Black holes and gray areas: State, federal authorities take a closer look at pharmacy compounding
Authorities in Massachusetts are looking to tighten regulations on compounding pharmacies as the state health department announced some changes to the makeup of the Massachusetts Board of Pharmacy and sent cease-and-desist notices to three compounding pharmacies for alleged violations.
Retail pharmacies looking to get into sterile compounding and exercise greater control over that supply chain — as Walgreens did last month when it bought an independent specialty compounding pharmacy in Indiana — should take note because it seems there will be increased scrutiny on the practice following a nationwide outbreak of meningitis linked to alleged unsanitary conditions at the Framingham, Mass.-based New England Compounding Center.
At the same time, federal authorities are looking to crack down on an industry whose regulatory environment the Massachusetts health department characterized as a "gray area." In November, Food and Drug Administration commissioner Margaret Hamburg testified before the House Committee on Energy and Commerce, detailing the FDA’s response to the meningitis outbreak and requesting greater oversight for the agency over pharmacy compounding.
In her testimony, Hamburg herself said that the FDA’s ability to scrutinize and take action against compounding pharmacies that may be endangering public health has been held back by unclear and incomplete laws, some of which have led to legal challenges to the agency’s regulatory authority. Earlier that month, in response to the outbreak, Rep. Edward Markey, D-Mass., proposed legislation to strengthen the federal government’s ability to regulate compounding by ending the "regulatory black hole."
There are two basic forms of compounding: traditional or nonsterile compounding, which is done in the pharmacy and involves making products like creams and ointments, mouthwashes and suppositories; and sterile compounding, which refers to industrial scale compounding of injected drugs and requires specialized facilities and attention to sanitation and cleanliness.
Many pharmacy retailers, particularly independents, already do the former. With more and more retailers moving into specialty, the latter makes good business sense as well. But as state and federal authorities start taking a closer look at the practice, pharmacy retailers should pay close attention because things could start getting complicated.
Focus on the loyalty card as the definitive barometer of pharmacy success, not won/lost ESI patients
DEERFIELD, Ill. — Walgreens last Wednesday reported November sales of $5.9 billion, a decrease of 3.9% versus the same period last year. However, the company also noted it had enrolled 38 million customers for its new loyalty card program, which debuted in September.
And while much of the discussion around Walgreens’ performance over this past year has been focused on the chain’s exit and subsequent return to Express Scripts, it’s a little unrealistic to look at Walgreens’ monthly comps right now and measure the chain’s success in getting those patients back. (Incidentally, about 40% of those customers have come back to the Walgreens pharmacy camp, speculated Credit Suisse research analyst Ed Kelly.) For example, in the comparable year-ago period Walgreens was still a part of the Express Scripts network. And last year results didn’t have the significant drag of a major hurricane that interrupted operations of a number of stores for the better part of a week, either.
Better apple-to-apple comparisons will come at the end of January 2013, when you can measure the performance of a Walgreens fresh out of the Express Scripts network to a Walgreens folded back into that network. But even those comparisons won’t tell the full story, because Walgreens at the end of January 2013 will have well more than the 38 million enrolled loyalty card members that they have now. And while it may be early days for Walgreens’ loyalty card program as compared to the offers from Rite Aid or CVS Caremark, you can’t discount the influence those 38 million-plus best customers will have on performance on go-forward. It’s the experience differentiator that will help Walgreens — and others — compete with value-oriented retailers and a still-weakened consumer.
Loyalty cards are also the common denominator that gives each of the big three drug channel retailers the confidence that they can capture the same patient.
What do you think will be the big experience differentiator going forward? Is it loyalty cards, or is it something else? And between the big three, who has the inside bead on keeping their patients coming back for more? Post a comment below!
Diplomat Specialty Pharmacy named one of nation’s top job creators
FLINT, Mich. — Inc. magazine has named Diplomat Specialty Pharmacy as one of the country’s top 100 job creators, the privately owned company said.
Diplomat was named in the magazine’s inaugural Hire Power Awards, the winners of which are listed in the December/January issue. Winners came from categories including health care, marketing, staffing, telecommunications, consulting and technology, and selections were based on reviews of hiring statistics from 2008 through 2011. Diplomat created 233 jobs during that period, particularly since April 2010, with plans to add more than 1,000 jobs in life sciences in five years.
"We want Diplomat Specialty Pharmacy to be the largest, most sought-after employer in the Flint area," Diplomat CEO Phil Hagerman said. "The agreement announced this week by Exelixis that Diplomat will serve as the exclusive specialty pharmacy for the new [Food and Drug Administration]-approved cancer drug Cometriq is the most recent example of how our company growth has been fueled in large part by developments in the specialty drug market."