Drug Store News - February 2019

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At Dr. Reddy’s, we know the opioid crisis touches everyone. Our employees are working around the clock to develop life-changing medicines that can help treat this debilitating disease because Good Health Can’t Wait.


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To order, contact your ITG Brands sales rep today. ©2018 Fontem. NOT FOR SALE TO MINORS. my blu™ and the myblu logo are trademarks of Fontem Holdings 4 B.V. PyriSalt™ and the PyriSalt logo are trademarks of Purilum LLC.

Vol. 41 No. 2 DrugStoreNews.com


32 Counter Talk with Rowland Global’s Ed Rowland

22 Focus On: Art Naturals 38 Industry Issues Summit

36 One-On-One

Dispatches from one panel discussing pharmacy services, another focused on beauty

with RxCut’s Al Branca

98 Last Word with David Orgel Consulting’s David Orgel

50 Private Label REX Awards 2019 The top manufacturers of private-label products


56 McKesson’s Partnership Focus

68 Generics

From independent pharmacies to national chains, DSN looks at McKesson’s enterprisespanning emphasis on building strong partnerships

Manufacturers invest in infrastructure as approvals roll in

74 Counter Talk with Benzer Pharmacy’s Meghann Chilcott


76 News

8 Editor’s Note


10 Industry News

78 Feminine Hygiene

20 Products to Watch 24 One-On-One with Mile High Labs’ Jason Roth


26 One-On-One

84 Feminine Hygiene Products


with Sheralven’s Steven Koss

86 Hot Companies

28 Counter Talk

Where some of the biggest players in beauty stand in 2019

with Purina’s Joe Toscano

30 Counter Talk

92 ECRM Roundup

with Relex Solutions’ Greg Wilson

Standouts from the cosmetic, fragrance and bath EPPS


94 News


Facebook.com/ DrugStoreNews Twitter.com/ DrugStoreNews

Natural, organic products thrive in the space

96 Vaping


After a year in the FDA’s crosshairs, the future holds promise for e-cigarette makers and retailers

DSN (ISSN 0191-7587) is published monthly 12 times a year by EnsembleIQ, 8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631. Subscription rates: Manufacturers, schools, libraries and all others allied to the field $119. Canadian subscribers $129. Foreign subscribers $225. Periodicals postage paid at Chicago, IL, and additional mailing offices. POSTMASTER: Please send address changes to DSN, Circulation Fulfillment Director, P.O. Box 3200, Northbrook, IL 60065-3200. Canada Post: Publications Mail Agreement #40612608. Canada Returns to be sent to Bleuchip International, P.O. Box 25542, London, ON N6C 6B2. For change of address, six weeks notice to Drug Store News, P.O. Box 3200, Northbrook, IL 60065-3200 is requested. Give old and new address and zip code. If possible, enclose address portion from cover on previous issue. Subscription changes also may be emailed to drugstorenews@omeda.com, or call 847-564-1468. Vol. 41, No. 2, February 2019. Copyright © 2019 by EnsembleIQ. All rights reserved.




Ready for the Road Ahead Retailers need to be ready if an economic slowdown is around the corner By Seth Mendelson


etail has proved it can thrive during the strong economy of the last five years. Can the industry do the same during the economic slowdown that some said may be right around the corner? Though 2019 may offer more of the same for retailers and the economy in general, some industry officials who say they are in the know claim that there are increasing signs, including a tanking stock market, that the super-heated economy may have recently peaked. A recession, they said, may be in the offering in the next Seth Mendelson Editor in Chief/ 12-to-18 months. Some said the coming slowdown will Associate Brand be caused by a number of factors — international trade Director wars, commodity prices, employment issues, and the simple fact that all bull markets have life spans. Always at the forefront of economic fortunes, mass retailers should be planning for the next recession and what they need to do to keep consumers, who have been flush with money and optimism over the last few years, coming through the doors when that optimism and spending start to fade.

There is no doubt that all three of the national drug store chains are taking steps to make themselves unique in the retail world. As we’ve discussed many times here before, retailers must be willing to change in order to stay relevant with a fickle consumer base. That starts with having attractive and convenient stores. Good times or bad, consumers will visit the retail outlet that makes the most sense to them, as long as these stores offer a friendly and safe environment, good pricing and the right assortment of products. But it also takes thinking outside the box to separate yourself from the competition. There is no doubt that all three of the national drug store chains are taking steps to make themselves unique in the retail world. They each are trying to become health services alternatives for consumers, hoping that this will lead even more shoppers to use their services in the future. Walmart is doing the same thing, paying a lot of attention to its in-store experience, while gobbling up digital retail companies in a direct attack on Amazon — its main competitor these days. The strategy, it appears, is to buy up so much of the digital retail world that some of these companies will play out successfully. There is more that needs to be done, including making sure that the sales team is up to snuff in terms of being able to educate the consumer in-store. No one is wishing for an economic slowdown, but we all need to be prepared for it when it comes. That preparation should have started months ago. Playing catch up now would not be a bad thing. dsn



An EnsembleIQ Publication 8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631 Vice President, Brand Director Eric Savitch (856) 489-3336, esavitch@ensembleiq.com Editor in Chief /Associate Brand Director Seth Mendelson (212) 756-5160, smendelson@ensembleiq.com EDITORIAL Associate Managing Editor David Salazar (212) 756-5114, dsalazar@ensembleiq.com Senior Editor Sandra Levy (845) 893-9573, slevy@ensembleiq.com Desk Editor Maria Manliclic (212) 756-5093, mmanliclic@ensembleiq.com Online Editor Gisselle Gaitan (212) 756-5138, ggaitan@ensembleiq.com SALES & BUSINESS Beauty Director Laura Fontana (440) 724-4369, lfontana@ensembleiq.com Northeast Manager Alex Tomas (212) 756-5155, atomas@ensembleiq.com Regional Manager Steven Werner (312) 961-7162 swerner@ensembleiq.com Brand Marketing Manager Mary Ellen Magee (856) 419-8411, mmagee@ensembleiq.com Media Production Assistant Betty Dong (212) 756-5134, bdong@ensembleiq.com Director of Audience and Data Gail Reboletti (224) 231-6363, greboletti@ensembleiq.com PROJECT MANAGEMENT/PRODUCTION/ART Vice President Production Derek Estey (877) 687-7321 x 1004, destey@ensembleiq.com Creative Director Colette Magliaro cmagliaro@ensembleiq.com Art Director Amy Kelkenberg PRESIDENT Consumer Goods Retail Business Jennifer Litterick (647) 946-9219, jlitterick@ensembleiq.com CUSTOMER SERVICE Having a problem with your subscription? Send us full details with the mailing label of the last copy you received, along with your telephone number. Write to: Circulation Fulfillment Director, Drug Store News, P.O. Box 3200 Northbrook, IL 60065-3200; email drugstorenews@omeda.com; or call (847) 564-1468 CIRCULATION LIST MANAGER Elizabeth Jackson MeritDirect (847) 492-1350 x 318. REPRINTS PARS International, LF-Reprints@parsintl.com, (212) 221-9595 x435, tinyurl.com/LF-reprints. Single copy price is $15 for a regular issue and $100 for a statistical issue. PERMISSIONS For permission to reuse material from Drug Store News/DSN (ISSN 0191-7587) please access www.copyright.com or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, (978) 646-2600, (855) 239-3415. CCC is a not-for-profit organization that provides licenses and registration for a variety of uses.

CORPORATE OFFICERS Executive Chairman Alan Glass Chief Executive Officer David Shanker Chief Financial Officer Dan McCarthy Chief Digital Officer Joel Hughes Chief Innovation Officer Tanner Van Dusen Chief Human Resources Officer Ann Jadown Executive Vice President, Events & Conferences Ed Several

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BD Unveils Second-Gen Nano Pen Needle BD is launching a new iteration of its BD Nano pen needles. The

company recently received the Food and Drug Administration’s blessing for the BD Nano second-generation pen needles, which it said is meant to offer people who inject insulin better condition management through more reliable subcutaneous delivery of the injected hormone. The BD Nano second-generation pen needles use a contoured needle base to help mitigate the risks resulting from userinjection force variability, and it concentrates then distributes pressure closely around the injection site to compensate for variable injection forces. Doing so, the company said, allows for a more reliable target depth than other 4-mm pen needles. The new design has demonstrated more reliable subcutaneous injection depth, resulting in up to an eight-fold reduction in calculated intramuscular injection risk, according to BD. It also features a new ergonomic design for easier to use. “The launch of BD Nano second-generation pen needles reinforces BD’s commitment to providing the most advanced solutions possible for people with diabetes to help achieve better

clinical management of insulin use,” said Stanislav Glezer, BD’s global vice president of medical affairs. The new launch includes all the benefits its predecessor pen needle has, including BD’s 32G x 4 mm pen needle with fivebevel PentaPoint comfort, which has been clinically shown to enter the skin more easily than other three-bevel needles, as well as its extra thin wall EasyFlow technology that increases the medication flow rate, BD said. BD Nano second-generation pen needles are expected to be commercially available in mid-2019.

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Aubío Launches Two New Items

Getting Things Ironed Out

Aubío Life Science is

OraLabs is introducing the releasing two products to Pantene On The Go Frizz the market. The Scottsdale, Iron. According to David Ariz.-based company is Hirschman, vice president of introducing the Aubío sales and marketing at the Cold Sore Treatment Gel, Parker, Colo.-based company, designed to provide quick the new product has a sugrelief from the pain and gested retail price of $5.99 itching associated with and is used similar to a flat cold sores. Featuring a moisturizing formula with aloe, the iron application. product has a suggested retail price of $19.99, according to “We are addressing an company CEO Rachel Wagner. important issue for women and Aubío also is introducing its Hydrating Lip Balm, which their hair,” he said. “We found offers an SPF of 30 and features a hydrating formula to help through research with Procter moisturize lips. Wagner said that it has a suggested retail price & Gamble, which owns the of $4.99. Both products are offered with customized counter rights to the name, that nearly and floor displays. 70% of women are concerned Wagner also saidMcKesson that the cold1/2 sorepage product the official frizz and fly-away hair. ad.is Clinical Programsabout • Drug Store News, February 2019 cold sore gel of the U.S. Ski & Snowboard team. The sponsorWe provide a truly on the go name and the Pantene brand is ship gives Aubío promotional platforms, including on-course portable solution to this prob- something we are very excited signage and commercial spots to publicize the product. lem. Tying in with the P&G about, too.”

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BiPro Brings BiPro Bold to Shelves BiPro is expanding its offerings. The Appleton, Wis.-based brand, which a brand of Agropur, announced the launch of its new BiPro Bold collection, a 100% protein isolate that provides 23 g of pro-

tein per serving and offers a blend of 70% whey protein isolate and 30% milk protein isolate. “The high-quality fast and sustained-releasing protein isolate in BiPro Bold offers the perfect protein powder solution,” said Aaron Martin, director of nutrition innovation at Agropur. “BiPro Bold is lactose-free, contains only 1 g of naturally occurring sugar, and is a source of [medium-chain triglycerides, or MCTs,] and prebiotic fiber. BiPro Bold truly provides consumers with a powerful protein solution for any time of the day.” Other benefits and features of the brand’s new product include MCTs for satiety and energy; prebiotic fiber for healthy digestion; sweetened flavor from stevia and naturally sourced flavors; 2.3 g of leucine; free of lactose, gluten and rBST hormones; 0 g of carbohydrates or added sugars or fats; and cold filtered protein isolate, the company said. “Consumers are paying attention to what their bodies need, and BiPro is there to provide convenient fuel options for individuals and families,” Corrie Drellack, director of marketing at



Agropur, said. “Not only can BiPro Bold be enjoyed as a traditional shake or smoothie, but we encourage customers to get creative by incorporating protein into morning coffee, snacks and everyday foods. We are excited to work with ambassadors who speak to the diverse audience BiPro Bold supports.” The product is available in creamy vanilla, chocolate milkshake and boldly bare unflavored varieties.



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Mom Bomb, Look Beauty Are DSN /ECRM Award Winners Mom Bomb won the Drug Store News/ECRM Buyers’ Choice award for its bath bomb products during

ECRM’s Cosmetics, Fragrance & Bath EPPS held in Orlando in January. Look Beauty was the finalist for its two new lines: Know Cosmetics Fixer Brand and the Watermelon Collection masks. The two companies were selected from dozens of entries in the award program, samples of which were displayed in the ECRM hospitality area during the EPPS meetings. Buyers cast their votes based on product innovation and packaging. “The winners of this year’s awards are clear examples of the product innovation around two trends that continue to be hot — bath bombs and facial masks,” Tony Giovanini, senior vice president of HBC for ECRM, said. “What’s very cool is the fact that these two winners demonstrate that new session participants like Mom Bomb, as well as veteran participants like Look Beauty, are both bringing innovation to the category on a regular basis.” Mom Bomb was founded in 2017 by Heather Roberts, who found herself in the middle of a health crisis. After months of debilitating pain, she turned to such homeopathic remedies as essential oils to help with her symptoms. It was at that time that she started making bath bombs, which she found soothing. After getting feedback from friends in similar situations, she realized that the very bath bombs that she used to help get her through her illness could be used to help countless other mothers going through their own personal times of hardship. The line has grown in just a short time to include a total of four products: Mom Bomb, Magic Bombs, Calm Bombs and Bubble Bouquet. Look Beauty, created by CEO Allan Lever, provides solutions for women’s everyday makeup challenges. The products are cruelty-free, with no parabens, mineral oil or gluten. Recognizing universal beauty in the marketplace, the brand said it has developed quality products to help women conquer typical makeup issues with effective and beautiful precision.




CoverGirl Launches Outlast Nudes Cosmetics Collection CoverGirl’s newest cosmetics collection is putting a new spin on

nude lip colors. The beauty brand has unveiled its line of Outlast Nudes, which features seven shades that the company said are designed to complement a variety of skin tones and undertones. Featured products in the collection include: • The Outlast All-Day Cream Nudes, which are kiss-proof and transfer resistant, provide moisture and are formulated with sunflower seed oil. Available in seven shades — light cool, light warm, medium cool, medium warm, deep cool, deep warm and universal nude — the line was designed to enhance the natural tone of lips instead of masking them. The cream nudes retail from $7.99 to $10.99; • The CoverGirl Eye Enhancers Shadow, which was designed to make eyes easily go from day to night, contains a powder formula and features kits that come with one, two, three or four options. Featuring six shades — maroon moment, glitzy gold, first impression, sweet escape, negative space and al fresco — the one kit option retails for $2.99, the three-kit option retails for $3.99 and the four-kit option retails for $4.49; and • The Cheekers Blush, a mini compact that gives a natural

makeup look, is blendable with high-intensity hues. Available in four shades — Bordeaux burgundy, flushed, pink candy and peach guilt — it retails from $3.99 to $5.49. CoverGirl’s Outlast Nudes collection is available at mass market, drug store, food and e-commerce retailers nationwide.

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Pharma Logistics Helps Ease Regulatory Burden on Back End Pharma Logistics is all about helping

pharmacists meet a growing list of regulations and procedures. According to officials at the Libertyville, Ill.-based pharmaceutical reverse distribution firm, Pharma Logistics provides on-site service to collect returns, as well as flexibility for pharmacies to pack and ship their own pharmaceutical returns. The company also ensures that pharmacies meet regulations pertaining to the security of the drug supply chain, the regulation and security of controlled substances, and the management of pharmaceutical hazardous waste, which are enforced by the Food and Drug Administration, Drug Enforcement Administration and the Environmental Protection Agency. David Malecki, the company’s COO, said that the Drug Supply Chain Security Act, enacted in 2013 and enforced by the

FDA, provides requirements and processes that pharmacies must follow in order to protect patients from receiving harmful or dangerous drugs. Pharmacies are required to confirm that the entities they work with are licensed or registered with the FDA, Malecki said. Additionally, for every prescription drug it receives, a pharmacy must store transaction information history and a statement.

Pharmacists also must respond properly to suspect and illegitimate drugs and establish and follow a process to investigate and handle suspect and illegitimate prescription drugs. Malecki also said other EPA rulings affect pharmacies. For example the EPA is finalizing a ruling that records must be retained for three years, unless there is an enforcement activity or a request by the EPA regional administrator to keep them longer. Finally, Malecki said Pharma Logistics is here to take some of the load off of pharmacists to be able to know what these rules and policies are and not be overburdened. “Send us your product, we’ll deal with the back end of it,” he said, adding that the company offers a compliance handbook as a reference for pharmacies to use to remain compliant, which is available at PharmaLogistics.com.

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New Year, New Products HRG spotlights five new products that stood out from the rest in January


amacher Resource Group kicked off 2019 by evaluating more than 400 new products that hit the market in January. From 440 products — 67% of which were beauty launches, 30% of which were wellness focused and 3% of which were OTC products — the new product team selected five that stood out from the rest, and that could stand out on the shelf.


Ace Kinesiology Knee Support

Ace Kinesiology Knee Support is designed to focus targeted pressure on sore or injured joints. The product features a targeted pressure pad and a flexible fiber matrix backing to make application easier. It’s water resistant and can be worn for up



to three days. 3M Consumer sells the knee support in three-count packages.

designed to remove warts by penetrating deeply to kill the virus inside the wart. It can be used on common and plantar warts.


Aspercreme with Lidocaine Dry Spray

Sanofi is expanding its Aspercreme offerings with a quick-delivery method. The company’s Aspercreme with Lidocaine Dry Spray features maximum-strength lidocaine that is applied with an odor-free and dry spray designed to dry instantly. The product is meant to desensitize aggravated nerves and numb pain away.


Prell Clean Rinse Conditioner


Compound W NitroFreeze Pen and Replacement Tips



Scarguard Labs’ latest introduction is formulated to protect post-surgery scars and sensitive skin from sun exposure. The product can be used over any existing scar treatment without impeding results. dsn

Prestige Consumer Healthcare’s Compound W line is expanding with the NitroFreeze Pen. The product is a nitrous oxide treatment

Though technically a relaunch, Prell’s Clean Rinse Conditioner adds to the legacy brand’s shelf presence. The Neoteric Cosmetics brand formulated the conditioner to be suitable to all hair types, as well as for everyday use.

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Naturally Affordable Art Naturals makes organic products accessible, appealing By Seth Mendelson


fficials at Art Naturals are always quite eager to talk about the upscale nature of their product lines. They proudly gush over just about everything from their fancy product packaging and their elite customer service to quality natural and organic ingredients as key points that make the Gardena, Calif.-based company unique from its many competitors in the marketplace. Yet one thing that is decidedly not upscale about these natural and organic beauty products — and the ultimate difference between Art Naturals and its competition — is its affordable pricing structure, a difference that makes the items simply more accessible to a greater number of consumers, they said.



“When we started this company in July 2015, I saw a great opportunity to fill a niche in the skin care category,” said company founder and CEO Joseph Nourollah. “Just from my time I started to pay attention to this marketplace, I quickly came to understand what the consumer was looking for from this category, and that was great top-quality products, with excellent packaging, at good price points that they could afford.” Nourollah’s story truly is a rags-to-riches tale. He dropped out of high school with just $400 to his name. Sensing an opportunity, and after learning about the different areas of skin care, he focused on the organic segment, seeing an excellent chance to develop a company there. First came the Internet strategy, and then the implementation

of a comprehensive approach to traditional retailing. Michael Elefant, Art Naturals’ chief sales officer, takes the story of the company’s founding a step further. “Joseph realized as a young guy that natural and organic products in this category have always been associated with high prices,” he said. “It got his wheels turning, and he realized that he could create a great company by offering high-quality merchandise at affordable price points.” There was a step two in this process. Nourollah and his team needed to create a base from which to work from, which would allow the company to create the products and sell them at affordable price points. So, for the first year or two, Art Naturals focused on Internet sales. “Getting into retail is a process that can take 6-to-8 months, if we are lucky,” Elefant said. “Our strategy was to go online with our product mix, build excitement and awareness with consumers there, and slowly get our products into retail as the consumer demand for the merchandise grew. E-commerce allowed us to instantly create sales online and eventually take that demand and show retailers how important it is to stock our expanding line of products.” Elefant is adamant that Art Naturals’ online success is playing a big role in the company’s overall rise to prominence in the beauty business. “Consumers are seeing our success online and how our product stands out,” he said. “Retailers have a lot of young brands to choose from in our categories. Having the following we have online makes it easier for them to select our product for inclusion in their beauty section assortment.” So far, so good for the company’s strategy. Currently, Art Naturals offers nearly 150 SKUs across a number of key beauty categories, including its flagship skin care products, but also in hair care, bath and body, men’s care, and essential oils. The products are produced at the company’s headquarters and factory/warehouse in Gardena, where all of its 180 employees work.

The privately held company’s sales, just $10 million in 2015, are now close to $100 million — with about 20% of that volume coming from the roughly 12,000 retail stores the company has product in. On its website, the company states that it “has always believed that beauty treatments should stem from the purest forms of nature. We gathered the finest ingredients and extracts from around the world to handcraft health-conscious essentials for your skin, hair and body, mind and spirit. All of our products are BPA-free, crueltyfree, and eco-friendly. Our aim is to offer high-quality items at an affordable price to enhance the well-being of our customers — beauty and nature lovers alike.” Its mission: “We believe that everyone should experience the incredible benefits that nature has to offer. Supporting our customers in their quest to live a healthy life has always been priority. Our loyalty lies in natural ingredients, affordability and longlasting results. Your skin, hair and body/mind/spirit deserve it.” The privately-held company’s sales, just $10 million in 2015, are now close to $100 million with about 20% of that volume coming from the approximate 12,000 retail stores the company has product in. Art Naturals counts Walmart, H-E-B, Albertsons, Meijer and CVS Pharmacy as its current retail partners. Both Nourollah and Elefant expect retail sales to grow quickly as the company puts more emphasis on brick-and-mortar and gets more retailers to take on Art Naturals merchandise and expand their assortments. By 2020, they think about $50 million will be generated through traditional retail markets. There also will be growth in new categories. Nourollah said that Art Naturals is focusing on the baby, vitamins and pet categories for growth in the near future, as well as expanding out the men’s grooming segment. “Let’s be clear,” he said. “We do not want to be a typical beauty brand that just copies what other companies offer to the marketplace. We put a new twist on everything, and that also catches the consumer’s eye.” In addition to the company’s online success, it’s still committed to focusing on details in-store. Elefant said that Art Naturals employs a complete graphic design team to work on in-store marketing efforts, as well as developing shelf talkers and floor decals to build brand awareness. He was quick to add that company officials encourage retailers to utilize a “brand block” strategy with the full Art Naturals assortment to build that brand identity. “We think that, in about five years or so, we are going to be an internationally recognized brand with a very strong following of consumers who recognize what we bring to the table,” Nourollah said. “We are going to be a household name in many, many different segments, and our retail partners will benefit from our success. It is going to be a very interesting time for Art Naturals and our partners.” dsn




High Standards Mile High Labs’ core principles focus on safety, compliance and consistency


ason Roth is looking long-term when he talks about the CBD marketplace. As CEO of Boulder, Colo.-based Mile High Labs, Roth said it is important to show all concerned, including various government agencies, retailers and consumers, that the correct steps are being taken to ensure that his company is in compliance. Drug Store News sat down with Roth to discuss the health of the CBD marketplace. Drug Store News: What can you tell us about Mile High Lab’s offerings? Jason Roth: Mile High Labs is an industrialscale cannabinoid extractor that produces a considerable amount of the CBD full spectrum, distillate and isolate available on the market today. We operate the only end-toend Good Manufacturing Practice-certified extraction facility in North America, which is why the industry›s most recognizable and successful brands rely on our CBD as their main active ingredient. Our flagship extraction facility is in Loveland, Colo., and we have offices and distribution centers across the United States and Europe, allowing us to keep a finger on the pulse of the entire global CBD market.

“Our entire supply chain has been built from the ground up with this retail environment in mind. Mile High’s hemp suppliers go through an extensive vetting process to ensure the quality and safety of their biomass.” 24


DSN: What makes you different? JR: We’ve always defined ourselves by what’s essential to the longevity of the CBD market: safety, compliance and consistency. Understanding regulatory pathways and achieving standard-setting compliance results are foundational to Mile High Labs, and these core principles still influence every decision we make. Additionally, we’re the only cannabinoid extractor that has the technology and scalability to meet growing global demand. Our proprietary processes and equipment are unmatched, and we continue to push our production capacity higher on a daily basis. The CBD market is booming. Still, there are many concerns in the marketplace with retailers about products and quality. How do you address this issue? Our entire supply chain has been built from the ground up with this retail environment in mind. Mile High’s hemp suppliers go through an extensive vetting process to ensure the quality and safety of their biomass. Every step of production is traced from the farm, to the lab, to the bottle, and our CBD undergoes multiple stages of testing before it reaches the hands of our customers. We understand why retailers are apprehensive — CBD is extremely underregulated right now, and many suppliers aren’t capable of holding themselves to the same standards that Mile High does. By devoting our company to the highest levels of regulation and transparency, we’ve been able to address these concerns and turn wary first-time buyers into long-term business partners. DSN: Explain how retailers can maximize their potential? JR: Retailers can maximize their potential by questioning where and how their CBD products are made. Consumer interest in CBD is exploding, and first-time users

Jason Roth, CEO, Mile High Labs

are looking for retailers that can answer their questions and address their concerns. One of our primary focuses involves making sure that retailers are adequately equipped with the education and resources they need to feel comfortable answering these questions. DSN: What’s the future for the category? JR: The applications for CBD are almost limitless. Right now, CBD isolate is a hot commodity because of its potency and complete lack of THC. Water-soluble CBD is beginning to come into its own and will truly revolutionize the category by offering accurate dosing, no hemp flavor and extremely high bioavailability. The potential for water-soluble is beyond anything we’ve seen thus far, and it can easily mix with many existing formulations. Based on recent consumer trends, many users are treating CBD as a daily supplement taken once in the morning and once more throughout the day. Timed and extended-release products will be the direction for these daily consumers. dsn

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Sheralven’s Smell of Success The family-owned company keeps pace with trends in the fragrance category


heralven is a full-service, familyowned company that specializes in sales, manufacturing and distribution of fragrances and beauty products. Drug Store News caught up with Steven Koss, president and CEO of the Brentwood, N.Y.-based company, to discuss how the fragrance and beauty categories are changing — and how Sheralven keeps pace.

that have sustainable benefits, personalization and affordable luxury. DSN: As a major distributor of fragrances and beauty, what is working now and what is not? SK: What’s working is creating new, unique items with a point of difference. Making high quality products at reasonable prices, and bringing affordable luxury to everyone with new, recognizable brands. What’s not working is doing the same old thing. Consumer trends are important to follow and adapt to how/where they are shopping.

retail. Every year, more and more fragrances are purchased online. Retailers are adapting by carrying smaller assortments in store, showcasing the top SKUs and offering a broader assortment online with in-store call outs to their e-commerce sites.

DSN: Describe what the future looks like for the category. SK: The future of the category is the customer experience and product differentiaDrug Store News: How large is the fragrance tion. Consumers are seeking an omnichancategory? What are the current trends? nel approach to discover new products Steven Koss: According to Bloomberg, the through social media and digital platforms. global perfume market is $49.4 billion. In They want products and experiences that page ad.How Macro Helix •changing? Drug Store News, 2019 addition, the industry McKesson is growing at 1/2 a rate DSN: is the industry How does areFebruary unique with benefits that are important of 5% per year. that impact retailers? to them, such as socially conscious brands, Trends in the fragrance category include, SK: The industry is changing with the growth effective ingredients and customizable but are not limited to, natural ingredients of e-commerce and the decline of traditional options that fit their needs and lifestyle. dsn

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Polishing Up Your Pet Treat Section February marks National Pet Dental Health Month By Joe Toscano

A Joe Toscano, vice president of trade and industry development, Purina

s more and more pet owners are becoming actively engaged and informed about their four-legged friends’ health, targeted or functional food and treats are growing in popularity. Consumers are looking for nutrition that’s not only enjoyable, but also healthy and enables their pet to live his best life. In fact, when it comes to pet treats — a category that always has held great potential for retailers as a basket builder — 25% of the category currently is made up of functional treats. It’s these better-for-you treats that are growing faster than the rest of the treat category — at nearly 5% growth versus. 3.6%. Pet treats that specifically address dental health make up 12% of the total pet treat category. As February is National Pet Dental Health Month, it’s important that consumers and retailers alike understand the importance of good oral care for pets, as well as the opportunity dental treats present to build sales in the treat aisle.

Oral Health Concerns for Pets

Periodontal disease is the most common dental disease found in both adult dogs and cats. It develops as a result of bacteria and plaque that make their way under the gum line. As periodontal disease progresses, it becomes painful and, if left unchecked, will result in the loss of a tooth. Signs of periodontal disease include bad breath, redness along the gum line, tartar accumulation and oral pain. However, it’s hard to detect oral pain in our pets, as many signs are subtle and can go unnoticed. Left untreated, over time periodontal disease may even result in damage to such internal organs as the heart, liver and kidneys. The good news is that with consistent home dental care and regular vet visits, periodontal disease can be prevented.

At-Home Dental Care Solutions

At Purina, our innovation and product cycle is guided by research. We have more than 500



scientists, veterinarians and nutritionists on staff who work tirelessly to uncover breakthrough nutrition that helps dogs and cats live longer, healthier lives. Therefore, we offer products that help consumers manage their pet’s oral health from puppy and kittenhood through adulthood. Purina launched the DentaLife brand of dog and cat treats early in 2016. DentaLife treats are made with wholesome ingredients and feature a crunchy exterior and chewy, porous inside that pets love. The treats, which are approved by the Veterinary Oral Health Council, help clean hard to reach places and are scientifically proven to reduce tartar buildup on a dog’s teeth.

Consumers are looking for nutrition that’s not only enjoyable, but also healthy and enables their pet to live his best life. Under the same DentaLife brand, we launched the Advanced Clean Dental Chew for dogs. The new treats are made with a dense, chewy texture designed to keep your dog chewing longer. Together with its patented twisted triple-ridge shape, DentaLife Advanced Clean is able to reduce tartar buildup and deliver a powerful deep clean. DentaLife also released ActiveFresh in January 2019, which is a revolutionary scientific breakthrough in combatting bad breath. This new proprietary recipe fights bad breath at the source versus the traditional method of masking it.

The Dental Opportunity at Retail

Pet retailers can take advantage of this trend by brushing up their treat sections to focus on these functional snacks. Retailers should consider a monthly merchandising program that uses new merchandising units and secondary placements, plus highlight new items in the oral health segment. In doing so, they can realize incremental sales and profits. dsn

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Being Smart About Assortment Drug stores need better data analytics to manage assortment growth By Greg Wilson

D Greg Wilson, vice president of sales and field strategy, Relex Solutions


rug store retail has never been a simple enterprise, but recent changes have left operators struggling with a new and still evolving set of challenges around product assortment. Years ago, a store may have stocked between 7,000 and 8,000 over-thecounter SKUs. Retailers now have to account for and optimize anywhere between 15,000 and 20,000 SKUs. Add to that the introduction of fresh and convenience products in many locations, and the scale and scope of a merchandiser’s responsibilities has grown enormously complex. Given this expanding assortment profile, what new concerns must drug store merchandisers take into consideration? Some challenges remain the same like the evergreen question of how to ensure the right product is available in the right location at the right time. Though the question is familiar, the answer becomes more difficult when the assortment more than doubles in size. It also is complicated by greater assortment diversity. Today’s drug store must account for expiration dates on fresh foods to avoid spoilage and other concerns that are more commonly relevant to supermarkets, such as encouraging customers to shop the whole store. But unlike supermarkets, drug stores face significant shelf space and throughput capacity constraints, often excluding larger retailers’ strategies and solutions from serving as a viable model. Without a thoughtful strategy in place, products may sit unmoved for extended periods — a problem with the potential to inflict exponential damage as more fresh products are offered. More often than not, retailers attempt to resolve these problems through brute force, assigning more people to spend more time working at a more detailed level. This approach is neither practical nor sustainable. There’s significant value to be found in reaching the right decisions, but that value should not be eliminated by the cost of the resources required to get there. As complexity grows, the need for assistance from technology grows as well. Many retailers


try to address this by forcing point solutions that weren’t designed to solve these problems. While integrating disparate solutions through data integration can deliver incremental progress, they remain constrained by platform and process limitations that inevitably get in the way of achieving the goal. These approaches mistakenly assume that data alone can provide clarity — but clarity requires the right technology. Drug stores probably are not able to rely on the previous generation of solutions to address their rapidly evolving needs, and would be better served by a new generation of technology with multiple functionalities built into their core algorithms and platform. These “unified” solutions are better equipped to negotiate increasing assortment size, diversity, complexity and throughput limitations within the drug store. A unified solution can forecast a demand spike for a fresh product a month ahead of time and then apply that knowledge to make recommendations that reduce potential bottlenecks by adjusting the orders of ambient stock, which is less susceptible to waste, for the forecasted spike. The store may have too much toothpaste for a couple weeks and their hygiene aisle may be force filled to maximize available shelf space, but the toothpaste won’t go bad. The fresh product with the shorter shelf life can be ordered in the necessary quantities and with appropriate timing even through the forecasted demand spike — all staying within the drug store’s space and throughput limitations. Only a holistic view of the problem can truly impact each of the necessary components. Of course, drug store retailers’ challenges will continue to evolve, and their solutions must be capable to do the same. Retailers should continuously evaluate their technology to ensure it can meet both current and future operational needs. The best modern solutions leverage newer technology to enable flexibility and adaptability to the rapidly changing conditions in retail, thus insulating their users from obsolescence. dsn








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Alibaba’s Healthcare Juggernaut Alibaba Health presents a model for what an online giant entering the health space could do By Ed Rowland

S Ed Rowland is a Drug Store News contributing editor covering global issues. As the principal of Rowland Global, he believes in the promise of global business and supports companies in their strategy, tactics and execution of international growth initiatives.


hanghai is 12 hours ahead of New York. Within the healthcare world, the fledgling Alibaba joint venture, Alibaba Health, may also be ahead of such U.S. counterparts as Amazon, Google and others. The race is dynamic and fluid. Or as one of my favorite philosophers Yogi Berra said when asked what time it was responded, “You mean now?” It’s tough to track. A major investment firm describes Alibaba Health as a joint venture/investment holding company engaging in pharmaceutical e-commerce, intelligent medicine and product tracking platform businesses in China. Alibaba Health is in start-up investment mode, with an accounting year ending March 31 and its most recent reported revenues relatively small by Alibaba standards — almost $357 million. The company has a B-to-C pharmacy arm through its TMall entity, as well as outsourced B-to-B centralized procurement and distribution. Alibaba Health has turbo charged Chinese health care by completely rearranging the value chain. Previously, hospital pharmacies purchased their prescription drugs from doctors. Chinese doctors do not receive salaries commensurate with services provided and seek “gray income.” Enter rebates from pharmaceutical companies. In exchange for a doctor’s commitment to prescribe a certain prescription, a rebate was paid to the doctor. The doctor then sold the drug to the hospital at an inflated price, pocketing the rebate. E-commerce, led by Alibaba Health, is changing Chinese health care overnight literally and figuratively. No more rebates. Alibaba Health’s acquisition activity in just the last few months spans products, services and even traditional retail operations. With the backdrop of Amazon entering brick-and-mortar by acquiring Whole Foods and its rumored interest in the retail pharmacy game and acquisition of PillPack last summer, there’s a parallel track with Alibaba Health. And the battle isn’t just within the United States and China. Amazon acquired


the e-commerce platform souq.com in part to protect its Middle East turf. Meanwhile, Alibaba has launched its e-commerce platform, Lazada, in Southeast Asia. In September, the online platform Lazmall conducted a “9.9 campaign” with huge fanfare across six countries — Thailand, Indonesia, Malaysia, the Philippines, Singapore and Vietnam. The sale saw such key multinationals as Procter & Gamble and L’Oreal sign on. On the domestic China front, parent Alibaba transferred Ali JK Nutritional products to Alibaba Health in early June for $1.4 billion in stock, increasing Alibaba’s stake in Ali Health from 48% to 56%. The division sells medical devices, healthcare products, adult products and healthcare services on TMall with annualized revenues of $3.2 billion from over 3,300 merchants. Later in June, a strategic collaboration agreement with Merck KGaA to develop patient-centric digital services was announced. This deal combines Alibaba Health’s online drug-tracking abilities with Merck’s knowledge in diabetes, thyroid and cardiovascular issues. Then, in August, Alibaba Health paid roughly $61.3 million for a 14.52% share of the 1,000plus pharmacy chain Guizhou Ensure. An additional roughly $58.7 million capital contribution resulted in a 25% total company stake.

With the backdrop of Amazon entering brick-and-mortar by acquiring Whole foods and its rumored interest in retail pharmacy, there’s a parallel track with Alibaba Health. The healthcare battlefront includes content/ service, retail and product. There will be more change and Alibaba Health will be at the forefront. Or, as my hero Yogi put it, the future ain’t what it used to be. dsn


Ear to the Ground How to build up the in-store ear care segment


an retailers make money from the ear wash segment? According to Marsha Garcia, the vice president of Orange Park, Fla.-based Doctor Easy, the potential is there, provided merchants take the right steps to build sales and profits. DSN talked with Garcia about the company, its products and its future. Drug Store News: Tell us a little bit about Doctor Easy. Marsha Garcia: Doctor Easy is a familyowned company. Our primary focus has been manufacturing spray ear washers for the medical community for more than 20 years. In fact, my late husband, Dr. Teddy Garcia, invented spray ear wash technology in our busy walk-in medical clinic in 1997. We were cleaning a lot of ears with the old syringe method and knew there had to be a better way. That led to the development of our patented Elephant Ear Washer and the founding of Doctor Easy by myself, my father and my husband. When one of our medical distributors put the Elephant Ear Washer on Amazon several years ago, consumers quickly made it a leader in the ear wax removal category, where it remains to this day. While we were gratified to see so many people buying our professional ear washers for home use, we felt they might be missing out. We decided to make a consumer-focused ear wash kit, so individuals could get everything they needed for professional-grade

ear washing at home. That’s when we developed the WaxRx pH Conditioned Ear Wash System. DSN: You’re currently headed to retail with WaxRx — what spurred this move? MG: With the increasing interest from consumers for self-care, adding a professionalgrade ear wax product will help the retailer fulfill his customers’ desire for home-based solutions to medical issues. Since 2017, WaxRx has been exclusively a direct-toconsumer product, with nationwide cable TV and digital marketing driving demand. With more than 60,000 units sold and $2 million-plus spent in raising brand awareness, retailers can benefit from the pent-up demand we have created for WaxRx, by adding this innovative wax removal system to their ear care section. DSN: How can retailers maximize sales from the product? MG: More than 8 million people a year end up in the doctor’s office for ear wax removal when current OTC offerings fail. Retailers can maximize sales and profits in the ear care category by offering WaxRx as a professional-grade alternative to lower price point, and less effective products. With the advent of OTC hearing aids, and the fact that ear wax is the top killer of hearing aids, cross marketing WaxRx in the hearing aid section also can highlight the availability of a truly professionalgrade solution to ear wax in the store.

Our ultimate goal is to drive ear wax sufferers to the ear care section of their favorite retailer, instead of the doctor’s office. We’ll accomplish this by adding information on retailers offering the WaxRx System to our ongoing national cable television and digital advertising plan. 34


Our ultimate goal is to drive ear wax sufferers to the ear care section of their favorite retailer, instead of the doctor’s office. We’ll accomplish this by adding information on retailers offering the WaxRx System to our ongoing national cable television and digital advertising plan. DSN: What are your plans for the future? MG: While Doctor Easy intends to remain a leader in ear wax removal, we’re excited to see our line of consumer-focused ear care products expanding. Later this year, we will be introducing an innovative product designed to relieve dry ear itch, the second most common ear complaint. dsn Marsha Garcia, vice president, Doctor Easy


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Counting on Discounts Axe Rx’s SlashRx helps bring lower-priced prescriptions to pharmacies


harmacies small and large are looking for any advantage possible to fend off the competition and get consumers to utilize their services. Al Branca, the president of Axe Rx, told DSN that his company’s SlashRx program can help pharmacists be more efficient operators and gain a competitive advantage. Drug Store News: Tell us about SlashRx. Al Branca: Our company is one of the nation’s first pharmacy benefit administrators. We own and manage several whitelabeled pharmacy discount programs. We are the back-end technology for many online brands and provide sophisticated API’s that power pricing tools and pharmacy locators. SlashRx is one of our flagship brands and is more pharmacy-friendly than most programs as we pay higher dispensing fees and pass through all negotiated discounts to the cardholder.

Al Branca, president, RxCut



DSN: What makes the company unique? AB: First and foremost, we are not a PBM, nor do we act like one. We are a technology company that only operates in the discount card space and not the funded world, so we do not practice the typical bad habits of spread and hidden rebates. We also are segment agnostic, meaning that not only do we provide tremendous savings for the uninsured and underinsured, but even those with prescription benefits can often experience savings by using our program.

“We act as a gatekeeper at the pharmacy counter. Our technology exposes not only our negotiated price, but the pharmacy’s cash price as well, and the patient always pays the lesser of the two.”

DSN: How does the SlashRx program benefit consumers? AB: We act as a gatekeeper at the pharmacy counter. Our technology exposes not only our negotiated discounted price, but the pharmacy’s cash price as well, and the patient always pays the lesser of the two. In fact, our price is often lower than a generic insurance co-pay. Now that the Trump administration has abolished gag clauses in PBM-Pharmacy, contracts with the signing of the bipartisan “Patient Right To Know Act” and the “Know The Lowest Price Act,” the pharmacy can feel safe letting their patients know that there may be lower cost payment options than their insurance, and no longer have to worry about retribution or breach of contract with PBMs.

Listen, pharmacy is a crowded, dog-eatdog space, so any advantage a pharmacy can gain by being different and helping their patients better afford their needed meds goes a long way with not only retention, but attracting new traffic as well. Our loyalty program also allows independents to process 90-day refills and not lose patients to mail-order programs and keeps them compliant with regard to lowering their U&C. Also, as part of our loyalty program, independent pharmacies earn an additional admin fee per claim regardless of where the transaction occurs.

DSN: How does the program benefit independent retail pharmacies? AB: Today, there is a paradigm shift within the pharmacy industry. We are having newfound success partnering with independents and creating for them a frictionless loyalty program so they can compete with national chains and flush out some of the not so pharmacy friendly programs that put them in the red. This is a new era of selfdisruption as pharmacies are now clamoring to become transparent. Even CVS has a new ad campaign describing a “behind-thecounter” discount program.

DSN: What steps does a retail pharmacy need to take to get going with this program? How about costs? AB: The process is painless and simple. Pharmacies can either fill out a request for contact form or call our Pharmacy Loyalty Hotline at (800) 727-1973, and one of our representatives will send a marketing agreement that spells out the additional compensation per claim. We will also ask for a high-resolution copy of their corporate logo so we can white label their free SlashRx website and provide 5,000 custom branded loyalty cards at no charge. We also will give pointers on best practices and even outside distribution techniques to drive new traffic to the pharmacy. There is no cost to join the program. dsn


Raising the Profile of Pharmacy Services Panelists emphasize the need to make value clearer By David Orgel


t first blush, it’s hard to understand why pharmacy needs to make its case better. Pharmacists, after all, are highly trusted professionals who do a world of good for their patients. They are on the front lines of care. However, pharmacy faces a range of challenges in clarifying its value to multiple stakeholders, a point emphasized during an executive panel at the 20th Drug Store



News Industry Issues Summit in New York City last November. The challenges include measuring outcomes, getting payers on board, connecting better with providers, and even further engaging patients. “How do we show the healthcare world the value of pharmacy, our pharmacists and the pharmacy services we offer?” asked panel moderator Jocelyn Konrad, Rite Aid executive vice president of pharmacy. “To me, we have to come together

as an industry to clearly show how we’re driving positive health outcomes. We know that we’re driving positive outcomes, but how can we clearly define their value and tell that story outside of our industry? It’s probably our biggest challenge.” Panelist Craig Norman, who is senior vice president of pharmacy at H-E-B, said that pharmacists are both undervalued and underutilized, but more underutilized. “I think that the public has grown in its

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DSN INDUSTRY ISSUES SUMMIT understanding of the value of pharmacists over the years, but we’ve still got a heck of a long way to go,” he said. “We are the face of neighborhood health care, right? It’s incumbent on us to build that relationship.”

Retailers Outline Proactive Strategies

In light of these challenges, retailer panelists at the summit relayed strategies they are pursuing to further underscore the role and value of pharmacy. One of these is to better connect pharmacy to the rest of the store, said Jeff Mondelli, vice president of pharmacy at Wakefern. “We’ve really tried to integrate our in-store dietitians with pharmacy,” he said. “We have 222 pharmacies, and about 160 of these locations have dietitian coverage. It’s a relationship type of thing with our dietitians to really try to marry up fresh healthy foods and wellness throughout the day with pharmacy services. So our pharmacists and dietitians work together. We’ve really leveraged our core competency, which is food, with our department.” At Kroger, having pharmacists work alongside the retailer’s nurse practitioners and dietitians is essential to delivering on its vision of helping people live healthier lives, said panelist Colleen Lindholz, president of Kroger Health.

Al Babbington, CEO and co-founder of PrescribeWellness, and Chris Jobes, sales director at Johnson & Johnson

“Taking a multidisciplinary team approach allows us to put the patient in the right place at the right time to maximize their care plan” she said. “Our team of 22,000 healthcare professionals, combined with our food and grocery experts, are working on the front lines every day,

helping people in the aisles, at the pharmacy counters and in our clinics.” Differentiation in how pharmacy services are offered plays an important role for retailers, said panelist David Badeen, vice president and DMM of health care at Sam’s Club. He said most pharmacy services

Kroger Takes Multilevel Approach Health care plays out in numerous ways at Kroger, but it all starts with the mission statement, said Colleen Lindholz, president of Kroger Health, who was a panelist at the Drug Store News Industry Issues Summit. “Our mission statement says we want to simplify health care by creating solutions that combine health, wellness and nutrition, connecting customers on a personal and emotional level,” she said. On one level, Kroger pursues its mission through a wide network of pharmacies and clinics, and has a big focus on nutrition. On another level, the company recently launched its OptUp mobile app as a tool to “simplify healthier shopping,” Lindholz said. “At Kroger, we aspire to change the way America eats by combining a deep understanding of our shoppers with our broad expertise across food and health. We’ve built a powerful tool that provides customers with the support they need to make healthier food choices.” OptUp is a data driven wellness app built with the goal of encouraging simplicity and informed choices for shoppers. The app combines solutions for a range of consumer wellness challenges into a single package. It provides nutrition guidance and boosts convenience.



A recent Kroger announcement explained that key features include scoring groceries based on nationally recognized dietary guidelines, with input from Kroger dietitians; providing personalized product recommendations; presenting a “household OptUp score;” offering tools to scan and search products for nutrition information and product alternatives; and bringing the capability to add better-for-you options to a digital cart for curbside pickup or delivery. “We know if we can help people make better, more informed choices about what goes into their grocery carts,” Lindholz said. “We can help them live healthier lives. Kroger did its homework before the OptUp launch. It put some 2,000 diabetic patients within the company onto the app over a two-year period. “We were ecstatic when we found out that the results of the pilot were statistically significant, showing improvement in key health metrics, including hemoglobin A1C and blood pressure,” she said. “We are on the way to lowering overall medical costs and sustaining behavior change, the payers in the country are recognizing that also.” —David Orgel

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Panel moderator Jocelyn Konrad, executive vice president of pharmacy at Rite Aid; Lari Harding, vice president of product marketing at Inmar; Craig Norman, senior vice president of pharmacy at H-E-B; and Jeff Mondelli, vice president of pharmacy at Wakefern

— from immunizations to MTM services — are widely available and not exclusive to a particular retailer. Sam’s Club puts a premium on personal interaction in delivering its services, he said. “With us being a membership organization, we have the ability to communicate directly with our patients, probably more so than a lot of others do, because we have all the information on them,” he said. “And so what we’ve tried to do is use that information and talk to the patient, and say, ‘What’s important to you?’ So it’s that personal interaction that we keep talking about, and how do we make sure that pharmacist has that personal interaction.”

Partners Support Pharmacy Needs

Retail partners, including technology companies, are key players in supporting pharmacy and patient care. A number of these partners were summit panelists, who outlined their support roles. Al Babbington, CEO and co-founder of pharmacy technology provider PrescribeWellness, compared community pharmacists to the first responders of California’s wildfires in 2018. The fires



caused tragic deaths, and so do preventable medical conditions, he said. “One hundred people a day are dying in this country of prescription overdose,” he said. “Two hundred a day are getting a leg amputated because they’re not managing their diabetes. And 2,000 a day are being hospitalized for preventable chronic disease.” Babbington asked, “Who is that first responder? It can only be that local community pharmacy,” he said. “When we focus on what we can do, it is to bring technology to support our first responders.” Chris Jobes, sales director at Johnson & Johnson, said his goal is to support the value perception of pharmacy, which in turn will make the pharmacy business model more sustainable. Much of this work involves better connecting pharmacies with the larger ecosystem, using data and information about a patient’s journey. Jobes said succeeding with this opportunity would bring measurable benefits. “If we do it the right way and bring the right partners together, we can go upstream from retail and add data from the health system and payers, at the

inflection point where the individual transitions from patient to consumer,” Jobes said. “We can capture information on their health every step of the way because that’s where the true value lies. The data exists; it is a matter of working together in a coordinated manner. We are building for the long term.” A useful strategy is to bring best practices to pharmacy that might have originated in other settings, said panelist Lari Harding, vice president of product marketing at Inmar, which focuses on solutions in areas including supply chain, promotions and health care. “We’re trying to help our clients innovate by taking some of the capabilities that have been very successful in one component of our business and moving it into the pharmacy,” she said. “An example is a project that used behavioral analytics on patients with diabetes, which identified seven different personas of people with diabetes, and how you can better communicate with them.” Another panelist, Jeff Barkoff, vice president of retail solutions at higi, emphasized the importance of supporting patient

DSN INDUSTRY ISSUES SUMMIT engagement within the pharmacy, and determining how to shift interactions beyond mere transactions to valued relationships. “Ongoing engagement is really the piece that’s missing from the conversation. higi looks at how we can transform the relationship by combining the biometric screening data with pharmacy data and systems,” he said. “Combined, the pharmacist then has important insight to help guide that consumer to the right next health action. In nurturing this relationship, retail pharmacies can use repeat messages and measurements to intervene at the right time.”

Business Model Needs Focus

Panelists addressed the challenges of obtaining compensation for certain pharmacy services and offered suggestions on how to underscore the value to stakeholders, which include payers. “We need to prove value before we can start recognizing the benefit,” Wakefern’s Mondelli said “It’s about failing quickly on things that don’t work, and scratching them off the list. And where you have traction, it’s being able to communicate that to the stakeholders it’s going to matter to. Why should I invest as a payer in this program? And if we can’t articulate it clearly enough, it doesn’t matter how well we’re doing.” H-E-B’s Norman urged other states to follow Idaho’s lead in empowering their pharmacists. “I wish every state in our country had the foresight that Idaho has, to allow pharmacists to initiate therapy based on the result of a point-of-care test,” he said. “Allow

David Badeen, vice president and DMM of health care at Sam’s Club; Jeff Barkoff, vice president of retail solutions at higi; and Colleen Lindholz, president of Kroger Health

pharmacists to adjust dosages for therapies when it is necessary. Allow them to partner through collaborative relationships with the provider community, in growing better health care in our communities. That’s where we really need to go.” Panelists cited the importance of eyeing the big picture of pharmacy’s role, including in preventive health care. “We are committed to changing the way health care is delivered in this country,”

Kroger’s Lindholz said. “It’s all about strategic partnerships, personalization, breaking down the walls, and leveraging our unique assets and capabilities as America’s largest grocery store. We believe food is medicine. And we believe in it so much that it’s become the guiding force behind our approach to health care. There is a huge opportunity to change the trajectory of chronic disease, and we are going to be part of the solution.” dsn

Optimistic About Pharmacy’s Future The pharmacy industry faces lots of challenges, but one retail veteran offered an upbeat view of pharmacy’s future. Craig Norman, senior vice president of pharmacy at H-E-B, gave his optimistic take as a panelist at Drug Store News’ Industry Issues Summit. “The practice of pharmacy has gotten very complicated over the years,” he said. “But what we’ve done is to focus in on those more interactive services that we can provide to consumers.” He said H-E-B was one of the first retailers to provide immunizations on a large scale, a move that began nearly 20 years ago. “The immunization program is the cornerstone to touching a patient in a much more different way than we ever had before.”



That led to a range of additional services, from medication therapy management to such medication flavoring children, he said. “All of those services are differentiators. They’re all things that will increase the value of the pharmacist in the consumer’s eyes.” Yet there’s more. Norman expects great things from a new generation of pharmacists armed with excellent educations and training. “They will have the ability to practice at a much higher level than I would as a 1983 graduate,” he said. “The valuable interactions that they can have with the prescribing community and the patients are the things that are going to make a difference over the coming years.” —David Orgel





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Know Thy Customer — and Partners Retail, manufacturing execs discuss the importance of insights and relationships in beauty By David Salazar

Lauren Brindley, Walgreens’ group vice president, personal care; Rebecca Brown, E.T. Browne’s vice president, marketing; Musab Balbale, Walmart’s e-commerce vice president and GM of health, beauty, wellness and pharmacy; and Shannon Curtin, the Possibility Group’s founder


here is the beauty category headed, what challenges are in the way, and how can companies incorporate the needs of their consumers when planning for the future? These were the questions at the center of the beauty trends panel, which was part of the Drug Store News Industry Issues Summit. Moderator Shannon Curtin, founder of the Possibility Group, led panelists through a discussion that ran the gamut from regulation to consumer insights and how manufacturers and retailers can collaborate to overcome hurdles facing the industry. One of the challenges panelists identified are regulations. In particular, a recent California law focused on animal testing, making it illegal for manufacturers to import and sell a beauty product that was developed or manufactured using animal testing — whether it was the manufacturer or a third party who carried the testing out. Though panelists noted that including third



parties added a level of difficulty to compliance, others highlighted such legislation as an opportunity to see if a company’s sourcing aligns with consumer demands. Walgreens’ group vice president of beauty and personal care, Lauren Brindley, said that the California law codifies a larger trend in the beauty space, namely a desire for transparency as to what’s in the products consumers buy. As a result, such efforts offer an opportunity for companies to prioritize transparency and tie it back to a company’s cause. (Walgreens eliminated animal testing for its own brands several years ago.) “I think whether it’s legislative or not, it should be a conversation in all boardrooms — how are we actually thinking about transparency, provenance and ethics,” she said. “There is an emergence of consumers wanting this type of clarity. It is really important, especially amongst younger consumers who are interested in brands with purpose and the world around them. I think it’s something everybody should be thinking about.”

Curtin said that the recent changes to the tax code are enabling companies to make investments that can help them succeed with consumers. WestRock’s vice president of retail insights and solutions, Leon Nicholas, said he sees two areas of infrastructure investment from companies — e-commerce and insights. While e-commerce investments allow for more agility, he said, insights can help companies understand the return on their efforts and investment. “People are investing in insights quite a bit, particularly in the beauty space, to better understand ‘What is the ROI of that shipper or that magic mirror that I’ve placed there in the cosmetics aisle? What am I getting out of that?’” he said. “And you can algorithmically tune that to start to have what I call an ‘insights productivity loop’ so that the insights are feeding back to you information that you can then apply to that promotion in real time because the cost of in-store promotion failure today has just gotten too high.”

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Joann Marks, Cosmetic Promotions’ founder and CEO; Bruce Kramer, Wahl Clipper’s senior vice president, consumer division; Tonya Rupert, Weis Markets’ beauty and personal care category manager; and Leon Nicholas, WestRock’s vice president, retail insights and solutions

Insights are key to Cosmetic Promotions’ strategy, according to founder and CEO Joann Marks. The company partners with manufacturers and retailers to help introduce and promote brands to consumers. One way they achieve this is by taking a generational approach, gathering consumer insights from different sources to find what offerings will work best for each — from direct-mail beauty sampling kits and pop-up beauty schools for millennials to dorm-room bag drops and exit sampling at concerts for Gen Z. “We always drive to improve the shopping experience by innovating ways to surprise and delight the consumer,” Marks said. “That’s our core strategy, and of course we always customize our solutions to resonate with the evolving segments and generational groups of the larger consumer base.” Meeting consumers where they are also is integral to E.T. Browne’s strategy, Brown said. She said that to promote its Palmer’s Cocoa Butter Stretch Mark Cream, the company partnered with pregnancy app OVIA to identify potential pregnant influencers who create content that’s featured in the app and on Palmer’s social media. “For a low relatively low investment, you get this huge presence that has authenticity,” she said. “It’s warm and it’s authentic, and it pays off much larger than the original investment.” The need for authentic interactions also informs retailers’ customer outreach efforts.



Tonya Rupert, Weis Markets’ beauty and personal care category manager, said it is set to introduce clubs, which offer customers the ability to put points toward products in the categories they prefer to shop. The company then uses that information to send pertinent outreach materials. “With the data we track from our loyalty card, target email communications are sent out,” she said. “Customers don’t shop our stores as a destination for beauty care product, so we can utilize their loyalty data to customize promotions that might be relevant to their next shopping trip.” The question of relevance isn’t just applied to communication with consumers — it also informs retailers’ larger strategies. Brindley said that one of the biggest questions in beauty is understanding the role of brickand-mortar in an omnichannel approach, noting that doing so and using a company’s assets correctly can drive growth. For Brindley, even in an omnichannel approach, the in-store experience is key. “I believe it’s the accountability of brick-andmortar retailers to create the reasons for customers to visit — the store has a fundamental role to play,” she said. “There’s a number of digital retailers now moving into the physical space too because there are certain categories where there needs to be an experience to complete the customer journey.” Musab Balbale, Walmart’s e-commerce vice president and GM of health, beauty, wellness and pharmacy, said that online

also can play a role in discovery and help get customers to return to the site, even if they don’t initially buy anything. “If I could be a place where you come for that innovation and discovery, a place where you come to learn — regardless of whether or not you buy in that moment — I gain share of mind,” he said. “One of my key focuses is on transitioning our experience from being transactional to being more relationship based.” Reconciling the dichotomy between a focus on transactions and a deeper partnership also applies to relationships between suppliers and manufacturers, according to Bruce Kramer, senior vice president of Wahl Clipper’s consumer division. He said that a key element of success is a partnership between suppliers and retailers, rather than a relationship focused on transactions. When transactions are the focus, Kramer said, manufacturers can be pressured to cut corners and produce a lesser product, which ultimately impacts the customers — and potentially sales. Working together is something Kramer said can help grow the category. “The retailers who are winning are the ones who create true partnership,” he said. “Manufacturers want to partner with retailers. We’re happy to invest our dollars with the retailer to get the word out about our products to the customer. But it needs to be utilized, where we really are working as a partner.” dsn



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Store Brand Bonanza Attention to detail keeps private-label items in consumers’ minds, carts By Carol Radice


nnovation is a word thrown around quite frequently these days. Every company seems to be claiming that their latest products are earth-shattering game changers, poised to revolutionize what consumers are interested in buying. In reality, only a few new launches truly fit this bill, and the others, well, not so much. In the world of private label, innovation is coming from many directions and influences, and can be seen across a multitude of categories. Within this context, most experts agree that premium private-label offerings are driving much of the interest today. This month, DSN’s Retail Excellence Awards, or REX, recognizes the top influencers in the private-label category that are helping retailers achieve all this and more within their private-label programs.

CALICO BRANDS Ontario, Calif.-based Calico Brands has a long history of providing quality lighters in a wide variety of colors, styles and value. Its innovative, multipurpose lighters feature squeeze-grip ignitions, adjustable flames, flexible nozzles and wind-resistance flames. In addition, Calico Brands offers a wide array of sparkwheel and electronic disposable pocket lighters. As one of the largest manufacturers and distributors of disposable lighters in the world, Calico Brands is a full-service company with a U.S.-based packaging and warehouse facility, featuring an in-house packaging design department, product testing and stateof-the-art packaging machines. Executives said innovation is at the heart of how the company attracts and retains customers. “Offering the best lighter products in the industry is our inspiration to continue paving the way for new product innovation in the utility lighter and pocket lighter category,” said a Calico Brands marketing official. “Our product innovations continue to set new category standards of excellence and be a catalyst for our growth and success in the marketplace.” Looking to set itself apart, Calico Brands focuses on producing quality products, abiding by industry standards and regulations, innovating to grow the category, and offering value and cost



savings. Moreover, officials pointed out that their expertise and knowledge of the product category/industry, brand awareness/ brand recognition, manufacturing and distribution capabilities, combined with its merchandising and promotional strategies, puts the company in a field of its own.

CHASE PRODUCTS Since 1927, Chase Products has manufactured a variety of aerosol products from disinfectants and insecticides to cleaning products and paints, as well as personal care items and craft and hobby sprays. A leader in the “Made in America” movement, all of the raw materials Chase uses are sourced from the United States and manufactured and assembled at its Midwest plant. Chase is a partner with more than 50 different retailers across the country to provide private labeled national brand equivalent products. Its position as a manufacturer of EPA-registered disinfectants, particularly those which kill cold and flu viruses comparably with the national brand, has helped establish it as a preferred source for retail and professional private-label formulations. Chase Products has a lengthy history of innovation in aerosol products. Initially manufacturing and distributing pesticides, Chase was the first company to manufacture spray paint, the first to develop hair spray and package spray starch, and the first to formulate and manufacture an antiperspirant in aerosol form. In 2011, Chase introduced Champion Sprayon Green World N, the first full line of EPA Safer Choice-certified continuous-spray green cleaning products. In 2015, Chase launched its Home Value brand, 20 Made in America cleaning and personal care aerosols for the dollar/discount store market. “Private label is no longer just about having a much better price,” said Judy Albazi, president and CEO of the Broadview, Ill.-based company. “Now it is about having a great price and great quality, so that consumers will always consider all of the alternatives. We are proud of the fact that many of our clients have been with us for 60 years, and have no hesitations in marketing products manufactured by our company.”

REX AWARDS 2019: PRIVATE LABEL Capitalizing on the interest in natural beauty products, the company recently expanded its Nature’s Beauty portfolio to include skin care, hair care, and body and luxury bath items, all featuring plant-based, nature-derived formulations. “Our success is tied to being an innovative, ethical, all-inclusive supplier of products and programs that foster a strong partnership,” said Gregory Rubin, CEO of Garcoa. “In addition, we believe in the importance of working with our retailer partners and being transparent about what it takes to build a strong, successful private-label program.”

GLOBAL TISSUE GROUP EDGEWELL PERSONAL CARE With roots dating back to 1875, Edgewell Private Brands Group has a long history of leading the way in wet shaving. As part of the Edgewell Personal Care business, the company’s commitment to quality and innovation makes it uniquely positioned to take store brand wet shaving to the next level. “We continue to focus our efforts on quality, innovation and delivering unsurpassed product performance,” said Tom Parker, senior channel manager at the Shelton, Conn.-based company. Edgewell’s long-term goal, Parker said, is to help its retail partners deliver great store brand razors with meaningful value for their shoppers. Whether helping to create a winning national brand equivalent portfolio or a more differentiated approach to the store brand mix, Edgewell’s strength is in offering customized programs to meet a variety of needs. This approach has helped make them the top-ranked supplier of private-label shaving products in the United States. “We pride ourselves on being flexible and responsive to retailer and customer requirements,” Parker said. “We work closely with our retail partners to ensure we always offer innovative shaving solutions that will meet business objectives by exceeding consumer expectations.”

GARCOA LABS Garcoa Labs is the largest woman-owned private label, control label and contract manufacturer in the United States, according to company officials. Among other things, its commitment to quality, service, value and innovation has helped this company stand apart in a crowded field. From product and ingredient research to marketing insight and manufacturing, Garcoa has become known for creating and developing programs that are innovative and exclusive. From concept to shelf, the Calabasas, Calif.-based company has a broad expertise in all aspects of brand and product development within a range of categories, including skin care, hair care, men’s shaving and grooming, multicultural beauty care, foot care, bath and body, artisan crafted bar soaps, baby care, and over-thecounter topicals, along with light household, limited vitamins and powder products. Always innovating, its newest offering is a line of nutritional gummy products.



Officials at Medford, N.Y.-based Global Tissue Group believe that treating every retail customer as a member of their family helps play an important role in setting their company apart from others offering private label bath tissue, facial tissue, napkins and paper towels. Global Tissue Group offers paper products across three tiers — standard, premium and ultra premium. Company officials pointed out that providing value, quality and consistency are at the center of their business model. Their belief is that by creating compelling user experiences, the company can help retailers build consumer brand loyalty. In fact, GTG’s operating philosophy is to make quality the focus of everything they do for one simple reason — they use the same products that they sell to their retail partners. With flexibility at the core of what it offers, Global Tissue Group can customize its private-label program to fit a variety of retailer needs, from sizing constraints to package design. “We pride ourselves on our responsiveness and work hard to maintain a commitment to innovation, and constantly strive to improve our offerings,” said Philip Shaoul, the company’s president and COO on the GTG website.

ORALABS Since 1990, OraLabs has been producing a variety of personal care products, including lip care, oral care, skin care, sun care, foot care, analgesics and antibacterial hand sanitizers. Products are manufactured and sold under OraLabs brands, as well as private-label, licensed brands, contract manufacturing and national brands. The Parker, Colo.-based company has invested heavily in highspeed automation capabilities, enabling it to produce quality products at competitive price points. OraLabs’ filling capabilities, alongside its package design and research and development teams, offer retailers customized programs to meet a wide variety of needs. “Our expertise in developing our high-quality formulations, and the fact that we are a turnkey U.S.-based manufacturer, allows us to cover the full spectrum of lip care,” said David Hirschman, the company’s vice president of sales and marketing. “That goes from standard sticks to the flavor profile to OTC therapeutics and cold sore treatments.” OraLabs is expanding into private-label vapor products as well, including inhalers, topical chest rubs and vapor hand sanitizers.

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REX AWARDS 2019: PRIVATE LABEL PREMIER BRANDS Holding its manufacturing process to the highest standards is one of the qualities that sets Mount Vernon, N.Y.-based Premier Brands apart from its competitors. The company’s portfolio includes more than 150 products across several segments, including foot care, first aid, sprays and beauty. Its foot care line features gel insoles, foam and memory foam insoles, cushions, padding, and powders. The company also produces liquid and non-liquid methods for the safe removal of common warts, nail fungus, calluses, corns and bunions. Premier Brands’ first aid products include Sterile Saline Wound Wash, Medicated First Aid Spray, Burn Relief Spray with Aloe and Liquid Bandage. The company also offers solutions and delivery systems for poison ivy, skin rashes, insect bites, scar treatment and more. In addition, Premier Brands has a private label beauty product line that includes face and body lotions, as well as wax strips.

PROFOOT Brooklyn, N.Y.-based Profoot has been introducing innovative foot care solutions designed to relieve pain and discomfort since 1986. Dan Feldman, president, said the privately-held company prides itself on uncompromising quality, quick order turnaround times and speed to market. His company’s nimbleness, Feldman said, is part of what helps set it apart from larger competitors. Feldman, an avid runner, grew up in the business. During this time, he developed his passion for improving foot health and introducing products that offer relief from common foot ailments. The company produces foot care products under the Profoot brand, as well as for key drug chains under its own store brand label. The company’s product line includes insoles, orthotics, cushions and pads that address issues caused by bunions, hammer toes, corns and calluses, fungus and the like. Profoot’s specialty product line targets such conditions as plantar fasciitis and metatarsalgia ball-of-foot pain. “Unlike many large public organizations where new management cycles through every few years, our development team has a combined experience of over 40 years in promoting foot health,” Feldman said. “What also sets us apart is that we encourage consumers to give us feedback, and take that to heart when introducing new products or tweaking existing ones.”

STARCO GROUP The Starco Group is best known for offering aerosol products in a wide range of categories, some of which include household, air care, disinfectants, insect control, pet care, arts and crafts, seasonal, personal care, cosmetic, OTC, sun care, food, beverage products, and wine and spirits. Most likely have not heard of the Santa Monica, Calif.-based company before, but it is responsible for creating a number of firsts in the industry. For instance, TSG developed the first spray sunscreen line that met the Whole Foods preferred list; marketed the first sunscreen with a patented spray wand; invented the first ever non-separated mineral spray sunscreen; helped create the first



non-GMO and organic cooking oil spray line; commercialized the first and only household cleaning aerosol line to be approved by the EPA Safer Choice Program; and invented the first anti-graffiti coating on which spray paint could be washed off with water. “The key for us is a relentless pursuit to create game changing intellectual property that changes commercial verticals,” said Ross Sklar, chairman and CEO. “When we create new technologies, we often borrow raw materials from sectors that don’t typically make it into those channels. For example, we’ve used food-grade ingredients in paints before to achieve unique performance attributes. We are not your average contract manufacturer.”

UNIPHARMA Unipharma officials hope to play off of their success with the Drkids brand of pediatric OTC and allergy products in the private-label world. The Tamarac, Fla.-based company is offering a private-label version of Drkids to retailers. The products feature exact dosing, meaning consumers won’t have to worry about giving their children too much or too little of a medication, according to Edgar Arrieta, the company’s business development manager. The private-label version is available in eight SKUs, including acetaminophen diphenhydramine, dextromethorphan, natural cough syrup with English ivy leaf, and a natural nasal saline solution drop with Himalyan salt. “We offer the most innovative way to dispense medicines to kids,” Arrieta said. “The unidose packet is premeasured, and that provides a lot of relief for parents who worry whether they are

giving enough or too much medicine. The best news is that one package can be used for several kids per household.”

UNITED EXCHANGE CORP. For the past 25 years, United Exchange has worked hard at delivering quality private-label, control and licensed personal care, beauty, health, pet, and consumer goods to a variety of retail channels. Based in Cypress, Calif., this minority-owned, privately-held company’s diversified customer base includes Walmart, Costco, Amazon, Target, CVS Pharmacy, Walgreens, Dollar General, Dollar Tree, 7-Eleven and more. Its products currently are distributed in more than 100,000 retail stores. Its state of the art U.S. based and international contract manufacturing facilities, combined with its own in-house product development and design teams, enable UEC to quickly bring innovation, value and technology to retailers in a timely and cost-efficient way. Moreover, UEC’s worldwide distribution centers enable it to offer affordable, flexible and reliable shipping choices. What makes UEC a unique consumer packaged goods company is that it thrives on innovation and a strong commitment to its retailer partners, company official said. “Our expertise has been tried and true for over 25 years in providing quality service and value to all our customers,” said Grace Manzano, senior brand manager.

VALUE SMART PRODUCTS Value Smart Products, founded in 1998, is a private label and contract manufacturing company specializing in laundry and dish detergents, as well as additives. It is the largest producer of private label oxy stain remover in North America, and also is the only privatelabel producer of laundry scent boosters. After six years of research and development, and a significant amount of investment developing its laundry scent booster business, Value Smart is the only company in North America with a true national-brand equivalent. Its latest innovation centers around a distinct laundry pod offering, something the company will introduce in the next few months. “Our business has grown tremendously as a result of our success in the laundry scent booster, oxy stain remover, laundry pod, dish and rinse aid categories,” said Drew Harrison, president of the Suwanee, Ga.-based company. What sets the company apart from others, Harrison said, is Value Smart is large enough to serve retailers’ needs, but small enough to react quickly to changes. The company values customer service so much that every retailer is partnered with a customer service manager. “VSP focuses only on privatelabel products, unlike competitors trying to sell branded products with private label, Harrison said. “We are very nimble and can react to changes in the marketplace or customer needs quickly.” dsn


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Partnering to Navigate Change McKesson’s staying power comes from adaptation BY DAVID SALAZAR


or a company approaching 200 years old, McKesson remains spry. It also is no stranger to changes, particularly this year. As the company prepares to move its headquarters from San Francisco to Las Colinas, Texas, it simultaneously is readying for a change in leadership. Effective April 1 — the same day the new headquarters become official — Brian Tyler, currently president and COO, will take over as CEO. These changes take place as McKesson looks to help its customers — whose ranks in the pharmacy world run the gamut from such national chains as Walmart, such regional chains as Lewis Drug and independent players, many of whom operate under the Health Mart banner — navigate a constantly changing landscape. “When we think about the future of retail pharmacy, we think independent and community pharmacies play a critical role in the health of the communities they serve,” Tyler said. “Supporting these pharmacies and finding new ways to help them improve the care



they deliver — all while reducing costs and improving efficiency — are a key focus for us. Community pharmacy is an important part of addressing health care’s overall challenges.” And McKesson is placing itself front and center to help navigate these changes. Tyler said that while retail pharmacy has long been a core part of its heritage, McKesson also is working to be on the forefront of technology and approaches that make it a distribution partner, as well as a resource for building out pharmacies’ offerings. “Over the years, we’ve taken our highly efficient distribution network that’s able to deliver our core distribution services, and we’ve evolved the company to offer a variety of other healthcare technologies, clinical solutions and services. By helping our customers run more efficient business operations, we support them in delivering the important care for their communities,” Tyler said. He also said McKesson’s U.S. operations take learnings from its European and Canadian operations, where it owns and operates drug chains.

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The need to support customers comes as the industry undergoes a shift that Chris Dimos, president of retail solutions for McKesson’s ad. Supplylogix Health Mart division, McKesson characterized 1/2 as apage fundamental change in pharmacy’s role. “Pharmacy was previously looked at as a distributive business, focused on product distribution. Today, we’re seeing that



knowledge distribution is becoming much more important,” he said. That change creates the dual need “to provide knowledge in a way that is impactful for the patient, while still having quality products and a robust supply chain.” Indeed, a key way that McKesson enables its customers to enhance their offerings is by leveraging its distribution network — through which roughly one-third of the nation’s medications pass on a nightly basis, according to Gene Cavacini, senior vice president and COO of U.S. Pharma. “If we’re doing our pick, pack and ship job right, nobody ever thinks about us,” Cavacini said. “Everything should just happen seamlessly and invisibly so customers don’t have to give that part of our relationship a lot of thought. This allows us to focus on helping them become more efficient in their operations and supporting them in delivering care to their patients.” To get to that point, though, the company has invested heavily in its distribution capabilities, according to Ammie McAsey, senior vice president of distribution operations. “Our network of 26 distribution centers has continually undergone upgrades, in some cases, we’ve built new locations and we’ve •retrofitted Drug Store News, February others,” she said. “For the2019 last 10 years, we’ve accelerated our implementation of automation.” Among the automation that McKesson’s DCs leverage are automatic order-picking machines that can operate between 800 and

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“As the ‘front door to primary care,’ we need to empower independent pharmacies and support services that go beyond the fill. Independent pharmacy has a great advantage - its relationship, its partnership, its longevity with the patient... and that is very exciting.” Nimesh Javari President of Health Mart


Connecting the Continuum

1,000 “lines” per hour — a “line” is a line item in a customer’s order, such as three bottles of acetaminophen. McAsey said that the best human pickers might hit 600 lines per hour. The company also uses an order storage retrieval system, or OSRs, in its facilities, which brings products directly to workers at their station. The small-footprint OSRs can hold roughly 15,000 items, McAsey said. McKesson also is set to open a new distribution center in Seattle this April, replacing an older facility in Everett, Wash., and serving the same geographic area as the older facility. McAsey said that the company is taking a new approach that gives the facility a smaller footprint. The Seattle DC will work with McKesson’s Portland, Ore., DC on cross-stock opportunities, building orders in two different facilities, but offering a seamless delivery for its customers. McKesson’s central distribution capabilities also encompass six central-fill facilities that can help pharmacies — both chains and independents — with the time and cost of filling scripts. “Our central-fill facilities are basically an extension of a retail pharmacy,” she said. “We have great partnerships with some of our chain customers, and we’re working to build similar partnerships in the independent space to be able to aggregate a number of independent pharmacies. If they can send some scripts to a central-fill pharmacy operated by McKesson, they can really reduce the cost of dispensing.” Central fill is just one area where McKesson is investing in ways to improve its pharmacy customers’ capabilities. Other solutions include better ways to handle administrative burdens and methods for building clinical offerings. Among McKesson’s recent acquisitions is CoverMyMeds, a leader in healthcare technology, including



With pharmacies fiercely competing for patients’ business and loyalty, McKesson has taken extensive measures to make sure that independent pharmacies don’t lag behind in technology. McKesson Prescription Technology Solutions president Nathan Mott said the company has created a broad and deep network throughout the continuum of care. “The technology connects pharmacy to pharmaceutical manufacturers, payers and providers, which ultimately helps patients get the medicines they need to lead healthier lives,” he said. “We’re helping pharmacies make sure the patient gets on the best therapy, and this helps to start the transition for pharmacy from a dispensing only model to one helping to provide more clinical capabilities,” McKesson’s recent acquisition of CoverMyMeds, a leader in healthcare technology, including electronic prior authorization and real-time benefit check, enables pharmacies to connect to more than 700,000 doctors, large pharma manufacturers and the majority of payers within their pharmacy workflow. Mott said that the impetus behind the acquisition was to build out McKesson’s network with providers and facilitate better communication between providers and pharmacists. “Those two stakeholders are closest to the patient, and most familiar with the diagnoses and different therapies that are available,” Mott said. Mott pointed out that some insurance plans may not cover a therapy or may require a prior authorization because of step therapy or quantity criteria. “We have now the capability to seamlessly and electronically communicate between the doctor, pharmacy and payer to make sure all stakeholders are making the most appropriate clinical therapy decisions for that patient,” he said. “We automate as much as we can to help patients get on the therapy as quickly as possible.” Through RelayHealth Pharmacy Solutions, McKesson helps to process claims between the pharmacy and payers. “Last year, we helped facilitate over 20 billion transactions that ensures the communication between pharmacy and payers is seamless, and the pharmacy gets reimbursed appropriately for the care they’re delivering,” Mott said. Independent pharmacists also are tasked with helping patients get affordable medicines. “We work with the pharmacy, manufacturers and payers to ensure we get patients on therapy and, in a lot of cases, help them drive down their out-of-pocket costs,” Mott said. “We save patients a significant amount of money to ultimately get them over that financial hurdle and get them on therapy.” — Sandra Levy

electronic prior authorization and real-time benefits check. Tyler engaged in similar conversations with our retail and communitysaid that McKesson is focused on increasing its pharmacy cus- based pharmacy partners. Hopefully, through investments in techtomers’ access to specialty drugs for their patients. However, there nology and clinical programs and services, we can marry those are various administrative tasks that accompany these products. conversations and be a conduit, if you will, to help improve the CoverMyMeds automates some of them, while helping facilitate end-to-end efficiency in the market.” better communication between various stakeholders, according to Being that conduit means helping customers maintain the human Nathan Mott, president of McKesson’s Rx technology solutions. touch that builds patient relationships, while leveraging technology “We acquired CoverMyMeds to build out our network with pro- to help its customers continually deliver on patient needs, even as viders, because ultimately, care is really a combination of provid- they continually shift. ers and pharmacists interfacing with the patient,” Mott said. “The more we can have seamless communication between those two parties, the more everyone wins.” “Further, the payers win because if a patient is adherent, it prevents more severe medical issues. And biopharma manufacturers are better able to get their therapy in the hands of patients, and we can provide clinical feedback right back to the manufacturer to make sure the patient is on the right therapy.” “We firmly believe that health care is fundamentally a humanCoverMyMeds’ ability to span various stakeholders and stages dependent industry. Pharmacy and pharmacists will always be of the process is a good example of how Tyler said McKesson posi- an important part of that, and we can provide other capabilities tions itself in the pharmacy distribution model. — whether it’s digital capabilities or services — that can be proMcKesson 1/2 pagesit ad. • Drug News, February 2019 “As the wholesale distributor, we fundamentally in HVS the midvidedStore in a store setting,” Tyler said. “We know the model will condle of this model,” he said. “It gives us a platform to have great tinue to evolve as patient and customer expectations continue to conversations upstream — insights into how manufacturers are evolve, and we want to be at the forefront of leading those efforts thinking about things — and then we can look downstream and be on behalf of our pharmacy customers.” dsn

Central fill is just one area where McKesson is investing in ways to improve its pharmacy customers’ capabilities.

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More Than Just a Name Health Mart members highlight McKesson’s partnership, resources as business boons BY SANDRA LEVY


hen behemoths like CVS Health, Walgreens Boots Alliance and Amazon tie the knot with healthindustry players to gain a stronger foothold in the healthcare arena, one can only imagine what a formidable challenge it is for independent pharmacies to be successful in a rapidly evolving healthcare environment. Yet, to hear independent pharmacists Tony Willoughby, Heather Ferrarese and Cole Sandlin tell it, this is a great time to be an independent pharmacy owner. Willoughby, president of Dallas-based Thrive Pharmacy Solutions; Sandlin, owner of Fred’s Pharmacy in Hamilton, Ala.; and Ferrarese, owner of Bartle’s Pharmacy in Oxford, N.Y., operate different models of pharmacies, but they share one distinction — they are Health Mart pharmacies. As part of McKesson’s Health Mart network of 5,000 independent pharmacies nationwide, their pharmacies are thriving, which they said is thanks to the scale of cutting-edge technology, services, resources and tools McKesson puts within easy reach. Armed with a strong value proposition, McKesson executives said the company is shaping the future of retail pharmacy by emboldening its Health Mart pharmacies to differentiate themselves, so they can grow in a more complex landscape, thereby



ensuring their success over the long term, while improving patient care and reducing costs. Whether it is providing access to managed care networks through its Health Mart Atlas pharmacy services administrative organization, assistance with calculating DIR fees, technology solutions, OTC products and programs, education and training, McKesson executives said the company has left no stone unturned to ensure that Health Mart independent pharmacies will not be left behind. “What we see in the independent segment is generational loyalty, so the business can continue to thrive. ‘Because you took care of my parents, or my extended family, as I go from a healthy state into needing a prescription, I’ll transition into that same environment because of the trust and quality care provided,’” said Chris Dimos, president of McKesson Retail Solutions. “The referral network becomes tight and that loyalty becomes extremely strong. That’s why you’ll see multigenerational families in the community owning and operating pharmacies, and also patronizing those same pharmacies.” Sandlin, a third-generation pharmacist, who purchased Fred’s Pharmacy from his parents five years ago, credited the company for helping to drive store traffic, increase customer loyalty and boost revenues.

Supplementing the Bottom Line to Build Patient Loyalty If you ask pharmacy operators what keeps them up at night, their profit margin might be at the top of the list, particularly as reimbursements for pharmaceuticals decrease and front-end sales grow in importance. This is as true for chains — 35% to 40% of their sales come from the front end of the store — as it is for independents that garner roughly 6% of their sales from the front end. “As drug reimbursements continue to decline — on average 9% a year since 2010 — pharmacy operators are really looking for solutions, whether it be ancillary products or front of store offerings, and they’re looking for drug distribution suppliers to help them with that,” said Chris Savage, vice president of McKesson’s consumer products group. One of the ways major retailers have sought to pad their margins is through private-label brands, something McKesson takes seriously. It offers its Health Mart own brand OTC products to its independent customers who operate under the Health Mart banner, as well as SunMark OTC products to its chain and government customers. The company augments this with its Front Edge category management strategy, which focuses on price, promotions, placement in store, and having a competitive portfolio. “We offer solutions and service to help the pharmacies really build their brand — in particular for independents with Health Mart — to let them stand out among the competition,” Savage said. “We’re giving them a value proposition that represents a symbol of quality with those Health Mart private-label products.” Part of building out the portfolio — with margins that can be as high as 60% — is consumer insights, which include identifying customer needs and segmenting customers based on demographics or geography to help pharmacies differentiate themselves to their customers. In listening to consumer feedback, the company found desire for a more robust vitamin portfolio, and has recently introduced roughly 100 new items in the vitamin category, supplementing the launch with promotional giveaways of free children’s vitamins. Savage said that such efforts help build patient loyalty. Alongside the vitamin portfolio rollout, McKesson is building out other Health Mart ancillary programs, which also offer touchpoints for pharmacists to identify potential patients’ opportunities. “It helps the pharmacy boost its revenue,” Savage said. “Vitamins are just one of those key categories that help out with lower margins. Also, ancillary programs increase loyalty, which builds repeat sales from those patients.” —David Salazar

For example, he uses Health Mart’s children’s chewable vitamin program, offering a year’s free supply of vitamins. “Customers don’t have to fill a prescription to get the vitamins. They cost a little less than a dollar apiece, but we dispense them for free. It’s a way to give back to the community and draw in new customers and business,” Sandlin said. Owners said having the Health Mart brand name also is seen as opening the door to an independent pharmacy’s success when competing with retail pharmacy giants that are household names. “As a Health Mart store, it creates a national brand of healthcare destination,” Sandlin said “When people see the logo or commercial, they know when it comes to health care, if you go to a Health Mart store, you’ll get what you need.”McKesson also provides such tools as the MyHealthMart dashboard, which enables independents to run their businesses more efficiently and cost effectively. The dashboard provides reimbursement information, shows pharmacists how they can optimize results for their business and patient base, what they can do in terms of quality and insurance tools, and what their cash flow is going to be over time. “These tools can be used by independent pharmacists to manage their business and optimize the care they provide to their patients,” Health Mart president Nimesh Jhaveri said. “When we look at the technology available for pharmacists today, it can feel overwhelming. However, with the Health Mart team and the training available, it’s simplified and impactful.” Willoughby said that Health Mart is a strategy partner that acts as a clearinghouse of what is occurring in the industry, which allows Health Mart members to focus on the day to day of operating their business, while maintaining tabs on industry trends. This helps inform local strategic initiatives, and in the case of Thrive, it has partnered with a Dallas-based accountable care organization to work directly with primary care physicians to improve care for patients with chronic conditions.

Owners said having the Health Mart brand name is seen as opening the door to an independent pharmacy’s success. “We’ve extended our community pharmacy out of the four walls of our pharmacy into the practices of a physician network of about 500 physicians that care for over 900,000 local patients,” Willoughby said. “All business owners balance maintaining day-today operations, while keeping an eye on new trends. We use our partners at Health Mart to help us see what’s changing in the market, such as reimbursement, payment models and collaboration opportunities.” Ferrarese relies on Health Mart’s medication adherence performance solution to increase her efficiency, streamline her workflow and boost revenue. With 600 patients in the medication synchronization program, Ferrarese said her workflow is more predictable. “Due to declining reimbursement, I don’t want to have excess inventory sitting on




my shelf for months that may never get used. With Health Mart’s adherence tools, I am able to identify which patients would be my best target for my medication synchronization program. I’m able to reduce my inventory expenses because I’m not ordering those products until I’ve filled the prescription,” she said. Having a medication adherence solution also opened the door for Ferrarese to partner with a local county behavioral health plan. “We showed their providers how many patients we had, who they were and what they were doing as far as compliance with medication,” she said. “My pitch to them was, ‘There are things I can do at the pharmacy level to help you improve compliance because with MACRA and MIPS and reimbursement changing how we are all going to be paid, it’s in physicians’ best interest to have compliance.’” Willoughby echoed Ferrarese’s sentiments concerning the value of McKesson’s medication synchronization program, in which Thrive has approximately 3,000 patients enrolled. In addition to impacting patient care through improved medication engagement and adherence, it also impacts physician practice workload to free up practice staff to take care of patients. “The average physician office has about 25% of their calls driven primarily for prescription refills,” Willoughby said. “As you enroll more patients in medication synchronization, you’re able to pull prescription refill workload out of the practice, which improves both the staff’s and the patients’ experience.”



Having access to the right managed care networks is crucial for independents’ success, particularly as the industry evolves to valuebased care models. Launched in April 2018, Health Mart Atlas’ PSAO partnership with American Pharmacy Cooperative manages core PSAO services, including third-party PBM and payer contracting, as well as credentialing, central pay and MAC pricing appeals for community pharmacy.

Having access to the right managed-care networks is crucial for independents’ success in value-based care models. Crystal Lennartz, Health Mart Atlas’ vice president of pharmacy performance, said that an increasing number of plans have a preferred or a narrow structure, which means they typically are limiting the number of pharmacies that can participate in exchange for lowering costs for their members. “It’s increasingly difficult now,” she said. “Only certain PSAOs or pharmacies may have access into those preferred networks. If they are not preferred, there can be a co-pay differential for patients, or they may not be able to serve that patient at all. To service those patients and their prescription needs they need to be able to have access to the right networks.”


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Health Mart Atlas vice president general manager Eyad Farah pointed out that the company is getting access to more networks that in the long term will drive the success of its pharmacies and its network. Being able to anticipate DIR fees can prevent a pharmacy from having a serious cash flow problem that can put it out of business. Ferrarese praised McKesson for providing a robust DIR calculator. “It shows what your ingredient costs are, who are your primary payers and, based on your performance, this is what we are estimating our DIR fees will be,” she said. “That lets you sleep at night.” Education also is a cornerstone of McKesson’s strategy to help

Health Mart pharmacies drive revenue, grow their business and improve patient outcomes. Health Mart University’s online training tools provide useful information on getting into new services, such as immunizations and MTM. In addition, Health Mart hosts peer-led town hall meetings, which include the opportunity to share experiences and gain CE credits. Among the topics presented: quality performance and measures, medication synchronization, profitability and advancing care, increasing revenues with such services as vaccines and MTM, and fostering relationships with prescribers. Mike Cihlar, Health Mart’s retail operations director, said the company has hosted more than 400 town hall meetings over the past five years. “Peer-to-peer networking and peer-led education are a great catalyst for helping our independent pharmacies evolve, and it helps them deliver the proper care, greater efficiency and more profit in their business,” he said. “Having 5,000 Health Marts being able to share their story across the family is important.” What does the future for independent pharmacies look like? Despite challenges that undoubtedly lie ahead, Ferrarese sees the glass half full. “McKesson is providing stores with ways to boost immunization services, how to promote medication sync services, and how you can streamline your business expenses and reduce some staffing hours,” she said. “When you partner with a PSAO and wholesaler that understands the whole picture and the payer landscape, they’re able to guide and direct us.” Sandlin also envisions a bright future. “McKesson equips us with services, protocol and training in order for us to change and continue being unique when competing with big-box chains, so that we will have a valued place in health care down the road,” he said. dsn

Maintaining Independents’ Independence Eyeing baby boomers who were approaching retirement age — and pharmacy owners who wanted to sell their pharmacies for personal reasons, but with no exit strategy — was the impetus behind McKesson’s decision in 2008 to launch RxOwnership. RxOwnership provides free and confidential consulting and resources to any independent pharmacy owner interested in buying or selling a pharmacy, as well as those who want to start a pharmacy business. It basically is a matchmaking business, said RxOwnership vice president Chris Cella. “We started identifying people looking to sell their pharmacy,” he said. “Then we identified other individuals looking to buy pharmacies, or those looking to come into the business for the first time. We started matching them up. Can we help you get this deal done?” RxOwnership has assisted in more than 5,000 transactions, including identifying pharmacies for sale, doing background work on the demographics of an address and helping to derive the approximate valuation of a pharmacy. “We’ll help them with the process of license transfers, contracting,



financing, pharmacy systems, and bringing them under the McKesson distribution umbrella,” Cella said. “Buying a business can be daunting, especially if it’s the first time. A lot of things that can fall through the cracks, and there are a lot of checks and balances you need to make sure are complete.” Cella pointed out that according to the National Community Pharmacists Association, 1,000 independent pharmacies will look to change hands each year. “There is a large influx of pharmacy students who graduate who don’t have employment locked up upon their graduation,” he said “They are looking at independent pharmacy ownership as a viable opportunity.” To that end, RxOwnership makes presentations at pharmacy schools, and it has a Women in Pharmacy mentor program. “We’re trying to teach students that independent pharmacy ownership is a very viable option,” Cella said. “We are here to help you through the whole process. We are tackling the preservation of independent pharmacy ownership.” —Sandra Levy

McKesson Pharmacy Systems


Poised for Success Generics makers build up capabilities, FDA collaboration as approval numbers rise By Sandra Levy


fter a year that saw record-high generic and biosimilar drug approvals by the Food and Drug Administration, many manufacturers said that 2019 should be more of the same. More importantly, many industry officials said they are prepared for this and are eager to take advantage of the government’s new and more open posture. The agency gave its full or tentative approval to 971 generic drugs during fiscal year 2018, a huge difference from the 409 drugs approved in 2014, according to a recent PricewaterhouseCoopers report. The spike in the number of generics greenlighted by the FDA comes on the heels of President Trump’s Blueprint to Lower Drug Prices and the FDA’s Reauthorization Act in 2017, which greatly increased FDA’s funding and authority. Additionally, under Trump’s appointed commissioner, Scott Gottlieb, the FDA has launched the Drug Competition Action Plan and the Biosimilars Action Plan, both broadly aimed at lowering prices through increased competition in the markets. While many generic drug manufacturers applaud the FDA and the Trump administration for creating more opportunities, their actions also have created challenges, leading some manufacturers to enhance or revamp their strategies for success. These new approaches include making greater investments in research and development, breaking ground on new manufacturing plants and state-of-the-art labs, diversifying their portfolio, and hiring additional staff with greater scientific and regulatory proficiency.

Investing in the Future

Srinivasa Rao, Dr. Reddy’s vice president and head of regulatory affairs North America generics, praised the FDA’s new posture,



Amneal Pharmaceuticals’ capabilities include a Brookhaven, N.Y., manufacturing facility.

which he said has spurred Dr. Reddy’s to ramp up its investments, including adding research and development staff in India, where the company is headquartered. “We constantly increase our technology space with the latest state-of-the-art equipment,” Rao said. Hefty investments also are being made at Mayne Pharma, according to CEO Scott Richards, who said the South Australian company with U.S. headquarters in Raleigh, N.C., has made significant investments in its staff, facilities, and R&D capabilities, including more than $140 million to expand its manufacturing capabilities and capacity globally. Mayne Pharma also recently completed a new solid-dose oral manufacturing plant in Greenville, N.C., which Richards said quadrupled its manufacturing capacity and

added multi-particulate layering, bead coating fluid bed technology and commercialscale handling of potent compounds. “The new facility allows Mayne Pharma to work more effectively with challenging and difficult drug substances,” said Richards, who noted that more than 15 new products are targeted to launch from this site by the end of next year. Additionally, Mayne Pharma invested $35 million in R&D last year, focused on the creation of first-to-market generics, hard-to-manufacture products, and complex products utilizing drug delivery capabilities the company has in-house or through its strategic alliance partners. R&D also is a factor in Bridgewater Township, N.J.-based Amneal’s new strategy in light of the FDA’s recent actions. Andy Boyer, Amneal’s executive vice


Ahead of the curve in quality and value. ®

Camber Pharmaceuticals, Inc. (732) 529-0430 camberpharma.com

PHARMACY | GENERICS president of commercial operations, said it is focused on portfolio selection, combined with execution from its R&D, legal, regulatory and operations arms. “Everything starts with quality and supply from a customer standpoint,” he said. “Operations, quality and regulatory are the key functional areas that allow Amneal to be successful in delivering products of high quality and high service levels.” Having a discerning eye for what products are brought to market is a key component of Amici Pharmaceuticals’ efforts. Amanda Samojedny, Amici’s director of operations, said the Melville, N.Y.-based company is selective in the types of drugs for which drugs it pursues approval. “Given that we are a newer drug manufacturer, our focus has been on pursuing generic drug approvals on items for which there is not enough competition in the market, or none at all,” Samojedny said. A diversified business model has been an important ongoing strategy for many generic drug makers, but it is increasing in importance in the current climate of speedier approvals, which offers companies the opportunity to diversify quickly. This approach is central to Upsher-Smith Labs’ efforts, according to Jennifer Colvin, vice president of marketing, corporate communications and commercial analytics at the Maple Grove, Minn.-based manufacturer. “We are focused on significantly increasing our pipeline of products to include new dosage forms, as well as more traditional and specialty products,” Colvin said. Mayne Pharma’s Richards agreed that innovation is key. “Our pipeline today includes a much broader array of dosage forms, including transdermal patches, hormonal drug/ devices, topical creams, ointments and foams, as well as our history in immediate release and modified release tablets and capsules,” he said. As companies like Upsher-Smith and Mayne Pharma pursue novel dosage forms, Dr. Reddy’s strategy is focused on developing complex generic products. Doing so “allows us to differentiate ourselves from our competitors,” Rao said. Regardless of the dosage form or drug



Biosimilars Wait to Take Off One of the most promising classes of cost-saving drugs is a bit of a late bloomer. Though the Food and Drug Administration has approved 16 biosimilars — seven in fiscal year 2018 alone — only seven have launched. Michael Kuchenreuther, senior research analyst at St. Louis-based Numerof & Associates, said there are various challenges to wider biosimilar adoption. Though there existed an expectation that biosimilars were going to hit the market and enable immediate cost savings when President Obama signed legislation to accelerate biosimilar approvals, “Eight years later this hasn’t come to fruition,” Kuchenreuther said. “The market has not moved as fast as some had originally anticipated.” One of the foremost challenges facing manufacturers when they go through the approval process is demonstrating interchangeability of their products, which ultimately allows for substitution of the biosimilar for the reference product. “In order to be deemed interchangeable, the manufacturer must demonstrate the biosimilar is sufficiently similar to the reference product and is expected to produce the same clinical result,” Kuchenreuther said. “Manufacturers are still unclear how best to demonstrate this.” Suppliers also have to be willing to invest in clinical studies demonstrating that switching patients from the reference product to the biosimilar does not carry any safety or efficacy risks. Educating prescribers is yet another formidable challenge. A recent survey of 15,000 specialty physicians found that 61% believe biosimilars have a different efficacy than the reference product — highlighting a knowledge gap and hesitancy toward biosimilars, Kuchenreuther said. Despite the obstacles, the space still holds promise. “We’re still looking at almost $300 billion dollars in annual biologic sales that will be losing patent protection by about 2023, which means that there’s a number of opportunities for manufacturers to be able to make an impact and create competition,”he said. — Sandra Levy

complexity, the secret to success for Camber Pharmaceuticals, according to president Kon Ostaficiuk, is a focus beyond generic alternatives to big-ticket drugs. “Camber targets products that will or may have a larger impact on an individual’s wellness and not just ‘blockbusters,’” he said.

Passing Regulatory Muster

While generics companies are quick to point out that they always have worked diligently to gain FDA approval, they appear to be working even harder prior to submission. A shorter approval process — as Gottlieb has stressed — does not mean a less thorough one. Indeed, the expedited process requires manufacturers to provide more clinical data than was previously required. “It requires more upfront investment to produce a quality ANDA submission and

quite a bit of work upfront,” said Rao of Dr. Reddy’s. “You need to understand this process well.” Generics makers keenly aware that they must continue to enhance their processes and innovate as they seek the FDA’s blessing. This is as speedier review times requires manufacturers to be more flexible and work more closely with the FDA. Camber’s Ostaficiuk emphasized that his company always has worked to streamline its processes to shorten approval time — thus minimizing time to market. Camber’s work with parent company Hetero Drugs and associate companies has resulted in an extensive pipeline of products and a unified approach to regulatory oversight. “Our corporate strategy is to continue to have Camber, Ascent Pharmaceuticals and the Hetero Labs teams work closely with



Here at Upsher-Smith Laboratories, LLC, our heritage is generic pharmaceuticals. We and our parent company, Sawai Pharmaceutical Co., Ltd, have been formulating and manufacturing quality generics for decades.

In keeping with our unwavering commitment to high-quality products and sustainable growth, we’ve recently rolled out a strategic plan to double our on-market offerings. This means our customers can expect a greater number of consistently supplied, quality products supported by our highest level of customer service. As we celebrate our 100-year anniversary, we remain proud of our strong reputation as a trusted partner in the generic marketplace, and we look forward to delivering even more affordable options to patients and healthcare professionals. Visit us at www.upsher-smith.com to learn more.

Upsher-Smith Laboratories, LLC, 6701 Evenstad Drive, Maple Grove, MN 55369 Š 2019 Upsher-Smith Laboratories, LLC 113953.01


PHARMACY | GENERICS the FDA to submit and provide as much information as quickly as possible via electronic submissions to secure as many approvals as we can in 2019 and beyond,” Ostaficiuk said. When it comes to seeking approval for biosimilars — lower cost, highly similar versions of protein-based biologic drugs — they need to provide more clinical data than is required in order to gain FDA approval. Dr. Reddy’s Rao said biosimilars require the development of characterization data from a physical and chemical standpoint. “The product needs to really mimic the brand,” he said, adding that the difficulty for companies is in creating a physically and chemically similar product — and proving it. “With generics, a bioequivalent study is needed that is much simpler compared to a clinical study for biosimilars,” Rao said, highlighting the need for a qualified development team. “That’s where the cost is from an investment perspective.”

Looking Forward Cautiously

Though many manufacturers are optimistic that 2019 will be another record-breaking year for generic and biosimilar approvals, some also have some concerns about the future. There are certain challenges posed by therapeutic areas that the FDA is focusing on, Mayne Pharma’s Richards said. “We expect the FDA will prioritize those markets where there is limited competition,” he said. “Often, these limited competition products are also complex products

Mayne Pharma recently opened a new manufacturing site in Greenville, N.C.

requiring greater barriers to overcome in terms of development — an area of focus for Mayne Pharma.” Upsher-Smith’s Colvin pointed out that the FDA’s increasing and increasingly fast approvals are good for competition, but that competition creates downward pricing pressure on manufacturers. “As a result of this pricing pressure, some generics may not be able to stay on the market,” Colvin said. Amneal’s Boyer emphasized the importance of having a path to commercialization. He said that while it still is important to work on a process that improves the efficiency of approval versus commercialization

of applications, he is concerned “that too much time and resources are being spent by the FDA and the industry on product approvals only to be put on a shelf and not commercialized. That does not help our goal to lower the cost of health care.” Camber’s Ostaficiuk agreed that having more approvals does not always equate to better conditions or supply of generic products that are available, and hopes the FDA focuses on areas of need. “We hope the FDA approves more new drug entities that will benefit the patients and consumers, and not just the 10th or 12th player on a particular drug that is in the market already,” he said. dsn

Exclusivity Losses Offer Big Opportunity Ninety-five billion dollars. That is the opportunity that drugs losing patent exclusivity present for generic drug manufacturers over the next five years, according to IQVIA data. The figure is staggering compared with the years between 2014 and 2018, during which the impact of brand exclusivity losses totaled $69 billion.


IQVIA anticipates the impact of brand exclusivity loss to total $26 billion in 2019, $21.6 billion in 2020, $13 billion in 2021, $18.1 billion in 2022 and $16.3 billion in 2023. As for which drugs are expected to come off patent, according to the National Pharmaceutical Services, a division of Pharmaceutical


Technologies, the following 19 drugs are expected to lose patent exclusivity in 2019: Afinitor, or everolimus; Avastin, or bevacizumab; Azasite , or azithromycin; Eliquis, or apixiban; Emend INJ, or fosaprepitant; Exelon, or rivastigmine, patch; Exjade, or deferasirox; Factive , or gemifloxacin;

Firazyr, or icatibant; Gilenya, or fingolimod; Invega sustenna, or paliperidone; Orencia, or abatacept; Prezista, or darunavi; Ranexa, or ranolazine; Rozerem, or ramelteon; Tarceva , or erlotinib; Uloric, or febuxostat; Xyrem, or sodium oxybate; and Zyclara, or imiquimod. — Sandra Levy

Customer confidence in a brand you can trust.


We know our customers have options when it comes to generic products. Our goal is to make the choice easy by


delivering the highest levels of quality and service.

(631) 396-0129




Evolutionary Trends in Pharmacy Tech Data-driven decision-making helps improve customer experience, sustain business success By Meghann Chilcott

A Meghann Chilcott, chief technology and marketing officer, Benzer Pharmacy


s technology evolves, so does the way people react to it and use it in their lives. With every advance comes a new challenge to the status quo — a factor that might cause business leaders in certain industries to lose sleep, but not among those of us leading the charge in the pharmacy sector. At the heart of the matter, the roles of IT and business intelligence have become increasingly critical in how data is managed, integrated and distributed across the chain of command. Yet, it’s when that data finds acceptance at the point of care that it makes the biggest impact. The evolution of pharmacy technology is best seen in light of real-world benefits to patients at each touchpoint. Here are a few places to start: • Maximizing the value of medication adherence: Statistics suggest approximately half of all patients with chronic diseases don’t take their medications as prescribed. Valuable information in hindsight; but now, with the advent of business intelligence and predictive modeling techniques, participating pharmacists can get out ahead of the problem and target patients who are at risk of falling out of compliance with their medications. The availability of real-time data and the visibility to use it expands the “circle of support” around customers, resulting in fewer unplanned hospitalizations and reduced chances of complications arising from any shortfall. • Personalized access to healthcare resources: It’s no secret that many patients simply don’t have reliable transportation and/or the physical mobility required to make a visit to the pharmacy. One advantage of emerging technology is evident in home delivery of medications, but others include the use of wearable health monitors that send health information back to the pharmacy as a way to keep the pharmacist in the loop. Should a medication not be taken as directed, automated text alerts subsequently can be sent as timely reminders to patients. • Developing more perfect pictures of health: Various augmented reality devices that


allow pharmacists to see patient records and prescription information already are being used in many settings, but those only scratch the surface. In large part, patients of all ages are showing greater desire for instant access to healthcare information — something the digital transformation has made possible for the first time. The upside brings the pharmacist to the patient rather than the other way around. Health care is being better served with the help of such technology as smart prescription dispensing kiosks and telehealth services. • Automation that doesn’t run on autopilot: As the use of robotic technology for such time-consuming duties as counting out pills to fill a prescription or counting monthly inventory becomes more commonplace, pharmacists who can take more time providing 1-to-1 service have become far more common. Many are using social media and other Internet of Things technologies to get out from behind the counter and actively engage with patients on their health — empowering data-driven decision-making, creating brand new efficiencies and contributing to greater cost savings across the board.

The evolution of pharmacy technology is best seen in light of real-world benefits to patients at each touchpoint. In any case, the evolution of pharmacy technology is no longer a discretionary matter of compiling databases of analytic information or spreadsheets of predictive risk factors. Rather, we see it as part of a mandatory, rapidly expanding direction for driving down costs in the future, while enhancing the customer experience for the better in the present. The best may be yet to come. But from the perspective of today, much of what it promises already is here — ready and waiting. In theory, the proof is in the practice. dsn



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Teva, Amgen Reach Settlement Over Generic Sensipar Teva is putting the brakes on selling its generic Sensipar following a recent settlement with Sensipar maker Amgen.

Amneal Receives FDA Approval for Generic Exelon Patch Amneal has received regulatory

approval for its first transdermal generic product. The Food and Drug Administration approved Amneal’s generic Exelon patch (rivastigmine transdermal system). Amneal’s generic of Novartis’ branded product will be offered as 24-hour patches in dosage strengths of 4.6 mg, 9.5 mg and 13.3 mg. Amneal’s generic Exelon patch is indicated to treat mild, moderate and severe memory problems associated with Alzheimer’s disease. “We are pleased to receive approval on the company’s first

transdermal product, which demonstrates our commitment to develop and bring to market complex generic products,” Amneal president and CEO Rob Stewart said. “Our diverse pipeline of approximately 220 products is expected to deliver additional complex product approvals this year and help us achieve our goal of launching up to 50 generic products in 2019.” Rivastigmine transdermal system had a market value of approximately $225 million for the 12 months ended November 2018, according to IQVIA.

Camber Launches Generic Albenza Camber Pharmaceuticals is introducing its albendazole tablets.

The product, which is a generic of Impax Labs’ Albenza, is indicated to treat infections of tapeworms or other parasites. Camber’s albendazole tablets are available in twocount bottles of 200-mg tablets.



Under the terms of the settlement, Teva has agreed to stop selling the generic until its license date in mid-2021, or earlier under certain circumstances. The settlement puts to bed an ongoing patent infringement suit that followed Teva launching its generic Sensipar, after getting it approved by the Food and Drug Administration. Teva will pay Amgen an undisclosed amount as part of the settlement. Other terms of the deal were not released. Sensipar (cinacalcet HCl) is a calciumsensing receptor agonist indicated for secondary hyperparathyroidism, or HPT, in adult patients with chronic kidney disease on dialysis. It also is used for the treatment of hypercalcemia in adult patients with parathyroid carcinoma and severe hypercalcemia in adult patients with primary HPT who are unable to undergo parathyroidectomy.

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A More Natural Tone Natural and organic features are driving the feminine hygiene category By Nora Caley


ome good news: There are more products in the feminine hygiene category than ever. Some bad news: There are more products in the feminine hygiene category than ever. With growing demand for new products, especially in the natural category, feminine hygiene is in the middle of a huge expansion of merchandise, giving retailers the opportunity to offer a broader assortment and increase profit margins and penny profits. At the same time, however, this explosion of merchandise is putting the onus on suppliers and retailers to ensure they are stocking the right items across such segments as pads, tampons, wipes and freshening sprays. No one wants to get stuck with a product assortment that is out-of-date with an increasingly demanding consumer. “Recent trends in our cultural zeitgeist highlight the need for more female empowerment in all aspects of women’s lives, including feminine care,” said Jennifer Delaney, senior director of marketing for intimate health at Vagisil maker Combe. Marketing is crucial, and education is an important part of empowerment, especially in health issues. Delaney said White Plains, N.Y.-based Combe recently conducted a study that found that 79% of women think that vaginal health is very important relative to their overall health, yet 95% do not typically talk about their vagina. “Education and open dialogue about vaginal health is imperative for women of all ages and stages, so that they can make the best choices for vaginal care,” she said. “One of our key missions as a company is to break down the social stigmas that surround vaginal health and to normalize conversations around it, so that women feel comfortable and empowered to take control of their own vaginal and sexual health.”



The Vagisil brand has long had a mission of reducing shame around vaginal health issues. The brand has been “Shameless about Vaginal Health” for 45 years, Delaney said, and in 2019 it is celebrating “Generations of Shameless” to highlight women’s issues that span age groups. Empowerment is a theme for other manufacturers, too. “When it comes to feminine care, the biggest trend we’re seeing is that women are looking for products that work seamlessly in their active, busy lifestyles,” said Joseph Juliano, vice president of innovation, Canada and marketing services at Tarrytown, N.Y.-based Prestige Consumer Healthcare, which makes Summer’s Eve freshening sprays, washes and wipes. “Feminine hygiene is a big part of that personal care puzzle, helping women feel empowered and confident to take on their day.” Juliano agreed that eliminating stigma is an important part of feminine care products’ branding. “Gone are the days when feminine care was a whispered-about purchase,” Juliano said “The category is

expanding and capitalizing on the idea that self care and wellness, no matter what form they come in, should be a celebrated and non-taboo topic.”

Social Media Helps

Menstruation, pregnancy care and related women’s health topics have become less taboo with the passage of time, as well as with the emergence of social media as a source of information and community. Women can go online to research product benefits and warnings, and also to inform each other about recalled products and other cautions. For example, in December, Kimberly-Clark announced a voluntary product recall of its U by Kotex Sleek Tampons for what it called “a qualityrelated defect that could impact the performance of this product.” Women used social media to post stories of the tampon’s unraveling inside their bodies, and Kotex used social media and other outlets to announce the recall. “It used to be you had to call a phone number or reach out to the Better Business

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HEALTH | FEMININE HYGIENE Bureau, but now with Facebook and Instagram and things of that nature, people are holding companies more accountable,” said Beatrice Feliu Espada, founder and CEO of the Honey Pot in Atlanta. She also said that another trend also is playing a role. “When you have movements going on such as #MeToo, all of these affect each other.” The Honey Pot manufactures plant-based feminine care products, including 100% cotton tampons made without pesticides, chemicals, chlorine, dyes, dioxins or other synthetic materials. There also are washes and wipes made with coconut oil to fight bacteria, aloe vera to soothe irritated skin, cucumber to moisten and refresh, and other plant-based ingredients. New products include the Honey Pot Refreshing Panty Spray, which contains no fragrances, parabens or sulfates, and is available in lavender and jasmine. They are talc-free and 100% natural and cruelty-free. Also coming soon is a CBD pain salve. “Natural is a consumer trend right now all across the board,” Feliu Espada said.

Eco-friendly Still Strong

Sustainability also is a big trend. According to Nielsen, in its 2018 report on the sustainable consumer, sales of products with sustainable attributes made up 22% of the total store, with organic, sustainable



and clean attributes driving the majority of the sustainable segment’s growth. Also according to Nielsen, sustainability’s share between 2014 and 2017 grew nearly three percentage points, while conventional products’ share of sales dropped by almost four percentage points. Young consumers are driving much of this trend. According to Nielsen, millennials are twice as likely than Baby Boomers (75% versus 34%) to say they are definitely or probably changing their habits to reduce their impact on the environment. The younger age group also is more willing to pay more for products that contain environmentally friendly or sustainable ingredients (90% versus 61%), organic/natural ingredients (86% versus 59%), or products that have social responsibility claims (80% versus 48%). Gen Y represents a growing force within the feminine care category, said Tracy Garbowski, director of commercial marketing for feminine care at Shelton, Conn.based Edgewell Personal Care. “With over 60% of millennial moms with children under three working outside of the home, they need products that are both versatile and fit into their active lifestyle,” she said. Edgewell Personal Care makes products under several brands including Carefree, Stayfree and o.b.

Also, Garbowski said, women of all ages are seeking products that are free of unnecessary ingredients. “Women are becoming increasingly aware and selective about the products they use for their bodies,” she said. “With consumers seeking ‘better-foryou’ feminine care products, interest in natural and organic, less and transparent ingredients, as well as those that have a lower environmental impact, have been exhibiting strong growth within the category.” Several factors are driving interest in organic feminine care products. “The trend is women now understand that conventional products are made of plastic that are full of toxins and chemicals,” said Helen Robinson, co-founder of Organic Initiative, a New Zealand-based company with U.S. headquarters in Manhattan Beach, Calif. “They know they now have a choice. For an affordable price they can have a healthy option to them and also a healthy option for the world from a biodegradable standpoint.” Organic Initiative, or Oi, makes organic cotton tampons with biodegradable applicators, organic cotton tampons without applicators, and pads and panty liners made with organic cotton. There also is the Oi menstrual cup that is free of silicone, latex, BPA and phthalates. New products include Oi Girl for younger consumers and also tampons with plant-based applicators.




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“Our mission is to take plastic out of feminine hygiene products,” Robinson said. “All the conventional product players will say the amount of chemicals in plastics is so minute it won’t have an impact, but we know inherently if you use these products over time, it must have an impact.” Robinson also said that these features are important because women have to trust the brand they use. Trust helps build loyalty, and feminine hygiene is typically a very loyal category. Oi products have been certified by the New Zealand-based BioGro and by Global Organic Textile Standard. The certifications help Oi products stand out from competitors’ products that contain only small percentages of organic materials, Robinson said, because women are reading the fine print on packaging.

More Innovation

The sustainability trend is contributing to interest in other products, such as reusable menstrual cups. “The eco-friendliness of the product is more important than ever,” said John Szustaczek, president of Ontario, Canada-based Ultumum Sales and Marketing Innovations Group, makers of the UltuCup. “With the amount of plastic in our oceans, landfills and sewer systems, the amount of refuse we are discarding as a country, it’s becoming more and more evident that menstrual care items play a large contributing factor to that environmental issue.”



Szustaczek said the UltuCup, a reusable silicone menstrual cup, has several environmentally friendly features. The packaging is recyclable, and the starter guide is printed on recycled paper with vegetable-based inks. Also, UltuCup is made in the United States so the company does not use resources to ship the product from overseas. The product launched in 2018, and Szustaczek said sales are strong and distribution is growing. Social media has had a positive impact. “We have seen a lot of discussion and communication at educational institutions,” he said. “Colleges and universities are having groups of individuals that discuss health and hygiene and personal issues and menstrual issues.” Consumers of all ages are looking for not just organic or non-synthetic, but for innovative products that work. “The most important trend related to feminine care is having truly effective natural alternatives to what is currently available on the market,” said Deeannah Seymour, CEO and founder of pH-D Feminine Health in Madison, Tenn. The solution, Seymour said, is a natural alternative that is not only effective but also can be used prophylactically to maintain normal vaginal health. The company makes boric acid vaginal suppositories, as well as supplements such as pH-D Women’s Health Menopause Support and pH-D Women’s Health Probiotic with Cranberry capsules. The company offers information about the products on its own website, and Seymour said retailers also are posting information on their own channels. “The more innovative retailers are educating

their customers in social media about natural alternatives that customers are discovering at their stores.” The future will see more sustainable, natural and toxin-free products available. “More and more, women are looking for more organic and more sustainable feminine hygiene products,” said Vilmante Markeviciene, founder and designer of Orland Park, Ill.-based Genial Day. “We even see the big brands shifting to more natural feminine care products.” The big players still rely on TV advertising for their marketing, Markeviciene said, and smaller players are trying more creative approaches, including social media channels. Genial Day, which makes certified organic menstrual pads, reaches its audience through influencers, vloggers and bloggers, digital marketing, and online subscription offers. Online product reviews and ratings also are part of the mix.

Retailers Can Thrive

Digital marketing is not only a way for manufacturers to engage with consumers, but also a way for retailers to reach key shoppers. “Most retailers are focused on attracting the millennial consumers, who are critical for success in the feminine care category,” said Edgewell’s Garbowski. “As such, they are leveraging targeted marketing tactics that appeal and effectively reach her throughout her journey, which includes a strong focus on digital and social media, including influencers, as well as targeted sampling programs.” Ultumum’s Szustaczek said retailers have moved beyond wondering whether to carry UltuCup and other menstrual cups. Now they are trying to figure out how many SKUs to carry, and how quickly that section of the category will grow. It is important for retailers to understand that a woman’s time is her most precious commodity, said Combe’s Delaney, and that there isn’t a magic bullet approach. “As our shopper research shows, retailer success in the intimate health category cannot be distilled down to one best practice in retail, but rather is the result of many best practices that ladder up to executional excellence.” dsn

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Maintaining a Balance The company pH-D Feminine Health introduced pH-D Women’s Health Probiotics with Cranberry to support vaginal, urinary and digestive health. The product has a therapeutic level of cranberry extract, along with 20 million CFUs of probiotics. The brand also offers pH-D Women’s Health Menopause Support to naturally help reduce menopause symptoms. Both of these new products support the market demand for safe, natural solutions, the company said, which is the key attribute of its best seller, pH-D Feminine Health Support. Coming soon is pH-D Menstrual & Pelvic Pain Formula, which is an effective way to holistically address the common symptoms of menstruation.

O.B. Organic to Make its Debut Edgewell Personal Care will introduce O.B. Organic this year. The company said O.B. Organic delivers “trusted protection you need with nothing you don’t.” Now available with a plant-based applicator or without, O.B. Organic is made with 100% organic cotton from tip to string, and is free of chlorine, fragrances and dyes.

Vagisil to Add New Wash Scent Combe will extend its successful Vagisil Scentsitive Scents line with new products in March. The company said women have strongly responded to the Scentsitive Scents line of intimate washes and wipes as they allow women with sensitive skin to enjoy “v-friendly,” beautifully scented products. The brand will launch a new wash scent, as well as two innovative new forms to the category.



Prestige Consumer Healthcare launched several products through its Summer’s Eve brand. The new products, formulated with consumers’ needs at the forefront, offer innovative solutions and technology in feminine hygiene. For the first time, Summer’s Eve is introducing a line of period focused freshness products. The lineup offers what Prestige calls first-to-market technology for optimal freshness during a woman’s period cycle. Summer’s Eve also is rolling out new fragrance-free washes and cleansing cloths, an introduction based on the consumer insight that many women prefer low or no fragrance with their personal care products. For consumers who want new fragrances, Summer’s Eve also is launching new fresh scents as part of the core Summer’s Eve line.


Follow the Leaders What innovation will some of the largest names in beauty roll out this year? By Seth Mendelson


ith all the good news being bandied around, it seems that the mass-market cosmetics and personal care businesses are struggling a bit, and it may get worse before it gets better. A heady combination of increased challenges from independent brands and a shopper drain away from mass to such specialty doors as Sephora and Ulta Beauty caused some angst for retailers looking to cash in on this key segment. That said, mass-brand manufacturers and retailers remain optimistic, convinced that this year will show a turnaround in volume and consumer expectations. An opportunity to fortify the self-care movement as a way to shore up beauty sales also exists. For example, Maly Bernstein, vice president of personal care at CVS Pharmacy, said that during the holiday season, the chain saw more customers “hitting our beauty aisles for some ‘me time.’” Optimism also is rife as mass brands introduce more vegan, CBD-based and edgy innovation into the market. Another pot of gold for mass is skin care. Facial cleanser category sales were up 11% and moisturizer sales were up 16%, compared with the previous year, according to Nielsen data through Dec. 1. The good news in skin care was met with some sobering data from Nielsen. Massmarket makeup and nail sales were flat on a



52-week basis. Brands that once blazed the path struggled, including e.l.f., whose sales were off 14%; Coty, which was tracked down 13%; and Revlon, whose dollar volume declined 11%. Fragrance fared even worse, off 7% during the period. Compounding the challenges, TABS Analytics 5th Annual Color Cosmetics Study suggested the beauty industry in general is about to hit a wall. The research survey of 1,000 consumers showed that the

heaviest beauty enthusiasts are buying less. “This sector is clearly in decline and will soon be in recession — a state that retailers and product manufacturers can expect to last for several years,” said Kurt Jetta, president and founder of TABS Analytics. Jetta suggested that this trend would put the brakes on the rampant mergers and acquisitions that punctuated the industry, and even make launching shade and line extensions challenging.






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Undeterred, some officials at the nation’s biggest legacy brands said they are readying for battle to change the course. Many new faces are in executive suites and a playbook consisting of more influencers’ programs, edgy innovation and an escalation of pricing. That last move could pay off, suggested Jefferies’ analyst Stephanie Wissink, who said trading up to “masstige” is showing signs of life in the mass landscape. Here is a sampling of what the major beauty brands are unfurling for 2019.


Somehow, amidst the backdrop of dwindling sales from competitive brands, L’Oréal’s portfolio tracks above industry growth, Wissink said. “NYX continues to lead L’Oréal’s portfolio, up 3% for the 52 weeks. Maybelline accelerated 5% on a four-week basis.” What’s L’Oréal’s secret sauce? Retail and financial experts pointed right to the top management, starting with Jean-Paul Agon, the company’s chairman and chief executive. “I believe more in competition and exemplarity. The best way to move the industry is to move forward and others will follow, will compete, and that’s what’s happening,” Agon said. L’Oréal is well prepared for the struggle, especially with NYX Professional Makeup, one of the hottest nameplates under its banner. NYX is putting a sparkle into sales this year, literally, with a new Glitter Goals Pro Palette and Liquid Eyeliner. Glitter is poised to have a big year, experts said. L’Oréal always has found ways to make its brands — including Maybelline and Garnier — click with new consumer demands. On the product front, Maybelline, in particular, has attracted younger users. Its sales were up 4% in the past 12-week period ended Nov. 16, as tracked by Nielsen. Fit Me was a big hit, and new items in the pipeline are expecting to resonate with millennials, buyers said, such as Snapscara mascara — featuring a campaign starring Gigi Hadid and Adriana Lima, along with other models. Garnier has ramped up its efforts in the fast-growing mask business under its Skinactive logo. Retailers are set for such rapid-fire



launches from the company as Unlimited Mascara, featuring a two-position bendable brush; Infallible Full Wear Concealer; the Rouge Signature Matte Colored Ink; and Infallible 24HR Fresh Wear Foundation. In skin, L’Oréal will put even more muscle behind its Age Perfect franchise. The new Hydra-Nutrition Range, retailing from $19.99 to $24.99, includes manuka-honeyinfused skin balm, day cream, night balm and eye gel developed for aging-related dryness. Also rolling out to broader mass retail distribution is the L’Oréal Paris Revitalift Derm Intensives line, which launched online in November. Garnier has launched a new franchise called Glow Boost, with an emphasis on natural and clean ingredients. Product innovation is on the front burner at Maybelline, said Amy Whang, senior vice president of marketing at the New York City-based company. “Maybelline prides itself on creating cutting-edge formulas that deliver incredible results,” she said. “We offer tones and textures for every woman and focus on products that perform, work

hard for her lifestyle, and are easy to use.” An example rolling out is Made for All, a range of 12 lipsticks priced at $7.49 that was road tested on 50 skin tones. The company has not been timid about expanding its digital footprint. “The digital revolution is a real revolution because it made everything different,” Agon said. “The digital revolution may be responsible for the birth of many e-commerce based indie brands, but it’s also behind the growth of existing large brands,” he said. He also said the need to keep up in regard to technology was why L’Oréal acquired ModiFace, which just debuted a virtual salon nail app — one beauty segment that had been hard to capture in augmented reality.

Procter & Gamble

Although P&G sold off most of its beauty franchise to Coty, the surviving nameplates are having a healthy renaissance, especially Olay. “There isn’t a piece of our beauty business that isn’t growing right now,” said

HOT COMPANIES P&G CEO David Taylor. P&G borrowed a page from its bustling premium SK-II brands to rejuvenate Olay. Olay, in fact, could serve as a textbook case for how to revamp a mature line. Alexandra Keith, president of global hair care and beauty sector at P&G, took a hard look at the SKUs in the sagging line and cut 20% of them, while also upgrading the packaging to make it more relevant to contemporary shoppers. Social media got more plugged in and more influencers were put to work. The strategy worked, and Olay posted double-digit growth in its last quarter. There’s more in store for 2019 with such launches as Olay Masks and Olay Mists. Olay Masks is a range of three clay-based stick masks — Glow Boost with white charcoal, Pore Detox with black charcoal and Fresh Reset with pink mineral complex — targeted at different skin issues. Olay Mists, designed to instantly hydrate, are available in two varieties — vitamin C and bergamot extract, and aloe leaf and chamomile. Under its Simple brand, P&G will offer three of its best-selling skin-care formulas in a new pouch format designed for the on-the-go consumer. P&G’s hair care business also is adding more bounce — sales were up in low single digits. Natural is a segment P&G admitted it has to play catch up in and, earlier this year, the company kicked off a partnership with Kew Garden to help identify active botanical ingredients that can be used in its portfolio of products. Interestingly, P&G, after selling off brands, is starting to acquire them again — during the year, P&G purchased Native deodorant. In deodorants, P&G embarked on a different type of campaign in October. The Secret brand activated a “I’d Rather Get Paid” campaign, which is targeted at the digitally native generation and addresses the gender pay gap.


Alan Jope stepped into the role of CEO from his position as president of beauty and personal care at Unilever. He has received high marks for building Unilever’s higher-end beauty portfolio via such acquisitions as Living Proof, Murad, Kate Somerville and

Ren. Unilever also nabbed SheaMoisture and Nubian Heritage maker Sundial Brands, and is giving the rapidly growing brand leeway to establish an even stronger hold in the market, not to mention helping fund the $50 million New Voices Fund — a platform to help women entrepreneurs of color launch brands. Unilever is building momentum in such core skin care businesses as Pond’s and Vaseline. “We saw good growth from the core and our new brands,” said CFO Graeme Pitkethly in regard to the company’s beauty offerings. Look for more innovation from Unilever this year, especially in the multicultural category and in the use of social media. The inspiration will come from such campaigns as one for Dove Men+Care with influential American men and athletes, focusing on African-American men. The campaign centered on the idea of masculinity, care and sensitivity in African-American culture. Esi Eggleston Bracey, executive vice president and COO of personal care in North America at Unilever, said, “We really need to shift the conversation from multicultural marketing to creating value in a multicultural America.”


Things have been challenging for the mass division at Coty. The company felt the pain of sharp dips in sales for most business segments. The declines were blamed mostly on back-end disruptions that were, in part, from integrating the new brands.

Challenges in Coty’s Consumer division, which includes CoverGirl, Clairol and Rimmel, were greater than expected, and the segment has yet to turn around. In the most recent quarter, the segment posted a more than 20% sales decline to $828.8 million in sales. Despite the lackluster numbers, retailers credit Coty with putting muscle behind its products. CoverGirl opened a concept store in Times Square to add exposure and hipness to the brand. The move into freestanding retail is just the latest in a series of initiatives tied to CoverGirl’s massive re-brand that began rolling out in September. The flagship will sell product, but is intended to serve largely as a marketing vehicle to introduce consumers to CoverGirl’s redesigned look and products. Coty is rolling out a revamp for CoverGirl with a new logo and trend-driven launches. The most recent launch is TruBlend Matte Made Liquid Foundation, which consists of 40 shades. This year, Coty will be busy with new items from CoverGirl and Rimmel, among others. CoverGirl has two collections of note: Full Spectrum and Outlast Active. Aimed at women of color, Full Spectrum consists of eight face and lip products, including liquid and powder foundations, liquid lipstick, concealer, a contour kit, and cheek palette, formulated with super-rich pigments designed to pop on medium-todeep skin tones. Outlast Active is sweatproof makeup designed for the growing number of wellness-obsessed consumers, who want products to last through their workouts. Rimmel is reinforcing its power in eyes with an extension of its Scandaleyes mascara called Wow Mascara that has a flexible brush and two types of bristles. CoverGirl also is getting notice from CVS as a partner in its Beauty Mark campaign which features unretouched imagery. CoverGirl achieved Leaping Bunny certification by Cruelty Free International, which aims to end animal testing for cosmetics. The certification is the first step in a larger, long-term partnership between the animal protection and advocacy group and Coty, which has committed to obtaining Leaping Bunny certification on at least one other Coty brand by 2020. As CoverGirl


February 2019


HOT COMPANIES gets clicking on all cylinders, retailers expect renewed effort behind Sally Hansen, Rimmel and Clairol.

deeper into skin care. Last year, some of its hits included the Charcoal Detox Cleansing Stick and the RefreshMint Cucumber and Bamboo Eye De-Puffer. Its makeup remover sales also are up more than 60%. This year, the skin care-inspired makeup brand is broadening its traditional skin-care assortment to include The Perfect Matcha 3-in-1 Melting Cleansing Balm, Coconut Milk Eye Makeup Remover and Skin Booster Vitamin Shots. Markwins’ stable of brands is likely to grow this year — the company has said it is “actively seeking” to further build out its portfolio in the makeup and skin care space.


Revlon also got a new boss with Debra Perelman being named its first woman CEO. Perelman is the only female chief executive of a top-20 manufacturer. While her name may be familiar — her father Ronald Perelman is the majority stakeholder in Revlon — she more than earned her right to tackle the role after spending more than six years working in many facets of the beauty brand. She’s willing to take risks. Perelman recently unfurled an optimization program earmarked to save between $125 million to $150 million. She also green-lighted the launch of a premium brand called Flesh that went exclusively into Ulta Beauty. In addition, she’s ramping up digital, but putting more muscle into in-store presentation, too. Both Revlon and Almay are stepping up their in-store presentations. Almay was just reset at Ulta Beauty, for example, and the first 140 stores with the new look have seen about a 50% sales uplift, the company said. Revlon’s first 2019 offerings are trenddriven and aimed at attracting younger shoppers to the venerable brand. Key products include the ColorStay Endless Glow Liquid Highlighter and the ColorStay Look Book Eye Shadow Palettes. Revlon also is expected to gain traction with its new PhotoReady Candid Collection, infused with antipollution skin-care ingredients, that rolled out in October. Almay’s new products include the Velvet Foil Cream Shadows, Gel Smooth Liner Metallics and Make Them Jelly Hi-Lites.


For many years, e.l.f. provided sizzling growth and, according to Jefferies’ Wissink, benefited from the “hyper cosmetics cycle.” Make no mistake, the brand still is coveted by retailers and consumers, but growth is challenged by a lack of prestige innovation for it to draw upon. Tarang Amin, chairman and CEO, has promised that the brand will focus on three strategic initiatives: thoughtfully increasing investment in



the e.l.f. brand, focusing on key items and optimizing 2019 shelf sets. In the pipeline is a new full-coverage concealer formula in a wide shade range and a new concealer.


Markwins once could have been considered one of the independents challenging the legacy brands. Yet with Wet ‘n Wild, Physicians Formula, Black Radiance and now Lorac under its belt, the company is positioned as one of the major powers. Its Wet ‘n Wild collection has been one of the industry’s biggest movers and shakers. Last year’s Breaking Beauty campaign, celebrating inclusiveness, is being released again with even more of a push. In tandem with the Breaking Beauty campaign are innovative products building on several Wet ‘n Wild franchises. Among the new is a stick foundation planned for the Photo Focus foundation franchise, the No. 1 foundation launch in drug stores in 2017. Mega Glo is launching loose highlighting powders. Mega Last will get new shimmer and crème shadows and a high-shine lipstick. Color Icon is refreshing bronzers. Markwins also has numerous new items planned for Physicians Formula, Black Radiance and Bonne Bell, as well as a push behind Lorac, which takes it into the specialty realm. Physicians Formula plans to spread the success of its Butter franchise into eye and lip. The brand also signed its first collaboration with an influencer, Casey Holmes. Physicians Formula is getting

Milani Cosmetics

Milani got a host of new leaders selected to help steer its future. Grace Ray joined Milani as CEO from the same title at Living Proof. Evelyn Wang, who as senior vice president of marketing for Wet ‘n Wild helped it gain exposure, is now at Milani, and retailers expect her to bring the same pizzazz to that brand as she did her former company. Wang gave a nod to the already powerful punch Milani has in the market, especially with influencers who are helping move the sales needle. With Wang in place, Milani has big potential to nab shelf space in 2019, retailers said. During the year, Gryphon Investors bought a majority stake in the business. Of note in products are new mascaras — Most Wanted Lavish Lift & Curl, Ultra-Def 3-D and Highly Rated 10-in-1 Volume, priced at $9.99 each.


One of the reasons for sluggish sales of venerable brands is the dramatic headway indie lines are making. This is especially the case in products targeted to multicultural consumers, as well as those with a natural positioning. Vegan and CBD are on the hot-to-watch list. Some of the up-and-coming brands retailers singled out as gaining shelf space include: Mielle Organics, L.A. Colors/L.A. Girl, the Balm, the Mane Choice, Okay Pure Naturals, TGIN, Masque Bar, Ardell, essence, Palmer’s, China Glaze and exclusive or private brands. dsn



wahlusa.com/pet-grooming Contact us at 1-800-334-4627

©2019 Wahl Clipper Corporation *Based in part on data reported by Nielsen through its Scanning Service for the trimmer & clipper Category for the 52 week period ending 12-29-2018, for the XAOC & FDM markets.


Fresh Finds Standout exhibitors from ECRM’s cosmetic, fragrance and bath conference By Seth Mendelson


eauty is hot. So hot that many retailers said they are having a great deal of trouble finding the right products to satisfy a more discerning and demanding customer base. Drug Store News found a number of companies showing their wares at the late mid-January cosmetics/fragrances/ bath conference in Orlando, Fla. Here are what some of the manufacturers were showcasing at the four-day event, which drew more than 700 attendees. Arion Perfume & Beauty is offering the Nomad Life line of travel-sized beauty



products. The 55-SKU line features shampoos, conditioners, body wash, night and day creams, baby oils, men’s grooming, and face cleansers. Price points range from $4.99 to $7.99, according to Xavier Garcia, the San Antonio-based company’s vice president of sales. Garcia said the line, which is cruelty-free, is designed for consumers who are on the go and are unable to take larger-sized products with them. “We are looking to capitalize on the travel and convenience aspects,” he said. “We offer consumers easy solutions in a wide range of personal care categories.

When people are on the road, size does matter and we address those needs with Nomad Life.” The company also is offering Vegan Moi, a 25-SKU line of bath, body, skin and color cosmetics products. “These products are also 100% vegan and animal cruelty-free,” Garcia said. “And at a $5 suggested price, they are at very accessible price points.” Bellapierre, a Chatsworth, Calif.-based company, was highlighting its new Glitz It Up lip collection. Products in the four-SKU collection carry a $9.99 price point. “We think we stand out in a crowd because of


the quality of the product and the fact that we have a very attractive price point,” said Alix Rosenberg, account manager at the company. “We know that we are offering a value to customers and we do not compromise on anything, whether it is the packaging and the quality of the product.” Design Plus is hoping to take its que bella line of face products, which have sold extremely well at Target, into other retailers. The 35-SKU line, which includes masks, sheets, scrubs and muds, has a suggested retail price range of $1.99 to $2.99, according to Stephany Maguire, the brand design and marketing coordinator at the U.K.-based company. “We are just looking to capitalize on our success at Target,” she said. “We started from scratch there, and we are now the No. 1 SKU in the bath and body category.” Design Plus also is pushing its 15-SKU Awks line of face masks, cleanses and scrubs, which is formulated for teen skin and for five specific types of skin or behaviors: stressed skin, oily, breakout prone skin, dry skin, menstrual and normal skin. Products in the line are priced at $1.99 each. “The combination of ease of use and

our target on a young audience makes this a great product for retailers,” Maguire said. Duncan Enterprises executives think they can take their success at one retailer and build on it with other retailers across the country. The Fresno, Calif.-based company is taking its Lique brand of lip care products, now sold just at Kohl’s, and offering it to all retailers. The 50 SKUs in the line, including lip wipes, scrubs and lip masks, are priced between $7 and $14. “We have been in Kohl’s for a couple of years and it has been a wonderful run,” said company co-founder Ashley O’Rourke. “The collection has had great success in Kohl’s and now we would like to take it to the next level.” Lique’s marketing pitch, O’Rourke said, is that it is a prestige brand, with packaging that shows prestige ingredients, at a massbrand price point. “Consumers will feel that they are using a prestige brand, which she wants, but the price points will make her want to buy it for her kids,” she said. Officials at Jacqui & David think they are on to something. The Doral, Fla.-based company has signed up Nickelodeon star JoJo Siwa and is introducing a fragrance

line under her name that is targeted at young women under the age of 16 years old. The fragrance comes in three sizes plus three gift sets. “We really think that this is going to be a hit with younger women who associate with JoJo,” said Mark Kronfeld, director of the company. “It is quite unique and will bring incremental sales to those retailers who stock the product. JoJo is among the hottest entertainers right now, and we are very happy to be involved with her at a point where she is just taking off in her career.” Okay Pure Naturals is introducing 10 products in its natural baby line. The Miami Gardens, Fla.-based company is pricing the products, including a chest rub, shampoo, calming bath, lotion, baby oil and diaper rash cream, at between $9.99 and $12.99 “We stand out in a crowd because of several factors,” said Ali Mithavayani, the company’s CEO. “First, we feature all-natural and organic ingredients. Then our packaging appeals to both genders and, finally, consumers have come to know that Okay is known for its quality products that they can trust. Retailers try our products and almost immediately they are looking to increase their orders.” dsn



Wahl’s New Vacuum Trimmer Looks to Reduce the Mess Wahl’s latest innovation is looking to keep

Hello Products Expands Activated Charcoal Lineup New additions are coming to Hello Products’ Activated Charcoal line. The Montclair, N.J.-based company has unveiled its new Activated Charcoal Epic Whitening Toothpastes and Activated Charcoal Infused Floss, which will hit Target’s shelves in February. “We’re on a mission to bring meaningful magic to oral care routines everywhere, and we can’t wait to bring this incredible collection of new pastes to Target shoppers,” said Craig Dubitsky, founder of Hello. New flavor additions to the collection include hemp seed oil, acai and dragon fruit. All are fluoride-free and also are vegan, gluten-free and absent dyes, artificial sweeteners, flavors, parabens, SLS, microbeads or triclosan. Hello’s new Activated Charcoal toothpastes will retail for $6.99 each, and the Activated Charcoal Infused Floss will retail for $4.99.

Sunday Riley Rolls Out A+ Retinoid Serum Formula Sunday Riley, a brand that

uses clinically proven ingredients blended with botanicals, has unveiled its entry into the world of retinols. The Houston-based company’s new A+ High-Dose Retinoid Serum is powered by a 6.5% blend of retinoids and botanicals, features a potent formula, and was created with trans-retinoic acid ester complex to reduce the appearance of pores and wrinkles, while improving the



signs of premature aging, the company said. In addition, the serum includes 5% retinoid ester, 1% liposomal-encapsulated retinol, Hawaiian white honey and 0.5% blue-green algae that also improves skin clarity and reduces the appearance of imperfections. Sunday Riley’s A+ HighDose Retinoid Serum, which debuted on Sephora shelves on Jan. 25, and is available on the company’s website.

the hair trimming mess to a minimum. The Sterling, Ill.-based company has introduced the Wahl Lithium Ion Vacuum Trimmer. The vacuum trimmer features an adjustable vacuum intake that allows users to control the amount of suction, as well as anti-choke exhaust ports on the front and back. It also has a hair canister than can be either popped open or completely removed to be emptied. Wahl’s vacuum trimmer has a lithium ion battery that offers 90 minutes of run time, self-sharpening blades, an LED charge indicator, nine guide combs, and cordless or corded use. Wahl officials said the product was informed not by just what men using the trimmers need, but by what their partners would like as well — a clean bathroom. “Knowing what men want from their trimmer is a priority, but we also dig deeper to find out what the women who live with bearded men think,” said Steven Yde, division vice president at Wahl. “Not surprisingly, mess-free trimming is high on their wish list. The Wahl Lithium Ion Vacuum Trimmer has a suggested retail price of $59.99, and is available at select retailers nationwide or at WahlUSA.com.


Old Spice Presents Fresher Skin Care Collection, New Brand Ambassador Old Spice is tackling the skin care

Maybelline New York, Puma Intro AthleisureInspired Collection Maybelline New York and Puma are

bringing the worlds of fashion, sports and beauty together. The companies launched the specialedition Puma x Maybelline collection, which was designed with Generation Z in mind and caters to the athleisure-obsessed demographic that is always on the go. “Our young consumer today prioritizes an active lifestyle, whether it be career, fitness or personally. She’s always on the go, never settles and needs high-performance products that keep up with her grind,” said Trisha Ayyagari, deputy general manager at Maybelline New York. “The Puma x Maybelline collection was created to do just that.” The 12-piece collection features smudgeproof mascara, metallic highlighter and the popular Super Stay Matte Ink long-wear lip color in limited-edition shades. The collaboration also produced two new duo sticks — a long wear matte and metallic eye stick and a waterproof color and gloss face stick. The products will come in sleek, on-the-go packaging. “This collection is truly the representation of the point where the gym meets the runway, a goal we strive for in everything we do for our female consumers,” Adam Petrick, global director of brand and marketing at Puma, said. The Puma x Maybelline collection’s availability will vary by market both in store and online, the companies said.

needs of men with a new collection and global brand ambassador. The Cincinnati-based Procter & Gamble brand, unveiled its new Fresher collection, which infuses fresh scents and antiperspirant technology together, that slides on clear without leaving behind any residue. To launch the five-piece line, the brand called on actor, comedian and writer Deon Cole to be its new global brand ambassador. The Fresher collection consists of a Deep Scrub with Deep Sea Minerals, Exfoliate with Charcoal, Moisturize with Shea Butter, Cooling with Mint

and Relax with Lavender products. To kick off the collection launch, Old Spice will feature five commercials starring Cole. The spots also will feature actress Gabrielle Dennis, as well as cameos from former NFL player Thomas Jones and comedian Keraun Harris.

Thalia Sodi Launches Adria By Thalia Hair Care Collection The Thalia Sodi Brand is expanding into hair care. The eponymous brand of singer/songwriter, author and entrepreneur Thalia Sodi is launching Adria By Thalia, a seven-piece hair care collection. Adria By Thalia includes shampoo, conditioner and other styling essentials, including hair spray, dry shampoo and styling foam. The products are made with the company’s proprietary CAPPA 5 Complex, which includes coconut, agave, passion fruit, peony and avocado extracts with proteins and amino acids meant to help hair’s health and look. The collection includes the foundation shampoo; the nourisher conditioner; all in wonderful all-in-one spray; the stylist styling foam; the big deal volumizing spray; the refresher dry shampoo; and the perfectionist hair spray. The line is rolling out to most Walmart stores and select Target locations online and in store nationwide, the company said.




The Vapor Wave The rumors of the death of vaping and e-cigarette products may be greatly exaggerated By David Salazar


he frontier in the vaping and e-cig space is closing, but opportunity still is presenting itself for both retailers and suppliers. The category continues to draw new regulations and scrutiny, even as it shows promise as a method to help quit smoking and sales of combustible cigarettes decline. Manufacturers in the category said they are maintaining compliance with the Food and Drug Administration’s guidelines, but noted several headwinds to more widespread adoption and innovation existed.

Regulatory Pressure

First, the bad news: The e-cigarette and vaping category spent much of 2018 drawing the ire of Food and Drug Administration commisioner Scott Gottlieb. Early in the year, he put out a notice of proposed rulemaking regarding flavors on electronic vaping systems. In November, responding to the National Youth Tobacco Survey logging a 78% increase in e-cig usage among teens, Gottlieb pushed for a selective flavor ban that would prevent sale of flavors besides traditional tobacco and menthol from retail locations that don’t have a separate section inaccessible to minors. As a result, Juul Labs, one of the larger names in the vaping space, moved to downsize the presence of its flavored pods in retail stores. In midNovember, the company’s CEO, Kevin Burns, said that Juul Labs would no longer be filling orders from the roughly 90,000 retail stores that stocked its products for its cucumber-, mango-, crème- and fruitflavored pods. That left only its products that mirror cigarettes — Virginia tobacco, classic tobacco, mint and menthol — to be sold by retailers. While Juul moved quickly to scrub the physical retail presence of its flavored products to



showcase compliance, other industry players are largely unsure of Juul’s long-term compliance efforts. At E-Alternative Solutions, which sells the Cue and Leap brand vaping products, company officials are seeking ways to stay compliant as they wait for more information from the FDA. “EAS prides itself on being compliant. In addition to complying with federal and state laws, we have our own set of voluntary guidelines to ensure our products are marketed to adult smokers,” said Chris Howard, EAS vice president, general counsel and chief compliance officer. He also said that the company stresses preventing youth access to its products, and its marketing focuses only on adult smokers seeking alternatives to combustible cigarettes. “We don’t agree flavors are determinative to youth when deciding to experiment with these products. We acknowledge the rise in youth experimentation with e-cigarettes needs to be addressed. That said, we must make sure that measures implemented

don’t restrict adult smokers’ choices, which could ultimately drive them back to using combustible cigarettes. So our plan, at least at this point, is to continue with our current adult-only practices.” Similarly, officials at Fontem Ventures’ blu said that it has not sought to entice young people to try its products. “For 10 years, blu has been committed to delivering something better for adult smokers,” said Greg Moser, vice president of marketing at blu. “This mission has always gone hand in hand with ensuring blu is responsibly marketed to adults. We are disappointed that the actions of some in our industry may have put our youth in danger and jeopardized the choice of genuine adult smokers.” Media coverage of the FDA’s scrutiny on the vapor category pose a challenge, EAS’ Howard said, in particular because it requires time to respond to what he characterized as a “campaign of misinformation.” In addition to defending the harm reduction potential of the category, all companies

must spend time passing regulatory muster. “Another huge burden for EAS and other vapor companies is the uncertainty associated with FDA requirements for vapor products,” Howard said. “With only limited, vague guidance from FDA, companies need to develop data in support of Premarket Tobacco Applications to demonstrate their products are for the net benefit of public health. I would say dealing with this regulatory uncertainty and knowing that however it plays out, it’s going to be expensive and time-consuming, that’s a real challenge for us and similarly situated companies.”

Promise for Converting Smokers

Challenges for the category are coming as combustible cigarettes decrease their annual sales. Per IRI data, cigarette unit sales were down 4.6% in 2018 versus 2017. This was as electronic smoking devices registered 13% sales and 16% unit sales growth. Additionally, more research is taking place to assess the efficacy of vaping products as smoking cessation tools. In late January, the New England Journal of

Medicine published findings from British researchers who used a randomized trial to compare e-cigarettes to other nicotinereplacement therapies. Over the course of a year, the abstinence rate among e-cigarette users was 18%, compared with 9.9% in the nicotine replacement group. Additionally, roughly 80% of the e-cigarette users were likely to still be using the e-cigarette a year into the study, compared with 9% of the other group. Though the study focused on refillable e-liquid vapes, blu, EAS and Juul all offer closed systems that allow for easy refilling using pods. EAS CEO Jacopo D’Alessandris said the main reason for using a closed system is quality control. It also offers easy variety, particularly when it comes to flavors. Within flavors, EAS and blu both offer differing nicotine levels — including 0% nicotine formulations. “As flavor variety plays a large role in adult smokers switching, myblu features an expansive flavor range, while also offering multiple nicotine strengths from 4.0% to 0%, ensuring there is a myblu liquidpod to meet the need of any adult smoker,” Moser said. D’Alessandris said EAS is among the few offering a 0% nicotine formulation for every flavor it sells with its Cue system. The company’s Leap system currently only offers 4.8%, but is set to have 2.4% and 0% formulations available soon. Blu offers its myblu flavors — Cherry Crush, Gold Leaf, Vivid Vanilla and Magnificent Menthol — in a 0% formulation, though its myblu Intense flavors are only available in 2.5% and 4%. The New England Journal of Medicine in January also published an editorial from Belinda Borreli and George O’Connor about using e-cigarettes to assist with quitting smoking. The authors noted a

consensus around the safety of e-cigs relative to combustible cigarettes, but suggested they be used when FDA-approved treatments and behavior counseling fail, with a clear timeline for winding down use at the lowest level necessary to manage cravings. One area to watch is innovation, something that D’Alessandris said is currently impossible in the United States due to FDA regulations and puts American companies behind European ones. “This situation is gradually making the gap between what’s happening in the United States versus other countries increase,” he said. He also said that because European regulators take a different approach to the category, “companies there are still able to innovate and launch new products.”

Building the Category

With everything happening in the vaping and e-cigs category, one of the main hurdles retailers face can be how to educate smokers looking to switch. “A lot of these smokers don’t really know what this technology does or what type of experience it’s going to give to them,” D’Alessandris said. “They have a lot of questions. We help customers and retailers to make sure their assortment is as simple as possible.” One of the mistakes he said many retailers make is having too large an assortment, which can lead to confusion with too many systems, flavors and nicotine levels. And as in all other categories, location is key. “Space is limited, but as much as possible try to merchandise these new technologies, e-cigarettes close to combustible cigarettes. This is where the shopper goes, they’re used to that,” D’Alessandris said. “Being able to display alternatives close to the combustible cigarette. That can have the benefit of reaching that demographic of smokers walking into the store.” dsn




Caught in Crosshairs of Tabloid Controversy Exploring retail responsibility and consumer trust By David Orgel

S David Orgel is an awardwinning business journalist, industry expert and speaker. He is currently the principal of David Orgel Consulting, delivering strategic content and counsel to the food, retail and CPG industries.


upermarkets and other retailers don’t typically get pulled into the increasingly polarized national political dialogue. Stores are typically places to escape the political and media blitz, strolling the aisles for eggs, paper towels, beauty items and pharmacy needs. So it was surprising to see supermarkets cited on a roster that spotlighted “the year’s worst actors in the news media and anyone else who interfered with a free press.” Jim Rutenberg, The New York Times’ mediator, wrote an opinion piece in late December, called “The Top 18 Media Grinches of 2018.” Not surprisingly, the roster was filled with politicians and media giants. But retailers? The article put supermarkets on its list, and it read this way: “Long before Twitter and Facebook, the magazine racks in supermarket checkout aisles were the original platforms. In 2016, those racks featured covers of the National Enquirer as it pilloried Hillary Clinton with false allegations that she had covered up a “child sex scandal,” committed treason and was hiding a deadly illness (from which she seems to have miraculously recovered).” The piece went on to more directly implicate supermarkets. “The supermarkets arguably played as much of a role in spreading politically motivated misinformation as any online entity swarmed by Russian bots.” First, let me get something out of the way. I don’t care if you voted for Clinton, Trump or George Washington. This is not a column about politics. Neither is it specifically about the actions of the National Enquirer, published by American Media, which has been in the news lately over a number of alleged controversies related to the 2016 election. I’ll leave it to others, including the Enquirer’s readers, to evaluate those details. Instead, my point here is about retailers. I feel it’s going too far to place blame on retailers for selling a specific “supermarket tabloid” at the checkout. Supermarkets were not intended to


play a political role. It’s ludicrous to put supermarkets and “Russian bots” in the same sentence. Moreover, tabloid readers always have understood that they aren’t exactly getting a fully journalistic or objective version of events. That said, this topic is still important for retailers to explore. That’s because they’re likely to be pulled even more into the spotlight on many issues in this 24/7 news and social media cycle. How can they deal with these types of situations and make sure to retain the trust and respect of their shoppers? Do they need to police everything they sell and pull products in advance that might potentially offend? I turned to an expert, Charlie Arnot, who is CEO of the Center for Food Integrity, on the topic of shopper trust. Arnot said retailers need to avoid overreacting in cases like this. “It’s not the retailer’s job to censor unless something is immoral or illegal,” he said. “If a retailer decides an item is what shoppers want, then I see no problem keeping it.” He emphasized that retailers need to offer choice, but also to let consumers make decisions for themselves.

I feel it’s going too far to place the blame on retailers for selling a specific ‘supermarket tabloid’ at checkout. Interestingly, Arnot said today’s “increasingly tribalized nature of communications” will put retailers more in the spotlight. He was referring to a growing number of narrowly focused and even obscure issues and media outlets. Retailers will need to decide which topics are relevant to the broad base of their shoppers, he said, “because you can’t respond to everything.” The tabloid case may be an extreme one, but it’s instructive. Retailers need to stay on top of what’s really important to their customers. The rest is just noise. dsn

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