The Fixers: Health Mart advances as lifeline for hard-pressed independents

In an era of unprecedented threats to community pharmacy, they’ve been the canaries in the coal mine.

It’s a grim scenario, made all the more disturbing by the loss of another 1,152 owner-operated drug stores in 2006, the last year for which figures are available. But the 23,000 to 24,000 independent pharmacies that remain are nothing if not tough and resilient, and recently they’ve seen the emergence of some new and hopeful business solutions from their wholesale drug suppliers that can get them back in the game and open pathways to a healthier economic future.

The fastest growing of those new solutions is McKesson Corp.’s pharmacy franchise network, Health Mart. Under the direction of a 42-year-old, German-born McKesson veteran who seems to exude confidence, energy and passion in equal parts, Health Mart has exploded in size since it was recast two years ago as a high-tech, slickly merchandised and smartly designed community healthcare center. Backed by McKesson’s menu of retail programs and information technology—and by a sophisticated, chain-like approach to marketing and advertising—Health Mart stores are designed to gird independent operators against the perils of the modern retail marketplace through a combination of chain-like efficiencies and personalized patient care.

It’s a combination many of McKesson’s independent customers have embraced.

“We are about 1,850 Health Marts now, and we continue to grow at a fairly robust rate of about 30 to 50 a month,” declared Stefan Linn, senior vice president of marketing for McKesson and president of the Health Mart franchise.

That growth rate is remarkable, considering that the Health Mart network consisted of fewer than 300 stores two years ago.

Linn’s commitment to the nation’s largest and fastest-growing pharmacy franchiser—along with that of other McKesson team members who were critical to Health Mart’s rapid development over the past two years, such as Tim Canning, senior vice president of the independent segment—has given many beleaguered independent pharmacy owners a new lease on life in a cutthroat retail market dominated by ever-larger chains, such as Walgreens, CVS Caremark and Wal-Mart.

What Health Mart brings to the table is both a growing suite of back-end merchandising, marketing and store-support capabilities to help level the playing field with more muscular chain retailers and something a little less defined but just as real, said Linn: strength in numbers.

“It’s not just about the store itself, or the relationship between the franchisee and the franchisor, it’s also about the collection of stores,” he said. “Each one of these stores makes a commitment to each other by joining. So we think that by focusing on the leading stores, they’re getting the most out of the program, and they’re adding the most to it.”

Linn is quick to defer credit for Health Mart’s success to the team that runs the franchise operation, and to the McKesson people who develop and manage the sophisticated offerings that allow its franchisees to go head-to-head with big chains. Among those programs:

• McKesson Reimbursement Advantage, a data-driven modeling tool to help operators capture the highest possible prescription reimbursements in any given market;
• McKesson Patient Outreach Network, promoting medication adherence and pharmaceutical care to help independents strengthen patient relationships while reimbursing them for adherence services;
• A Medication Therapy Management program set to kick off this month in a test with the Wisconsin Pharmacy Quality Collaborative. The support program will help operators grow their businesses and get properly paid for the patient care they provide, according to McKesson; and
• The McKesson OneStop Generics Program is still one of the top generics purchasing programs among independent retailers, Linn stated. Last year, the company added an enhanced generic rebate program and extended price protection and dating.

The service includes a dedicated team of generics specialists through the McKesson OneStop GenericsConnect program.