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. McKessonHBOC’s 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 5ꯠ 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 aren’t available because the drug company simply won’t provide a package with so few pills, or buying the small package is terribly costly because the incentive that comes with a 5ꯠ-count bottle is lost. “That’s where repackaging comes in. If we can sell pharmacies the product they need in repackaged 100-count bottles for less than what they’d pay the drug manufacturer, and if there’s 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 that’s packaging related, RxPak assumes responsibility. Labels applied by RxPak carry the drug maker’s name and location as well as RxPak’s. 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.