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Retail executives blast Saturday mail cuts

By Ed O'Keefe

Eye Opener

CVS Caremark, one of the nation's largest pharmacy chains, warned Monday that patients receiving prescriptions by mail can expect higher costs if the Postal Service drops Saturday deliveries and competitors raise weekend rates.

"Mail order pharmacies and other merchants will have no choice but to shift these costs to patients," CVS Senior Vice President Kenneth Czarnecki told members of the Postal Regulatory Commission on Monday at a hearing on the future of American mail delivery held in Chicago. "These added costs not only impact patients’ pockets, but will also place significant fiscal strain on our health care system."

CVS shipped more than 50 million prescriptions by mail in 2009, 90 percent of them with the Postal Service, said Czarnecki, who worried that delivery cuts would change his company's business model.

"Eliminating Saturday delivery sets a precedent that would open the door for additional service cuts in the future," Czarnecki said.

Other retail executives and the publishers of small newspapers also said they oppose Saturday cuts, arguing they would be negatively impacted by the move.

John R. Seebeck, marketing director for furniture chain Crate and Barrel, said his company reluctantly supports Saturday cuts only if the mail agency keeps postage rates low.

"We would rather adjust when a customer hears or interacts with us – vis-à-vis a five-day week service schedule -- versus the necessity of discontinuing mailing a customer altogether due to rate increases," Seebeck said. The company also urged the Postal Service to adopt greater labor flexibilities, make changes to its pension system, close unneeded post offices and offer more goods and services at postal retail outlets in order to generate more revenue and keep postage rates down.

Christopher Huckle, publisher of the Cadillac News in northwest Michigan, said delivery cuts would irreparably harm his Monday to Saturday publication and delivery schedule.

"It dismays me to discover that even as important daily newspapers like ours grapple with changing reader habits, a down economy and fiscally-strapped advertisers, the element that is most likely to force us to change our business plan comes from a distribution vendor, not a change in our market or our readers," Huckle said. Saturday mail cuts would mean less advertising revenue, demand for lower subscription rates, and staff layoffs, he said.

Despite the gloom and doom, the Postal Service cutbacks have the support of media giant including Time Warner, which publishes 20 major magazines. Three of the mail agency's largest customers, movie mailer Netflix, AT&T and Bank of America have yet to issue an opinion.

The PRC will hold two more town hall forums to hear from business leaders and everyday mail customers on Wednesday in Rapid City, S.D. and Monday in Buffalo. The panel is expected to issue a formal, nonbinding opinion on the future of the Postal Service at some point this fall.

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Cabinet and Staff News: White House Budget Director Peter R. Orszag plans to leave at some point in July (who will replace him?). Newly minted Gulf Coast pay master Kenneth Feinberg says faster claims payments are needed. Interior Secretary Ken Salazar's delicate balancing act on oil drilling. Obama's pick to lead the Center for Medicare and Medicaid Services faces a confirmation battle. Oh, and just in case you were worried: USAID Chief Rajiv Shah is not running for president.

DEFENSE DEPARTMENT:
Defense policy bill could affect insourcing efforts: Many federal service contractors could see their jobs brought back in-house if provisions in the House and Senate Defense authorization bills are passed into law, according to an industry group.

Armed man, gunshot sounds cause NJ base lockdown: Something that sounded like gunfire and a FedEx delivery driver with a gun led to a one-hour lockdown at a Navy base Monday. A base official said there were no injuries and no real danger.

EPA:
EPA to delay enforcing lead-paint regulation: The rule would require contractors who work in older homes to become certified by a government-approved trainer and follow a series of safety precautions.

FAA:
FAA, European Commission partner on air traffic overhaul: The agency is working with European partners to develop and deploy technologies to integrate transatlantic air traffic control.

GOVERNMENT WORK/LIFE/OPERATIONS:
Data.gov's next big thing: Mashing up federal stats with maps: The site soon will offer a chance to preview a so-called viewer that will let them combine many of the 270,000 data sets with maps.

Obama uses powers to expand federal rights, benefits for gays and lesbians: The administration has targeted one government restriction after another in an attempt to change public policy while avoiding a confrontation with Republicans and opponents of gay rights.

IMMIGRATION:
White House denies GOP senator's claim linking border security to immigration reform: Officials denounced comments by Arizona Sen. Jon Kyl who told "tea party" supporters that President Obama in a private conversation told the senator that securing the border would make it more difficult to pass overall immigration reform.

JUSTICE DEPARTMENT:
Obama administration to buy Illinois' Thomson prison: Lawmakers are threatening to scotch Obama's proposal to move terror detainees to the unused state prison, a critical part of his plan to shut down the Guantanamo Bay detention center.

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By Ed O'Keefe  | June 22, 2010; 6:00 AM ET
Categories:  Eye Opener  
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Comments


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Posted by: maidalan22 | June 22, 2010 6:44 AM | Report abuse

Since there are drug stores on every corner and opposite corners five minutes from pretty much every house in America, I don't think this will be a problem. It's probably much harder to find a Starbucks than drug store. And don't worry, if you have a Walgreens but no CVS, don't worry, CVS will be building a store right across the street in no time, and vice-versa.

If you are so disabled you cannot make it to the local pharmacies on every corner, in every grocery store, Target, Walmart, et al... you probably have impetus to re-order your prescription such that you could miss two days if'n it doesn't make it Friday.

As far as daily papers go, it's called the "internet" and your business model has already changed. We're already moving toward quicker and better ways to print or utilize newspaper coupons, and with that, the Sunday newspapers = dead too.

Posted by: NovaMike | June 22, 2010 9:34 AM | Report abuse

What a bunch of bull$h!t

This is a bogus argument. People will just have to plan a bit more carefully to make sure that they get their medicines on time - something they should be doing anyway.

Posted by: adrienne_najjar | June 22, 2010 9:53 AM | Report abuse

Looks like CVS is looking for an excuse to increase its prices for prescription medicine! It won't fly. We know 99.9% of Americans can handle the very minor planning required by no mail delivery on Saturday.

Posted by: Rich393 | June 22, 2010 10:08 AM | Report abuse

"Three of the mail agency's largest customers, movie mailer Netflix, AT&T and Bank of America have yet to issue an opinion."

Netflix in particular should issue an opinion, since their business model is more time-sensitive. Their regional distribution centers are efficient in exchanging DVDs within a week. But cutting a day off the mail delivery schedule cuts it closer than some customers may like.

Posted by: RossEmery | June 22, 2010 10:13 AM | Report abuse

These retailers are the reason the postal system is in such a mess. For at least 30 years the appointed crooks at the postal service have insured that the junk mail from retailers was subsidized by 1st class mail. Anybody alive during the 50's and 60's remembers the circlar publishers hiring street people to deliver their flyers, and incidently the local druggist delivering our meds. The major marketeer's paid off the right people to get the post office to offer cheap delivery. It made the mail on a normal route go from about 15-20 pounds to 80-100 for each relay. This required many more letter carriers and made a once great job into a beast. This is what we always do. Subsidize peter to pay paul. Its time the post office charged actual cost for everything. Yes they would lose business at first, but it would eventually stabilize. I could just scream every time I have to carry my mail to the trash, knowing my letter to grandma subsidized the delivery of a flyer I didn't want for which I now have to pay to dispose of.

Posted by: bundies | June 22, 2010 11:44 AM | Report abuse

Mail order prescription subscribers already plan ahead - perhaps the pharmacies will have to adjust their order fulfillment schedules. CVS Caremark, for instance, tells subscribers it's 10 -14 days before you will receive your order, even when it's a routine refill. Notification of shipment is usually a week or more after submission. So, either it will take longer to receive, or cost more to speed up their fulfillment process.

Posted by: devaneya | June 22, 2010 12:29 PM | Report abuse

Couple of things ~ if you are elderly and live in a community with many elderly people, keep your eyes open for who gets drugs by mail.

Odds are good that they are getting many of the same things you do, so stock up before Christmas Fur Shur.

Now, after my "Steal This Book" session, be very aware that people receive very powerful medicines through the mail, and many of those medicines in the hands of a child could result in serious death or injury.

There's stuff going through the mail that should be restricted to the direct handling of the pharmacists, and go from them to the patients or the patient representatives.

Posted by: muawiyah | June 22, 2010 10:28 PM | Report abuse

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