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Digital camera sales stay on the rise

BY Doug Desjardins

Digital camera sales continued to climb the first half of the year, bucking projections that they would begin a slow decline in 2008 after a record-setting year in 2007. According to data from the NPD Group, camera sales increased 5.8 percent from January to June compared with the same period last year.

NPD Group analyst Liz Cutting said those numbers were helped by a good month in May, when sales increased 13 percent compared with May 2007. “That was a real surprise, and I think the economic stimulus checks had something to do with it,” Cutting said. Sales were up again in June, but only by 3.2 percent.

While drug stores still account for a small percentage of digital camera sales—a little more than 2 percent—the rate continues to grow as camera prices fall and retailers add more models. NPD estimated that digital cameras priced under $100—typically the highest priced models in drug stores—now account for 14.3 percent of cameras sold this year, compared with just 9.4 percent at this time last year.

That price deterioration has allowed retailers like Walgreens, Rite Aid, CVS and Longs Drugs to carry a wider variety of cameras. Walgreens added two models from General Imaging to its lineup in May priced at $79 and $99. The average price of a digital camera sold in drugs stores is now down to $86.

But on the other end of the spectrum, sales of single-use cameras—once a strong category for drug retailers—continued to decline. The NPD Group study shows single-use camera sales were down 40 percent during the first six months of the year compared with the same period last year.

“The fact that 76 percent of U.S. households have at least one digital camera has a lot to do with that,” Cutting said. “There’s still a market out there (for single-use cameras) but it’s shrinking.”

Recent trends in photo processing also are tilting in favor of drug retailers, particularly in online orders and the use of in-store kiosks. According to the Photo Marketing Association, online photo processing increased 47 percent in May with photos processed through in-store kiosks jumping 25 percent for the month.

In all, 50.2 percent of photos processed in May were done through retail channels. The percentage of orders made online and picked up at retailers increased from 10.2 percent to 11.3 percent, and the percentage of prints made at kiosks rose from 14.3 percent in May 2007 to 15.1 percent in May 2008. Orders made and processed at in-store mini-labs remained about even at 23.7 percent.

The percentage of prints made at home dropped more than 6 percent from 38.7 percent last year to 32.5 percent in May, but was offset by orders made online and received by mail, which accounted for 16.5 percent of the market compared with just 12.1 percent last year.

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Court rules against Watson in Naprelan case

BY Drew Buono

CORONA, Calif. The United States District Court for the Southern District of Florida ruled that Watson Pharmaceuticals’ naproxen sodium extended-release tablets, a generic version of the pain medication Naprelan, infringes the brand drug manufacturer’s patent, Watson announced Wednesday.

Elan initially brought the suit in October 1998 after Andrx filed an application for a generic version of the drug. In March 2002, the District Court ruled that Elan’s ‘320 patent was invalid. Watson acquired Andrx in November 2006.

In May 2004, the United States Court of Appeals for the Federal Circuit reversed the District Court’s finding of invalidity and remanded the case for further proceedings. In January 2005, Elan filed a related case against Andrx in the United States District Court for the Southern District of Florida alleging that Andrx’s generic drug infringes the patent and is seeking damages for willful infringement. In late 2005, the parties completed briefing the District Court on the validity of the patent and whether Andrx’s product infringes it, and the matter has been under submission to the District Court since then.

Watson said it intends to appeal the ruling.

Watson’s naproxen sodium tablets had sales of $4 million over the year ending June 30, according to IMS data.

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Medicare officials predict lower 2009 Part D costs than expected

BY Alaric DeArment

WASHINGTON Monthly premiums for Medicare’s Part D prescription drug program next year will be lower than expected, Medicare officials announced Thursday.

Based on bids submitted by Part D plans, the Centers for Medicare & Medicaid Services estimated that the average monthly premium that recipients will pay for standard Part D coverage will be $28 – lower than the $44.12 predicted in 2003.

At the same time, it is $3 more than the premium for this year, mainly because of rising drug costs and higher plan estimates for catastrophic coverage and the phase-out of a CMS demonstration project.

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