Improvements at Rite Aid are on the horizon
WHAT IT MEANS AND WHY IT’S IMPORTANT — Rite Aid is a glass-half-full/glass-half-empty kind of company. If your glass is half full, you’re looking at the sequential improvements in pharmacy margins and front-end comps, and the excitement around the chain’s still-new Wellness+ loyalty program. If your glass is half empty, you’re making note of the seven straight quarters of script declines and the fact that Rite Aid had to lower sales projections … again. Our glass is half full.
(THE NEWS: Rite Aid’s new loyalty program a major bright spot in tough Q3. For the full story, click here)
Here’s the crux: The building blocks are in place. All Rite Aid now has to do is execute the potentially profit-driving programs it has in place — Wellness+, store segmentation, Save-A-Lot/Rite Aid combo stores, immunizing pharmacists and an expanding inoculation program. Additionally, it will need to continue pushing the envelope with some of its more cutting-edge initiatives, such as Internet-accessible video couponing and live pharmacist consultations, available online.
Not only is Rite Aid showing improvement across several metrics and is executing against concrete plans designed to continue that upward momentum, but the team that’s driving this engine also has done it all before — twice, when you factor in president and CEO John Standley, who helped engineer Rite Aid’s first turnaround earlier this decade and then went on to turn around Pathmark.
Many of the same executives walking through the halls of Rite Aid headquarters today were with the company 10 years ago, when that team inherited a company on the brink of bankruptcy and brought that company back to black. It was because of that team that Rite Aid could even consider an acquisition the size and scope of Brooks/Eckerd. And today you could argue that Rite Aid is once again on a path — rocky though it may be — back to the black.
Diabetes, inhaled corticosteroids may be linked, study finds
NEW YORK — A link may exist between diabetes and the use of inhaled corticosteroids to treat asthma and chronic obstructive pulmonary disease, according to published reports.
HealthDay News reported that researchers analyzed data on 380,000 patients in Quebec, finding a 34% increase in the rate of new diagnoses of diabetes and progression of the disease among those who used inhalers, with greater risk among those using higher doses.
Still, the article quoted an endocrinologist at the New York University Medical Center who said “pro-inflammatory” lifestyle choices associated with the respiratory diseases and Type 2 diabetes could be a factor rather than the inhalers themselves.
Don’t expect ‘pay-for-delay’ battle to cease
WHAT IT MEANS AND WHY IT’S IMPORTANT — Patent settlements between branded and generic drug companies, sometimes called “pay-for-delay” deals, aren’t going away any time soon.
(THE NEWS: Report: Banning ‘pay for delay’ settlements likely won’t happen. For the full story, click here)
Critics of the deals already have had a tough enough time getting them banned. The apparent absence of language banning the deals from the final version of the Senate appropriations bill, not to mention the Republican majority in the House next year, makes a ban unlikely to happen. And in September, the U.S. Second Circuit Court of Appeals in New York upheld a ruling it had made in favor of the deals in a case over a settlement between Bayer and Teva Pharmaceutical Industries subsidiary Barr Labs concerning a generic version of the anthrax treatment Cipro (ciprofloxacin).
The Federal Trade Commission and members of Congress, including Sen. Herb Kohl, D-Wis., had fought long and hard against the deals, with the backing of advocacy groups and The New York Times’ editorial board, contending that they cost consumers $3.5 billion a year and cause generic drug launches to be delayed by an average of 17 months longer than when no settlements are in place.
Supporters of the deals, on the other hand, pointed to a report by RBC Capital Markets showing that generic drug companies prevailed in 76% of cases in which a settlement was reached, but only 48% of cases that went to trial. They even considered the term “pay-for-delay” a misnomer because it would be illegal for a generic drug company to delay launch after the branded drug’s patent had expired, and most of the settlements allow generic launch months or even years ahead of patent expiration.