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Tracing the Drug Trail

BY Deena Amato-mccoy

On April 21, 1980, Rosie Ruiz was the first runner to cross the finish line in the Boston Marathon’s women’s race—or so it seemed. Actually, riding the subway for most of the race and emerging from the crowd during the final half-mile helped Ruiz claim her first-place medal. (She was determined a fraud a week later.)

Interestingly, Ruiz’s bad judgment and fraudulent act set the stage for more sophisticated data tracking during races, including on-course video cameras, and most notably, runner chips. (The computer chips, which runners attach to their sneakers, interact with sensor mats placed at checkpoints between the start and finish lines. This enables officials to track and record each registered participant’s progress in real time.)

Currently, the danger of counterfeit drugs is pushing a similar data-tracking movement.

The public often associates counterfeit medicines with drugs available illegally online. However, many fake drugs unknowingly are being sold and distributed through retail pharmacies.

Until recently, counterfeiting was difficult to detect. In 2006, however, the U.S. Food and Drug Administration stepped in and began adding information-tracking guidelines to control the situation and help the retail industry fight back.

The agency tied its efforts to the use of e-pedigrees, or electronic documents that track the change of custody as items pass through the supply chain. They are a perfect fit for the pharmaceutical supply chain. Interest is growing, albeit slowly.

As of July 2006, a Florida law requires wholesale distributors based in the state to provide electronic pedigrees that can track drugs through the point of creation up through retail distribution. California will enact a similar law effective Jan. 1, 2009.

Based on its robust foundation, RFID promises to be a strong catalyst for e-pedigrees. Its powerful data-collection principles enable users to uniquely identify labeled objects, and it also provides granular insight into tagged items’ movement.

Interestingly, some fault RFID for e-pedigrees’ slow adoption. Some say RFID systems are too expensive. Others say RFID doesn’t “fit” all drugs. (For example, tags are ineffective on metal-based containers and liquid prescriptions.) Still others blame a lack of operating standards.

While these points are true, RFID is not the only e-pedigree game in town. In fact, lower-cost, tried-and-true barcodes are an option. While standard barcodes do not have the historical perspective of RFID, 2-D barcodes can help companies serialize pharmaceuticals at a lot- and bottle-level.

E-pedigrees can only be effective, however, as supply partners integrate existing systems so they can share data. By leveraging the new EPCIS (Electronic Product Code Information Services) standard, for example, trading partners have a seamless framework that secures the exchange of data at every point of the shipment of goods throughout the supply chain.

Regardless of the method they choose, all trading partners affiliated with the manufacture or sale of pharmaceuticals should be exploring how they can benefit from e-pedigrees and supply chain integration.

Without this chain-of-custody insight, I am certain the industry (and unsuspecting consumers) will remain pawns in the very dangerous drug-counterfeiting game.

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Sears comps hurt by energy costs

BY CSA STAFF

HOFFMAN ESTATES, Ill. Sears Holdings today reported net income of $216 million, or $1.40 per diluted share, for the first quarter ended May 5, compared with net income of $180 million, or $1.14 per diluted share, for the first quarter ended April 29, 2006.

“In part, our domestic operating results reflect the impact of some of the same challenges being faced by our customers, such as rising energy costs and a slower housing market,” said Aylwin Lewis, Sears Holdings’ ceo and president. “However, as an organization, we need to overcome these factors by better controlling costs and developing innovative solutions that better meet our customers’ needs and allow us to generate a more reasonable level of profitability even in the face of such challenges.”

Domestic comparable-store sales declined 3.9% during the first quarter of fiscal 2007. Sears domestic comparable-store sales declined 3.4% for the quarter, while Kmart comparable-store sales declined 4.4%. We believe these declines reflect both increased competition and the impact of external factors such as rising energy costs, a slower housing market and poor weather conditions during the latter part of the first quarter of fiscal 2007. Kmart experienced lower transaction volumes across most merchandise categories, most notably within home goods, health and beauty products, and food and consumables. Similarly, Sears domestic recorded comparable-store sales declines across most merchandise categories and formats, with a notable decline in home appliance sales, which we believe reflects both a slower U.S. housing market and the impact of increased competition.

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Big Lots 1Q net sales up 3.4%

BY CSA STAFF

COLUMBUS, Ohio Big Lots today reported first quarter fiscal 2007 income from continuing operations of $29 million, or 26 cents per diluted share, compared to income from continuing operations of $14.5 million, or 13 cents per diluted share, in the first quarter of fiscal 2006. Including the impact of discontinued operations, first quarter fiscal 2007 net income totaled $28.8 million, or 26 cents per diluted share, compared to $13.7 million, or 12 cents per diluted share, in the prior year.

Net sales for the first quarter ended May 5, increased 3.4% to $1.13 billion, compared to $1.1 billion for the same period in fiscal 2006. Comparable-store sales for stores open at least two years at the beginning of the fiscal year increased 4.9% for the quarter.

For the second quarter 2007, the company expects income from continuing operations of 7 cents to 10 cents per share versus income from continuing operations of 4 cents per share last year. Comparable-store sales are expected to increase 2% to 4%, compared to a 5.2% comparable-store sales increase recorded last year.

For fiscal 2007, the company expects income from continuing operations of $1.25 to $1.30 per share versus income from continuing operations of $1.01 per share last year.

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