MMR: Mass Market Retailers, January 11, 2021
OPINION MMR A Shift in Pharmacies Relationship to PBMs By Jeffrey Woldt The Supreme Courts decision in Rutledge v PCMA to uphold Arkansas right to regulate pharmacy benefits managers signals a turning point in the protracted battle to make the relationship between PBMs and retail pharmacies more equitable In a unanimous ruling Justice Amy Coney Barrett did not hear the case the court found that an Arkansas statue enacted in 2015 which requires PBMs to reimburse pharmacies at a rate that equals or exceeds their wholesale costs is valid The Pharmaceutical Care Management Association the trade group that represents the nations 11 biggest PBMs contended that the Arkansas law was in conflict with the federal Employee Retirement Income Security Act of 1974 which established minimum standards for retirement and health plans in the private sector and should be preempted After succeeding in the lower federal courts PCMAs position was rejected by the Supreme Court Pharmacy advocates who lent their support to Arkansas Attorney General Leslie Rutledge as the case moved through the judicial process hailed the ruling as a landmark They argued that if the Arkansas statute and similar laws that have been passed in 40 other states were invalidated it would be increasingly difficult for pharmacies to survive In its response to the Supreme Courts decision a coalition of pharmacy groups including NCPA APhA the National Association of State Pharmacy Associations and the Arkansas Pharmacists Association pointed out that more than 16 of independents in rural areas closed for good in recent years further limiting access to health care in areas where it is already in short supply While expressing its disappointment with the high courts action PCMA raised the specter of unintended Pharmacies need to be profitable consequences As states across the country consider this outcome we would encourage they proceed with caution and avoid any regulations around prescription drug benefits that will result in higher health care costs for consumers and employers Everyone wants to limit spending but PCMA should appreciate the fact that when properly used prescription medications are the most cost effective component of health care More fundamentally they need to understand that pharmacies like PBMs are businesses and must turn a profit if they are to remain viable and continue meeting the needs of patients Why We Departed From Tradition By David Pinto Thirty five years have passed since the initial issue of Mass Market Retailers rolled off the press During that time the editors of MMR have unfailingly named a Retailer of the Year each January Our editors had much to choose from for our definition of mass market retailers included grocery chain drug and discount retailers The selection though never easy nonetheless inevitably came down to a few practitioners of the retail art whose accomplishments were difficult to overlook or underplay This year we have broken precedent by naming not one but two Retailers of the Year We made this decision simply because we determined that two practitioners of the retail art were simply too good to overlook You have only to turn to page 1 of our current issue to discover who the chosen retailers are The first is a proven master of the retail art a company that has routinely placed at or near the top of its class year after year decade after decade That retailer is of course Target Corp arguably among the two finest retailers to open their doors for the first time in the early years of the second half of the 20th century The other retailer that can realistically lay claim to the title of finest retailer is of course Walmart a company that has elevated the retail art to levels never before achieved So the choice of Target was not a difficult one Neither was our selection for the other Retailer of the Year designation Our choice H E B for reasons too numerous to be confined to a few paragraphs on our editorial page Those retail authorities who really know about the pitfalls of mass retailing and there are relatively few fully understand what H E B has meant to the mass retailing community Indeed if that significance were the sole criterion for selecting a winner in the Retailer of the Year category H E B could honestly Its refreshing to know that this first call of 2021 was especially good lay claim to the title with little pushback from other contenders Truth is H E B has in challenging other mass retailers made them better at what they do or attempt to do Indeed of all H E Bs many remarkable accomplishments perhaps most impressive is that this company decided some time ago that there is more than one way to come to market Virtually alone H E B has made the onesize fits all concept obsolete by replacing it with a retail model that attempts almost always successfully to tailor that model to the peculiarities of the customer that market serves In itself that accomplishment is sufficient reason to recognize H E B But there are other reasons as well reasons the retailers many competitors have come to recognize rue marvel at and seek to duplicate often with indifferent results Interestingly H E B has never sought headlines or recognition As a result other sometimes larger retailers have received more accolades But the groups of people who mean most to H EB have unfailingly recognized its achievements Those groups in ascending order of importance are the retailers supplier partners its workforce and its customers It is this last group that is especially noteworthy Indeed if a credible survey were undertaken to determine how many and how frequently shoppers switched grocery stores H E B would happily but not surprisingly finish at the bottom of such a list In truth one of H E Bs core characteristics is that the retailer and its thousands of staffers at all levels throughout the company know just how capable this company is So it is that the editors feel more than vindicated for naming H E B one of the publications two Retailers of the Year for 2020 Goodness knows these editors have made more than enough bad calls over the years Its refreshing to know that this first call of 2021 was an especially good one Congratulations H E B and of course Target as well What Will Normal Be for Mass Retail By Scot Meyer The arrival of a new year can be a time for hope and that is especially true as the world puts 2020 in its rear view mirror The approval of two COVID 19 vaccines with more potentially on the way will likely mark the beginning of the end for a pandemic that shook the U S economy killed more than 300000 Americans and cost millions of The pandemic s effects may well be permanent people their jobs The vaccines already being administered by retail pharmacists also hold the promise of a return to normalcy the those for whom the pandemic has been more inconvenience than personal tragedy the people who want to stop wearing masks and start socializing traveling eating at restaurants and maybe even going back to the office or to trade shows again But what will the return to normalcy look like for mass retail shoppers Will they go entirely back to their pre COVID ways or will new habits picked up during the pandemic have staying power The new normal is unlikely to look like the old normal Lots of people were inspired by the pandemic to try online shopping including options like store pickup for the first time and many will decide they like having that as an option Brick and mortar stores are still not expected to go away but more and more consumers are expected to become omnichannel shoppers That trend will only accelerate as online shopping technologies and options improve Walmarts recent experiment with hosting a shoppable variety show on the social media platform TikTok shows one way that things will likely go What else The effects of the COVID 19 pandemic will have long term impacts on the retail sector and will disrupt consumer shopping behaviors and their priorities in a number of ways in the years ahead according to a new report from Edge by Ascentials research and data insight arm Retail Insight The Future of Retail Disruption report highlights a number of changes that are likely coming for mass retailers beyond the embrace of the convenience offered by online retailers For example the pandemic has revealed some of the weaknesses of the U S health care system and that could spell an opportunity for retailers Taking advantage of that opportunity could mean becoming a full on health care provider as Walmart is doing with its growing number of Walmart Health centers Or it could mean just expanding the offerings of good for you products and services The COVID 19 pandemic is having a seismic shift on the retail industry and its effects are likely to be permanent says Xian Wang global content director at Edge by Ascential We have seen a dramatic shift towards digital commerce with 40 of global retail sales projected to come from e commerce by 2024 To adapt in this new environment retailers need to proactively define their own market position and focus on the priorities of consumers such as what they are placing more value in and their biggest concerns which can vary by market The new normal will undoubtably be better than the retail world of 2020 which was to a large extent defined by COVID 19 But that doesnt mean it will be easy JEFFREY WOLDT Editor in Chief Vice President Phone 212 699 2326 jwoldt@ racherpress com SCOT MEYER Executive Editor Phone 212 699 2312 smeyer@ racherpress com MARK BAUMGARTNER Senior Editor Phone 212 699 2334 mbaumgartner @ racherpress com LESLIE SELDIN Desk Editor Phone 212 699 2389 lseldin@ racherpress com DAVID PINTO President JOHN DIOGUARDI Publisher Phone 212 699 2361 johnnyd@ racherpress com MARK WOLZ Copy Editor Phone 212 699 2330 mwolz@ racherpress com BILL BUCKLEY Art Director Phone 212 699 2331 bbuckley@ racherpress com STEPHANIE THOMPSON Art Director Phone 212 699 2323 sthompson@ racherpress com JENNIFER DONNERUNO Executive Vice President Controller Phone 212 699 2336 jdonneruno@ racherpress com ANDREA FALLIN EVP Strategy Phone 212 699 2321 afallin@ racherpress com PEGGY NAVARRE Production Manager Phone 212 699 2371 pnavarre@ racherpress com PAM VANDERNOTH Circulation Subscriptions Director Phone 212 699 2362 pvandernoth @ racherpress com SUSAN SCHINITSKY Group Publisher Published by RACHER PRESS INC 126 Fifth Ave 12th Floor New York N Y 10011 212 213 6000 Fax 212 725 4594 VOL 38 NO 1 January 11 2021 38 MMR January 11 2021
You must have JavaScript enabled to view digital editions.
