Traditional retail pharmacies will need to evolve to meet the rising expectations of their patients around cost and convenience, industry leaders said.
Online competitors continue to try to siphon off sales of both prescription drugs and other products — from CBD and vitamins to greeting cards — but so far brick-and-mortar drug stores have met these challenges by investing in solutions, such as online ordering and delivery to drive-thrus and curbside pickup. They also are emphasizing their in-store services that differentiate them from online players.
An increasing number of competitors are entering the space, however, including, most recently, tech entrepreneur Mark Cuban. The “Shark Tank” star has invested in the newly renamed Mark Cuban Cost Plus Drug, which is promising “huge savings” on hundreds of generic drugs.
Before Cuban’s investment, e-commerce giant Amazon acquired PillPack in 2018, a deal that was feared to have the potential to disrupt traditional pharmacy.
Amazon was seeking to capitalize on inefficiencies in the traditional brick-and-mortar drug store industry by offering a more streamlined, low-cost model, according to a report from consulting and investment firm Back Bay Life Science Advisors.
“We see this less as the beginning of a new era for prescription drug distribution or the beginning of the end for traditional pharmaceutical chains,” Back Bay said in a report on Amazon’s pharmacy operations. “Instead, we see adaptation ahead.”
“I think everybody is trying to meet the customers where they want to be met and offering convenience,” he said.
Food and drug retailers have proven during the last two years that they are up to the challenge of meeting consumers’ evolving demands, said Steve Anderson, president and CEO of the National Association of Chain Drug Stores, or NACDS.
“Before and throughout the COVID pandemic, NACDS chain and associate members have remained focused on meeting the overall health-and-wellness needs of patients and consumers, as well as serving as a go-to source for an array of consumer products,” he said. “Over the past two years, the NACDS membership rose to the unique challenges presented by the COVID crisis — innovating boldly to meet changing consumer demands and mindsets, including changes in the way that consumers shop.
“This includes omnichannel, digital, click-and-collect, delivery and much more,” he said. “We have heard NACDS chain members say they have accelerated the development and deployment of new technology by several years.
“It also is worth emphasizing that throughout the pandemic, pharmacies have provided trusted, convenient and equitable access to services ranging from COVID testing to vaccinations for COVID, flu and many other vaccine-preventable illnesses,” Anderson said. “Services will remain a central and unique aspect of the pharmacy value proposition.”
Many food and drug retailers have been at the forefront of pharmacy innovation and have taken steps to compete against the threats of online players.
That could save both time and money, Sanchez said, describing retail pharmacy as “the lowest cost of entry into health care,” compared with urgent care clinics or physicians’ offices.
Sandra Canally, founder and CEO of The Compliance Team, which provides certifications for a variety of pharmacy services, agreed that traditional drug stores can compete with emerging online players by offering more clinical services.
“This is especially true for patients with chronic diseases that need extra attention,” she said, noting that these patients often spend more time visiting their pharmacist than they do their primary care doctors.
Immunizations, screenings and other face-to-face services are the kinds of offerings that distinguish brick-and-mortar retailers from online competitors, Canally said. Some pharmacies also have integrated their services with some primary care practices and leveraged the retail dietitians in their stores.
“These are all positive add-ons that can impact patient outcomes, and obviously are good for the pharmacy’s operation as well,” she said. “It’s all about expanding the business model. If you have the space for a nurse practitioner, or someone to meet with customers to do diabetic teaching, you’re expanding services to meet the needs of the patient.”
Pharmacies will continue to play an important role in helping patients manage their diseases and “keep them out of the emergency room,” Canally said.
Still, patient expectations around e-commerce have risen during the pandemic, said Eyad Farah, president of Health Mart and Health Mart Atlas, the independent franchise divisions of McKesson.
“Coming out of the pandemic, the biggest challenge to traditional pharmacies may simply be the expectations for convenience and customer service that people experience with online shopping,” he said. “Truthfully, these expectations are now patient demands, and they are increasingly being applied to health care as well.”
Patients are progressively accessing health care via digital channels, with a wider range of options for care and medications, Farah said. He noted that 84% of patients participated in a telehealth appointment in the last 12 months, according to the 2022 CoverMyMeds Medication Access Report.
Pharmacies need to consider the patient journey and the role pharmacy plays in that journey, he said. “While patients have higher demands, they still want a personal touch, whether virtually or in person, that only local, community pharmacies can provide with convenient, one-on-one quality care,” Farah said.
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He also said that while competition from digital pharmacies has grown during the pandemic, this trend has also created opportunities for pharmacies to implement solutions of their own that can improve convenience, speed and transparency.
“Pharmacies must address an omnichannel experience, offering both online and real-world ways for patients to access services and information that help them manage their health,” Farah said. “This could be as simple as a robust website with online refill capabilities, home and mail delivery, or creating two-way digital communication with patients via an app.”
The use of point-of-care diagnostic tools, including fitness trackers and smartwatches that can collect patient data and send it directly to pharmacists and other providers, has also been increasing, he said.
“Pharmacies must embrace remote monitoring and diagnostics, and rethink their digital capabilities to maintain and increase patient engagement opportunities,” Farah said. “Consumers are using virtual visits more than ever before and plan to continue using them past the pandemic.”
To help improve patient care through technology, Health Mart recently launched the Health Mart Digital Portfolio, a solution designed to help pharmacies attract new patients, highlight unique pharmacy services and build stronger relationships within the community.
Powered by Tabula Rasa HealthCare’s PrescribeWellness platform, the Health Mart Digital Portfolio provides pharmacies with a new suite of digital tools and services, including a consumer web portal and mobile application, to enhance pharmacy reach and patient outcomes via a multichannel online platform. It also includes a customer portal, giving pharmacies the ability to provide an easy-to-use prescription refill option for patients.