
a dose-dependent reduction in prostaglandin formation and, secondarily, in renal blood
flow, which may precipitate overt renal decompensation. Patients at greatest risk of
this reaction are those with impaired renal function, heart failure, liver dysfunction,
those taking diuretics and ACE inhibitors, and the elderly. Discontinuation of NSAID
therapy is usually followed by recovery to the pretreatment state.
Advanced Renal Disease: No information is available from controlled clinical studies
regarding the use of Flector® Patch in patients with advanced renal disease. Therefore,
treatment with Flector® Patch is not recommended in these patients with advanced
renal disease. If Flector® Patch therapy is initiated, close monitoring of the patient's
renal function is advisable.
Anaphylactoid Reactions: As with other NSAIDs, anaphylactoid reactions may occur
in patients without known prior exposure to Flector® Patch. Flector® Patch should not
be given to patients with the aspirin triad. This symptom complex typically occurs in
asthmatic patients who experience rhinitis with or without nasal polyps, or who exhib-
it severe, potentially fatal bronchospasm after taking aspirin or other NSAIDs (see
CONTRAINDICATIONS and PRECAUTIONS - Preexisting Asthma). Emergency help
should be sought in cases where an anaphylactoid reaction occurs.
Skin Reactions: NSAIDs, including Flector® Patch, can cause serious skin adverse
events such as exfoliative dermatitis, Stevens-Johnson Syndrome (SJS), and toxic epi-
dermal necrolysis (TEN), which can be fatal. These serious events may occur without
warning. Patients should be informed about the signs and symptoms of serious skin
manifestations and use of the drug should be discontinued at the first appearance of
skin rash or any other sign of hypersensitivity.
Pregnancy: In late pregnancy, as with other NSAIDs, Flector® Patch should be avoid-
ed because it may cause premature closure of the ductus arteriosus.
PRECAUTIONS: General: Flector® Patch cannot be expected to substitute for
corticosteroids or to treat corticosteroid insufficiency. Abrupt discontinuation of corti-
costeroids may lead to disease exacerbation. Patients on prolonged corticosteroid
therapy should have their therapy tapered slowly if a decision is made to discontinue
corticosteroids.
The pharmacological activity of Flector® Patch in reducing inflammation may diminish
the utility of these diagnostic signs in detecting complications of presumed noninfec-
tious, painful conditions.
Hepatic Effects: Borderline elevations of one or more liver tests may occur in up to
76 •Store
Drug 18, 2008
News
August
LEGISLATIVE/
REGULATORY REPORT
anism for cooperation on
significant events related to
tions, and developing a bet-
ter understanding of each
electronically certify that
products sent for export to
food and feed safety, inclu- sides’ respective regulatory the United States meet FDA
ding designated points of systems; standards for safety and
contact, emergency contacts • Developing a system manufacturing quality;
and thresholds for notifica- that would allow China to • Establishing a mecha-
nism for notifying both sides
15% of patients taking NSAIDs including Flector® Patch. These laboratory abnormali-
ties may progress, may remain unchanged, or may be transient with continuing ther-
Carcinogenesis, Mutagenesis, Impairment of Fertility: Carcinogenesis: Long-term
studies in animals have not been performed to evaluate the carcinogenic potential of of significant risks to public
apy. Notable elevations of ALT or AST (approximately three or more times the upper
limit of normal) have been reported in approximately 1% of patients in clinical trials
either diclofenac epolamine or Flector® Patch.
Mutagenesis: Diclofenac epolamine is not mutagenic in Salmonella Typhimurium health related to product
with NSAIDs. In addition, rare cases of severe hepatic reactions, including jaundice and strains, nor does it induce an increase in metabolic aberrations in cultured human lym-
fatal fulminant hepatitis, liver necrosis and hepatic failure, some of them with fatal out- phocytes, or the frequency of micronucleated cells in the bone marrow micronucleus safety, and the gross decep-
comes have been reported. test performed in rats.
A patient with symptoms and/or signs suggesting liver dysfunction, or in whom an Impairment of Fertility: Male and female Sprague Dawley rats were administered 1, tion of consumers, and for
abnormal liver test has occurred, should be evaluated for evidence of the development 3, or 6 mg/kg/day diclofenac epolamine via oral gavage (males treated for 60 days
of a more severe hepatic reaction while on therapy with Flector® Patch. If clinical signs
and symptoms consistent with liver disease develop, or if systemic manifestations
prior to conception and during mating period, females treated for 14 days prior to mat-
ing through day 19 of gestation). Diclofenac epolamine treatment with 6 mg/kg/day
sharing information to facili-
occur (e.g. eosinophilia, rash, etc.), Flector® Patch should be discontinued.
Hematological Effects: Anemia is sometimes seen in patients receiving NSAIDs. This
resulted in increased early resorptions and postimplantation losses; however, no
effects on the mating and fertility indices were found. The 6 mg/kg/day dose corre-
tate investigations.
may be due to fluid retention, occult or gross GI blood loss, or an incompletely
described effect upon erythropoiesis. Patients on long-term treatment with NSAIDs,
sponds to 3-times the maximum recommended daily exposure in humans based on a
body surface area comparison.
Congress, however, is seek-
including Flector® Patch, should have their hemoglobin or hematocrit checked if they
exhibit any signs or symptoms of anemia.
Pregnancy: Teratogenic Effects. Pregnancy Category C.: Pregnant Sprague Dawley
rats were administered 1, 3, or 6 mg/kg diclofenac epolamine via oral gavage daily ing to make more changes on
NSAIDs inhibit platelet aggregation and have been shown to prolong bleeding time in from gestation days 6-15. Maternal toxicity, embryotoxicity, and increased incidence
some patients. Unlike aspirin, their effect on platelet function is quantitatively less, of of skeletal anomalies were noted with 6 mg/kg/day diclofenac epolamine, which cor- both sides. The Senate on July
shorter duration, and reversible. Patients receiving Flector® Patch who may be responds to 3-times the maximum recommended daily exposure in humans based on
adversely affected by alterations in platelet function, such as those with coagulation a body surface area comparison. Pregnant New Zealand White rabbits were adminis- 31 forwarded a bill for Pres-
disorders or patients receiving anticoagulants, should be carefully monitored. tered 1, 3, or 6 mg/kg diclofenac epolamine via oral gavage daily from gestation days
Preexisting Asthma: Patients with asthma may have aspirin-sensitive asthma. The 6-18. No maternal toxicity was noted; however, embryotoxicity was evident at ident George W. Bush’s sig-
use of aspirin in patients with aspirin-sensitive asthma has been associated with 6 mg/kg/day group which corresponds to 6.5-times the maximum recommended daily
severe bronchospasm which can be fatal. Since cross reactivity, including bron-
chospasm, between aspirin and other nonsteroidal anti-inflammatory drugs has been
exposure in humans based on a body surface area comparison.
There are no adequate and well-controlled studies in pregnant women. Flector® Patch
nature that bans lead from
reported in such aspirin-sensitive patients, Flector® Patch should not be administered
to patients with this form of aspirin sensitivity and should be used with caution in
should be used during pregnancy only if the potential benefit justifies the potential risk
to the fetus.
children’s toys and seeks to
patients with preexisting asthma.
Eye Exposure: Contact of Flector® Patch with eyes and mucosa, although not studied,
Nonteratogenic Effects: Because of the known effects of nonsteroidal anti-inflamma-
tory drugs on the fetal cardiovascular system (closure of ductus arteriosus), use dur- ensure that chemicals that
should be avoided. If eye contact occurs, immediately wash out the eye with water or
saline. Consult a physician if irritation persists for more than an hour.
ing pregnancy (particularly late pregnancy) should be avoided.
Male rats were orally administered diclofenac epolamine (1, 3, 6 mg/kg) for 60 days pose possible health prob-
Accidental Exposure in Children: Even a used Flector® Patch contains a large prior to mating and throughout the mating period, and females were given the same
amount of diclofenac epolamine (as much as 170 mg). The potential therefore exists doses 14 days prior to mating and through mating, gestation, and lactation. lems do not end up on any
for a small child or pet to suffer serious adverse effects from chewing or ingesting a Embryotoxicity was observed at 6 mg/kg diclofenac epolamine (3-times the maximum
new or used Flector® Patch. It is important for patients to store and dispose of Flector® recommended daily exposure in humans based on a body surface area comparison), product that could eventually
Patch out of the reach of children and pets. and was manifested as an increase in early resorptions, post-implantation losses, and
Information for Patients: Patients should be informed of the following informa-
tion before initiating therapy with an NSAID and periodically during the course
a decrease in live fetuses. The number of live born and total born were also reduced
as was F1 postnatal survival, but the physical and behavioral development of surviv-
wind up in a child’s mouth.
of ongoing therapy. Patients should also be encouraged to read the NSAID
Medication Guide that accompanies each prescription dispensed.
ing F1 pups in all groups was the same as the deionized water control, nor was repro-
ductive performance adversely affected despite a slight treatment-related reduction in
And a bill currently being
1. Flector® Patch, like other NSAIDs, may cause serious CV side effects, such as MI or
stroke, which may result in hospitalization and even death. Although serious CV events
body weight.
Labor and Delivery: In rat studies with NSAIDs, as with other drugs known to inhibit
debated in Congress includes
can occur without warning symptoms, patients should be alert for the signs and symp-
toms of chest pain, shortness of breath, weakness, slurring of speech, and should ask
prostaglandin synthesis, an increased incidence of dystocia, delayed parturition, and
decreased pup survival occurred. The effects of Flector® Patch on labor and delivery in strengthened pedigree re-
for medical advice when observing any indicative sign or symptoms. Patients should
be apprised of the importance of this follow-up (see WARNINGS, Cardiovascular
pregnant women are unknown.
Nursing Mothers: It is not known whether this drug is excreted in human milk. quirements and subpoena
Effects). 2. Flector® Patch, like other NSAIDs, may cause GI discomfort and, rarely, Because many drugs are excreted in human-milk and because of the potential for seri-
serious GI side effects, such as ulcers and bleeding, which may result in hospitaliza- ous adverse reactions in nursing infants from Flector® Patch, a decision should be power for the FDA and also
tion and even death. Although serious GI tract ulcerations and bleeding can occur with- made whether to discontinue nursing or to discontinue the drug, taking into account
out warning symptoms, patients should be alert for the signs and symptoms of ulcer- the importance of the drug to the mother. may include a new user fee
ations and bleeding, and should ask for medical advice when observing any indicative Pediatric Use: Safety and effectiveness in pediatric patients have not been estab-
sign or symptoms including epigastric pain, dyspepsia, melena, and hematemesis.
Patients should be apprised of the importance of this follow-up (see WARNINGS,
lished.
Geriatric Use: Clinical studies of Flector® Patch did not include sufficient numbers of
to fund pre-approval inspec-
Gastrointestinal Effects: Risk of Ulceration, Bleeding, and Perforation). 3. Flector®
Patch, like other NSAIDs, may cause serious skin side effects such as exfoliative der-
subjects aged 65 and over to determine whether they respond differently from younger
subjects. Other reported clinical experience has not identified differences in responses
tions of generic drug firms.
matitis, SJS, and TEN, which may result in hospitalizations and even death. Although
serious skin reactions may occur without warning, patients should be alert for the
between the elderly and younger patients.
Diclofenac, as with any NSAID, is known to be substantially excreted by the kidney, and The bill, called the Food
signs and symptoms of skin rash and blisters, fever, or other signs of hypersensitivity
such as itching, and should ask for medical advice when observing any indicative
the risk of toxic reactions to Flector® Patch may be greater in patients with impaired
renal function. Because elderly patients are more likely to have decreased renal func- and Drug Import Safety Act
signs or symptoms. Patients should be advised to stop the drug immediately if they tion, care should be taken when using Flector® Patch in the elderly, and it may be use-
develop any type of rash and contact their physicians as soon as possible. 4. Patients ful to monitor renal function. of 2007 and introduced last
should be instructed to promptly report signs or symptoms of unexplained weight gain ADVERSE REACTIONS: In controlled trials during the premarketing development of
or edema to their physicians (see WARNINGS, Cardiovascular Effects). 5. Patients Flector® Patch, approximately 600 patients with minor sprains, strains, and contusions fall by Reps. John Dingell
should be informed of the warning signs and symptoms of hepatotoxicity (e.g. nausea, have been treated with Flector® Patch for up to two weeks.
fatigue, lethargy, pruritus, jaundice, right upper quadrant tenderness, and "flu-like"
symptoms). If these occur, patients should be instructed to stop therapy and seek
Adverse Events Leading to Discontinuation of Treatment: In the controlled trials, and Burt Stupak, D-Mich.,
3% of patients in both the Flector® Patch and placebo patch groups discontinued treat-
immediate medical therapy. 6. Patients should be informed of the signs of an anaphy-
lactoid reaction (e.g. difficulty breathing, swelling of the face or throat). If these occur,
ment due to an adverse event. The most common adverse events leading to discon-
tinuation were application site reactions, occurring in 2% of both the Flector® Patch
would also require any food,
patients should be instructed to seek immediate emergency help (see WARNINGS). 7.
In late pregnancy, as with other NSAIDs, Flector® Patch should be avoided because it
and placebo patch groups. Application site reactions leading to dropout included
pruritus, dermatitis, and burning.
drug or device to be deemed
may cause premature closure of the ductus arteriosus. 8. Patients should be advised
not to use Flector® Patch if they have a aspirin-sensitive asthma. Flector® Patch, like
Common Adverse Events: Localized Reactions: Overall, the most common adverse
events associated with Flector® Patch treatment were skin reactions at the site of
misbranded if its labeling
other NSAIDs, could cause severe and even fatal bronchospasm in these patients (see
PRECAUTIONS, Preexisting asthma). Patients should discontinue use of Flector®
treatment.
Table 1 lists all adverse events, regardless of causality, occurring in > 1% of patients failed to identify its country
Patch and should immediately seek emergency help if they experience wheezing or
shortness of breath. 9. Patients should be informed that Flector® Patch should be used
in controlled trials of Flector® Patch. A majority of patients treated with Flector® Patch
had adverse events with a maximum intensity of “mild” or “moderate.” of origin—that could poten-
only on intact skin. 10. Patients should be advised to avoid contact of Flector® Patch
with eyes and mucosa. Patients should be instructed that if eye contact occurs, they tially establish a point of dif-
should immediately wash out the eye with water or saline, and consult a physician if
irritation persists for more than an hour. 11. Patients and caregivers should be instruct-
ed to wash their hands after applying, handling or removing the patch. 12. Patients
ferentiation in the mind of
should be informed that, if Flector® Patch begins to peel off, the edges of the patch
may be taped down. 13. Patients should be instructed not to wear Flector® Patch dur-
the consumer, as to the safe-
ing bathing or showering. Bathing should take place in between scheduled patch
removal and application (see Full Prescribing Information, DOSAGE AND ADMINIS-
ty of one drug over another.
TRATION). 14. Patients should be advised to store Flector® Patch and to discard used
patches out of the reach of children and pets. If a child or pet accidentally ingests The current draft would
Flector® Patch, medical help should be sought immediately (see PRECAUTIONS,
Accidental Exposure in Children). require the FDA to inspect for-
Laboratory Tests: Because serious GI tract ulcerations and bleeding can occur with-
out warning symptoms, physicians should monitor for signs or symptoms of GI bleed- eign drug-making facilities
ing. Patients on long-term treatment with NSAIDs, should have their CBC and a chem-
istry profile checked periodically. If clinical signs and symptoms consistent with liver every two years; four years for
or renal disease develop, systemic manifestations occur (e.g. eosinophilia, rash, etc.)
or if abnormal liver tests persist or worsen, Flector® Patch should be discontinued.
Drug Interactions: ACE-inhibitors: Reports suggest that NSAIDs may diminish the
some low-risk facilities.
1 The table lists adverse events occurring in placebo-treated patients because the
antihypertensive effect of ACE-inhibitors. This interaction should be given considera-
placebo-patch was comprised of the same ingredients as Flector® Patch except for
tion in patients taking NSAIDs concomitantly with ACE-inhibitors.
Drug borders
diclofenac. Adverse events in the placebo group may therefore reflect effects of the
Aspirin: When Flector® Patch is administered with aspirin, the binding of diclofenac to
non-active ingredients. 2 Includes: application site dryness, irritation, erythema, atro-
protein is reduced, although the clearance of free diclofenac is not altered. The clinical
phy, discoloration, hyperhidriosis, and vesicles. 3 Includes: gastritis, vomiting, diarrhea,
significance of this interaction is not known; however, as with other NSAIDs, concomi-
constipation, upper abdominal pain, and dry mouth. 4 Includes: hypoaesthesia, dizzi-
tant administration of diclofenac and aspirin is not generally recommended because of
ness, and hyperkinesias.
the potential of increased adverse effects.
Diuretics: Clinical studies, as well as post marketing observations, have shown that
Foreign labeling describes that dermal allergic reactions may occur with Flector® Patch
treatment. Additionally, the treated area may become irritated or develop itching,
CONTINUED FROM PAGE 1372
Flector® Patch may reduce the natriuretic effect-of furosemide and thiazides in some
patients. This response has been attributed to inhibition of renal prostaglandin synthe-
erythema, edema, vesicles, or abnormal sensation.
DRUG ABUSE AND DEPENDENCE: Controlled Substance Class: Flector® Patch is not
Services Task Force on Drug
sis. During concomitant therapy with NSAIDs, the patient should be observed closely
for signs of renal failure (see WARNINGS, Renal Effects), as well as to assure
diuretic efficacy.
a controlled substance.
Physical and Psychological Dependence: Diclofenac, the active ingredient in
Importation determined that
Lithium: NSAIDs have produced an elevation of plasma lithium levels and a reduction
in renal lithium clearance. The mean minimum lithium concentration increased 15%
Flector® Patch, is an NSAID that does not lead to physical or psychological depend-
ence. policing the U.S. border for
and the renal clearance was decreased by approximately 20%. These effects have
been attributed to inhibition of renal prostaglandin synthesis by the NSAID. Thus, when
OVERDOSAGE: There is limited experience with overdose of Flector® Patch. In clinical
studies, the maximum single dose administered was one Flector® Patch containing bogus prescription drugs
180 mg of diclofenac epolamine. There were no serious adverse events.
NSAIDs and lithium are administered concurrently, subjects should be observed care-
fully for signs of lithium toxicity. Should systemic side effects occur due to incorrect use or accidental overdose of this would seriously stretch FDA
Methotrexate: NSAIDs have been reported to competitively inhibit methotrexate accu- product, the general measures recommended for intoxication with non-steroidal anti-
mulation in rabbit kidney slices. This may indicate that they could enhance the toxici- inflammatory drugs should be taken. funding. And that was before
ty of methotrexate. Caution should be used when NSAIDs are administered concomi- Manufacturer: Teikoku Seiyaku Co., Ltd.
tantly with methotrexate. Sanbonmatsu, Kagawa 769-2695, Japan the controversy surrounding
Warfarin: The effects of warfarin and NSAIDs on GI bleeding are synergistic, such that Distributor: Alpharma Pharmaceuticals LLC
users of both drugs together have a risk of serious GI bleeding higher than users of One New England Avenue, Piscataway, NJ 08854 the contaminated heparin
either drug alone. Version October 2007 8283 Ed. I/10.07
from China surfaced.
www.drugstorenews.com
www.drugstorenews.com August 18,Store
Drug 2008 News
• 15
 Rx 2.0
THE FUTURE IS NOW
Tech revolution not swift enough
BY JIM FREDERICK
Healthcare experts and policy-
makers agree that the long-brewing
transition of the U.S. healthcare sys-
tem from paper-based recordkeep-
ing to electronic data storage and
transmission is inescapable. It’s just
that the health information technolo-
gy revolution is taking a little longer
than many stakeholders like.
That list of stakeholders includes
retail pharmacists, who stand to
gain from the shift to health infor-
mation technology and electronic
prescribing. The conversion to a
live, data-driven platform for
patient health services and record-
keeping will be a giant step in phar-
macy’s long effort to become a fully
integrated partner with physicians
and other health professionals in
the delivery of care. And more than
most practitioners, retail pharma-
cies are already equipped with the
technology and communications
It’s About Staying Negotiable.
Ranked Number One In Buying Terms (Including Ability To Negotiate,
1
Prices, Deals, And Return Policies).
1Based on a survey by Retail Pharmacy Management, 2006.
Drug Store News
78 • August 18, 2008
TECH REPORT
systems to accommodate enabled passage last month of legisla-
health information technolo- tion that will help drive the health
gy and paperless prescribing. information technology revolution.
The conversion to health The new impetus is contained in
information technology is one the Medicare Improvements for
of those rare public-private ini- Patients and Providers Act of 2008,
tiatives that draw wide support which became law after Congress
from both political parties and voted to override President Bush’s
from the Bush White House, veto. Among its tenets: financial
which has long advocated elec- incentives to spur the physician
tronic health records. Drawn by adoption of electronic prescribing
the promise of fewer prescrib- for Medicare.
ing and dispensing errors, “E-prescribing is a common sense,
Sens. Debbie Stabenow, D-Mich., and Patrick Kennedy, D-R.I., are
lower health costs and a more two of the most vocal champions in Congress on behalf of health much-needed solution to help elimi-
comprehensive and holistic information technology and e-prescribing. nate preventable prescription errors
approach to caring for patients, and make medicine in America the
a broad cross-section of House and Together with other health information safest it can be,” said Schwartz, a
Senate lawmakers have co-sponsored technology champions like Debbie Pennsylvania Democrat who pushed
or supported legislation to transform Stabenow, D-Mich., Allyson Schwartz, for insertion of e-prescribing incentives
the U.S. healthcare system through D-Pa., Marion Berry, D-Ark., and in the Medicare bill.
data-capture technology. Patrick Kennedy, D-R.I., in the House Under terms of the new law,
The list ranges from such liberals as of Representatives, along with John physicians will see their reimburse-
Sens. John Kerry and Edward Kennedy Ensign, R-Nev., Max Baucus, D-Mont., ments rise 2 percent over the next
of Massachusetts to such conservative Olympia Snowe, R-Maine, Gordon two years for treating Medicare
Republicans as Reps. Phil Gingrey and Smith, R-Ore., and other pharmacy- patients, with smaller raises the fol-
former House Speaker Newt Gingrich. friendly lawmakers in the Senate, they CONTINUED ON PAGE 110 33
For more information, visit: www.watson.com
©2008 Watson Pharma, Inc., Morristown, NJ 07962 04335 July 2008
www.drugstorenews.com
www.drugstorenews.com August 18, 2008 • 16
Drug Store News
 MTM slowly gains support
though pilot programs, outreach
Clear as mud.
Two and a half years after the
launch of Medicare Part D and
the federally mandated concept
of medication therapy man-
agement, that seems to be the
general consensus among
many pharmacists, pharmacy
leaders, managed-care admin-
underutilized and mis-
istrators, employee health
benefit managers and patients
understood component
themselves about just what
MTM consists of, how and by
whom it’s delivered most cost-
effectively, who qualifies for it
and who pays for it.
True, many chain and inde-
pendent pharmacies are partici-
pating in pilot programs and
local health outreach initiatives
that deliver MTM services to
small groups of Medicare benefi-
First In Service Because
We Put Service First
DrugStore
Drug News
Store News
ciaries or other plan members.
And a growing number of soft-
ware vendors are providing
interactive solutions and phar-
“MTM remains an
of the Medicare drug
benefit program.”
macy system enhancements to
help pharmacy operators navi-
gate the uncertainties of
advanced medication counsel-
ing. The systems cull prescrip-
tion records to identify patients
SM
www.drugstorenews.com
www.drugstorenews.com
who qualify for additional coun-
seling services, walk pharma-
cists step-by-step through the 30-
to 60-minute MTM intervention
session and help them bill cor-
rectly for those services.
Nevertheless, MTM remains
an underutilized and misun-
derstood component of the
Medicare drug benefit pro-
gram. Despite its endorsement
by the Centers for Medicare and
Medicaid Services as a viable
and reimbursement-worthy
component of pharmacy servic-
es for older Americans—and
despite big inroads made by com-
panies like Mirixa, the turnkey
MTM and disease-management
solutions provider developed for
pharmacists by the National
CONTINUED ON PAGE 82 19
REPORTERSNotebook
Supplier News — Centice’s PASS Rx
confirms the accuracy of dispensed solid
prescription medications, helping improve
safety, quality and efficiency by verifying
the contents of a filled and capped prescrip-
tion vial prior to handing it to the customer.
Using patented proprietary sensors, the
system’s first sensor analyzes the chemical
composition of the drug while a second ana-
lyzes the size, color and shape of the tablet
or capsule. The results are combined to cre-
ate a unique spectral fingerprint of the drug,
which is then compared with a proprietary
database of NDC fingerprints, all in a mat-
ter of seconds.
InnovationRx has created a new service
aimed at helping the 50 percent of people
who do not take their medications as pre-
scribed, as well as the near 33 percent who
receive prescriptions that they never fill,
according to the company.
Key elements of InnovationRx include:
• Adherence Assessment Targets the under-
CONTINUED ON PAGE 18
81
August 18, 2008
August 17
2008 •• 79
 Rx 2.0
THE FUTURE IS NOW
Alliances make forward strides toward ‘telehealth’
BY MICHAEL JOHNSEN
NEW YORK — Telehealth is well on
its way to becoming a viable reali-
ty, evidenced by the number of
announcements between at-home
diagnostic manufacturers and
healthcare platform providers.
But the real push toward tele-
health will come sometime in
October. That’s when the
Continua Health Alliance is
expected to finalize its telehealth
compatibility protocols—proto-
cols that will ensure products
and services from different com-
panies will all work together.
And that’s when consumers will
get their first real taste of what
kind of impact telehealth services
can have on managing real condi-
tions—diabetes, heart health,
blood pressure and weight man-
agement—when combined with
the health data management
services that platform such
providers as Google Health and
Microsoft HealthVault are put-
ting together today.
That’s where the rubber
Drug
DrugStore News
Store News
meets the road.
The new guidelines include
500 modules (and growing) of
source code that will enable
alliance members to develop
interoperable products. The
Alliance represents more than
250 companies to date, ranging
from manufacturers of home
diagnostic equipment to soft-
ware companies that will sup-
port these devices.
In testimony before the
Congressional Committee on
House Ways and Means
Subcommittee on Health July 24,
David Whitlinger, Continua
president and chairman, noted
that the alliance recently
announced a set of Bluetooth
standards that will help promote
wireless interoperability of home
diagnostic products.
“We define [telehealth] in
three large categories: health and
wellness, disease-state manage-
ment and aging independently,”
Whitlinger told Drug Store News.
“[Disease state management] is
perhaps much more interesting
www.drugstorenews.com
www.drugstorenews.com
TECH REPORT
to the pharmacy population
because these [senior patients]
are the frequent flyers, if you
will,” he said, especially given
the number of medicines that
they take and the frequency with
which they visit the drug store.
And those who are aging inde-
pendently may be an especially
attractive demographic, Whit-
linger noted, given the loyalty-
generating opportunities of not
only the senior seeking better
management of their health, but
also their caregivers.
“I’ve had a number of con-
versations with the large phar-
macy chains,” Whitlinger said.
“Almost all of them are looking
at some sort of personal health
record-management system. I
use that phrase broadly
because of the move toward e-
prescribing. … That kind of
tracking and healthcare infor-
mation technology is leading
[pharmacy operators] toward
offering more personalized
services they can offer to their
regular customers.”
REPORTERSNotebook
CONTINUED FROM PAGE 79 17
lying issues causing nonadherence and then
produces a nonadherence risk score that enables
triage and intervention.
• Pharmacist-Staffed Call Center: Staffed
with licensed pharmacists trained in motiva-
tional interviewing and adherence intervention
to provide patients with personalized, one-to-
one support and consultation.
• Medication Reminders: Patients receive
automated reminders to take their medica-
tion via e-mail, text message or automated
phone call.
• Case Management: Dedicated clinical
liaisons work with organizations to create
and define a customized adherence program
and ensure that clinical goals and standards
are met.
• Extensive Reporting Capabilities: Special
data-mining tool that analyzes and dissects out-
comes data providing patients a personal
account at the InnovationRx Web site.
Innovation and TeleManager Tech-
nologies have agreed to integrate In-
novation’s PharmASSIST Symphony work-
flow management system and TeleManager’s
Refill TeleManager to provide retailers with a
better way to handle prescription refills and
overall workflow.
Highlights of the PharmASSIST
Symphony/Refill TeleManager integration
include:
• Patient Access to Prescription Status:
Patients can call the pharmacy’s interactive
voice response system and receive detailed sta-
tus on the processing of their prescriptions.
• Increased Visibility: Pharmacies can
instantly determine the status and physical
location of all prescriptions, identify who
performed each workflow task and view
the date/time stamp of when each task was
performed.
• Automated Prescription Triage: Instantly
CONTINUED ON PAGE 108 32
August 18, 2008
August 18, 18
2008••81

THE FUTURE IS NOW
MTM
C ONTINUED FROM PAGE 17
79
Community Pharmacists As-
sociation—MTM has yet to
gain solid footing in many
Rx 2.0
parts of the United States.
Many pharmacists still
struggle to establish and
market an MTM practice,
and some wonder if it’s
worth the effort. The pre-
TECH REPORT
scription drug plans
administering Part D have
yet to agree on a universal,
standardized template for
MTM care and reimburse-
ment. And many patients
remain unsure of whether
or not their pharmacy even
offers the service.
Despite the hurdles, most
pharmacy leaders continue
to promote the effort as
critical to pharmacy’s
future, and it’s to clearly
define a fee-for-service role
in patient care that goes
beyond drug dispensing.
Many pharmacy stake-
holders are moving well
beyond the talking stage with
pilot programs and single-
market collaborative practice
models designed to extend
MTM services to more
patients. Support is coming
both from employers, munic-
ipal governments and other
public and private health
plan sponsors—and from
such groups as NCPA, the
NACDS Foundation and the
American Pharmacists As-
sociation. Among them:
• Kerr Drug has won
plaudits for its role in
ChecKmeds NC, a state-
sponsored MTM and well-
ness program available to
any North Carolina senior
who has a Medicare drug
benefit. Kerr’s pharmacists
have conducted thousands
of comprehensive medica-
tion reviews with patients
since the program’s launch
last October.
“Seeing us in this role
seems to be a real eye open-
er for some patients,” said
Lori Brown, manager of clin-
ical services for the regional
chain. “They love it—and
we love being able to do
what we are trained to do.”
• McKesson has launched
an MTM pilot program with
the Wisconsin Pharmacy
Quality Collaborative, a
multi-organizational initia-
tive led by the Pharmacy
Society of Wisconsin.
• The NACDS Foun-
dation is providing funding
for at least two MTM initia-
tives: including a pilot study
to improve medication
adherence via face-to-face
MTM provided by commu-
nity pharmacists to Med-
icare beneficiaries in New
Mexico and a study by the
University of Pittsburgh
School of Pharmacy to look
into how pharmacists can
best work with physicians to
integrate MTM services into
the community.

82 •Store
Drug 18, 2008
News
August www.drugstorenews.com
www.drugstorenews.com August 18, Store
Drug 19
2008 News
•
 Rx 2.0
THE FUTURE IS NOW
Retail clinics mature as viable healthcare option
BY ANTOINETTE ALEXANDER
Amid the backdrop of an overburdened U.S.
healthcare system and rising healthcare costs, the
convenient care industry has risen to the challenge
and today is a maturing industry that continues to
evolve into an accessible and affordable healthcare
solution for consumers.
“Health systems are increasingly seeing conven-
ient care as an asset and a means to expand the care
they already provide,” said Tine Hansen-Turton,
executive director of the Convenient Care As-
sociation. “Collectively, the industry is maturing and
learning more about what works and what con-
sumers want, so the model is evolving, while keep-
ing in line with consumer demands for accessible,
quality and affordable healthcare alternatives.”
The convenient care industry has, as of press time,
just shy of 1,000 clinics in operation. Hansen-Turton
said the CCA estimates that by the end of 2008 some
1,500 clinics will be in operation nationwide. Factor
in the rising number of work-site-based clinics, such
as those operated by companies like Toyota and Best
Buy, and that number is closer to 2,000 clinics by the
end of 2008.
Consumer-driven healthcare is at the core of the
movement, and that doesn’t look to be changing
anytime soon, with demand for medical services
climbing and healthcare spending projected to only
increase in the years ahead.
According to the Department of Health and
Human Services’ National Health Expenditure data,
healthcare spending is expected to reach $2.56 trillion
in 2009 and comprise nearly 17 percent of the gross
domestic product. By 2017, healthcare spending in
the United States is projected to reach almost $4.3 tril-
lion and about 19.5 percent of the GDP. As costs esca-
late, consumers are being forced to pay more of the
price for their own healthcare via higher premiums,
deductibles and copays.
One of the more recent developments taking hold
of the retail clinic industry is acquisition, namely
that of MinuteClinic by CVS Caremark and the
more recent acquisition of Take Care Health Systems
by Walgreens. These acquisitions are important in
that they serve as further evidence that the model is
a viable and critical component of today’s U.S.
healthcare system—clearly, they suggest that the
nation’s biggest pharmacy providers believe so.
“We strongly believe that the presence of Minute-
Clinic provides Caremark with a valuable edge over
its major PBM rivals because it offers a unique serv-
ice to the market and enables the company to begin
impacting not just a client’s ‘drug spend,’ but its
‘medical spend,’ as well. Take Care now does the
same thing for WHS, Walgreens’ in-house PBM,”
stated John Heinbockel, Goldman Sachs analyst, in a
research note issued last year soon after Walgreens
announced plans to snap up Take Care. “To be fair,
Take Care will probably not be as impactful in this
regard as MinuteClinic because WHS is not as large
and competitively well-positioned as Caremark.
Drug
DrugStore News
Store News
RETAIL CLINIC REPORT
[But] if Walgreens were to ever buy a major PBM,
Take Care’s importance would only be magnified.”
CVS Caremark is undoubtedly reaping the bene-
Top 10 retail clinic operators*
Clinic operator Clinics Retail partners
MinuteClinic 518 CVS (512)
Take Care 197 Walgreens (183)
Health Systems
The Little Clinic 61 Publix (35), Kroger (26)
RediClinic 31 H-E-B (20), Wal-Mart (16)
Target Clinic 24 Target (24)
Quick Health 16 Farmacia Remedios (7),
Longs (5), Wal-Mart (4)
Aurora Health Care 9 Wal-Mart (7), Piggly Wiggly (2)
NOW Express Care 9 Cub Foods (9), Shop 'n Save (1)
MedBasics 8 Carnival (6), USA Drug (2)
Sutter Express Care 6 Rite Aid(6)
Geisinger CareWorks 5 Weis Supermarkets (2), Kings (2)
Mr. Z’s (1)
Source: Chain Store Guide, www.csgis.com
AMA backs tobacco ban in clinic retailers
In what appears to be an annual event for the
American Medical Association, the group has
once again backed a new health policy that
aims to stunt the growth of retail-based clinics.
Physicians gathered in Chicago in mid-June for
the AMA’s annual meeting voted to adopt a poli-
cy that calls for the ban of tobacco products in
retail outlets that house store-based clinics.
The move came on the heels of the Federal
Trade Commission expressing concerns over the
rationale behind not allowing a clinic in a retail
store that also sells tobacco or alcohol.
The call by the AMA could fuel efforts in
some states where lawmakers are looking to
impose restrictions on retail clinics.
“It’s ridiculous for stores that house health clin-
ics to sell tobacco products,” William Dolan, AMA
board member, said of the AMA’s new policy. “To
keep the objective of getting and keeping patients
healthy, the sale of tobacco products must be
banned from any healthcare facility.”
The news of the AMA policy surprised conven-
ient care leaders.
“We do not understand how forcing retailers to
choose between having an in-store clinic and sell-
ing tobacco products serves the broader goal of
providing consumers with easier access to high-
quality, affordable health care,” said CCA execu-
tive director Tine Hansen-Turton. The news of the
AMA’s new policy came just days after public
comments filed by the FTC decried the rationale of
such a move.
“[The FTC’s] opinion further reinforced that
www.drugstorenews.com
www.drugstorenews.com
fits of the MinuteClinic acquisition as it works to
leverage its PBM offerings to develop new services
CONTINUED ON PAGE 88 21
Trade area states
AZ, CA, CT, FL, GA, IL, IN, KS, MD, MI,
MN, MO, NC, NJ, NV, NY, OH, OK, OR,
PA, TN, TX, VA, WA
AZ, CO, FL, GA, IL, KS, MO, NV, OH, PA,
TN, TX, WI
AZ, FL, GA, KY, OH, MI, TN
AR, OK, TX, VA
MD, MN
CA
WI
MN, MO
AR, TX
CA
PA
*as of July 31, 2008
anticompetitive regulations—like those the AMA
is suggesting—would not, in fact, be in the pub-
lic’s interest,” Hansen-Turton added.
This is not the first time that the AMA has taken
steps to place restrictions on store-based health
clinics. In June 2007, it called for an investigation
into the potential conflicts of interest posed by
joint ventures between store-based health clinics
and pharmacy retailers. According to the AMA,
that move was driven by retailers having stated
that such clinics help drive additional store traffic
and bolster sales of prescription medications and
front-end merchandise.
Responding to the AMA’s most recent health
policy adoption, Walgreens, which owns Take
Care Health Systems, issued a statement that said:
“Access to health care is limited when regulations
focus on products sold by the retailer. Take Care
health providers can be an effective resource for
those trying to quit smoking by offering informa-
tion on smoking-cessation programs and healthy
lifestyles, and referring them to products avail-
able at the store. Retail health clinics shouldn’t be
singled out among other healthcare facilities.”
The FTC in early June approved staff comments
regarding proposed regulation of retail healthcare
facilities in Illinois. Among the FTC’s concerns was
the bill’s (HB 5372) prohibition of a clinic “in any
store or place that provides alcohol or tobacco
products for sale to the public.”
As to HB 5372’s tobacco and alcohol sales
restrictions, FTC staff recognized the state’s
CONTINUED ON PAGE 21 88
August
August 18, 2008 20
2008 •• 87
 Rx 2.0
THE FUTURE IS NOW
Clinics mature
CONTINUED FROM PAGE 20 87
for the MinuteClinic business. CVS
Caremark has stressed that the clinics are
central to its overall strategy of providing
more touch points with patients, bolster-
ing its stores’ image as a healthcare
provider and providing convenient
access to care.
For Walgreens, the acquisition of Take
Care Health Systems has led the way in
helping it further reach out to the
employer-based healthcare industry. The
pharmacy retailer has since not only
formed a new Health and Wellness divi-
sion, but has snapped up work-site clinic
operators I-trax and Whole Health
Management.
“Collectively, I-trax and Whole Health
have a strong roster of corporate clients,
including Harrah’s Entertainment,
Lowe’s, Scotts Miracle-Gro, Sprint and
Toyota,” Mark Miller, William Blair &
Co. analyst said in research note issued
earlier this year. “According to manage-
ment, there are over 7,600 corporate cam-
puses with 1,000 or more employees
across the United States. Only 17 percent
of these corporate campuses—roughly
1,300 locations—have outsourced work-
site healthcare services to a third party,
and Walgreens is now the largest opera-
tor, with a nearly 30 percent share of
[that] existing market. Another 45 per-
cent of these large worksites have health-
care services managed by in-house clini-
cians, and another 37 percent do not pro-
vide any services in the workplace. Thus,
the larger opportunity will be for
Walgreens to expand from its estimated 5
percent share of the potential market by
highlighting a clear value proposition.”
Peter Miller, cofounder, president and
chief executive officer of Take Care
Health Systems, said the company is cur-
rently in discussions with an employer
who wants to do a “combined major
health risk assessment for its employee
population that would leverage both
onsite and retail clinics.”
“It is a very good example of the lever-
age we can create across all of the assets
that Walgreens has now built,” he added.
Miller said it was too soon to disclose
further details, but that the industry can
expect in the coming months to see more
of such programs.
Those services offered within clinic
settings are expected to further extend
beyond acute care like treating pink eye
and strep throat. For example, Take Care
Health Systems has been conducting
consumer research to further uncover
unmet needs in the marketplace and is
88 •Store
Drug 18, 2008
News
August
launching in the fall a men’s and
women’s full health screening that
includes biometric testing. Most insur-
ance companies will cover the screening.
Meanwhile, third-party payers are
increasingly jumping aboard the retail
“There have not been quality issues with convenient
care,” said Web Golinkin, CCA president and RediClinic
chief executive officer. “Consumers like it.”
clinic bandwagon as they recognize the
cost savings such clinics afford and that
consumer satisfaction is extremely high.
For example, in Minnesota—the birth-
place of retail clinics—Blue Cross and
Blue Shield is offering a new benefit
option that eliminates copays for mem-
bers who use retail clinics.
According to the company, BCBS of
Minnesota members made more than
40,000 visits to retail clinics in 2007, a
nearly 100 percent increase over the pre-
vious year. It is estimated that in 2007
employers and members saved more
than $1.25 million by using retail clinics.
That is not to say that the industry
doesn’t continue to face some challenges.
While there will likely continue to be
state-based legislative challenges on the
horizon and perhaps continued rum-
blings from some physicians’ groups,
Web Golinkin, president of the Con-
venient Care Association and chief exec-
utive officer of clinic operator RediClinic,
believe the business itself is perhaps the
biggest challenge facing clinics today.
“When you are inventing a new busi-
ness, it is not so easy. I think convenient
care operators today are providing a tre-
mendous value to consumers, as well as
third-party payers,” Golinkin said. “At
the same time, they have to find a way to
make sure they can make a profit, and
there is no doubt in my mind that will
occur and, in fact, is occurring in some
clinics in some markets. It will be an on-
going process of trying to refine the busi-
ness model as the industry matures.”
www.drugstorenews.com
www.drugstorenews.com
RETAIL CLINIC REPORT
Clinics’ legislative issues ease
BY ANTOINETTE ALEXANDER
Since first appearing on the
radar screen about eight years
ago, retail-based clinics have
faced their share of legislative
hurdles as some health officials
and policymakers have been
quick to raise their defenses
and act before truly under-
standing the model. Today,
however, much of the commo-
tion appears to be falling by the
wayside as the model proves
its role as a critical player in
today’s U.S. healthcare system.
“There are states that are on
the watch list because some-
body introduced some bill or
is trying to introduce some
bill, so you have to watch
what happens to make sure you
are not blindsided, but I really
think that the net of all of the
furor over retail clinics from a leg-
islative point of view is perhaps
in the rearview mirror,” said Web
Golinkin, president of the
Convenient Care Association and
chief executive officer of clinic
operator RediClinic. “There have
not been quality issues with con-
venient care. It is clear that con-
sumers like it. It is clear that
third-party payers like it and are
contracting with it, and it is clear
that, as a nation, we need to be
doing things to increase access
to affordable health care. Under
those circumstances, it is going
to be very difficult for any one
constituency to try to block the
development of convenient care
in a significant way.”
In recent years, several policy-
makers and physicians’ groups
AMA backs20ban
CONTINUED FROM PAGE 87
interest in safeguarding the health
and welfare of citizens and that
such interests may prompt regula-
tory restrictions that guard
against, for example, the sale of
alcohol and tobacco products to
minors. However, the rationale
for not allowing a clinic in a retail
store that also sells tobacco or
alcohol is unclear, according to the
have come forward in an effort to
curb the growth of the convenient
care model, citing such concerns
as a lack of continuity of care and
a risk of patients utilizing such
clinics as their medical home.
However, such efforts have large-
ly run out of steam as the conven-
ient care industry has worked to
educate officials on the model
and has adopted standards for
quality patient care and safety
that go even beyond those sug-
gested by such major medical
bodies as the American Medical
Association, American Academy
of Pediatrics and American
Academy of Family Physicians.
For example, in Massachusetts,
CVS’ application to open a
MinuteClinic in one of its stores in
Weymouth set into motion the cre-
ation of a specialized set of rules. It
didn’t happen overnight, but after
a long review process that includ-
ed two public hearings and the
submission of hundreds of pages
of testimony, state health officials
approved in January regulations
allowing for limited-service clinics.
“The legislative challenges
remain primarily state-based and
revolve around policymakers’
lack of familiarity with the model
and concern for how it fits in
with their existing conceptualiza-
tion of health care,” said Tine
Hansen-Turton, executive direc-
tor of the CCA. She stressed that
the association continues to focus
on educating local governments
and policymakers about the con-
venient care model and its bene-
fit to residents, and it continues
to “work hand-in-hand with state
medical associations.”
FTC. At the same time, this restric-
tion could limit the supply of
retail clinics and the basic medical
services they would provide if
retail stores were to decide sales of
tobacco and alcohol were more
profitable than having a retail
health clinic.
There was much opposition to
HB 5372, as proposed, and the bill
has been assigned to the Rules
Committee, essentially stopping
any further action this year.
August 18,Store
Drug 2008News
• 21
 Rx 2.0
THE FUTURE IS NOW
MinuteClinic business grows
thanks to support from CVS
MinuteClinic’s aggressive
growth plans, subsequent
acquisition by CVS Care-
mark and list of “firsts” has
put this clinic operator atop
the retail clinic rankings.
In September 2006, CVS
snapped up the in-store clinic
operator and, since that time,
has grown the number of clin-
ics from 83 to more than 500
locations across the country. It
was a move that made head-
lines, as it sig-
nified that
the conven-
ient care in-
dustry is here to
stay.
Today, Min-
uteClinic contin-
ues to be an
industry trail-
blazer. For
example, the
The difference between working with other medical suppliers...
VAX1797
90 Store
Drug • August 18, 2008
News
clinic operator was the first to
achieve accreditation for its
retail sites from the Joint
Commission on Accreditation
of Healthcare Organizations.
And with CVS’ acquisition
of pharmacy benefit manager
Caremark, MinuteClinic is
leveraging the PBM business
to develop new services that
will undoubtedly set the clinic
operator apart in the minds of
big healthcare payers.
States with MinuteClinics
Source: Chain Store Guide, www.csgis.com
RETAIL CLINIC REPORT
Walgreens extends Take Care to 23 U.S. cities
States with Take Care
Health Systems clinics
but has also
had a pro-
is president of Walgreens’
Health and Wellness divi-
found strate- sion—which includes Take
gic impact on Care, as well as the I-trax clin-
the convenient ics it acquired earlier this
care industry. year—was recently promoted
Take Care to corporate senior vice presi-
was cofound- dent. Miller serves as presi-
ed in October dent and chief executive offi-
2004 by Hal cer of Take Care.
Rosenbluth, Today, Take Care Health
Source: Chain Store Guide, www.csgis.com
past president Systems manages more than
Walgreens completed in and chief executive officer of 190 convenient-care clinics in
May 2007 its acquisition of in- global travel company Rosen- 23 cities in 14 states, and plans
store clinic operator Take Care bluth International, and Peter to have about 400 clinics in
Health Systems, a move that Miller, former president of a operation by the end of 2008.
has not only proved the will- Johnson & Johnson consumer Since opening its first clinic in
ingness of Walgreens’ senior healthcare company. November 2005, it has treated
management to be flexible, Rosenbluth, who currently nearly 600,000 patients.
Wal-Mart signs co-branding plan with RediClinic
Clinic operator RediClinic As of press time, the com- in Tulsa, Okla.; Fayetteville
(formerly InterFit Health) was pany operated 20 locations in and Rogers, Ark.; Richmond,
founded in 1989 and today H-E-B stores in Houston and Va.; and Atlanta. Additional
has more than 30 locations Austin, Texas, as well as 15 clinics are expected to open in
within retail settings. locations in Wal-Mart stores 2008 and 2009.
We believe in getting you what you need when you need it.
www.drugstorenews.com
www.drugstorenews.com Drug
August 18, Store 22
2008 News
•
 States with RediClinics
Source: Chain Store Guide, www.csgis.com
In February, it was announced that
Wal-Mart had signed a letter of
intent to work with RediClinic and
local hospital systems to open co-
branded walk-in clinics, dubbed
“The Clinic at Wal-Mart,” in 200 Wal-
Mart Supercenters.
Since its inception, RediClinic has
worked to expand its services (i.e.,
Weight Watchers and smoking cessa-
tion) and to leverage healthcare tech-
nology. Web Golinkin, Convenient
Care Association president and Redi-
Clinic chief executive officer, said the
company is testing telemedicine tech-
nology in Houston-area clinics to help
facilitate physician oversight.
How sweet it is!
Medical & Surgical Products, Vaccines & Injectables.
DrugStore
Drug News
Store News
Plans for Little Clinic’s growth could be far-reaching
The Little Clinic opened its
doors in 2003 with its first two
clinics in Kroger supermarkets in
Louisville, Ky. Today, the compa-
ny operates more than 60 clinics
within Kroger, Fry’s and Publix
locations in seven states.
Earlier this year, Kroger made a
“significant” investment in The
Little Clinic to support the rollout
of the clinic operator, which, in
2005, also attracted an investment
from Solera Capital, a private-equi-
Medcor, Target partner for clinics
With the loss of the MinuteClinics
it operated prior to CVS’ acquisition
of MinuteClinic, Target needed to go
back to the drawing board in
September 2006, when it launched
the first clinic bearing its own name.
Today, it has 24 in-store Target Clinics
in Maryland and Minnesota.
To open the clinics, Target part-
nered with Medcor, a medical
provider with more than 20 years of
and working with VaxServe.
www.drugstorenews.com
www.drugstorenews.com
ty firm based in New York.
In announcing the deal with States with LittleClinics
Kroger, details of the growth
plan were not disclosed.
However, the growth could be sub-
stantial, as Kroger has more than
2,486 supermarkets and multi-
department stores in 31 states
under two dozen local banners,
including Kroger, Ralphs, Fred
Meyer, Food 4 Less, Fry’s, King
Soopers, Scott’s, Smith’s, Dillons, Source: Chain Store Guide, www.csgis.com
QFC and City Market.
States with Target Clinics
experience operating clinics in a
variety of settings.
Target Clinics are staffed with
licensed nurse practitioners and
physician’s assistants and offer treat-
ment for such common illnesses as
strep throat, bronchitis and skin con-
ditions. Services also include well-
ness tests and screenings, as well as
vaccinations. The clinics accept
most major insurance plans. Source: Chain Store Guide, www.csgis.com
800.752.9338 | VAXSERVE.COM
August
August 18,
18,2008 23
2008••91
 Rx 2.0
THE FUTURE IS NOW BRANDED
Branded eyes biologics as patent expirations loom
BY DREW BUONO
2007 Top 10 therapeutic classes by U.S. sales
The well has been drying up for branded pharma-
ceutical companies over the past couple of years.
2007 2006 2005 2004 2003
With such blockbuster drugs as Pfizer’s cholesterol total dollars total dollars total dollars total dollars total dollars
drug Lipitor, the world’s best-selling drug, and
AstraZeneca’s gastroesophageal reflux disease drug 1. Lipid regulators $18.4 $21.7 19.8 $18.1 $15.4
Nexium nearing the end of their patent protection, all 2. Proton pump inhibitors 14.1 13.7 13.0 12.8 13.0
companies are facing concerns on how to make up 3. Antipsychotics 13.1 11.7 10.5 9.6 9.4
for the loss that made these companies the most prof- 4. Antidepressants 11.9 13.6 12.9 13.9 13.8
itable in the world over the last decade or so. 5. Seizure disorder 10.2 8.9 8.0 8.5 7.0
One way branded companies are trying to 6. Erythropoietins 8.6 10.1 8.7 8.2 7.5
maintain their status in the market is to invest in 7. Antineo monoclonal antib 6.8 5.8 4.0 2.6 1.8
biotechnology in order to gain new medicines to 8. Angiotensin II antagonist 6.6 5.8 5.1 4.5 3.5
bolster revenue as patents on top products 9. Anti-arthritis biological
expire. In the largest deal of the past year, response mod 5.3 4.4 3.7 2.6 1.7
AstraZeneca paid $15.6 billion to acquire Med- 10. Bisphosphonates 4.6 4.3 4.0 3.7 3.2
Immune, maker of the FluMist vaccine. This Total classes 286.5 276.1 253.9 239.9 219.6
acquisition doesn’t compare with discussions of
Roche buying the remaining 44 percent of 2007 Top 10 products by U.S. sales
Genentech that it doesn’t already own. That deal
would be worth about $44 billion and would 2007 2006 2005 2004 2003
give Roche full access to such billion-dollar total dollars total dollars total dollars total dollars total dollars
drugs as Avastin, Rituxan and Herceptin, which
are used to treat various forms of cancer. 1. Lipitor $8.1 $8.7 $8.4 $7.8 $6.8
“Big pharma companies have more drugs com- 2. Nexium 5.5 5.2 4.4 3.8 3.1
ing off patent in the next few years than they can 3. Advair Diskus 4.3 4.0 3.6 3.0 2.3
replace with their own pipelines,” said Glen 4. Plavix 3.9 3.0 3.5 3.1 2.3
Giovannetti, an analyst for Ernst & Young. “The 5. Seroquel 3.5 3.0 2.6 2.1 1.6
impact of the credit crunch and the downturn in 6. Singulair 3.4 3.0 2.5 2.2 1.8
the market doesn’t change the fact that drug mak- 7. Enbrel 3.4 3.1 2.8 2.0 1.4
ers need to invest in innovation to build pipelines.” 8. Prevacid 3.4 3.6 3.8 3.9 4.1
In other deals that have occurred over the past 9. Aranesp 3.2 4.0 2.8 1.9 1.0
year, Daiichi Sankyo agreed to purchase the 10. Epogen 3.1 3.2 3.0 3.0 3.1
German biotech company U3 Pharma for $233.5 Total drugs 286.5 276.1 253.9 239.9 219.6
million in an effort to boost its cancer drug pipeline. Source: IMS Health, U.S. sales in billions
“One of our goals for Daiichi Sankyo is to increase
our presence in novel therapeutics in the oncology
arena,” Takashi Shoda, the company’s president and
chief executive officer, said in a statement.
That deal was just one of many that now seem Focus shifts to replenishing pipeline
to be becoming part of a trend of Japanese phar- Most of the leading drug drugs that are awaiting deci- Sanofi-Aventis’ Rimonabant,
maceutical companies purchasing biotech com- companies have weak pipe- sions from the Food and Drug otherwise known as Acom-
panies to bolster their own pipeline for the lines and huge products going Administration: the choles- plia. Sanofi pulled Rimo-
emerging cancer drug market. Takeda Pharma- off patent. Drugs with $20 bil- terol-controlling Cordaptive nabant out of the review
ceuticals last month bought the biotech company lion worth of annual sales are and the diet drug Taranabant. process after FDA advisers
Millennium Pharmaceuticals for $8.8 billion, expected to lose patent protec- Analysts are confident that rejected it in 2006, despite its
while Eisai spent $3.9 billion to acquire MGI tion in 2008, according to IMS Cordaptive could become a availability in Europe, and
Pharma in December. Health, putting enormous potential blockbuster that many fear that Taranabant
On the other side of the world, Pfizer also has pressure on the industry with could someday compete with awaits the same fate.
plans to get itself involved in biologics, with the a flood of generics. Pfizer’s Lipitor—the world’s Eli Lilly is also banking on
aim of having 20 percent of its company invested in Many analysts said Merck top-selling drug that will go FDA approval this year for
it by 2009. Pfizer is planning on expanding its shows the most promise in the off patent in 2010. Some of Prasugrel, an experimental
oncology business in hopes of making up for the coming year compared with these analysts believe Corda- anti-clotting drug. If ap-
revenue the company will lose when its No. 1 sell- other drug makers. The com- ptive could reach $1 billion in proved, it would compete
ing drug, Lipitor, loses patent protection in 2010. pany’s $4.85 billion Vioxx set- annual sales within five years. with Bristol-Myers Squibb’s
But with the oncology drug market forecast to tlement, announced last No- But Taranabant’s prospects anti-clotting drug Plavix. The
grow 50 percent to $85 billion by 2013, Pfizer chief vember, resolved most of the are less certain, and analysts agency recently granted the
executive officer Jeffrey Kindler believes that, “There lawsuits associated with the are reluctant to provide sales drug priority review and
are a lot of patients that are suffering, and there’s a discontinued arthritis pain- estimates, mainly because it’s should have a decision made
tremendous opportunity to meet their needs.” killer. But Merck also has two in the same drug class as CONTINUED ON PAGE 96 25
CONTINUED ON PAGE 98 26

Drug
DrugStore News
Store News www.drugstorenews.com
www.drugstorenews.com August 2008••95
18, 2008
August 18, 24
 Rx 2.0
THE FUTURE IS NOW BRANDED

Diabetes’ alarming rise propels new research
Health costs associated with dia-
betes have skyrocketed to $174 bil-
lion annually.
The dollar amount has increased
an average $8 billion a year since
2002, according to the American
Diabetes Association.
The disease now afflicts nearly
23.6 million adults and children in
the United States, or 8 percent of the
population. The rate of new cases
continues to accelerate, with the
prevalence increasing 13.5 percent
since 2005. In 2007 1.6 million new
cases were diagnosed. According
the ADA, if the trend continues on
its current course, 1-in-3 Americans
born in 2000 will develop diabetes
in his or her lifetime.
Of those diagnosed in the United
States, 5 percent to 10 percent have
Type 1 diabetes, with 90 percent to
95 percent with Type 2 diabetes.
Type 1 is the more serious. Diabetes
is diagnosed through various test-
ing methods that determine the
blood glucose level. Maintaining a
proper blood glucose level is the key
to living successfully with diabetes.
Health complications from dia-
betes are wide-ranging and include:
heart disease, stroke, high blood
pressure, blindness, kidney disease
and nervous system disease that
can lead to numbness in extremi-
ties. Amputations for people with
diabetes are 10 percent higher than
the rest of the population.
Because of the seriousness of the
disease, public outreach programs
have been launched to encourage
Americans to be tested. For one,
the ADA introduced CheckUp
America, a public awareness initia-
tive. On March 25, the 20th
anniversary of American Diabetes
Alert Day was held to educate and
encourage testing.
Major research projects in recent
months have included the National
Heart, Lung and Blood Institute’s
ACCORD (Action to Control
Cardiovascular Risk in Diabetes)
trial and the ADVANCE Study, an
international research project that
involved 11,140 patients with Type 2
diabetes. Both, in part, tested for the
impact of intensive glucose-lower-
ing treatments versus standard glu-
cose-lowering treatments.
The Richard and Susan Smith
Family Foundation Pinnacle Pro-
gram and the ADA are funding stud-
ies of newly discovered Type 2 dia-
betes genes in mice, with the hope it
will lead to a new treatment.
Meanwhile, Georgetown Uni-
versity has teamed with Gentag
and Science Applications Inter-
national Corp. to develop a new
noninvasive method of measuring
blood glucose levels using RFID
technology. It would eliminate the
need for finger pricking.
Pharmaceutical firms have contin-
ued to keep diabetes high on priority
lists. There has been a flurry of new
research developments announced
recently in the area of diabetes
research including, most notably:
• Novo Nordisk, the world’s lead-
ing supplier of insulin products, is
completing final stages of develop-
ment on liraglutide, which, when
finally approved in the United
States, will usher in a whole new
generation of antidiabetic drugs
known as GLP-1 analogs.
Liraglutide, the subject of discussion
at several sessions at the ADA’s
annual meeting this year, works by
stimulating the release of insulin
when glucose levels become too
high and by inhibiting appetite—
thereby promoting weight loss
among patients with Type 2 dia-
betes. Last month, the company
applied for approval to sell liraglu-
tide in Japan.
• Five Prime Therapeutics and
Pfizer are working together on the
discovery of antibody targets and
novel therapeutic protein products
to treat certain areas of diabetes
and cancer.
• GlaxoSmithKline and the
Harvard Stem Cell Institute are
working together on stem cell
research to find new medicines for
various diseases, including diabetes.
• Eli Lilly and Transition Thera-
peutics are partnering on the explo-
ration and marketing of gastrin-
based therapies in the treatment of
diabetes.
• AstraZeneca and Columbia
University Medical Center are part-
nering to develop novel therapeutics
for diabetes and obesity.
Additionally, in July, AstraZeneca and
Bristol-Myers Squibb submitted the
new diabetes drug Onglyza to both
the Food and Drug Administration
and the European Medicines Agency
for approval. It is intended to improve
blood glucose levels in patients with
Type 2 diabetes.

Focus
CONTINUED FROM PAGE 2495
by the end of September.
In November, Lilly re-
leased a study showing that
Prasugrel was significantly
more effective at preventing
blood clots than Plavix. But
it was significantly more
dangerous in exacerbating
bleeding—a side effect of
both drugs. 20
Biotech Amgen’s pipeline
contains Denosumab, an
osteoporosis drug that could
compete with Merck’s Fosa-
max, which lost patent pro-
tection Feb. 6.
Amgen released study
results Jan. 24 showing that
Denosumab is more effec-
tive than Fosamax in treat-
ing bone disease of the hips.
Bret Holley, analyst for
Oppenheimer & Co., project-
ed $2 billion in annual peak
sales for the drug.
Japanese pharmaceutical
manufacturer Takeda’s
new diabetes drug could
get approval soon. The
drug, Alogliptin, is show-
ing promise after the
American Diabetes As-
sociation in late May
released parts of nine stud-
ies of the medication that
were submitted for market-
ing approval in the United
States in January. They
showed that the drug low-
ered blood sugar levels as
much as Merck’s Januvia
without serious side effects.
Alogliptin, also known
as SYR-322, will compete
with Merck’s Januvia and
Novartis’ Galvus, which
also is up for approval at
the FDA. All three drugs
are in a new class of dia-
betes treatments known as
DPP4 inhibitors that signal
CONTINUED ON PAGE 9927

96 •Store
Drug August 18, 2008
News www.drugstorenews.com
www.drugstorenews.com Drug
August 18,Store 25
2008 News
•
 Rx 2.0
THE FUTURE IS NOW
Branded eyes
CONTINUED FROM PAGE 24 95
The company now has
almost 18 drugs for different
cancer treatments in its pipe-
line. It also currently has
Sutent on the market now, a
kidney-cancer drug, but it
only generates $600 million in
sales annually, meager com-
pared with the nearly $13 bil-
lion made by Lipitor last year.
In response to this move
toward biologics, Pfizer took
an equity investment in
FivePrime Therapeutics as
part of a new research and
licensing deal to find anti-
body targets and therapeutic
protein products to treat dia-
betes and cancer. FivePrime
has an oncology drug right
now in preclinical study.
Pfizer also purchased Sere-
nex giving it access to
Serenex’s drug SNX-5422,
which is in phase I trials and
is designed to treat cancer tu-
mors and cancers of the
blood, lymph nodes and
bone marrow. Other com-
pounds in Serenex’s library
have the potential for uses in
treating cancer, as well as
such neurodegenerative and
inflammatory diseases as
Alzheimer’s, Parkinson’s
and arthritis.
Pfizer also acquired Coley
Pharamceuticals, another
The Pharmacy Drive-Thru Equipment Specialist
98 •Store
Drug 18, 2008
News
August
biotech company specializ-
ing in making vaccine tech-
nology and drugs to treat
cancer, allergies, asthma and
autoimmune diseases.
Another way branded com-
panies are trying to maintain
sales is by increasing whole-
sale prices for the 50 top-sell-
ing branded drugs. The com-
panies increased the prices by
an average of 7.82 percent in
2007, after increases of 6.73
percent and 6.22 percent in the
previous two years, according
to Delta Marketing Dynamics.
Some individual branded
drugs had double-digit price
increases over three years.
GlaxoSmithKline raised the
price of its antidepressant
Wellbutrin XL by 44.5 percent
from 2005 to 2007. Sanofi-
Aventis raised the price of its
sleep drug Ambien 70.1 per-
cent. Shire increased the price
of its attention deficit disorder
medication, Adderall XR, by
33.5 percent, while the price of
cholesterol-fighting Lipitor,
which brought in roughly $13
billion last year for Pfizer, rose
16 percent in that time.
The companies are doing
this in part to shift patients
toward next-generation drugs.
One example is with Ambien.
The price was raised before
the drug lost its patent protec-
tion in hopes of making
patients move to the less-
or mo
ore information on our
om
mplete
t liline off products,
d t visit
i it
ur web site at www.bavis.com
201 Grandin Road
Maineville, OH 45039
tel 513.677.0500
fax 513.677.0552
info@bavis.com
BRANDED
18 Novel drugs approved by the FDA in 2007
compared with 22 in 2006
Source: FDA CDER, Market Insights Analysis, January 2008
expensive Ambien CR, which past few months. Lawmakers in mid-June to a six-month
is patent-protected for several and the Food and Drug moratorium on advertising
more years. Administration have all new drugs. They also agreed
Another example of shifting agreed that something needs to limit how doctors would be
focus toward next generation to be done to restrict what is used in their ads, a reference to
drugs is Amylin Pharma- directed at the consumer. Pfizer’s misuse of Dr. Robert
ceuticals and Eli Lilly’s Type 2 In particular, House in- Jarvik in ads for Lipitor.
diabetes drug Byetta. Both vestigators are focused on The Pharmaceutical Re-
companies have been working four drug makers: Merck and search and Manufacturers of
on a once-daily version of Schering-Plough for market- America also jumped on
Byetta, which they hope to ing of the cholesterol drug board by creating a new policy
seek approval for in 2009 and Vytorin, a combination of in early July that said drug
to launch sometime in 2010. Zocor and Zetia; Pfizer for representatives wouldn’t be
Dried-up pipelines aren’t using a doctor who does not allowed to hand out logo-cov-
the only things stopping practice medicine in its ads for ered pens, prescription pads,
branded companies from the cholesterol drug Lipitor; mugs, clocks, mouse pads and
bringing in big revenues. and the anemia drug Procrit other freebies at physicians’
Direct-to-consumer advertis- by Johnson & Johnson. offices. This was done to cut
ing has been a big issue and a The pharmaceutical compa- down on the barrage of logos
big thorn in the side of nies, however, responded in a patients see when they walk
branded companies over the concilliatory way by agreeing CONTINUED ON PAGE 28 100
Lipid-lowering agents lose the top spot by prescription volume
% Market
Total Rxs* share % Growth
U.S. Industry 3,811 100.0 2.8
1. Antidepressants 233 6.1 2.3
2. Lipid regulators 221 5.8 8.8
3. Codeine and comb 186 4.9 5.0
4. Ace inhibitors 158 4.1 2.4
5. Beta blockers 133 3.5 1.6
6. Proton pump inhibitors 108 2.8 6.6
7. Seizure disorders 102 2.7 7.3
8. Thyroid hormone, synthetic 101 2.7 3.8
9. Calcium blockers 87 2.3 0.4
10. Benzodiazepines 83 2.2 3.4
All 1,412 37.1 4.3
*In millions Source: IMS Health, National Prescription Audit, Dec 2007
www.drugstorenews.com
www.drugstorenews.com August 18,Store
Drug 26
2008 News
•
 Focus
CONTINUED FROM PAGE 25 96
aimed at treating heredi-
tary angiodema.
Firazyr will enter the
as much as US$400 million
annually. The FDA rejected
the product in April
medicine. Both companies
now will work on an-
swering the questions
deal will help make up for
the anticipated loss of its
patent for its billion-dollar
the pancreas to produce European market this year because the agency ques- posed by the FDA. hyperactivity treatment
more insulin and the liver and is expected to generate tioned the efficacy of the Shire is hoping that this Adderall XR.
to make less glucose.
Assuming it is approved
by the agency, Alogliptin
will succeed Actos, which
generates about 29 percent
of Takeda’s current revenue
and will lose patent protec-
tion in 2011.
Another possible diabetes
drug could be Liraglutide by
Penetrate to the root of
Novo Nordisk.
Novo Nordisk, the world's
leading supplier of insulin
acne to clear skin fast.
products, is completing
final stages of development
of the new drug, which,
when finally approved in
the United States, will
usher in another new gen-
eration of anti-diabetic
drugs known as GLP-1
analogs. Liraglutide, anoth-
er hot topic of discussion at
the American Diabetes
Association’s annual meet-
ing this year, works by
stimulating the release of
insulin when glucose levels
become too high, and also,
by inhibiting appetite—
thereby promoting weight
loss as well among patients
with type 2 diabetes. The
company a few months ago
released results from a 32-
week extension of a 20-
week phase 2 obesity study
in which patients were
treated with its diabetes Obagi SoluCLENZ Rx GelTM contains
medication Liraglutide.
Liraglutide was com-
the only solubilized form of 5% BPO
pared in the study with the The solubilized BPO in SoluCLENZ Rx Gel is 1/10,000
weight-loss medication
the size of any other benzoyl peroxide product available,
Orlistat. In all, 398 of the
564 participants were not so it can penetrate deep into the follicle and clear acne
all patients with diabetes. in as little as two weeks.
The results showed that
patients treated with Lira- To learn more about SoluCLENZ Rx Gel and how
glutide lost more weight your patients can treat acne where it starts,
than those taking Orlistat. visit www.soluclenz.com.
Last month, Novo
applied for approval to sell
Liraglutide in Japan.
Shire appears to have SoluCLENZ Rx Gel is a prescription acne therapy to be used only under
the supervision of a physician.
expanded its pipeline with
SoluCLENZ Rx Gel and SoluZyl Technology are trademarks of OMP, Inc.
its acquisition of Jerini in a Obagi is a registered trademark of OMP, Inc.
deal worth $554 million © 2007 Obagi Medical Products, Inc. All rights reserved. 07/08

that it announced last

month. The deal will add
Jerini’s new drug, Firazyr,

DrugStore
Drug News
Store News www.drugstorenews.com
www.drugstorenews.com August 18,
August 18, 2008 27
2008••99
 Rx 2.0
THE FUTURE IS NOW
BRANDED
Branded eyes wining and dining doctors
at restaurants.
new trial called Seas were
recently released showing that
crease patients’ risk of cancer.
In the trial, 102 patients that
their cancer, compared with 23
taking placebo. But just as
CONTINUED FROM PAGE 26 98 Merck though has other the drug did not help people took Vytorin developed can- with the ENHANCE trial, that
into the office. The new mar- worries about Vytorin besides with heart-valve disease avoid cer, compared with 67 taking proved Vytorin was no better
keting code also will ban indi- what the government is trying further heart problems. But the placebo. Of those, 39 peo- than Zocor at blocking plaque
vidual representatives from to accomplish. Results from a the drug did appear to in- ple taking Vytorin died from buildup in carotid arteries,
Merck and its partner Scher-
ing-Plough are awaiting two
much larger studies into the
effectiveness of the drug.
Those studies results are ex-
pected in 2011.
The FDA also presented
trouble to the pharmaceuti-
cal industry as a whole by
Rx Only Carcinogenesis, Mutagenesis, Impairment of Fertility
limiting the number of new
Data from several studies employing a strain of mice that are highly susceptible drugs it has allowed on the
DESCRIPTION to developing cancer suggest that benzoyl peroxide acts as a tumor promoter. market, only 18 approved
SoluCLENZ Rx Gel™ (benzoyl peroxide, 5%) is a proprietary topical, gel- The clinical significance of these findings to humans is unknown. Benzoyl
based, benzoyl peroxide for use in the treatment of acne vulgaris. peroxide has not been found to be mutagenic (Ames Test) and there are no last year, compared with 40
published data indicating it impairs fertility. just nine years ago, ac-
Benzoyl peroxide is an oxidizing agent that possesses antibacterial
properties and is classified as a keratolytic. Pregnancy: Teratogenic Effects: Pregnancy Category C cording to IMS Health.
Animal reproduction studies have not been conducted with benzoyl peroxide.
It is not known whether benzoyl peroxide can cause fetal harm when This is due in large part to
Solubilized benzoyl peroxide (C14H10O4) is represented by the following
chemical structure:
administered to a pregnant woman or can affect reproduction capacity. the fallout from the with-
Benzoyl peroxide should be used by a pregnant woman only if clearly needed. drawal of Merck’s pain-
There is no available data on the effect of benzoyl peroxide on the later
growth, development and functional maturation of the unborn child. killer Vioxx in 2004.
Nursing Mothers The rise in black-box
It is not known whether this drug is excreted in human milk. Because many warnings to certain medica-
drugs are excreted in human milk, caution should be exercised when benzoyl
peroxide is administered to a nursing woman. tions also has had an
Pediatric Use impact on the business. The
Safety and effectiveness in children have not been established. most obvious example: the
SoluCLENZ Rx Gel contains Benzoyl Peroxide USP 5% as the active
ADVERSE REACTIONS diabetes medications Av-
ingredient in a gel-based formulation consisting of: Benzyl Benzoate, BHT,
Cyclopentasiloxane, Dimethyl Isosorbide, Ethylhexyl Isononanoate,
Allergic contact dermatitis, dryness and burning and stinging have been andia by GlaxoSmithKline
reported with topical benzoyl peroxide therapy.
Ethoxydiglycol, Silica. and Actos by Takeda, due to
CLINICAL PHARMACOLOGY
OVERDOSAGE the risk of heart failure in
If excessive scaling, erythema or edema occurs, discontinue use of this
The mechanism of action of benzoyl peroxide is not totally understood but
preparation and consult a physician. some patients. For the
its antibacterial activity against Propionibacterium acnes is thought to be a
major mode of action. In addition, patients treated with benzoyl peroxide fourth quarter—the quarter
DOSAGE AND ADMINISTRATION
show a reduction in lipids and free fatty acids, and mild desquamation
Use once or twice daily or as directed by your physician. Clean the skin after the announcement—
(drying and peeling activity) with simultaneous reduction in comedones and
acne lesions.
thoroughly and allow skin to dry completely before applying. Apply one pump of Avandia sales dropped by
SoluCLENZ Rx Gel onto fingertips and apply evenly to entire face, avoiding the
Little is known about the percutaneous penetration, metabolism, and eyes, nose and mouth. If bothersome redness, dryness or peeling occurs, 55 percent, and overall for
excretion of benzoyl peroxide, although it has been shown that benzoyl reduce application to every other day or once a day. the year, sales dropped by
peroxide absorbed by the skin is metabolized to benzoic acid and then
excreted as benzoate in the urine. There is no evidence of systemic toxicity
If experiencing post-application sensitivity, wait 10 minutes after washing 29 percent. Actos, on the
before applying SoluCLENZ Rx Gel to allow the skin to dry completely.
caused by benzoyl peroxide in humans. other hand, didn’t take as
If going outside, use a sunscreen. Allow SoluCLENZ Rx Gel to dry, then follow
INDICATIONS AND USAGE directions in the sunscreen labeling. If sensitivity develops, discontinue use of
much of a hit because
SoluCLENZ Rx Gel is indicated for the topical treatment of acne vulgaris. both products and consult a physician. Takeda rolled out a new ad
CONTRAINDICATIONS
campaign touting safety.
SoluCLENZ Rx Gel is contraindicated in patients with a history of HOW SUPPLIED Former GSK chief execu-
hypersensitivity to benzoyl peroxide or any of the ingredients in the product. SoluCLENZ Rx Gel 27 mL NDC 62032-121-10
tive officer Jean-Pierre Gar-
SoluCLENZ Rx Gel is manufactured by:
WARNINGS
OBAGI MEDICAL PRODUCTS, INC.
nier said he does not foresee
When using this product, avoid unnecessary sun exposure and use a the FDA softening its posi-
Long Beach, CA 90802
sunscreen. Keep out of reach of children. If swallowed, get medical help or
contact a Poison Control Center right away. Product made in U.S. tion on drug approvals.
Prescribing information as of March, 2008 Garnier, who recently
PRECAUTIONS Questions? Please call 866-927-1270.
General stepped down from the
For external use only. company, said that the FDA
Information for Patients ®
has raised the bar and com-
Avoid contact with eyes, eyelids, lips and mucous membranes. If accidental panies must adapt by shift-
contact occurs, rinse with water. Contact with any colored material (including
hair and fabric) may result in bleaching or discoloration. If excessive irritation ing drug development pri-
develops, discontinue use and consult your physician. orities and conducting tri-
Patents Pending
Obagi is a registered trademark of OMP, Inc.
als on targeted subpopula-
SoluCLENZ Rx Gel is a trademark of OMP, Inc. tions to better realize rare
60723010V
side effects prior to regula-
tory submission.
Other senior industry per-
sonnel suggest the U.S. elec-
tion has had a strong impact
on the FDA’s position on
new drugs.

100Store
Drug News
• August 2008
18, www.drugstorenews.com
www.drugstorenews.com August 18,Store
Drug • 28
2008News
 Rx 2.0
THE FUTURE IS NOW GENERICS
Patent expirations launch the age of generics
BY DREW BUONO drug company in the world, with sales
of $9.4 billion, while Barr was ranked GenericsGenerics
continue togain
continue to gain traction
traction
(Brand generics are allocated to brands and generics)
About $15 billion worth of brand- No. 4, with $2.5 billion in revenue. (Brand generics are allocated to brands and generics)
ed drugs are coming off patent this Together, the two companies have % Dollars % Total Prescriptions Dispensed
year, with many of the major patent more than 500 products on the market, 100 11% 10% 11% 12% 12%
expirations already occurring, as well as more than 200 applications 13% 15% 16%

according to IMS Health. This, along pending in the United States to sell 47% 47%
80 48% 51% 53%
with the other $75 billion worth of generic versions of brand-name drugs 57% 61%
65%
drugs going off patent from 2009 to with combined sales exceeding $120
60
2012, makes this the age of generics. billion a year. The combined company
Some of the drugs that have lost will have about 37,000 employees and 89%
90%
89%
88% 88%
patent protection so far this year are operations in more than 60 countries. 40 87%
85% 84%

GlaxoSmithKline’s migraine medica- The bid for Barr is the latest in a 54% 53%
52% 50%
47%
tion Imitrex, Merck’s osteoporosis string of deals upending the generics 20
43% 39% 35%

drug Fosamax, Janssen Pharma- business. On July 23, a British pharma-

ceuticals schizophrenia drug Ris- ceutical giant, GSK, said it would enter 0 2000 2001 2002 2003 2004 2005 2006 2007 2000 2001 2002 2003 2004 2005 2006 2007
perdal and GlaxoSmithKline’s epi- the generics market through a joint
lepsy and bipolar I disorder treat- CONTINUED ON PAGE 104 30 Brands Generics
Source:
Source:IMS Health, IMSPrescription
National AuditsPrescription Audit Plus, National Sales Perspectives, Dec. 2007
ment Lamictal. These four IMS Health, IMS National Plus, National Sales Perscriptives, Dec 2007

drugs had sales of more than

$7 billion in 2007, according to
Lehman Brothers. Authorized generics build presence in industry
This also is backed by the BY AMANDA BALTAZAR
growth in the pharmaceutical
industry. While the growth is Authorized generics have become a
Prominence ofofauthorized
Prominence generics
Authorized Generics

only marginal, 3.8 percent in fact of life in the pharmaceutical

2007, generics continued to rise
in use and now occupy 65 per-
cent of total prescriptions dis-
pensed, according to IMS
Health. That’s a big difference
compared with the 18.6 percent
of prescriptions that were filled ics manufacturer. Because the generics
with generics back in 1984,
when the Hatch-Waxman Act
was first passed. One of the rea- market quickly and easily, bypassing
sons for this growth, according
to Lehman Brothers specialty
pharmaceuticals analyst Rich
Silver, is that generic substitu-
tion is occurring much more
quickly today at pharmacies
than it was compared with
even a few years ago. Silver
said that, “Successful generic
substitution today is at an 80
percent conversion within four
to six weeks, compared with 60
percent within six to eight
months just a few years ago.”
Another change that will
have a huge impact on the
future of generics is mergers
of branded and generic com-
panies, as well as between
generic companies. The big-
gest deal so far this year was
Teva Pharmaceuticals’ pur-
chase of rival generics manu-
facturer Barr Pharmaceu-
ticals in a deal worth more
than $7 billion.
Teva is the No. 1 generic
industry. 33% of branded companies adopted authorized 44% of branded companies plan to launch authorized
These drugs exist to bolster the cof- generics between 2005 and 2007 generics between 2008 and 2010
fers of branded pharmaceutical firms.
They are launched either by the brand-
ed company’s authorized generics sub-
sidiary or through a deal with a gener-
use the same formula as the brand-
name drug, they can be brought to
the 180-day exclusivity period that’s
awarded to the first generic drug on
the market.
A report from Cutting Edge
Information, “Combating Generics
Source: IMS Health
2008: Counter-Generics Strategy,
Tactics and Execution,” showed that if
anything, branded pharmaceutical Authorized generics case study: Allegra
companies are ramping up their
authorized-generic efforts.
Their research of 26 Big Pharma
companies showed that between 2005
and 2007, 33 percent of companies
launched an authorized generic.
When asked if they would launch one
between 2008 and 2010, an additional
11 percent said that it was likely.
And many of them plan to do it
themselves. Between 2005 and 2007,
11 percent said that they had created
a subsidiary company to market the
authorized generic. Between 2008 and
2010, 19 percent expected to have an Brand ANDA generic Authorized generic or brand generic
authorized generic subsidiary.
Source: IMS Health
“Some companies said that with the
CONTINUED ON PAGE 10832

102 AugustNews
Drug•Store
18, 2008 www.drugstorenews.com
www.drugstorenews.com Drug 18,
August Store News
2008 • 29

Progress slow for biogenerics approval
BY DREW BUONO
Biogeneric drugs still are
the hot topic in the pharma-
ceutical industry, but they
still are not allowed in the
United States.
Last summer, the news on
biogenerics, or biosimilars as
they are called in Europe, was
Flooded generic pipeline looms as branded patents expire
Would you like a cheaper
version of that blockbuster
drug? That question has
been asked at lot at pharma-
cies over the past couple of
years, and it’s only going to
become more frequent as
more brand-name drugs lose
patent protection, leading to
a wave of generic medica-
tions entering the market.
From the beginning of this
year until 2013, a total of 183
branded drugs will fall victim
to a new rival—a generic
counterpart. The biggest year
will be 2012, when 60 drugs
will go off patent. One of
these will be Pfizer’s choles-
Major wave of patent expirations continues
U.S. patent expiration timeline (Annual U.S. sales at risk)*
40
35
30
25
20
$bn
15
10
5
0
1995
1996
# of products 6 5
Sales at Risk represents U.S. sales ($ in billions in the year prior to patent expiry. Note that individual product sales may not be
lost in a given year owing to patent legislation and other regulatory hurdles.
Source: Lehman Brothers
Patent
CONTINUED FROM PAGE 10229
venture with Aspen, a South
African firm. In June, Daiichi
104Store
Drug 2008
News18,
• August
Rx 2.0
THE FUTURE IS NOW
the approval of Binocrit by
Sandoz, Epoetin alfa Hexal
from Hexal Biotech and
Abseamed from Medice
Arzneimittel Putter, all of
which were generics of
Johnson & Johnson’s anemia
drug Eprex. Skip ahead to
2008 and the headlines jump
back over the Atlantic.
terol drug Lipitor, which is
the best-selling drug in the
world with sales of about $13
billion. Ranbaxy and Pfizer
had been in heated disputes
regarding the patent protec-
tion of Lipitor, and both sides
recently settled on a date of
Nov. 30, 2011, for the release
of a generic version of the
drug with 180 days of exclu-
sivity in the United States.
Some of the other future
generic drugs will come from
TAP Pharmaceuticals’ acid
reflux drug Prevacid, which
will lose protection next year
and offer up its more than $3
billion in sales to generic
2001
2003
2004
1997
1998
2000
2002
1999
10 6 12 14 7 18 13 11
Sankyo bought Ranbaxy,
India’s biggest generics firm,
for $4.6 billion. And Sanofi-
Aventis now is attempting to
win full control of Zentiva, a
GENERICS
Early in 2008, it looked as if
this would be the year bio-
generics finally got approved
by Congress. Reps. Allyson
Schwartz, D-Pa., Lois Capps,
D-Calif., and Jason Altmire,
D-Pa., were leading an initia-
tive with three House com-
mittees, including the Energy
and Commerce Committee, to
rivals, according to Lehman
Brothers. Shire’s attention
deficit hyperactivity disorder
medication Adderall XR, as
well as Sanofi-Aventis’ blood
clotting drug Lovenox and
GlaxoSmithKline’s genital
herpes medication Valtrex,
all face patent expiration in
2009. And, according to
Lehman Brothers, these three
drugs had combined sales of
more than $4 billion in 2007.
But before jumping ahead
into 2009, 2008 expirations are
still occurring, and with $15
billion worth of branded
drugs losing their patent pro-
tection, it will be remembered
2005
2006
2007
2008
2009
2010
2011
15 17 19 25 20 23 28
Czech generics firm in which
it has a minority stake.
The future of the generics
business also relies on one
more factor, which seems to be
www.drugstorenews.com
www.drugstorenews.com
get approval for biogenerics. biologics, and the Patient Pro-
The House lawmakers were tection and Innovative Biologic
considering multiple bills, in- Medicines Act, sponsored by
cluding the Access to Life- Rep. Jay Inslee, D-Wash.,
Saving Medicine Act, spon- which would not let biosimi-
sored by Rep. Henry Waxman, lars be deemed interchange-
D-Calif., which would have let able. Neither of these bills
the Food and Drug went anywhere, however.
Administration approve bio- Then a few months later, the
similars as compatible with CONTINUED ON PAGE 10631
as a big year for generic drugs. graine medication Imitrex
Here is a list of the most- and Abbott Laboratories
popular drugs that have lost seizure and convulsion
or will lose patent protec- drug Depakote.
tion this year: Merck’s Depakote was the most
osteoporosis drug Fosamax, recent drug to face generic
GSK’s anxiety medication competition, with the Food
Paxil CR, GSK’s depression and Drug Administration
drug Wellbutrin XL 150 mg, approving the generic, dival-
Janssen’s schizophrenia pill proex sodium delayed-re-
Risperdal, Bayer’s birth con- lease tablets by 13 companies
trol pill Yasmin, GSK’s bipo- including: Sun Pharmaceu-
lar I disorder and epilepsy ticals, Genpharm, Nu-
treatment Lamictal, Boeh- Pharm, Upsher-Smith Labor-
ringer Ingelheim’s restless atories, Sandoz, Teva Pharm-
legs syndrome medication aceuticals, Dr. Reddy’s Lab-
Mirapex, UCB Pharma’s oratories and Lupin. Depa-
epilepsy and seizure treat- kote had sales last year in the
ment Keppra, GSK’s mi- CONTINUED ON PAGE 10832
Generics companies dominated
the Top 10 on a total prescription basis
Total % %
Leading corporations Rxs* share growth
U.S. industry 3,811 100% 2.8
1. Teva 454 11.9 7.5
2. Mylan Labs 297 7.8 12.0
3. Novartis (incl. Sandoz) 267 7.0 – 4.7
4. Pfizer (incl. Greenstone) 261 6.8 –11.0
5. Watson Pharma 225 5.9 6.0
6. Barr Labs (incl. Pliva) 135 3.5 1.9
7. Merck & Co. 122 3.2 –5.6
8. GlaxoSmithKline 103 2.7 –13.3
2012
2013
9. AstraZenaca 103 2.7 –12.0
60 25 10.Covidien-Mallinckrodt 93 2.4 –16.3
Top 10 2,059 54.0 –0.9
*In millions Source: IMS Health National Prescription Audit
talked about constantly, but
about which nothing has been
done: biogenerics. As it ap-
in the Senate or in the House of
Representatives for this year.
pears, biogenerics legislation For more, see biogenerics story
at top of page
will once again not be present
August 18, Store
Drug 2008 News
• 30
 Rx 2.0
THE FUTURE IS NOW
Biogenerics
30
CONTINUED FROM PAGE 104
Pathway for Biosimilars Act
was introduced in the House
by Reps. Anna Eshoo, D-Calif.
and Joe Barton, R-Texas. That
bill, however, was considered
disappointing by Generic
Pharmaceutical Association
president and chief executive
officer Kathleen Jaeger, citing
GENERICS
such “barriers” as 14.5 years of
market exclusivity in addition
to the time companies already
have under their existing
patents.
Jaeger at the time said that,
“This new bill, at best, is a dis-
appointing distraction that
does nothing to advance legis-
lation. At worst, it’s a step
backward that puts brand
company profits before patient
needs. For a pathway to work,
it must ensure patient access.”
Still, it doesn’t appear any
other legislative options will
be coming along any time
soon. Some of the reasons for
the delay are the health of Sen.
Edward Kennedy, D-Mass.,
the presidential election and
the Medicare bill.
One of the few bright spots
for biogenerics was a report
from the biotech company
Insmed last month that
showed its drug, INS-19, a
recombinant human granulo-
cyte-colony stimulating drug
for the treatment of neutrope-
nia, a disorder characterized by
an abnormally low amount of
white blood cells, was bio-
equivalent to Amgen’s Neu-
pogen. According to the com-
pany, that made Insmed the
first U.S. company to success-
fully demonstrate bioequiva-
lence for a follow-on biologic
product.
Insmed also is working on
creating another follow-on
biologic—a version of another
of Amgen’s chemotherapy
drugs, Neulasta. The compa-
ny has completed preclinical
pharmacological and phar-
macokinetic studies for the
product, INS-20, and intends
to start a phase I bioequiva-
lence study of the drugs in the
fourth quarter of this year.
Neulasta and Neupogen com-
bined had worldwide sales of
almost $4.3 billion in 2007,
according to Amgen.
Dr. Reddy’s is forming a
joint venture with an as-yet-
unnamed biotech company to
make biogenerics in competi-
tion with Ranbaxy Labor-
atories, Reliance Life Sciences
and other Indian companies,
as several biologics come off
patent in the next five years.
Dr. Reddy’s has a biologics
development center in
Hyderabad, India, with a 250-
member scientific team, and
already has developed and
launched a few biogenerics,
including Reditux, a generic
version of Roche’s Non-
Hodgkin’s Lymphoma drug.
The combined market for
biosimilars is expected to reach
$21 billion in sales by 2015 in
the United States and Europe.

106Store
Drug • August
News 2008
18, www.drugstorenews.com
www.drugstorenews.com Drug
August 18,Store 31
2008 News
•
 Rx 2.0
THE FUTURE IS NOW

Authorized10229
C
ONTINUED FROM PAGE
current [pharmaceutical]
climate and the rising pro-
file of generic companies, it
makes more sense to launch
an authorized generic
through a subsidiary—
there’s less red tape and
less worry about negotia-
tions,” said Eric Bolesh,
research team leader.
For the past few years,
for every branded drug
that’s gone off patent, an
authorized generic equiva-
lent has been launched.
Several have hit the market
this year, including:
• Patriot Pharmaceu-
tical’s authorized generic
version of Risperdal from
Janssen (both companies are
part of Johnson & Johnson),
which went head-to-head
with Teva’s generic risperi-
done in July.
• Alendronate sodium,
manufactured by Wat-son,
is an authorized generic
version of Merck’s osteo-
porosis medication, Fosa-
max. The generic company
receives the tablets from
Merck, which it then mar-
kets, sells and distributes,
giving Merck a cut of sales.
• And in June, Barr
Pharmaceuticals agreed to
sell authorized generic ver-
sions of Bayer AG’s Yasmin
and Yaz birth control pills.
Bayer will supply the pills
to Barr, which then will pay
a percentage of sales back
to the branded company.
So prevalent are authorized
generics that in June the Food
and Drug Administration
published a complete list of
them on its Web site. The list
included the drug’s name,
“A small company
is never going to
invest in R&D and
in having a law
firm to bring the
branded compa-
nies to court.”
Eric Bolesh,
research team leader
Cutting Edge Information
brand company manufactur-
er and the date the drug en-
tered the market. The list will
be updated quarterly to
include every new author-
ized generic drug.
Those who are most hurt by
this influx of authorized
generics are the manufactur-
ers of traditional generic
drugs.
According to Kathleen
Jaeger, president and chief
executive officer of the
Generic Pharmaceutical As-
sociation, the practice of
authorized generics “is a
brand tactic aimed at dis-
couraging generic competi-
tion.”
There is a flip side to this,
however. While the presence
of an authorized generic on
the market considerably
affects the generic drug that
is awarded 180 days of exclu-
sivity, there are many gener-
ics companies clamoring to
make authorized generic ver-
sions of brand-name drugs.
Among these companies
are Watson and Abbott Labs,
and there’s a simple reason
they’re involved: revenue.
“If you can guarantee
investment, it’s hard to turn
it down. This is money
going in the door, and it’s
money Wall Street is going
to see,” Bolesh said, adding
that it also gives smaller
generics companies an op-
portunity to get drugs out
there, if they work for the
branded companies.
“A small company is
never going to invest in
R&D and in having a law
firm to bring the branded
companies to court,” Bolesh
said. “So authorized gen-
erics make sense.”

Regulations10 prescription drugs. These

CONTINUED FROM PAGE 66
generic drugs to be therapeu-
tically equivalent to brand-
name drugs and that there is
no scientific or medical basis
for the view that generic
drugs will undermine treat-
ment outcomes.
No. 4: Pedigree laws
Key states: Kentucky,
Michigan, New York,
Texas and Utah
Almost all of the states
have proposed legislation
to require pedigree, or
track-and-trace, systems for
would require a label dis-
playing the address and
certification of every holder
of the drug between the
manufacturer and whole-
saler that distributes the
drug to the pharmacies.
At the federal level, Reps.
Steve Buyer, R-Ind., and Jim
Matheson, D-Utah, intro-
duced the Safeguarding
America’s Pharmaceuticals
Act of 2008 in April, which
would require electronic
pedigrees. California has
attempted to adopt electron-
ic pedigrees, in which each
drug bottle would have a
unique serial number on a
chip or barcode that would
correspond with a database
showing where the bottle
had been.
NACDS has come out
against mandating e-pedi-
gree, saying that the infra-
structure remains underde-
veloped and the technolo-
gy is insufficient, while
other methods to protect
drug safety already exist.
California has pushed back
the deadline for adopting
e-pedigree several times
for this reason.
No. 5: Tech certification
Key states: Illinois,
Kentucky, South Carolina
and others
“As the pharmacist
shortage continues, we’re
turning to technicians more
and more to meet the
demand for pharmacy serv-
ices,” Nicholson said.
Because of this, a number
of programs exist to certify
pharmacy technicians, and
most chain drug stores run
their own training pro-
grams. While several pro-
grams exist, some states
have sought to mandate
that all pharmacy techni-
cians receive training from
one particular program,
such as the American
Society of Health-System
Pharmacists.
Nicholson said that
while his organization
favors training require-
ments, it is against require-
ments that all pharmacy
technicians go through the
same program.
“We are not in support of
mandating a specific
accreditation program for
the training programs,” he
said. “We don’t think a
one-size-fits-all accredita-
tion program would be
appropriate.”

Flooded
buster to go off patent this year,
Protonix. Protonix brought in more
C ONTINUED FROM PAGE 30
104 than $2.5 billion for Wyeth in 2007,
United States of more than $800 easily making it the most-expensive
million. drug to go off patent in 2008. The
That figure puts it about a third of No. 1 generic company in the world,
the way behind the biggest block- Teva, as well as Daiichi Sankyo’s
newest acquisition Ranbaxy, were
two of the first companies to receive
approval from the FDA to market a
generic version of the drug, called
pantoprazole.
Next year, the big drug that
everyone will be after will be
Prevacid. The drug’s 2007 sales of
more than $3 billion easily gives it
a 2-to-1 advantage over the next
best-selling drug going off patent,
Sanofi-Aventis’ Lovenox, which
had sales of $1.62 billion last year,
according to Lehman Brothers.

Reporter’s notebook • Outbound Patient Calling.

CONTINUED FROM PAGE 18 81
evaluates refills as received and
either routes them for filling, marks
them for a doctor’s authorization or
flags pharmacist intervention.
• Outbound Fax-to-Doctor.
Automatically faxes authorization
request to physician’s office when
refill requires doctor’s authorization.
Automatically generates outbound
calls to remind patients to pick up
their prescriptions from will call.
The feature will be available as
part of a monthly subscription and
the companies offer more informa-
tion including a demo at the Web
site: www.pillphone.com.
Ramsell Pharmacy Solutions and
Mirixa have teamed to launch a phar-
macist-delivered medication therapy
management initiative for people with
HIV/AIDS. The new program allows
pharmacists to provide face-to-face
education and advice for the nearly
146,000 patients enrolled in AIDS
Drug Assistance Program in the
United States.
The initiative will use Ramsell’s
experience in HIV/AIDS and public
health pharmacy clinical services,
and will be delivered thorugh
MirixaPro, Mirixa’s medication care
management system. In addition to
each state ADAP organization, the
same services will be offered to state
Medicaid plans.
The pharmacist-patient face-to-
face education sessions are
designed to improve care and
increase treatment adherence.

108Store
Drug • August
News 2008
18, www.drugstorenews.com
www.drugstorenews.com Drug
August 18,Store 32
2008News
•
 Rx 2.0
THE FUTURE IS NOW

Revolution to shed the handwritten pre-

CONTINUED FROM PAGE 16 78
two years for treating Med-
icare patients, with smaller
raises the following three
years. The higher payments
should help doctors offset the
estimated $3,000 in costs they
incur for buying and installing
the software needed to pre-
scribe electronically.
Doctors who fail to make
the shift will face a series of
reimbursement cuts begin-
ning in 2012.
CMS will help physicians
make the transition to e-pre-
scribing, Health and Human
Services secretary Michael
Leavitt promised.
Leavitt told reporters that
paperless prescribing would
help reduce the estimated 1.5
million drug-related errors
each year that result in patient
injuries, as well as the estimat-
ed 150 million phone calls
pharmacists must make to doc-
tors for clarification each year.
But the healthcare system
will still have a long way to go
scription pad. SureScripts, the
pharmacy-founded e-pre-
scribing solutions provider—
which last month agreed to
merge with RxHub, the e-pre-
scribing platform created by
the PBM industry—predicted
that more than 100 million
scripts will be filled electroni-
cally in the United States in
2008—only about 7 percent of
the total.
Resistance from doctors is
the biggest reason for the slug-
gish pace of conversion. “We
have to work with the ven-
dors on the physician side …
to ensure that their software is
such that … the workflow is
optimal for writing and trans-
mitting prescriptions electron-
ically,” SureScripts acting chief
executive officer Rick Ratliff
told Drug Store News earlier
this year.
Another hurdle has been a
Drug Enforcement Admin-
istration rule that prohibits e-
prescribing of controlled sub-
stances. Former SureScripts
president Kevin Hutchinson
predicted the rule would be
overturned due to increasing
pressure from federal and state
lawmakers who say an elec-
tronic transaction trail will
help them better track the
drugs through the distribution
chain and to the patient.
“That will help tremen-
dously,” he noted. “It’s a road-
block for us today because
physicians have to think about
when to write scripts electron-
ically, and when to pick up the
paper pad.”
Other forces are driving
the move to e-prescribing, as
well. One of the strongest is
the growing demand at both
the state and federal level for
a system to establish an elec-
tronic pedigree of every
drug sold in pharmacies.
Behind the push for track-
and-trace technology: fears
by lawmakers and agency
watchdogs at HHS and the
DEA that the drug distribu-
tion system isn’t secure
enough against the threat of
counterfeit or tainted drugs,
which could enter the sup-
ply chain through gray-mar-
ket or other sources.
Beyond the push from law-
makers and retail pharmacy, a
slew of other recent initiatives
have emerged in many quar-
ters to spur the e-prescribing
revolution. Among them:
• Five physician groups—
the American Academy of
Family Physicians, the
American Academy of
Pediatrics, the American
College of Cardiology, the
American College of Ob-
stetricians and Gynecologists,
and the Medical Group Man-
agement Association—joined
forces to launch an online por-
tal, www.GetRxConnected.
com, that gives doctors a step-
by-step process to move away
from paper prescribing.
• Google has launched a
new service, called Google
Health, to provide a pass-
word-protected, Web-based
platform through which
patients, doctors, pharmacists
and medical labs could share
personal health information.
• Microsoft joined with
Kaiser Permanente to launch a
secure health data exchange
network through which
patients, physicians and other
health providers could access
test results, prescriptions and
other information.
• Blue Cross Blue Shield of
Massachusetts joined with
technology vendor Zix to
launch an e-prescribing alert
system for physicians and
their patients to help them
manage chronic diseases.
• The Pharmaceutical Care
Management Association un-
veiled a new print ad cam-
paign promoting electronic
prescribing. The targeted
audience: inside-the-Beltway
legislators and healthcare
policymakers.
• Under the umbrella group
Chain Drug Consortium, LLC,
a dozen regional drug chains
have joined with Microsoft to
allow consumers to store their
medication history online
using Microsoft HealthVault, a
Web-based platform for stor-
ing and sharing consumers’
health records.

Paradigm expertise where it so often is not other-

CONTINUED FROM PAGE 251
national economy, and the critical role
pharmacy plays in health care and
patient outcomes,” noted Steven
Anderson, president and chief execu-
tive officer of the National Association
of Chain Drug Stores.
“We’re not trying to challenge the
role of physicians or make radical
changes to the primary healthcare
delivery system,” noted Warren
Bryant, chairman, president and chief
executive officer of Longs Drug Stores,
in his first address as NACDS chair-
man this spring. “Rather, our model
improves upon the system by provid-
ing round-the-clock access to care and
wise available.
“Our vision for neighborhood phar-
macy is all about what the rest of the
system lacks: access and lower cost,”
Bryant added. “We’ve already built the
model. Because we’re retailers, we
already understand customer service.
And we’re constantly improving the
model.”
Other hurdles must also be over-
come. Among them:
• A more cautionary mood at the
Food and Drug Administration, which
has forced a slowdown in the introduc-
tion of new blockbuster medications
that build profit margins for retail
pharmacies and top-line revenue
growth. The FDA has also tightened
regulations on direct-to-consumer
advertising by drug makers.
• Rampant price discounting of
generic drugs, fueled by Wal-Mart’s
$4 promotion, increasing the com-
moditization of prescription drugs.
• Pressure from many states—led
by California—to implement new
electronic-pedigree laws. The result
could force chain and independent
retailers to spend big sums for
track-and-trace technology.
• Increasing competition and new-
patent settlements for drug manufac-
turers, which leads to new pressure on
the retail side as well.
• Continuing confusion over MTM,
which was mandated by the Medicare
Modernization Act, but which still
lacks universally acceptable standards
for implementation and billing.
These challenges all need to be
addressed. But in the larger picture,
community pharmacy appears poised
at the intersection of an aging America
and an explosion of new technology
and new advances in medicine. As
such, its future seems boundless.
“Pharmacy has the opportunity to
lead the way into a new healthcare par-
adigm,” recently noted David
Bernauer, former Walgreens and
NACDS chairman. The future, he said,
promises to be “one in which pharma-
cists will play a much larger role in
helping you manage your health
because they will have all the informa-
tion they need to help you.”

Drug retailers “We have no plans at all …

CONTINUED FROM PAGE 60 7
mail-order customers or form-
ing buying cooperatives.”
CVS’ only rival for
national dominance among
drug store operators,
Walgreens, is waging a com-
pletely different game plan.
to purchase a major PBM,”
said Jeff Rein, Walgreens
chairman and chief execu-
tive officer, earlier this year.
“We believe our independ-
ence from a large PBM dif-
ferentiates us and enables
us to successfully compete
for business as the provider
of choice.”
Walgreens is, however,
actively courting patients for a
broader set of healthcare
needs beyond basic pharmacy
services. The company has
embarked on a furious drive
to build up its specialty phar-
macy capabilities through the
acquisition of such companies
as Medmark and Option Care.
This spring, Walgreens broke
into what could be a huge
new-business opportunity by
purchasing two companies
that provide work-site em-
ployee health services. The
move allows the chain to take
its pharmacy offerings right
into employers’ offices.
Both Walgreens and Longs
are also focused on growing
their managed care business-
es organically. In its latest fis-
cal year, Longs doubled rev-
enues for its PBM division,
Rx America, by adding new
resources, staff and even
drug store outlets to serve its
client base.

110Store
Drug • August 2008
News18, www.drugstorenews.com
www.drugstorenews.com Drug
August 18, Store
2008 News
• 33