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Tuesday, January 06, 2009

Walgreens vs. Reality

Happy New Year!

I hope you all were able to enjoy some nice downtime with your families. I was once again fortunate enough to be on a beach that lacked wi-fi access. You can see my massive disappointment in the photo.

Let’s kick off 2009 with a good pre-holiday Wall Street Journal article that you may have missed: Pharmacies Fight Tough Battle on Generic Prices.

The article discusses “what some consider a generic-drug price war.” Yep, I am one of those “some” and am quoted in the article. No surprise to you, dear reader, if you saw CVS Escalates the Generic Price War in November.

But spare a thought for the poor chain executives who must convince shareholders that there is no price war. Walgreen's (WAG) senior vice president of pharmacy pooh-poohed the price war idea and then said: “I think that the pricing is competitive within certain therapeutic categories, and I think what you see is all of the retailers promoting their competitive price.”

Really? Then why did pharmacies have *no* promotion of prices until Wal-Mart (WMT) made its move? Why did Walgreens initially state that it would not match Wal-Mart’s “promotional drug pricing” but then switch course? (See “Walgreens Reacts” in Walgreens’ $4.33 Surrender to Wal-Mart.) Why is Giant Supermarkets now giving away generic antibiotics? Why is Walgreens now emphasizing cost-efficiency instead of growth?

On a related note, I think that I am not going bald. I think what you see is that I am follicly challenged.

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FYI, there is some sad news in the blogosphere. Peerless pharma news junkie Ed Silverman is hanging up his T-1 over at the Newark Star-Ledger’s Pharmalot. Check out his eloquent goodbye and leave him a note. Ed will be moving to Elsevier Business Intelligence, which publishes The Pink Sheet and other pharma titles. Best wishes, Ed!

8 comments:

  1. Welcome back! Nice vertical leap.

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  2. Astute, challenging and funny all at the same time. Great to have you back Adam and looking forward to your 2009 postings.

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  3. Check out this story... I just don't understand why retailers kick and scream about serialization when it could help them manage their inventory. Guess something major has to happen before anyone reacts.


    http://www.projo.com/business/content/bz_cvssued05_12-05-08_1CCHF19_v8.314c65f.html

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  4. I', really going to miss Pharmalot. Part of my morning coffee routine!

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  5. I love the whole “Really?” part. Would make a great Seth Meyers “Really???” segment on Saturday Night Live.

    Glad you had a great holiday vacation. And here’s hoping we all have a better 2009 than 2008!

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  6. Let me know when (if) you find a solution to being follicly challenged. I know there is little help for being bald!

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  7. But Adam, you're wearing a WATCH!
    Guess it's really hard to let go of everything...

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  8. Good eye, faithful reader! But it's my vacation watch...

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