Reports: Alberta government to give pharmacists allowance in preparation for generic pricing changes
NEW YORK — The government of Canada’s Alberta province will pay pharmacists C$1 for each prescription filled as part of a one-year transition program for which it will spend $24 million, according to published reports.
The Calgary, Alberta, Herald reported Wednesday that the program was designed to help pharmacists transition to a new business model. The newspaper also reported that provincial health minister Fred Horne said the province was "committed" to offering generic drugs to residents of the province for 18% of the cost of branded drugs, but that pharmacists had historically objected to efforts to lower generic drug prices.
Under provincial regulations, pharmacies buy drugs at a price, capped by the government, that suppliers can charge. Pharmacists are then reimbursed for the cost when prescriptions are filled and can charge the government a dispensing fee of $10.93 per prescription.
At the same time, many pharmacists have arranged volume deals, but the Herald reported that they said such deals, which provide an additional source of income, were under threat due to lowering of generic drug prices. The government plans to pay the current price for generic drugs until the end of May, the newspaper reported.
C$1 = 99 U.S. cents.
QS/1 introduces ‘first of its kind’ Medicare Part B documentation system
SPARTANBURG, S.C. — QS/1 has released Medicare Part B compliance documentation, which it said would be the first of its type on the market to help pharmacies that want to serve Part B customers while remaining compliant, the company said.
QS/1 said its Medicare Part B Compliance Documentation software system was the first of its kind, allowing pharmacies using NRx or PrimeCare Pharmacy Management Systems to serve Medicare Part B customer needs while keeping necessary documents in the event of an audit.
"Missing or incomplete documentation is the most common error that results in the repayment of claims," QS/1 market analyst Chris Kinard said. "Medicare Part B documentation for pharmacy gives you the audit compliance tools for Part B products and services."
During prescription processing, the prescription management system prompts the required Medicare documentation to print, allowing the patient to sign once for all required documentation using an electronic signature-capture device. In the event of an audit, all system-generated Medicare-required documentation can be regenerated with the patient signature and date signed.
Rite Aid posts $118.1 million profit for fiscal year 2013
CAMP HILL, Pa. — Rite Aid’s profits grew in fourth quarter and fiscal year 2013 amid stronger front-end sales and prescription count, the retail pharmacy chain said Thursday.
The company reported a $123.1 million profit for the fourth quarter and a $118.1 million profit for the fiscal year, compared with respective losses of $161.3 million and $368.6 million during the same period last year. In third quarter 2013, the company reported a profit of nearly $62 million, its first in five years, which together with the fourth quarter’s results helped deliver the company’s first profitable fiscal year since 2007.
Behind the results was a combination of stronger sales in Wellness-format stores, retention of most patients who switched to Rite Aid during the dispute between Walgreens and pharmacy benefit manager Express Scripts – which ended last year, but forced millions of Walgreens customers to fill their prescriptions at other retailers – the Wellness+ loyalty card program and increased use of generics.
"Together, we are successfully transforming Rite Aid into a true neighborhood destination for health and wellness," president, chairman and CEO John Standley said in a conference call with analysts to discuss the results.
Of the chain’s 4,623 stores, 797 are Wellness stores, and CFO and chief administrative officer Frank Vitrano said during the call that the format’s front-end comps exceed those of non-Wellness stores by more than 3%. A major factor is the Wellness Ambassadors, specially trained staff members who walk the aisles of the stores with iPads and provide information on health and wellness products and pharmacy services, acting as a "bridge" between the front end and pharmacy. The company reported that it had 1,300 Wellness Ambassadors trained at the end of the quarter. "Simply put, our Wellness Ambassadors can help grow our business by providing strong customer relationships," COO Ken Martindale said during the call.
The company plans to remodel 400 more stores in fiscal year 2014, the "vast majority" of which will be remodeled according to the updated "Genuine Well-Being" format, similar to the updated Wellness store in Lemoyne, Pa., featured in a recent video on Drug Store News’ website. For this purpose, $175 million of the $400 million Rite Aid plans to invest in the year has been set aside.
In addition to the lift from Wellness stores, the company has seen a 3% benefit in pharmacy comps, thanks in large part to the retention of customers from the Walgreens-ESI dispute. Vitrano said the company had retained 75-80% of the scripts it gained from the dispute. While the company expects that it may continue to lose some of those customers, it nevertheless expects to retain most of them.
A major factor in that retention has been the Wellness+ loyalty card program. To date, the program has nearly 25.2 million active members, defined as those who have used it at least twice over the past 26 weeks. Members accounted for 79% of front-end sales and 68% of prescriptions filled, Martindale said, adding that Gold and Silver members have continued to increase in number, and more than 50% of those customers shop at Rite Aid stores every week.
Another factor in the company’s growth has been patients with multiple chronic health conditions, also known as poly-chronic patients, who tend to be elderly. Standley said a "big chunk" of the chain’s scripts and "virtually all" of its best customers were poly-chronic patients.
Vaccinations also beat the company’s expectations, as it performed 2.4 million flu vaccinations and 400,000 vaccinations for conditions like pneumonia, shingles and whooping cough. The company had expected to perform 2 million flu vaccinations during the year.
Sales for the fourth quarter were $6.5 billion, compared to $7.1 billion in fourth quarter 2012. Sales for fiscal year 2013 were $25.4 billion, compared to $26.1 billion in fiscal year 2012.
Same-store sales for the quarter decreased 2%, including a 0.3% increase in front-end same-store sales and a 3.1% decrease in the pharmacy. For the fiscal year, same-store sales decreased 0.3%, including a 1.4% increase in front-end same-store sales and a 1% decrease in pharmacy same-store sales. Same-store prescription count increased 3% for the quarter and 3.4% for the fiscal year.
The decrease in total-store and same-store sales was due to one less week in fiscal year 2013 and also because of greater dispensing of generic drugs. The company noted that while the large-scale shift to generics – also known as the generic wave – results in lower sales, it also helps to drive gross profit.
Wall Street responded with optimism to the results. "Importantly, the underlying business, excluding the generic benefit and the Walgreen windfall, appears quite healthy," Guggenheim Partners analyst John Heinbockel wrote in a note to investors. Rite Aid’s stock was trading at $2.08 per share in late-morning trading Thursday, up from $1.98 at the start of the day.