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December 2005           AVDA News l NAW l Financial News

Pedigree Papers: The Next Step for Compliance with the Prescription Drug Marketing Act  May Be the Most Costly for a Distributor

The Prescription Drug Marketing Act  requires states to pass legislation for the licensing of wholesale distributors. Part of this act includes the requirement for a wholesale distributor to provide an “Identifying Statement” to reflect the origin of a prescription drug. The term “Identifying Statement” later became known as Pedigree Paper, but implementation of the Pedigree Paper requirement has been delayed a number of times by FDA.

The FDA will not address the requirements of Pedigree Papers until the end of 2006 or the beginning of 2007. As a result, individual states have passed legislation that requires implementation of some form of a Pedigree, either in a paper format or an electronic format, before the Federal legislation becomes effective.  DETAILS

Update on Florida Legislative Effort

Your AVDA lobbyist has spent the last month securing co-sponsors for the AVDA Veterinary pedigree exemption bill. To date, we have seven House co-sponsors. In the Senate, we have secured four co-sponsors. In addition, we have re-confirmed that the Fla. Department of Health, AG’s office, Office of Drug Policy and Statewide Prosecutor as well as the Florida Veterinarians Association do not oppose the bill. DETAILS

AVDA NEWS

AVDA 2006 Annual Conference Focused on Growing Your Business in the 21st Century

Are you looking for innovative ways to grow your business in the 21st Century? Are you concerned about ever-changing laws affecting how distributors and their customers do business? Are you questioning why someone should do business with you instead of someone else? Do you need to find a unique way to evaluate customers, channel partners and employees, and improve your communications skills at work and at home? If the answer to any of these questions is “Yes!” then AVDA’s 2006 Annual Conference is the place for you. DETAILS

2005 Supplier Recognition Awards

The ballot package for AVDA's 2005 Supplier Recognition Awards will be mailed in February. The package will ask you to rate your suppliers on a five-point scale in several areas key to the distributor-supplier relationship relationship. AVDA will compile the results and recognize the top manufacturers in an effort to help all manufacturers understand distributors' needs and facilitate discussion on how to improve the distributor-supplier relationship.

Please take the time to participate when you receive your ballot package.

Time to Register for the University of Industrial Distribution

AVDA is pleased to once again co-sponsor the University of Industrial Distribution (UID). UID 2006 is a concentrated educational program focused on the unique needs of wholesale distributors. Known worldwide for excellence in education, UID is sponsored by the leading distribution professional associations, in cooperation with the Industrial Distribution Program and Indiana University/Purdue University. DETAILS

AVDA Welcomes New Board Members

AVDA welcomes two new board members to serve on the AVDA board as Active Member directors. Jim Bradley, President of Bradley Caldwell, Inc. based in Hazleton, PA, joined the board in August. Jim is serving out the term previously held by Ben Coe, formerly of Burns Veterinary Supply. Bradley’s term will expire in April 2008. Bradley Caldwell, Inc is a distributor of pet, equine, farm & home, animal health, lawn & garden, pond and wild bird items.

Bruce Peterson of Columbus Serum Co. was elected by the AVDA board in November to serve as an active member director to complete the term previously held by Mike Gerlaugh of Columbus Serum. Peterson’s term will also expire in April 2008.

Peterson is the president and co-owner of Columbus Serum with his brother Bob. Bruce previously served on the AVDA board from 1988-1999. Columbus Serum Co. is based in Columbus, OH and is a distributor of animal health products in 20 states.

Legal Update

AVDA's legal counsel, Keeley, Kuenn & Reid, provides updates on cases impacting the distribution industry. DETAILS

AVDA Board to Meet at NAVC in Orlando

The AVDA board will be meeting in Orlando, Florida in conjunction with the NAVC conference at the Gaylord Palms hotel. The meeting will be held on January 6, 2006. Topics for discussion will include an update on state pedigree laws and on AVDA’s lobbying efforts in Florida.

AVDA Program Update: Get paid in two days instead of 30, 60 or more

When customers pay by credit card, funds are automatically deposited at your local bank in just two business days. AVDA has teamed up with the National Association of Wholesaler-Distributors (NAW) and Solveras Payment Systems to provide members with the latest credit card processing technology. The program includes negotiated group discounts and a full range of processing options designed to improve your cash flow, including a secure virtual terminal that allows you to manage transactions from any computer with Internet access.

The savings members can realize with the negotiated rates may be significant, but the value of the program goes beyond that. It also gives AVDA members a professional resource to help them honestly evaluate their payment processing needs. In addition to the negotiated discounts, a key feature of the new program is the complimentary savings analysis. This professional service helps you determine the true cost of your current processing service and shows a real world comparison of the program savings.

Please call 1-800-613-0148 (toll-free) to take advantage of the free savings analysis and learn more about the new program’s benefits.

NAW NEWS

NAW Executive Summit Set for January 31

If you view 2006 as this decade’s finest potential business environment, then NAW’s Executive Summit, January 31- February 2, 2006, at the Fairmont Hotel in Washington, D.C., will help you capitalize on maximum profits for your company. DETAILS

IRS Issues Proposed Regulation: Income Tax Deduction for Certain U.S. Production Activities

On November 4, 2005, the Internal Revenue Service published proposed regulations in the Federal Register (70 Fed. Reg. 67220-67276) under Internal Revenue Code section 199, on the recently enacted deduction relating to domestic production activities. For background information please refer to the Background section of this Advisory. The proposed regulations expand on the initial guidance, Notice 2005-14, that was issued in January 2005. DETAILS

Lemelson Patents on Bar-Code Technology Held Unenforceable by Federal Appeals Court

Since 1992 hundreds of companies have settled Lemelson patent infringement claims and paid over $1.5 billion in licensing fees to the Lemelson Foundation.  On September 9, 2005, the U.S. Court of Appeals for the Federal Circuit ruled that the Lemelson patents are unenforceable. DETAILS

New Publication from NAW

NAW/DREF is pleased to release this new book: Outlook 2006: An Executive's Companion to Facing the Forces of Change. Outlook 2006 is a diverse collection of insights from a power-packed group of 10 wholesale distribution analysts, authors, educators, and consultants. DETAILS

AVDA FINANCIAL NEWS

Driving Sales Volume: Thinking Inside the Box

One of the oldest adages in the business is that “sales solves all problems.”  The reality is closer to “sales sure helps with a lot of problems.”  Either way, there is no denying the importance of sales volume in impacting distributor profitability. DETAILS

Closing the Profit Gap

For the first time in several years, profitability is on the rise. However, profit improvements are not being enjoyed in equal proportion by all firms. DETAILS

Statement of Confidentiality

Most owners of closely held firms rightly feel that their financial, operating and sales data are highly confidential. Profit Planning Group is extremely sensitive to this issue, and has developed secure methods of handling and protecting data submitted by firms for industry performance surveys. As the largest provider of profitability studies in the world, their procedures mandate that they maintain confidentiality of all client data. DETAILS

Distributor Profitability Trends from 2002-2004

The five exhibits in this report demonstrate how distribution organizations weathered the recession of 2002-2003 and recovered in 2004. On each of the exhibits, the “all distributors” number reflects the median results across forty different lines of trade where the Profit Planning Group collects data on an annual basis. DETAILS


© 2005 American Veterinary Distributors Association 

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Coming Events

March 5-8, 2006

University of Industrial Distribution

Indianapolis, Indiana

April 23-25, 2006

AVDA 2006 Annual Conference

Westin Mission Hills

Rancho Mirage, California

AVDA Staff

Executive

Director

Jackie King

443-640-1040 

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Director of Meetings & Member Services

Kaymie Thompson

443-640-1040 

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Financial Manager

Amy Chetelat, CAE

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