Fred’s eyes smaller box concept, specialty solution to grow pharmacy business
During Fred’s third-quarter earnings call, the company told analysts it was testing a new, smaller format drug-dollar store concept and that its partnership with Diplomat was creating new clinical capabilities for the chain, which still sees pharmacy as a major growth opportunity.
The more Memphis-area patients continue singing those Delta blues, the more they’re going to be scuffling through Fred’s doors in their blue suede shoes. Effectively serving that economically-challenged patient is just one reason why Fred’s third-quarter call this week should resonate across the industry. Because Fred’s is in pursuit of two trends that are critical to its future — a specialty pharmacy solution that gains Fred’s entree into the only growth-game in pharmacy, and an answer to its big-box competitors with a small-footprint, dollar-store/pharmacy hybrid.
According to Centers for Disease Control and Prevention statistics, between 2009 and 2010, the prevalence of two or more chronic conditions for adults ages 45 to 64 years was more than twice as high among those living in poverty as among those at 400% or more of the poverty level. The disparity for those over 65 years was less drastic — 50.9% of seniors living below the poverty level had two or more chronic conditions vs. 39% of seniors at 400% or more of the poverty level.
But here’s the clincher — most patients over the age of 65 will be covered under Medicare plans. For those who aren’t, and for low-income patients, they’ll be covered under Medicaid. If Fred’s is reaching and catering its mix to value-consious shoppers, then they may have greater penetration among a Medicaid patient population, the rolls of which are set to expand in 2014 as part of the Patient Protection and Affordable Care Act.
So Fred’s is engaging a higher-touch, greater-prospective-growth business through Diplomat and more of the company’s core consumers may be eligible for specialty pharmaceutical coverage come 2014.
Fred’s, of course, isn’t the only forward-looking retail pharmacy operator who realizes the value of having a strong specialty pharmacy acumen — Kroger just last week acquired its own specialty pharmacy in Axium Pharmacy Holdings. And in last week’s fix, DSN’s Alaric DeArment explained how more retail pharmacy operators are banking on specialty as to where the pharmaceutical money will be.
Not to be overlooked is Fred’s development of a new retail format that will better fit into smaller markets, where Walmart and other big-box retailers likely aren’t, and still address the company’s value-consious consumer base. While most economically-challenged consumers are considered value-conscious consumers, not all value-consious consumers are economically challenged. That may explain why two-out-of-three shoppers regularly visit a dollar store when they’re out and about running their errands, according to a recent SymphonyIRI Group report.
And Fred’s isn’t the only value-driven retailer eyeing pharmacy. Dollar Tree has been piloting a third-party pharmacy in Florida under its Deal$ banner and Family Dollar has been increasing its sway in health and beauty care. Can pharmacy be too far behind for Family Dollar? They haven’t committed to any public disclosures, but this is what president and COO Mike Bloom had to say in October: "Our customer research indicates that our customers over-indexed in 18 of the top 20 ailments affecting the U.S. population. Many of our customers do not have health insurance, so we are providing them with more solutions to take care of themselves and their families. We are encouraged by the early results in these categories, which typically take longer to ramp up."
What do you think? Can a full-fledged national dollar channel pharmacy be too far behind?
Lupin launches generic fenofibrate
BALTIMORE — Lupin Pharmaceuticals has launched a generic drug for cholesterol disorders, the company said.
Lupin announced the launch of fenofibrate tablets in the 48-mg and 145-mg strengths. The drug is used to treat hypercholesterolemia or mixed dyslipidemia and severe hypertriglyceridemia.
The drug is a generic version of Abbott’s Tricor, which had sales of $1.26 billion during the 12-month period ended in June, according to IMS Health.
It’s the most magical time of the year – looking forward to pharmacy 2013
Each year, we say good-bye to the current year and welcome in the New Year full of hope and aspirations for a successful year ahead. Customers turn out in droves for “New Year, New You” specials and when they reach the register, the retail pharmacy world knows the scenario quite well. In a few short weeks’ time, you and your staff will be asking these all too familiar questions, “Did you have any insurance changes? Did you have a change in benefits? Did you know your brand drug is now available in generic?” and so on. Here are a couple of things to keep in mind as we approach 2013 with new opportunities:
Drug pricing changes
– January continues to be the month with the most price increases as published by the drug compendiums. Make sure that you utilize some of the tools out in the marketplace to help you manage these changes.
– Plan reimbursement schemes change bringing new profitability challenges at the drug level.
Health plan changes
– New plans are published with new design parameters.
– Members have new plans. Many times members don’t have their new cards yet. Again, this is another opportunity to use tools to improve your patient interaction to make sure everything goes smoothly.
– Deductibles are reset (including Medicare Part B!).
Drugs scheduled to come off patent in 2013
– Opana ER
In addition to these changes at the beginning of the year, there are some additional activities, particularly in regards to government regulations, which are anticipated to occur in 2013 as well:
- Track and trace – attempts by the Prescription Drug Security Alliance in 2012 to create a national, uniform solution did not make it through Congress, but watch Congress for another try in 2013.
- Prescription drug monitoring program (PDMP) – Legislation was recently introduced to the House with intents to create an efficient, cost-effective system for states to share information from their respective PDMPs. Forty-eight states have authorized PDMPs to facilitate the exchange of information among doctors, pharmacists and authorized law enforcement, but currently, there is no national standard for the exchange of such information across state lines. This legislation, if approved, would address the standardization of interstate data sharing.
- Medicare Part D – changes in the Medicare program continue to be an ever evolving situation. Premium and deductible changes along with cost-sharing changes in the coverage gap are scheduled to take effect in 2013.
Quality programs – The delivery of care via retail pharmacy continues to grow. And as these programs grow, expanded services are expected as well.
– Medication Therapy Management (MTM) programs will feature more pharmacists consulting with patients on the medications they are prescribed.
– AHRQ has released two assessment tool kits:
– Patient Safety Culture Assessment Tool
– MATCH Resource to Improve Medication Reconciliation
With the New Year, you have even more reason to stay diligent, be prepared and know what is happening in the marketplace. More and more of the pharmacy business is impacted by external events. Tools exist to help you manage many of these changes. Contact your vendors, stay active in the community. There are numerous opportunities for you to be ready and have a great 2013.
Emdeon VP of pharmacy network services
As VP of pharmacy network services at Emdeon, Paul Hooper directs the company’s pharmacy network services initiatives with a focus on developing programs, standards and partnerships that increase pharmacy efficiency and reduce healthcare costs. Paul has spent more than 25 years in the healthcare industry with a predominant focus in pharmacy. During this time, he has held roles in product development, systems, finance and operations at various recognized industry leaders: BASF, Abbott Laboratories, Cardinal Health, ArcLight and Emdeon. He holds a master's degree in business administration from Ohio University and a bachelor of science in food science from The Pennsylvania State University.