The Friday Report: October 5th, 2018

Drug Manufacturers Try to Broker a Compromise on Costly Medicare “Donut Hole” Spending Bill

Earlier this year, Congress voted to shift billions of dollars in Medicare drug costs away from senior citizens and back to pharmaceutical companies.

 In February 2018, a spending bill required drug manufacturers to cover more costs incurred by seniors when they fall into the “donut hole” of Medicare. This represented a significant loss for pharmaceutical lobbyists.

The pharma industry has altered its focus to the opioids packaged which is being prepared by the House and Senate leaders, looking for 2-3 times the amount of opioids funding.  Looking for a compromise solution, lobbyists are trying to eliminate the multibillion dollar price tag of absorbing the Medicare “donut hole” , the pharmaceutical industry would accept a bill designed to prevent brand name drug manufacturers from blocking generic competitors.

Stay tuned.

On-Demand Warehousing Provides Needed Flexibility at Critical Time

For companies that do not have adequate warehouse space capacity for their inventory, using on-demand warehousing provides a flexible option, enabling storage at an alternative location for a period of time. The concept takes advantage of underutilized warehouse space and helps meet the needs of companies challenged to position inventory as needed.

Similar to the Uber and Airbnb models, the concept of on-demand warehousing matches warehouse space to companies needing locations to store, handle and ship inventory.  Variations on the on-demand warehousing model include FBA, Fulfillment by Amazon, Warehouse Exchange, similar to the WeWork concept used in office space and MonarchFX, pioneered by Jim Tompkins, a well-established supply chain consultant.

Food Shippers Pressured to Use “Clean Labels”

Modern consumers have increasingly become more focused on reading labels to determine if the food products meet their personal standards for health and safety. Because consumers are interested in healthier foods without preservatives, additives and other ingredients that may impact human health, there has been greater focus on food labeling.

Food industry shippers are at a crossroads.  Clean label products are goods with shorter shelf lives, necessitating that food shippers get them to market faster to ensure quality and freshness.  Use of artificial preservatives increases shelf life giving food shippers more longitude in getting goods to market on time.

Read more about how clean labels are impacting both food shippers and consumers here.