HEALTH

Loyalty program adds the ‘plus’ to consumers’ wellness

BY Michael Johnsen

Rite Aid’s wellness+, one of the few loyalty cards that proffers an actual healthcare component as one of the benefits of use, continues to be one of Rite Aid’s key marketing initiatives moving forward. The retailer boasted 16 million wellness+ members as of July 26, only 12 weeks into the program, which suggests the company is well on its way to realizing projections of 20 million members by year’s end, according to several analyst reports.

No other loyalty card program provides actual healthcare screenings as one of the benefits of using the card. “[Rite Aid’s] wellness+ is really a key support mechanism for our wellness empowerment brand-positioning,” said John Learish, Rite Aid SVP marketing. “We’ve got some pretty interesting and appealing service benefits that are attached to the program.”

For example, a wellness+ member has around-the-clock access to a pharmacist either through an 800 number or through real-time chat by logging on to the wellness+ dashboard online. And when a customer reaches 500 points, Rite Aid offers a free healthcare screening, measuring blood glucose and total cholesterol. “It’s really a combination of the health benefits…with the savings benefits, that really differentiates this program,” Learish said.

The healthcare component associated with the program is one of those intangibles that helps distinguish Rite Aid’s loyalty card from others on the market, especially as consumers today can rattle their keychains with a host of retailers’ loyalty cards. But none of those programs tie pharmacy into the front-end, and vice versa, quite like Rite Aid does. Only three months into the program, more than one-third of front-end sales (37%) and prescriptions filled (36%) are being made by wellness+ cardholders, according to Rite Aid’s June 23 analyst call.

Rite Aid also is generating quite a bit of marketing data through the card, enabling the retailer to better target market-specific customer groups. “We’re getting some very interesting views into the data,” Learish noted. “We’ve got a lot of transactions coming through now, enough to make the data really meaningful. Across every single metric—average basket size, average units/basket, scripts/basket, margin—the wellness+ customer on all of those metrics dramatically exceeds the non-wellness+ customer.”

Going forward, as that data stream continues to become more robust, Rite Aid will be better able to target front-end-only customers and convert them into crossover customers—customers who both fill their prescriptions at Rite Aid and shop the front-end. For example, a cardholder identified as a front-end-only shopper now can be target-marketed around the benefits of transferring his or her prescriptions to Rite Aid—a $25 gift card and a much faster way to accumulate wellness+ points.

And the potential to capture and grow the number of prescription patients is significant. According to the chain’s annual meeting presentation, 71% of Rite Aid’s total shopper base currently shop the front-end only; and 24% shop both the front-end and fill prescriptions at the Rite Aid pharmacy. However, looking only at the prescription patients serviced by Rite Aid, 85% of those customers also shop the front-end.

So, enticing more patients to transfer their prescriptions to Rite Aid not only should boost pharmacy sales, but front-end sales as well. Pilot stores that tested the wellness+ offering before its national launch in April boasted a $37.09 average basket size, compared with an average basket size of $35.01 in those stores that did not yet offer wellness+ during the program’s pilot phase.

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HEALTH

CMPI survey: Alcohol, marijuana biggest substance problems among teens

BY Michael Johnsen

NEW YORK The Center for Medicine in the Public Interest on Thursday released the results of a national Teen Substance Abuse survey, indicating that police officers and high school teachers nationwide believe alcohol and marijuana are the most serious problem substances facing teenagers.

The results were released one week prior to a Sept. 14 Food and Drug Administration Advisory Committee meeting called to discuss whether or not additional sales restrictions need to be placed on dextromethorphan, a popular cold remedy ingredient that has been associated with teenage drug abuse. According to the survey, police and teachers polled do not believe it is a good idea to force Americans to visit a doctor to get a prescription to purchase commonly-sold cough-cold medicines.

When asked which substances do pose the greatest negative impact on teens, teachers and police identified marijuana and alcohol, followed by methamphetamine and cocaine. More than 1-in-4 police officers (27%) identified prescription drugs acquired by teens as having the greatest negative impact on teens, as compared with 15% of teachers. Nonprescription medicines were named by 1% of police officers as having the greatest negative impact; 2% of teachers identified over-the-counter medicines as such.

The survey also revealed that by a margin of 2-to-1, police officers and high school teachers support education efforts as a means to address abuse of OTC cough-and-cold medicines, versus restricted accessibility to consumers.

“Americans expect to be able to buy cough medicines conveniently at the supermarket or their neighborhood corner store,” stated CMPI VP Robert Goldberg. “Overly restricting access to cough-and-cold products containing dextromethorphan will create more health problems than it will solve, especially during cold-and-flu seasons. We need to find common sense solutions and invest more resources in education.”

The entire Teen Substance Abuse survey is available at Cmpi.org.

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Appeals court upholds decision to OK ‘pay-for-delay’ deals

BY Alaric DeArment

NEW YORK The federal government got a kick in the face Thursday as an appeals court ruled in favor of patent litigation settlements between branded and generic drug companies.

The U.S. Second Circuit Court of Appeals in New York decided not to reconsider a ruling it made earlier this year in the case of Arkansas Carpenters Health and Welfare Fund vs. Bayer AG. The case concerned the legality of a settlement between Bayer and Teva Pharmaceutical Industries subsidiary Barr Labs over the anthrax treatment Cipro (ciprofloxacin), but the court ruled that the deal between the two companies did not violate antitrust laws.

 

The appeals court’s decision is a major setback for the efforts of the Federal Trade Commission and members of Congress who have sought to ban such settlements.

 

 

In most cases, a generic drug company that wishes to market its version of a drug before the branded drug company’s patents expire will file an approval application with the Food and Drug Administration with a paragraph IV certification, a legal assertion that the patents covering the branded drug are invalid, unenforceable or won’t be infringed by the generic drug. In response, the branded drug company usually will sue, but cases frequently result in settlements whereby the generic drug company agrees to hold off launching its drug in exchange for payment of some sort by the branded drug company.

 

 

This often comes in the form of an agreement not to use an authorized generic, essentially the branded drug marketed under its generic name, to compete with the generic drug company during its customary six-month market exclusivity period. Legally, the generic company must launch before the patents expire or as soon as they do, and delaying launch after patent expiry would be illegal, though critics such as the FTC and The New York Times’ editorial board have often derided the settlements as “pay-for-delay” deals, with the FTC contending that they cost consumers billions of dollars a year. Nevertheless, most cases that are settled result in launch of the generic drug ahead of patent expiry. In the case of Bayer and Barr, Bayer paid Barr $400 million to hold off launching its version of Cipro.

 

 

“Patents, issued by the government, are given the presumption of validity,” read a statement from the Generic Pharmaceutical Association, the generic drug industry’s main lobby. “Any market entry of a generic drug before the brand patent expires –– whether as the result of a finding that the generic product does not infringe the patent, that the patent is not enforceable or through a patent settlement agreement with the brand company –– is a positive, cost-saving event for consumers.”

 

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