Wellness gaining traction among young, aging

BY Michael Johnsen

BELLEVUE, Wash. —Trans fat, salt and sugar—out. Products with a less-guilt-because-this-might-actually-be-good-for-you message—in.

At least that’s been the trend that has continued to gain significant traction across the marketplace over the past 10 years, according to a recent Hartman Group report titled “Reimagining Health and Wellness 2010” that was released last month.

Since 2005, spending on wellness products has grown significantly, with a higher proportion spent on wellness for fresh food categories. The average household spends $148.48 per month (or 19% of all monthly spending) on categories that have a wellness halo, The Hartman Group suggested.

But according to the report, the definition of wellness currently is undergoing a transformation, especially as more than half of all consumers (54%) reported they recently had changed their views on health and wellness, with younger consumers being more likely to have made changes in the past year, the report noted.

Younger consumers, for example, cited stress (51%) and energy levels (47%) as triggers for changing their views on health and wellness. For older demographics, it was the aging process that had them actively in search of wellness solutions. Graying baby boomers, for example, were more frequently shunning consumer packaged goods high in cholesterol, saturated fats, trans fats or salt in favor of more “fresh” fare out of concern for their heart health.

“Increased spending on products beneath a wellness umbrella, particularly in fresh categories, reflects what we have been witnessing for more than a decade now,” stated Laurie Demeritt, The Hartman Group president and COO. “Consumer understanding of wellness has moved away from traditional notions of condition treatment and disease prevention, and toward attaining a better quality of life. They are looking for products and services that help them meet their wellness goals and aspirations,” she said.

And they are not necessarily looking for those products and services at smaller, specialty health food stores, or even Whole Foods, anymore. Mass-oriented retailers have been buttressing their product mixes with healthier-for-you choices, and according to The Hartman Group survey, consumers are taking notice. “Consumers talk about the rising relevance of supercenters, [for example], because they are increasing their selection of ‘natural’ brands and products,” the report read.

Considered a complementary “tool” to optimum health and wellness, use of dietary supplements also is on the rise. This is especially the case with vitamin D—60% of surveyed adults have been actively looking to increase the amount of vitamin D in their diets.

Average monthly household wellness spending by category

Source: The Hartman Group “Reimagining Health and Wellness 2010”
CATEGORY 2010 2007 2005
Meat, poultry, seafood $20.22 $18.25 $18.31
Fruits and vegetables 16.81 12.67 14.79
Drugs and supplements 11.08 10.95 9.77
Cereals and bakery 10.73 8.46 9.08
Healthcare services 10.62 8.27 6.07
TOTAL AVG SPENDING $148.48 $115.98 $104.28


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Sorry, FTC: ‘Pay-for-delay’ isn’t going away

BY Alaric DeArment

WHAT IT MEANS AND WHY IT’S IMPORTANT This week’s decision by the U.S. Second Circuit Court of Appeals could make political efforts to ban generic-branded patent settlements a lot more difficult.

(THE NEWS: Appeals court upholds decision to OK ‘pay-for-delay’ deals. For the full story, click here)

The Federal Trade Commission in particular, not to mention some members of Congress like Sen. Herb Kohl, D-Wis., has fought hard against so-called “pay-for-delay” settlements between branded and generic drug companies, contending that they delay patients’ access to generic drugs and cost consumers billions of dollars every year.

The concerns of opponents are understandable. Because generic and branded drug makers are supposed to be competitors, what seem on the surface like sweetheart deals must look positively Faustian to many people. But the judges in the appeals court affirmed that whatever their appearance, patent settlements don’t violate antitrust laws.

And the facts seem to support that decision. According to a report released in January by RBC Capital Markets, generic drug companies prevailed in 76% of cases that included settlements, but only in 48% of cases that went to trial. Meanwhile, according to a report released the same month by securities and investment banking firm Jefferies & Co., on average, patent settlements result in generic launch three years before patent expiration. Legally, a generic drug company must launch its version of a drug before or at the time of patent expiration.

While patent settlements often involve some type of monetary transaction, in many cases, the “pay” is in the form of a promise by the branded drug company not to launch an authorized generic, which is the branded drug sold under its generic name at a lower price. Under the Hatch-Waxman Act, the first generic drug maker to launch a knockoff of a branded drug is entitled to six months in which to compete directly with the branded version, but the authorized generic allows the branded drug maker to undercut the generic drug maker by marketing a supposedly “generic” version of its own.

Authorized generics have seen a bit of a pickup as well, and more activity on that front can be expected. On Tuesday, Greenstone, the generics arm of Pfizer, announced that it would create a new business called the Authorized Generics Alliance in order to market authorized generics under the Greenstone label.


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Medicaid plans to end onerous AMP rules

BY Jim Frederick


(THE NEWS: NACDS, NCPA in joint statement praise CMS’ move to withdraw provisions of AMP rule currently blocked by injunction. For the full story, click here)

The White House, or more specifically the Centers for Medicare and Medicaid Services’ division of Health and Human Services, announced in recent days that it plans at last to scrap its controversial and burdensome pricing policies for generic drugs bought by retail pharmacies to dispense to Medicaid patients. If CMS’ newly proposed rule goes through, it will mean the end of the current, much-disputed provisions that define the average manufacturer price of Medicaid me-too medicines.

The proposed rule, to quote the National Association of Chain Drug Stores, calls for “the withdrawal of existing provisions that define AMP, that determine the calculation of federal upper limits [FULs], and that define ‘multiple source drug.’”

As currently defined, Medicaid’s payment model for reimbursing pharmacists to dispense generics is based on a flawed formula for determining what retail pharmacies pay for those medicines, as determined by a set of controversial market metrics.

The current AMP policy almost is a guarantee that retail pharmacies would lose money on nearly every Medicaid generic prescription they dispense. It’s only a temporary court injunction that has thus far kept that new formula from being imposed.

Thus, CMS’ turnabout marks a real victory for the chain and independent pharmacy lobby, which has bitterly contested the AMP reimbursement formula since it was made policy by the Bush administration more than three years ago. But the plan to withdraw the current AMP model doesn’t end the long battle by pharmacy for a fair payment policy for dispensing generic drugs to Medicaid beneficiaries.

What the pharmacy industry –– and the U.S. healthcare system itself, for that matter –– need is a permanent solution to the Medicaid reimbursement mess. And that solution can only be achieved by congressional action and enactment of a new law governing Medicaid.

The 2010 health-reform law goes part way toward that solution, by holding the line on pharmacy cuts and setting the FULs on Medicaid prescription payments at no less than 175% of cost. It also includes what NACDS president and CEO Steve Anderson calls “a much-improved definition and calculation method for AMP” that will “better approximate pharmacies’ costs for purchasing generic drugs.”

Anderson said the injunction lawsuit filed in 2007 by NACDS and its independent pharmacy counterpart, the National Community Pharmacists Association, has saved pharmacy more than $5.3 billion in cuts since a federal court blocked the imposition of the new AMP formula in January 2008. It also may have prevented the closing of more than 11,000 community pharmacies that otherwise would have been forced to dispense Medicaid scripts at a loss or stop serving lower-income patients.

“When we filed the lawsuit in 2007, we knew that patient care was at stake,” Anderson asserted.

The bottom line is that the White House and Congress need to establish a federal payment system that rewards –– rather than penalizes –– pharmacies for dispensing lower-cost generics that provide the same safety and efficacy profiles as higher-cost pioneer medicines. Such a permanent fix would be a win both for the pharmacy industry and the American taxpayer, by saving tens or even hundreds of billions of dollars over the long term in federal health costs.


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