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Article | February 28, 2001
New line helps repackaging pay off (sidebar)
Repackaging of drugs is the practice of receiving containers of pills or tablets from drug makers and repackaging them in smaller-count packages. McKessonHBOCs Greg Yonko senior vice president investment purchasing explains how it works. The drugs we repackage are typically those a drug company would much rather sell in large quantities say 5 per container. So that drug company offers an incentive in the form of a price break to buy in large quantities. What that means to a pharmacy that wants say 100 pills in a bottle is one of two things. Either those pills arent available because the drug company simply wont provide a package with so few pills or buying the small package is terribly costly because the incentive that comes with a 5-count bottle is lost. Thats where repackaging comes in. If we can sell pharmacies the product they need in repackaged 100-count bottles for less than what theyd pay the drug manufacturer and if theres still room in the transaction for a profit for us and the drug maker we become a good source of supply. As long as we can repackage it make a profit and pass on a savings to our customers it works. As for liability if it revolves around drug efficacy the drug maker remains liable. If a problem arises thats packaging related RxPak assumes responsibility. Labels applied by RxPak carry the drug makers name and location as well as RxPaks. According to Yonko RxPak does nearly $1 billion annually in repackaged drugs. It distributes them through its parent company McKessonHBOC which distributes $28 billion worth of drugs annually including product repackaged by RxPak.
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