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Walgreens/Express Scripts dispute adding fuel to merger fire

BY Michael Johnsen

WHAT IT MEANS AND WHY IT’S IMPORTANT — It’s been another busy week on the Walgreens/Express Scripts front as an arbiter ruled against preliminary injunctive relief in time for the 2012 Medicare open enrollment period, which actually started last week. What’s more, other parties are beginning to weigh in on the dispute, notably in favor of Walgreens.

(THE NEWS: Preliminary injunctive relief denied in WAG/ESI dispute. For the full story, click here.)

Thomas Engels, VP public affairs of the Pharmacy Society of Wisconsin, wrote in to the Wisconsin daily, the Herald Times Reporter, expressing a thought that a lot of people have been thinking of late — if one of the largest pharmacy chains in the country can’t swallow Express Scripts’ reimbursement terms, what does that mean for small chains and independents that don’t have near the economies of scale enjoyed by Walgreens?

That becomes even a greater concern when you consider Express Scripts’ proposed merger with Medco. Groups like the National Community Pharmacists Association have been very vocal in opposing that merger, suggesting that the resulting mega-PBM would push many independents into early retirement.

And the Preserve Community Pharmacy Access NOW! coalition on Oct. 19 added its voice to that issue — charging that an ESI-Medco PBM would also mean increased healthcare costs and reduced access for patients. 

Taken together, the dispute around Walgreens’ refusal to accept Express Scripts’ proposed reimbursement rates and the number of groups and organizations climbing the closest mountain top to voice their opposition to that ESI-Medco merger, the Walgreens/ESI battle is serving to  fan the flames around the ESI-Medco merger and what that would mean for retail pharmacy. 

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BBU to acquire Sara Lee’s North American fresh bakery business

BY Allison Cerra

HORSHAM, Pa. — Bimbo Bakeries USA announced that its parent company, Grupo Bimbo, will acquire the North American fresh bakery business of Sara Lee.

As part of the transaction, BBU will have to divest certain Sara Lee brands in certain markets. These include: the Sara Lee and EarthGrains brands in California; the Holsum and Milano brands in central Pennsylvania; the EarthGrains and Mrs Bairds brands in Kansas City; the EarthGrains and Healthy Choice brands in Omaha and the EarthGrains brand in Oklahoma City.

The announcement comes after the deal was approved by the Department of Justice.

"This is an exciting day for the customers, consumers and associates of both businesses," BBU president Gary Prince said. "We will soon be able to begin the important work of creating the new BBU — a U.S. bakery business serving the highest quality products to every market in America and providing the best value to our customers and consumers."

The transaction is expected to close Nov. 5.

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Hamacher research shows independents effectively can compete with national chains

BY Antoinette Alexander

WHAT IT MEANS AND WHY IT’S IMPORTANT — The news that Hamacher Resource Group has identified six front-end growth drivers for independent pharmacies is important because the nation’s 20,000-plus independent pharmacies need all the help they can get as they compete with the national chains.

(THE NEWS: Hamacher identifies six front-end growth drivers for independents. For the full story, click here)

There are six categories — first aid, eye/ear care, sun care, smoking cessation, durable medical equipment and foot care — that are selling better in independent pharmacies over chain pharmacies.

The white paper acknowledges that front-end sales might be tempting to overlook as over-the-counter, health and personal care products, general merchandise and durable medical equipment sales combined for 2% of annual sales for healthcare distributors. However, the research raises the point that this equates to a hefty $5.4 billion.

Furthermore, the white paper outlines strategies independent pharmacists can possibly undertake to meet the current challenges and embrace opportunities for growth. The strategies include:

  • Actively manage the front-end and maximize its profitability with an appropriate health, beauty and wellness assortment. Where medically appropriate, proactively recommend HBW items that complement dispensed prescription product(s).

  • Maintain a solid partnership with your distributor. Support from distributors includes headquarter-type services that equip the pharmacy to compete effectively.

  • Enhance the shopping experience for consumers by managing space more effectively, including category adjacencies, traffic engineering, and inventory stocking levels.

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