CVS Caremark to Acquire Longs Drug Stores
Woonsocket, RI and Walnut Creek, CA — CVS Caremark Corporation and Longs Drug Stores Corporation have entered into a definitive agreement under which CVS Caremark will acquire 521 Longs retail drug stores in California, Hawaii, Nevada, and Arizona as well as its PBM subsidiary, Rx America, for $71.50 per share in cash for a total purchase price of $2.9 billion, including the assumption of net debt. Following the completion of the purchase, CVS Caremark will fill or manage more than 1.2 billion prescriptions per year and operate approximately 6,800 drug stores in 41 states and the District of Columbia. The transaction is subject to review under the Hart-Scott-Rodino Act and is expected to be completed in the fourth quarter of 2008.

Despite Increases Health Care Costs Continue to Trend Down
Chicago, IL — Although a survey of more than 70 leading health care insurers representing greater than 100 million insured individuals found that health care costs are projected to raise employers' contributions by double digits, according to Aon Consulting Worldwide, the increase represents the lowest trend rate increase since the study began in 2001. The results revealed that HMOs are expected to experience a 10.6%, increase, 10.5% for POS plans, 10.7% for PPOs, and 10.5% for CDH plans. According to John Zern, Aon's director of U.S. health & benefits practice, "While the medical trend rate is still more than twice the consumer price index, it is encouraging to see that health care cost rate increases are continuing to slow down." It appears that prescription drug costs will follow a similar pattern. According to the survey, prescription drug costs are expected to increase 9.2%, which is slightly lower than the 9.5% trend rate one year ago.

Lawmakers Call for Overhauling FDA
Washington, DC — Rep. John Dingell (D., Mich) and Sen. Chuck Grassley (R., Iowa) want to overhaul the FDA by giving it broader powers that include the ability to levy fines, order drug recalls, and restrict drug-industry advertising. According to The Wall Street Journal, the Congressmen are making their recommendations based on a series of adverse events during the past year, including in part deaths related to Chinese-made blood thinners and cases of salmonella linked to jalapeno peppers. Other drug-related FDA safety issues include controversy over popular prescription drugs like Chantix and Vytorin,  both of which have been called into question, suggesting the agency was too lax on enforcing their safety and efficacy standards. The article suggests that the lawmakers' suggestions are an attempt to "stop the bleeding" and build "a much taller wall between the agency and the industry it regulates."

Jewel-Osco Launches Discount Prescription Program
Melrose Park, IL — Following in the footsteps of several other chain drug stores, Jewel-Osco, a company that operates in-store pharmacies in grocery stores in Illinois, Iowa, and Indiana, launched its own brand of discount pharmacy program called Prescription Plus. The new pharmacy loyalty program rewards frequent pharmacy customers with special discounts on future grocery purchases. Customers will receive a 10% discount coupon after every five prescriptions filled at one of the company's pharmacies when using their Jewel-Osco Preferred Card. While some restrictions apply, the company says that new, transferred, and refilled medication orders count towards earning the discount, which can be redeemed at the grocery checkout. The program will be available at all of its 184 Jewel-Osco locations. Grocery store locations without in-store pharmacies will also honor the 10% discount coupon.