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Australian Journal of Pharmacy : November 2006
news news Beware of generics price war,analyst warns HE Australian Government should be very wary of the scenario unfold- ing in the United States, following the launch by US retailer Wal-Mart of its US$4 ($5.20) generics program last month, according to industry analyst and Johnston and Rorke’s partner in charge of pharmacy services Bruce Annabel. Mr Annabel said the Government needed to keep in mind the high costs of the wholesaler supply chain in Australia. He emphasised that the Australian phar- maceutical industry was small compared to the US, highly centralised with a tightly controlled price chain. When the US retailer announced its plan to offer many generic drugs for just US$4 a prescription in September, it had T planned an initial test phase to customers of Wal-Mart’s 65 stores in Florida, expanding to the entire state in January 2007. However, just one month after this announcement and citing the ‘significant’ customer response to the discounted generics offer, Wal-Mart has accelerated the implementation of the program to include an additional 26 states in the US last month. The initial list of 314 generic medicines is made up of as many as 143 compounds in 24 therapeutic categories, including allergies, cholesterol, high blood pressure and diabetes. Some antibiotics, antide- pressants, antipsychotics and prescription vitamins are also included. ENERAL practitioners will be able to monitor patient blood pressure more readily and reliably, and improve the management of hypertension follow- ing the launch of a new initiative by the High Blood Pressure Research Council of Australia (HBPRCA). New drive to reduce error in blood pressure monitoring G The ‘Better blood pressure measure- ment’ initiative seeks to update medical technology in general practice by provid- ing modern blood pressure machines that are easy to use and provide more repre- sentative averaged measurements and reduce reliance on older devices filled with mercury. According to HBPRCA president, Pro- fessor Stephen Harrap, accurate mea- surement of blood pressure is crucial from a public health perspective. However, the list includes different ver- sions of the same medication, such as 12 variants of the antibiotic amoxicillin. The count of actual different medicines in dif- ferent dosages is 124. The US$4 price applies to a 30-day script at typical dosages and is good for successive refills as well as initial scripts. The US retailer’s executive vice-presi- dent, Bill Simon, denied that Wal-Mart was using the program as a loss leader, asserting that the company can operate it profitably by relying on its logistics and systems capabilities to take costs out of the supply chain and its pharmacy oper- ations. ‘Some of these new machines can auto- matically take three and on average two blood pressure readings at the touch of a button. ‘The better the blood pressure estimate, the more sound the clinical decision,’ he said. ‘The new digital devices are less observer-dependent and avoid digit pref- erence and Korotkoff sound difficulties such as the auscultatory gap. Such sources of error can adversely affect treatment decisions,’ he explained. Research is an important part of this initiative as there exists a unique oppor- tunity to assess fundamental changes in clinical practice when manual mercury sphygomanometers are replaced by new digital semi-automated machines. ¦ But while Wal-Mart’s executives emphasise the program’s benefits to cus- tomers, industry analysts expect the retailer to achieve increased pharmacy market share and increase store traffic. Bruce Annabel told the AJP: ‘There is a huge difference between the way the US retailer operates its pharmacies and phar- macy in Australia. The sheer size of Wal- Mart stores alone—their discount stores average 101,000 square feet and offer 120,000 items while their supercentres are even bigger—underscore the differ- ences in scale and operation. ‘Wal-Mart was using the generics pro- gram to generate traffic through their stores, with the objective of leveraging sales in other areas. ‘By contrast, pharmacy in Australia needed its margins as it does not have alternate sources of income. These mar- gins also allow pharmacists to give advice to customers on correct medication usage and so on’. Wal-Mart’s generic program has little to do with patient benefits or pharmacies as retailers of healthcare solutions and much more to do with retail margins and shareholder value, Mr Annabel said. ¦ THE AUSTRALIAN JOURNAL OF PHARMACY VOL 87 NOVEMBER 2006 ? 5