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Merlo shows why he’s boss

BY Antoinette Alexander

WHAT IT MEANS AND WHY IT’S IMPORTANT — A new chapter officially is under way for CVS Caremark, and it comes as little surprise that the Larry Merlo era has begun with a reminder of the core principles that put him in the captain’s seat to begin with — flawless execution, cross-functional thinking and management, and enhancing value.

(THE NEWS: Merlo puts stamp on his leadership in fourth-quarter earnings call. For the full story, click here)

According to Merlo, those are the three things that will define the company’s success in the years ahead.

Since beginning his career in chain pharmacy in 1978 with People’s Drug, which CVS acquired in 1990, Merlo has become an operations guru who wrote the book on successfully integrating acquisitions. Anyone who knows CVS’ history is aware that the chain hasn’t always been the healthcare mammoth it is today. Over the years it has largely grown through acquisitions. The list includes 2,000 stores from Revco, 240 stores from Arbor Drugs, some 1,260 Eckerd stores, 700 stand-alone Sav-on and Osco drug stores from Albertsons and, more recently, Longs Drug Stores’ 521 retail locations in California, Hawaii, Nevada and Arizona, as well as its pharmacy benefit management services.

That’s not to mention the acquisitions of retail clinic operator MinuteClinic and pharmacy benefit manager Caremark.

Today, its network of some 7,100 retail locations looks like one cohesive unit; clearly, a significant portion of that success can be attributed to the talents of Merlo.

Much has been made of the company’s performance on the PBM side, but that focus has largely centered on the short-term loss of one or two big clients and has overlooked its major deal with Universal American, which will vastly expand its presence in Part D at a time when the first of the boomers turns 65 years old. In fact, the deal will more than double the size of CVS Caremark’s Medicare Part D program.

As of Jan. 1, approximately 7,000 baby boomers will turn 65 years old each day, according to  AARP.

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Drug companies move ahead with new medications

BY Alaric DeArment

WHAT IT MEANS AND WHY IT’S IMPORTANT — The cardiovascular drug market will turn into a difficult conquest in the years to come as it increasingly will be dominated by generics, but that isn’t stopping drug companies from continuing to develop treatments — 299 of them, according to a recent report by the Pharmaceutical Research and Manufacturers of America — for high cholesterol, hypertension, atrial fibrillation, heart failure and other heart-related conditions. Indeed, with around 80 million Americans having cardiovascular disease, according to the American Heart Association, it’s a market that won’t disappear any time soon.

(THE NEWS: PhRMA: Nearly 300 preventive medicines for heart disease, stroke in development. For the full story, click here)

For a while now, drug industry experts have been playing the funeral dirge for the age of blockbuster drugs — those drugs that reach $1 billion or more in sales per year, often as a result of significant uptake due to their ability to treat widespread disease states. That’s especially true in the cardiovascular drug market, whose star performer, Pfizer’s cholesterol drug Lipitor (atorvastatin), will lose patent protection this year, knocking a hole in the more than $7 billion in annual U.S. sales that IMS Health attributes to the drug.

Nobody can say whether those 299 drugs in development include the next Lipitor, but a lot of them will soon be ready to hit the market. AstraZeneca announced Friday that the Food and Drug Administration hoped to finish its review of Brilinta (ticagrelor), for preventing acute coronary syndrome, by July 20.

A total of 16 regulatory applications seeking approval for new drugs or seeking approval for new uses of old drugs for treating heart disease have been submitted, according to PhRMA’s report. These include Gencaro (bucindolol), ARCA Biopharma’s treatment for genotype-defined heart failure that has received expedited review from the FDA; TAK-491 (azilsartan medoxomil), Takeda’s treatment for hypertension; and rivaroxaban, a drug for preventing stroke in patients with atrial fibrillation, thrombosis and embolism developed by Bayer and Johnson & Johnson. In addition, several drugs have recently finished phase-3 trials, such as GlaxoSmithKline’s Lovaza (omega-3 acid ethyl esters) for atrial fibrillation and a combination of irbesartan with amlodipine developed by Sanofi-Aventis for hypertension.

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Restoring FSA OTC coverage: Better medicine for all

BY Michael Johnsen

WHAT IT MEANS AND WHY IT’S IMPORTANT — As much as the Affordable Care Act was a tough pill to swallow for many conservatives, the flexible spending account changes may be the first piece of what many consider to be "bad medicine" to be reversed this year. Incentivizing self-care is better medicine for all constituents.

(THE NEWS: Report: Legislation restoring FSA OTC coverage is coming. For the full story, click here)

DSN has believed for some time that this would be the first piece of ObamaCare to tumble. Here’s why: It’s an easy give back to House Republicans looking for a full repeal, and it’s a show that the Democrats are willing to work with the other side of the aisle. As an aside, it also happens to be the right thing to do, for retailers, for consumer healthcare companies — oh yeah, and for consumers, too.

Requiring patients to obtain prescriptions for over-the-counter medications purchased with pre-tax dollars saves the U.S. government an estimated $9 billion. Conversely, that means Joe Public will be shelling out that much, if not more, on the Tylenol and Pepto-Bismol bought to help soothe the very headaches and upset stomachs caused by escalating healthcare costs. And it’s not just the consumer that’ll be spending more money. An analysis conducted by the Foundation for Healthsmart Consumers found that between doctor visits and retail pharmacies, healthcare costs associated with this provision could reach as high as $4.5 billion if even 10% of the population begins making additional appointments with their practitioners.

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