Nearly 60 franchisees file claims against Medicine Shoppe, Medicap
ST. LOUIS — A group of Medicine Shoppe International and Medicap franchise owners is filing claims against the two companies over an alleged breach of contract and failure to support the franchise systems.
Calling themselves "Franchisees for Fair Value" and accusing MSI-Medicap parent company Cardinal Health of "unfair and predatory practices," the nearly 60 franchise owners said that in recent years, an "arbitrary decision by MSI/Medicap to stop supporting its own franchise system" has led to dwindling services, while the company has continued to collect "exorbitant" franchise fees. Meanwhile, they said, MSI and Medicap have introduced an offer for new franchisees to join the system for $499 per month while charging the remaining franchisees royalties equal to more than 5% of store sales. Unlike retail pharmacy chains, MSI and Medical operate under a franchise system in which member pharmacies adopt the MSI or Medicap brand while continuing to operate as independent businesses.
Cardinal Health dismissed the group’s accusations.
“The overwhelming majority of our franchisees are pleased with the franchise system and its current offerings," Cardinal Health spokeswoman Tara Schumacher told Drug Store News. "We believe these claims are without merit, and we intend to vigorously defend our position.”
The complaint stems from a class-action suit filed in March 2010. The same organization, representing seven franchisees with more than 600 stores, sued Cardinal Health over the $499 fee for new franchisees, which the company introduced in July 2009, saying that Cardinal tried to renegotiate franchise agreements and then began reducing services across the board when it failed to reach its goal of getting 95% of stores to accept it, a claim that the company also dismissed at the time as having "no merit." In February of this year, a U.S. District Court judge in Ohio decided that the franchisees could refile individually in Missouri and Iowa, where MSI and Medicap originally had their headquarters, as opposed to filing a class-action suit.
FDA to review patch for HIV-related pain
SAM MATEO, Calif. — A Food and Drug Administration expert panel will review a drug made by NeurogesX as a potential treatment for pain associated with HIV.
NeurogesX said Thursday that the FDA Anesthetic and Analgesic Drug Products Advisory Committee would meet on Feb. 9, 2012, to review the patch drug Qutenza (capsaicin) as a treatment for pain associated with HIV-associated peripheral neuropathy, or HIV-PN.
The drug currently is approved for treating pain associated with postherpetic neuralgia.
NeurogesX filed with the FDA for approval of the drug last month, and the agency expects to decide whether to approve it in early March. While the FDA usually follows the recommendations of advisory committees, it is not bound by them.
NACDS, NCPA commend Reps. Rogers, Braley for concern over draft FUL lists
ALEXANDRIA, Va. — The National Association of Chain Drug Stores and National Community Pharmacists Association issued a statement on Thursday announcing that they commend Reps. Bruce Braley, D-Iowa; Mike Rogers, R-Mich.; and 38 of their colleagues who expressed concerns with draft Federal Upper Limits lists that recently have been published by the Centers for Medicare and Medicaid Services.
“We are concerned that these lists contain flawed information that is not reliable for use in establishing pharmacy reimbursement in Medicaid. We ask that you direct states not to use these draft lists for reimbursement purposes until they can be improved and finalized through a formal notice of proposed rule,” the members of Congress wrote in a letter to CMS.
NACDS and NCPA also have expressed concern with the draft FUL lists in written comments to CMS. “We are heartened that our arguments have been given further credibility by a large bipartisan group of representatives,” stated NACDS president and CEO Steve Anderson and NCPA CEO B. Douglas Hoey. “We want to especially thank Representatives Braley and Rogers for their leadership on this important issue.”
In addition to urging CMS to cease publication of draft FUL lists until a final AMP rule is in place, the representatives also urged the agency to be mindful of comprehensive pharmacy reimbursement. “When setting pharmacy reimbursement rates, both components of reimbursement — product cost and cost to dispense — must be taken into consideration when determining whether pharmacies are paid adequately,” the members of Congress wrote.
Click here to view the Braley-Rogers letter.