Stock market rebounds following ‘fiscal cliff’ compromise
NEW YORK — Wall Street on Wednesday celebrated the "fiscal cliff" compromise as stocks across the board were trading up by some 200 basis points. As of noon, the Dow was up 1.7% and Nasdaq 2.3%.
And that meant a recovery of sorts for many pharma companies, who saw their stock values decline last week as the "fiscal cliff" deadline approached. Analysts speculated that the mandated sequestration cuts in government programs like Medicare would lead to tougher negotiations on drug acquisition costs and possibly lowered reimbursement rates for providers.
Take Merck for example — in the weeks leading up to Dec. 31 Merck’s stock was off 6.7% according to an analysis posted by The Motley Fool. Today Merck is trading up slightly by some 15 cents to $41.09 per share.
The stocks of CVS, Walgreens and Rite Aid were faring a little better in afternoon trading. CVS was up 1.9% to $49.27; Walgreens up 2.6% to $37.97; and Rite Aid up 2.6% to $1.40.
However, the euphoria may soon wear off, especially for companies in the drug sector.
The bill delays automatic sequestration cuts for only two months, noted Carol Kelly, SVP government affairs and public policy in an email to NACDS members. "If sequestration cannot be avoided, pharmacies would experience reimbursement reductions for Medicare Part B drugs and immunizations as well as payments for durable medical equipment," she wrote. "In addition, Medicare Part D plans facing cuts would likely reduce pharmacy reimbursement, too."
And a provision in the fiscal cliff legislation applies mail-order reimbursement rates to retail pharmacy-provided supplies on April 1. It’s a provision that may drive many independent pharmacies out of serving Medicare diabetes patients noted the National Community Pharmacists Association earlier Wednesday morning.
For retailers and suppliers overall, other positives included the fact that the full package of such temporary business tax cuts as the Work Opportunity Tax Credit will be extended for one year, Kelly noted. And scheduled Medicare cuts to physicians will be delayed for one year.
According to a Reuters report, about $46 billion in business tax breaks were included in the compromise, such as an extension through 2013 of research and development tax credits and the 50% bonus depreciation where businesses can write off half the value of new investments immediately.
Dollar Tree continues growth, expands distribution center
CHESAPEAKE, Va. — "Dollar Tree has grown steadily for 26 years,” said Bob Sasser, president and CEO of Dollar Tree. That steady growth has led Dollar Tree to expand its Marietta, Okla. distribution center by 400,000 sq. ft., the company announced.
The facility in Marietta opened in 2003 and is currently 603,000 sq. ft. This facility supplies products to our stores across eleven states, including all of Oklahoma, Kansas, Colorado, New Mexico and Texas, and portions of Louisiana, Arkansas, Missouri, Nebraska, South Dakota, Wyoming and Montana.
Construction on the expansion is scheduled to start in February 2013 and should be completed in the autumn of 2013. The total cost of the expansion is expected to be approximately $25 million, financed by Dollar Tree using available cash.
"The expansion of our Marietta Distribution Center is consistent with our long-standing practice of building infrastructure to support future growth of our business. The additional capacity will allow Dollar Tree to continue to expand its reach and provide more value to more customers throughout the region,” Sasser added.
More than 100 full time positions will be created as a result of the expansion.
Rite Aid announces 50th anniversary customer appreciation savings
CAMP HILL, Pa. — Rite Aid announced a special series of 50th Anniversary customer appreciation savings as the culmination of RA50, its 50th anniversary celebration, which began last September. By participating in the sales events running through early March, customers can receive up to $100 in additional +UP Rewards on top of the savings they already earn through their wellness+ membership.
SVP marketing John Learish explained that the new sales events complete the company’s plan for celebrating its 50th anniversary. “We wanted RA50 to be a way to say ‘thank you’ to our customers, communities and associates for their support over the past 50 years. Our 50th Anniversary Sales Events, which offer up to $100 in additional +UP Rewards, is the perfect way to thank our most valuable customers.”
Customers can make multiple visits and purchases during each sales period to reach the reward thresholds. They can track their progress by checking their receipts or logging into their wellness+ dashboard on RiteAid.com. Participating items will be listed in a brochure available in stores, on Rite Aid’s website and on Rite Aid’s Facebook page. Participating items also will be identified by special signs at the shelf. All purchases must be made with a wellness+ card, Rite Aid’s free customer loyalty program
Rite Aid launched RA50 on Sept. 12 with the first of 50 acts of wellness in 12 markets across the country. From holding free diabetes screenings for high-risk populations and providing cribs to new mothers to stocking school nurses’ offices or relief centers in disaster-stricken areas, Rite Aid partnered with local organizations to address each community’s most pressing health and wellness needs. Rite Aid associates also volunteered nearly 10,000 hours of community service during this time in a wide variety of local activities.