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The transformative potential of at-home diagnostics for retail pharmacies

The market for at-home diagnostics is projected to surpass $8.15 billion by 2030, with pharmacies expected to capture significant revenue share.

Growth in at-home diagnostic testing is creating a new profitable category for retail pharmacies.  The market for at-home diagnostics is projected to surpass $8.15 billion by 2030, with pharmacies expected to capture a significant revenue share.

The at-home diagnostics surge presents a significant opportunity for retail pharmacists to grow revenue across the store, and offer consumers value through education, enhanced relationships, improved health outcomes and improving their own job satisfaction.  

At-home testing is well accepted by consumers given the frequent use of COVID-19 tests.  Consumers can access a growing suite of at-home tests: rapid antigen (immediate results) and at-home collection kits where the specimen is sent to a lab and results sent to the patient.

“Consumers are increasingly savvy about using at-home tests and well aware that getting the right diagnosis is key to getting the right treatment,” said Denise Conway, PharmD.  “We are now seeing a range of at-home tests for COVID, flu, sexual health and more tests are coming. As a pharmacist, I can help the patient choose the right test, and I can often provide convenient, accurate treatment.”

Enhancing the Customer Experience

Pharmacists will play a key role in helping a patient select the right test, and when possible, get them the right treatment. Opportunities for superior Pharmacist led customer care include:

  • Consumer Education with product selection and use:
  • Result Interpretation to understand results, clarify uncertainties, and advise on follow-up actions.
  • Personalized Health Advice as test results can inform discussions on medication management, lifestyle modifications, preventive care, and interventions.

“At-home diagnostics (with the exception of pregnancy tests) represent a relatively new category of in-pharmacy services…and adopted as a product sales opportunity”, said Jeff Lewis, PharmD, vice president of business development and clinical services for Profero, a pharmacy consulting firm. “However, tests haven’t been well-integrated into pharmacies as a service line opportunity – strategically aimed at improving both patient care and business revenue. This is a real opportunity.”

Capitalizing on At-Home Diagnostics Category Growth

Retail pharmacies fit well with at-home testing products, pharmacists are highly trusted by patients, offer convenient locations to purchase tests and provide solutions to treat patients. 

Leading pharmacy retailers are working with health plans to stimulate more at-home testing. Walgreens Health partnered with a major health plan to increase the use of at-home colorectal screenings. “The pharmacy was able to increase the rate of colorectal screenings up to 51% in underserved areas due to the support of pharmacists,” said John Driscoll, CEO of Walgreens Health. “Our pharmacies are providing an invaluable service in helping patients with early identification and health plans to lower costs and improve outcomes. As we continue to invest in automation, our pharmacists will be able to spend more time with patients. We believe pharmacists could take on more responsibility in the treatment,” said Driscoll.

Pharmacy retailers are using category management programs to increase the use and profitability of this category. Doug Field, chief revenue officer of PHASE Scientific Americas, manufacturer of the INDICAID brand of diagnostic tests, sees this as a high growth category.  “We are working with pharmacy retailers to educate them on this expanding category and help them increase their sales, and service to patients. We created a Category Enhancement Program for retailers: bundling product, merchandising, education, and care services, so they can maximize diagnostic offerings and care services to patients.”

Increasing care services is a priority for pharmacy retailers to provide distinctive experiences and improve their business model. CVS and Walgreens purchased Oak Street and Village MD respectively, and many other retailers have invested in convenient clinics. Rosalind Brewer, CEO of Walgreens said, “It was clear to me that traditional retail plus the pharmacy business is a very mature business, and at some point, we’re going to have to have another way to grow revenue.” 

By offering comprehensive testing services, at-home rapid antigen tests and at-home collection kits, leveraging partnerships and emphasizing convenience, retail pharmacies can enhance patient access, improve customer satisfaction and drive growth in this expanding market.

MaryKate Scott
MaryKate Scott

MaryKate Scott is a Principal of The Scott Group, a healthcare strategy consultancy serving health care systems, medical device and pharmaceutical companies as well as major retail pharmacies and convenient care clinic providers. Scott is a former McKinsey & Company Principal and Procter & Gamble marketer.  She wrote the original 2006 and 2007 peer-reviewed articles on Retail Clinics, published by the California Healthcare Foundation. She was an adjunct professor at the University of Southern California teaching The Business of Healthcare and sits on the board of several health organizations including an FQHC.

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