PHARMACY

Answering the Express Scripts challenge

BY Jim Frederick

Walgreens just took another leap forward in its drive to become America’s “first choice for health and daily living” and “a centerpiece in improving patients’ overall health.”

On May 7, the pharmacy giant announced it had completed its $225 million buyout of BioScrip’s community specialty pharmacies and centralized specialty and mail-service pharmacy businesses. The deal includes a national network with 30 BioScrip locations in 16 states and the District of Columbia, heavily focused on HIV, oncology and transplant patients.

Company leaders said the addition of BioScrip’s big specialty pharmacy network fits the “Well at Walgreens” strategy and marketing theme by bringing “additional specialty pharmacy products and services closer to patients” and advancing the potential for what community pharmacy can bring to the nation’s frayed healthcare network. It also “creates a strong network of support for our core drug store business to provide specialty pharmacy solutions to our patients,” said Kermit Crawford, Walgreens president of pharmacy, health and wellness.

Those benefits come none too soon. Beginning in January, Walgreens saw a hefty chunk of its prescription business bleed away following last year’s bitter contract dispute with pharmacy benefit management giant Express Scripts. With relations between the two companies severed over the issue of prescription reimbursement levels, millions of ESI members have taken their business to Walgreens’ competitors.

The company’s recent monthly sales reports clearly reflect the loss of those customers. Walgreens saw its total sales drop 3.7% in April, compared with April 2011, despite a larger store base, with scripts filled at comparable stores down 7.8% from prior-year levels and even front-end sales decreasing 0.5% from the same period last year. With ESI members accounting for 12.6% of Walgreens’ total prescriptions dispensed in April 2011, customer traffic for the combined March/April period was down 2.3%, compared with last year. One bright spot: average customer basket size was up 1.8%.

(See the full report here.)

Walgreens’ answer to critics who opposed its line-in-the-sand refusal to knuckle under to ESI’s pharmacy reimbursement terms has been to take its lumps in short-term declines in store revenues, while charging full-speed ahead with its long-term strategy of becoming the nation’s go-to resource for a broad spectrum of health-and-wellness services. With its increasing push into specialty and mail-order pharmacy via BioScrip and other acquisitions, its growing network of pharmacies and wellness clinics at employer worksites, more than 350 in-store Take Care health clinics, and an expanding menu of pharmacy services like immunizations, medication adherence programs and health screenings, the company wants to become “more than a drug store,” Walgreens president and CEO Greg Wasson said.

“Becoming ‘My Walgreens’ in every community across America is a lofty goal,” he told shareholders. “But with our expansive network of stores, expanding healthcare services and commitment to creating a satisfying customer experience, we can own the strategic territory of ‘well’…in every community we serve.”

Are Wasson and Walgreens on the right track? Will the drug store giant’s bold vision to become the nation’s top retail health and wellness destination be enough to offset the loss of its ESI customers and the constant pressure on pharmacy margins exerted by other PBMs, not to mention Medicare and Medicaid? Let us know what you think.

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PHARMACY

NACDS, NCPA urge Senate, House committees to preserve patient choice for Tricare beneficiaries

BY Antoinette Alexander

ALEXANDRIA, Va. — The National Association of Chain Drug Stores and the National Community Pharmacists Association today expressed concerns in a letter sent to Senate Armed Services Committee and House Armed Services Committee leaders over the potential impact of the administration’s fiscal year 2013 budget on Tricare beneficiaries and community pharmacy.

In a letter to Senate Armed Services Committee chairman Carl Levin, D-Mich., and ranking member John McCain, R-Ariz.; and a letter to House Armed Services Committee chairman Howard “Buck” McKeon, R-Calif., and ranking member Adam Smith, D-Wash., NACDS and NCPA stated that the budget would “increase healthcare costs for the Department of Defense, place significant financial burdens on Tricare beneficiaries and threaten access to local pharmacies.”

The industry groups outlined in the letters what they consider to be the flaw in the budget’s co-payments proposal to incentivize Tricare patients to move to mail order, which they said will, in fact, increase healthcare costs rather than decrease costs.

“The goal … is to reduce prescription drug spending. However, the co-payments currently in place for the Tricare pharmacy benefit are flawed, and the proposed changes will only build on this faulty structure. According to DOD’s own analysis, in the case of generic medications, mail order is more expensive than the retail pharmacy network,” the letters stated.

NACDS and NCPA urged the committees’ leaders to promote the use of generic drugs at neighborhood pharmacies. "Tricare mail order dispenses generics less frequently than other commercial mail-order programs,” the groups stated in the letters.

The letters also emphasized the importance of cost-savings demonstration projects, and urged Congress to include a medication therapy management project in the FY2013 Defense Authorization bill. “The use of MTM in targeted populations has been found to increase adherence to medications, reduce hospitalizations and physician visits, and reduce costs.”

The NACDS and NCPA urged Congress to ensure that community pharmacy access and choice are preserved for Tricare beneficiaries.


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PHARMACY

Walgreens finalizes BioScrip deal; expands specialty pharmacy footprint

BY Michael Johnsen

DEERFIELD, Ill. — Walgreens on Monday announced it has completed its acquisition of certain assets of BioScrip’s community specialty pharmacies and centralized specialty and mail-service pharmacy businesses. The transaction represents a total deal value of approximately $225 million.

“We welcome the BioScrip leaders and employees involved in the transaction to the Walgreens family,” stated Kermit Crawford, Walgreens president pharmacy, health and wellness. “BioScrip’s clinically focused community specialty pharmacies and access to additional limited distribution drug therapies, combined with Walgreens’ existing nationwide network of retail and health system pharmacies, creates a strong network of support for our core drug store business to provide specialty pharmacy solutions to our patients. This acquisition also significantly expands our nationwide reach to an additional half-million patients with chronic and complex health conditions.”

Beyond growing Walgreens’ specialty pharmacy footprint, the acquisition also will help grow Walgreens’ centralized specialty and mail-service pharmacy operations, the company stated.

The acquired community specialty pharmacy business includes a national network with 30 locations in 16 states across the United States and the District of Columbia, primarily serving HIV, oncology and transplant patients. Walgreens also acquired certain assets of BioScrip’s centralized specialty pharmacy business and traditional mail-service pharmacy business that dispenses prescriptions for, among others, Drugstore.com, which was acquired by Walgreens in June 2011.


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