The Deloitte Consumer Spending Index rose again in September, hitting its highest level in two years. The index attempts to track consumer cash flow as an indicator of future consumer spending. "The fundamentals of consumer spending continue to improve, giving households increased purchasing power," said Carl Steidtmann, chief economist with Deloitte Research, a subsidiary of Deloitte Services LP, and author of the monthly index. "The housing market is beginning to show signs of stabilizing while initi al unemployment claims have fallen significantly. Household net worth is rising and real wages are climbing at their fastest pace in 40 years. Signs of recovery got a boost from the cash for clunkers program in August, plus a gain in real spending has materialized across the board in recent months." Highlights of the index include:

• Tax Burden: The tax burden continues to fall with the weakening of the economy. The tax burden is at a level only seen on a few occasions over the past 50 years during brief periods following tax rebates. Continued decline is expected.
  
  
• Initial Unemployment Claims: Initial unemployment claims have come down sharply over the past three months which historically has been a reliable signal of economic recovery. Claims are down more than 100,000 from thei r recession peak
  
  
• Real Wages: Real wage growth continues to post solid gains due in large part to falling prices. Real wages are up 4.8 percent from a year ago as falling prices have given a big boost to consumer purchasing power.
  
  
• Real Home Prices: The pace of decline in home prices has slowed significantly on a year over year basis. Continued efforts to forestall foreclosures coupled with a tax credit for first-time home buyers have brought some stability to the housing market. The decline in home prices has made home buying much more affordable.

"The Index suggests that many households increasingly have the means to spend, and with the worst of the downturn seemingly behind us , the retail environment may soon see signs of life," said Stacy Janiak, vice chairman and Deloitte's U.S. retail leader. "Retailers have tackled cost cutting and cash conservation and the next few months will likely be all about enticing the consumer to spend. Offering personalized marketing, enhancing in-store customer conversion tactics and encouraging online product reviews are just a few of the ways that retailers may be able to gain an edge this holiday season."

In a move that likely will make the specialty retailer a little more competitive against retail pharmacy, GNC on Tuesday unveiled its new retail "experience" that will serve as the company's prototype for the future in its home market of Pittsburgh. The store seeks to transform its brand from a destination center primarily for the volatile weight loss diet aids and sports nutrition markets and into more of a premier health and wellness resource for the entire family.

The new 3,000 sq.-ft. location, now open at suburban Pittsburgh's Ross Park Mall, is a one-stop shopping experience for consumers seeking not only innovative, high-quality fitness and nutritional supplements, but also natural, alternative treatments for holistic wellness. The new store offers nearly triple the number of products available in today's GNC stores, with 1,000 new items. It features a comprehensive portfolio of health, wellbeing and sports nutrition products - under GNC's proprietary brands and other best brands in the category - as well as expanded product offerings in the categories of natural health and healing, probiotics, cleansing, proteins and health and beauty.

"GNC is launching an entirely new retail experience that will solidly position our brand and stores as the premier resource for a world class offering of health and wellness products for every member o f the family," stated Joseph Fortunato, GNC CEO. "The new concept store focuses on improving the quality of life for our customers by inspiring healthy and active lifestyles through not only innovative fitness and nutritional supplements, but also a wider assortment of natural and alternative treatments for holistic wellness. Consumers will find products they haven't typically discovered in a GNC. This retail concept will grow the GNC brand by expanding our customer base, while maintaining loyal core customers, and is one more way that GNC is increasing our ongoing commitment to help consumers "Live Well."

GNC's new store is divided into four individual sections that showcase distinct product categories, the specialty retailer announced. The front space underscores GNC's increased emphasis on healthy lifestyle management and provides customers with tools to address health, diet and overall wellbeing. Consumers will find products focused on cleansing and detoxifying, w eight management nutrition, fit and active accessories and women's wellness, as well as new categories such as yoga, expanded proteins, meal replacements and portion control. This space also features GNC's newest innovative line: GNC WELLbeING. Launched in May, it is a comprehensive, one-source line of whole body health products created exclusively for fit and active women, targeting whole body nutrition, fitness nutrition and therapeutic body care. The second space is the store's vitamin headquarters. Here, GNC offers a broad assortment of both preventative and condition-specific products for women, men, children and the family pet that address heart health, mood, sleep, diabetes, digestion and more. This section also showcases new health and beauty offerings, including high-performance skincare products for cellulite, stretch marks and teeth whitening, and an enhanced array of natural heath and healing products, such as herbals and homeopathic remedies.

However, GNC is not abandoning what once had been its core market. The back two rooms are designed for GNC's avid fitness and sports enthusiasts, with greatly expanded product assortments that take the category beyond the body builder. One distinct space targets sports, fitness and hardcore diet consumers with proteins, thermogenics, fitness accessories, nutritional bars, endurance products and drinks. The other is designed for the hardcore body building customer, with an assortment that includes niche designer formulated brands positioned to appeal uniquely to that consumer. The two fitness sections also carry a new assortment of accessories, including books, scales and blood pressure monitors.

Pharmacists may soon rekindle the traditional art of mixing medications as a shortage of liquid flu medicine leads them to crush capsules for young children and others who cannot swallow pills. Pharmacists are taught to mix medications, a process known as compounding, in pharmacy school. While some pharmacists compound medications each day, such drugs now account for a small percentage of the millions of U.S. prescriptions filled each year.

"Years ago this was the predominant way that medications were made," said Nimesh Jhaveri, executive director of pharmacy operations at Walgreen Co. Now, at the start of what could be a major flu season, Roche has a limited supply of the liquid form of its flu symptom drug Tamiflu, or oseltamivir. "They had a significant amount of it ... waiting just in case we needed it, and all of that went out of date, essentially. So they're having to replace that supply," said Rod Shafer, a pharmacist and the chief executive of the International Association of Compounding Pharmacists.

The H1N1 swine flu became a pandemic in June and has already infected millions of people in the United States.Tamiflu and rival drug Relenza, made by GlaxoSmithKline, can reduce the symptoms of flu, save the lives of patients with very severe symptoms and sometimes prevent influenza, all if taken early enough. The World Health Organization and the U.S. Centers for Disease Control and Prevention currently advise saving the drugs for those most at risk of severe complications, such as pregnant women, people with chronic diseases such as diabetes and children with asthma. Roche has advised pharmacies on how to compound capsules, which are in ready supply, into a liquid form. "It's not as simple as taking some capsules and throwing them in a liquid and giving it a shake," Shafer said.

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Continued from Flu Drug Shortage May Bring
Back Art of Pharmacy

LIQUID TAMIFLU STOCK DWINDLING

The supply of manufactured liquid Tamiflu is expected to come back shortly, so the chances of pharmacies actually having to do this are pretty small, Shafer said. Still, drugstores are preparing. Walgreens, the largest U.S. chain, said it can rework the capsules to give patients the medication in liquid form at its more than 7,000 locations. The active ingredients from the capsules must be combined with liquid, and pharmacists need to ensure that the ingredients are stable and keep their effectiveness. "Think of it as a recipe," said Walgreen's Jhaveri, himself a licensed pharmacist. "This is truly the art of pharmacy." The 15 to 20 minute process must be done each time a prescription needs to be filled. Pharmacies cannot make batches since that would be considered manufacturing, he said. Walgreens still has the liquid version of Tamiflu in stock in the majority of its stores, but "that stock is dwindling quickly," Jhaveri said. The biggest demand for Tamiflu has been seen in the Southeast, and supply is dwindling faster there. "We trying to be proactive, we know that this potentially could be a serious issue," Jhaveri said.

Liquid Tamiflu received a fresh dose of attention this week in a letter from doctors published in the New England Journal of Medicine. They advised that the dosage written in prescribing instructions does not always match up with the doses listed on the syringe used to dispense the product. Roche sent a letter to healthcare professionals to remind them to follow the dosing instructions and make sure that the measurements match up on the prescription and the device used to give the medicine.

The Centers for Disease Control and Prevention is going mobile as part of a pilot program over the next three months where subscribers will receive as many as three short health tips per week from the CDC.

WAL-MART announced recently that it is expanding its prescription mail delivery program. The company said it made the decision in hopes of "making it easier to receive prescriptions regardless of whether or not customers live close to a pharmacy." "Walmart's $4 generic drug program has helped so many patients afford their medication needs, but unfortunately we've found there are still too many patients unable to take advantage of our low prices because they are home-bound or live too far from a Walmart or Sam's Club pharmacy," said Dr. John Agwunobi, president of Walmart's health and wellness division. "With this program, we're able to provide consumers in every rural town or big city across America with more affordable prescription medicines through a convenient, free mail delivery system."The nationwide WAL-MART mail order prescription program raised several "troubling issues that could negatively affect patients," according to the National Community Pharmacists Association. In response, Bruce T. Roberts, RPh, NCPA executive vice president and CEO, issued the following statement:

"When WAL-MART launched a pilot program for mail order prescriptions in Michigan last May, we highlighted the unintended consequences of steering patients away from using community pharmacies. While WAL-MART contends they are saving patients money and offering more convenience, they fail to mention the downsides that come with mail order. "Deliveries can be delayed, sent to the wrong address, or damaged. In a recent survey of patients, NCPA found that 48 percent received their prescriptions late and were put in a position to do without their medication. In addition, when bulk supplies are ordered, patients can wind up with an excessive amount of medications if any changes occur to what their doctor prescribes. "In fact, community pharmacies often have to help patients who are left waiting by their mailbox. Nearly 85 percent of patients report having to go to their community pharmacy to receive an emergency supply of their medication when delivery mistakes occur. We understand the financial strains occurring under our current health care system, and community pharmacists are more than capable of helping patients reduce cost.

"Most importantly, when patients use mail order they lose the face-to-face relationship that occurs inside their community pharmacies with clinically trained health care professionals who are dedicated to promoting safety and improving health outcomes. For patients with transportation issues, such as those who are homebound as a result of their health, 87 percent of community pharmacies offer home delivery, often free of charge. This allows the pharmacist-patient relationship to continue. "Prescription medications offer tremendous therapeutic benefits when used correctly, but pose significant risks to patients when used improperly. It's been estimated that $290 billion is spent annually on hospital, physician and other treatments for inappropriate medication use. Clearly, more patients risk potential adverse drug events and the resulting treatment costs if they gravitate towards WAL-MART's mail order program. "Our biggest concern is that since WAL-MART is such a driving and dominant force in the marketplace, that this program will be copied by other mass merchant retailers who feel compelled to try to follow suit. Prescription medications are life saving tools that improve the lives of patients, not general merchandise. Such a cavalier approach to health care is not going to strengthen America's health care system."

U.S. pharmacies should generate more than $350 billion in prescription-drug revenue by 2015, an increase of some $100 billion from last year, with expensive specialty medications for chronic or complex illnesses helping to fuel the growth, according to a pharmaceutical supply-chain consulting firm. Pembroke Consulting, in a new industry report, also predicts that while a coming wave of generic prescription drugs will enhance pharmacy profits, those generic-drug profits will be pressured by a price war sparked by Wal-Mart Stores Inc.'s (WMT) $4 generics program and by the use of new contracting strategies.

Pharmacy revenue should grow by an average of 4.9% a year between now and 2015, a rate slightly lower than that projected by the federal government, Philadelphia-based Pembroke said. "This forecast reflects overall growth in demand for prescription pharmaceuticals," the firm said. "Generic drugs will soon be more than 80% of U.S. prescriptions, slowing pharmacies' revenue growth. However, expensive specialty pharmaceuticals will grow to be at least 30% of total pharmacy revenues, adding to revenue growth."The U.S. has nearly 54,000 retail pharmacy locations, including drug stores, mail-order pharmacies, supermarkets and mass merchants, Pembroke said. The pharmacies generated nearly $254 billion in revenue last year, according to the firm, which estimates pharmacy revenue of more than $354 billion in 2015. The top U.S. pharmacies ranked by total pharmacy revenue in 2008 were CVS Caremark Corp. (CVS), Walgreen Co. (WAG), Medco Health Solutions Inc. (MHS), Rite Aid Corp. (RAD) and Wal-Mart, according to Pembroke. The firm expects chain drug stores to expand their market share and predicts Wal-Mart will become the third-largest retail pharmacy chain possibly by next year.

Revenue at independent pharmacies will be flat despite overall market growth, although that segment of the industry should remain viable, Pembroke said. While revenue at mail-order pharmacies should grow due to higher use of specialty drugs, overall growth in mail-order prescriptions will lag the market because of increased competition from retail-based pharmacies, Pembroke predicts.

Generic drugs contributed $13 billion more in gross profits to pharmacies than brand drugs did last year, Pembroke President Adam Fein said. He added in a statement, however, that the "superior profitability" of generics will be threatened in coming years as health-care payers implement new payment benchmarks and pharmacies engage in a generic prescription drug war.

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