Pharmacy’s new era—in the home
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Customers of the $460 billion retail pharmacy sector are increasingly demanding a pharmacy experience that mirrors the rest of their retail experiences—omnichannel, convenient, and with home delivery at the center. 1 1. Adam J. Fein, “The 2021 economic report on U.S. pharmacies and pharmacy benefit managers,” Drug Channels Institute, March 2021, drugchannels.net; Victor Fabius, Sajal Kohli, Björn Timelin, and Sofia Moulvad Veranen, “ Meet the next-normal consumer ,” August 17, 2020, McKinsey.com; “The Update: How Walgreens’ customer-focused marketing is driving business growth,” Google, September 2020, thinkwithgoogle.com. While interests vary meaningfully across customer archetypes and can be segmented by various factors (for example, complexity of medical condition, digital experience preferences, and proximity to stores), our pharmacy market research has indicated that there are two key patient archetypes across the spectrum of experience. Making the experience right for these two groups will prepare pharmacies for a broader spectrum of customers.
Patients in one archetype, focused on convenience, are beginning to experiment with new, digital-first pharmacy entrants that facilitate in-home pharmacy experiences, especially during reflections on the COVID-19 crisis. 2 2. “The Update: How Walgreens’ customer-focused marketing is driving business growth,” Google, September 2020, thinkwithgoogle.com.
Customers in the other archetype—those with multiple chronic conditions—are seeking higher-touch clinical support models in the home and digitally, as well as wanting guidance from a trusted pharmacist in managing multiple medications. 3 3. Madison Como et al., “Pharmacist-led chronic care management for medically underserved rural populations in Florida during the COVID-19 pandemic,” Preventing Chronic Disease , July 30, 2020, Volume 17, cdc.gov. These developments put pressure on both pharmacy incumbents and new players attempting to define their future pharmacy value propositions. At the same time, these systemic changes present new focus areas for stakeholders across the value chain, giving players a chance to move quickly.
High-value patient archetypes
Two patient archetypes should be top priority for stakeholders: one that is primarily concerned with convenience, and one that desires an ongoing relationship with their pharmacist to support their chronic conditions and medication needs.
Convenience, convenience, convenience
The thought driving this archetype can be summed up as follows: “I want to spend as little time and energy as possible interacting with my pharmacy.” This tends to be the primary goal of young professionals, busy parents, active retirees, and others. Convenient, direct-to-consumer new pharmacy entrants are working to meet this need and, based on recent venture-funding rounds that value these players in the billions, are achieving early market traction. 4 4. Katie Jennings, “Digital health startup Ro raised $500 million at $5 billion valuation,” Forbes, March 22, 2021, forbes.com. A physician can prescribe a new prescription virtually, the customer pays online, and the prescription shows up a day later. In addition to providing convenience, delivery and medication synchronization (such as pharmacist coordination of refills) may improve medication adherence in certain use cases. 5 5. Alexis A. Krumme et al., “Medication synchronization programs improve adherence to cardiovascular medications and health care use,” Health Affairs , January 2018, Volume 37, Number 1, pp. 125–33, healthaffairs.org.
Clinical support for chronic conditions
Patients in the second archetype, in contrast, are looking for much-needed support from their pharmacy (and pharmacist) in managing and adhering to multiple medications. Their driving thought is “I have multiple medications, and I need support from a pharmacist I know and trust.” Polychronic and complex chronic homebound patients taking multiple medications often have adherence challenges and could benefit from a high-touch pharmacist model that includes, for example, adherence counseling and medication reconciliation. 6 6. Reyan Ghany et al., “High-touch care leads to better outcomes and lower costs in a senior population,” American Journal of Managed Care , August 28, 2018, Volume 24, Number 9, ajmc.com. In addition, complex chronic homebound patients are at a greater risk for high medical costs, including complications of chronic diseases. 7 7. Katherine A. Ornstein et al., “Epidemiology of the homebound population in the United States,” JAMA Internal Medicine , July 2015, Volume 175, Number 7, pp. 1180–6, pubmed.ncbi.nlm.nih.gov.
Why stakeholders may welcome the shift to home
The who, what, when, where, and how of pharmacy-care delivery is rapidly evolving: from traditional models to tech-enabled models, from in-person pickup to delivery, and from outpatient hospitals and clinics to the home. This shift may be welcomed by many stakeholders because e-commerce penetration in retail pharmacy is low relative to most other retail categories (exhibit).
A number of factors are driving the shift to in-home pharmacy care for convenience seekers:
- Demand tailwinds: The market has experienced a meaningful increase in consumer preference for home options during the COVID-19 crisis, with likely stickiness as normal activity resumes. 8 8. Victor Fabius, Sajal Kohli, Björn Timelin, and Sofia Moulvad Veranen, “ Meet the next-normal consumer ,” August 17, 2020, McKinsey.com.
- Tech-driven innovation: There has been substantial growth in tech-driven product and service-delivery models (for example, digital pharmacy and direct-to-consumer virtual care clinics) that are penetrating traditional channels and supporting the shift to home. 9 9. Heather Landi, “In a competitive digital health market, startups move to add new medication delivery services,” Fierce Healthcare , March 8, 2021, fiercehealthcare.com.
In addition to demand tailwinds, several major factors are driving the shift for those needing clinical support for their chronic conditions:
- Growth in homebound populations: The market has seen material growth in homebound populations, including those eligible for Medicare and those with intellectual and developmental disabilities (IDD), as well as an expansion of managed Medicaid and managed dual-eligible patients. 10 10. Katherine A. Ornstein et al., “Estimation of the incident homebound population in the US among older Medicare beneficiaries, 2012 to 2018,” JAMA Internal Medicine , May 26, 2020, Volume 180, Number 7, pp. 1022–1025, jamanetwork.com.
- Payer actions: Finally, there has been a rise in new medical-necessity and reimbursement policies and innovative programs from payers (for example, the Centers for Medicare & Medicaid Services’ Acute Hospital Care at Home) that have shifted care from hospitals, facility-based settings (for example, long-term acute care hospitals and skilled nursing facilities), and doctor’s offices and clinics to the home. 11 11. “Acute Hospital Care at Home Program: Approved list of hospitals as of 4/5/2021,” Centers for Medicare & Medicaid Services (CMS), April 5, 2021, cms.gov.
The challenges of moving the pharmacy into the home
Several challenges of serving the pharmacy market have delayed this move into the home:
- Pharmacy is more than drug fulfillment and delivery. New entrants have quickly shown they can offer drug fulfillment and two-day delivery. However, many patients rely on clinical support from their pharmacists. This can manifest as medication review and reconciliation, as adherence counseling, as limited prescribing, and, even more broadly, as disease management. 12 12. Patti G. Manolakis and Jann B. Skelton, “Pharmacists’ contributions to primary care in the United States collaborating to address unmet patient care needs: The emerging role for pharmacists to address the shortage of primary care providers,” American Journal of Pharmaceutical Education , December 15, 2010, Volume 74, Number 10, ncbi.nlm.nih.gov. To offer these services at home requires a fleet of pharmacists who can meet patients where they are, telepharmacy systems, or both.
- The unit economics of this sector are challenging. 13 13. Elizabeth Seeley and Surya Singh, “Competition, consolidation, and evolution in the pharmacy market: Implications for efforts to contain drug prices and spending,” Commonwealth Fund, August 12, 2021, commonwealthfund.org. Competitive cost of goods sold (COGS) and reimbursement rates often come with scale, and it can take new entrants meaningful time to establish themselves.
- Today’s in-home offerings from digital disrupters can be limited depending on the prescription need. For example, offerings may not include Schedule 2 narcotics, may only focus on one- or two-day delivery (for example, exclude difficult-to-deliver but immediately needed acute scripts), and may not always offer both traditional and specialty (low-volume but high-value) drugs simultaneously.
Implications for pharmacy incumbents and new entrants
The recent systemic changes in the market present risks for players across the pharmacy value chain. The new, consumer-focused digital disrupters have strong advantages given the newness of their systems, their speed and agility, and their customer-centric foundation. 14 14. Heather Landi, “NowRx, Medly Pharmacy land new funding as demand for digital pharmacies grows,” Fierce Healthcare , July 17, 2020, fiercehealthcare.com. However, incumbents are also well positioned given their existing platforms, high volumes, and large customer bases in a business that depends heavily on volume. Yet these same incumbents will likely need to do more to stay ahead of the competition. While national retail pharmacy chains have begun to offer home delivery (for example, free one- or two-day delivery with same-day delivery for an additional fee), it is not yet clear whether they will keep up with the delivery speed and experience of new e-commerce players. 15 15. “CVS Pharmacy prescription delivery now available from all locations nationwide,” CVS Health, June 19, 2018, cvshealth.com. To be successful in this market, incumbents will likely need to fundamentally rethink their existing processes, workflows, technologies, and systems so that they can engage the various customer archetypes in the settings and locations most important to them.
Potential actions in the next normal
Payers have an opportunity to build partnerships across the physical and virtual continuum to create a more coordinated healthcare ecosystem, to improve patient experience, and to drive down the cost of care. Partnerships with a direct-to-consumer pharmacy—likely an attractive offering for the highly convenience-oriented customer archetype—could create a differentiated experience that drives growth and retention. Payers also have an opportunity to improve ratings by partnering with digital pharmacies to close care gaps, improve adherence, and manage multiple medications.
Finally, payers have the opportunity to bundle intensive clinical-care models with mail-order pharmacy capabilities, meeting the needs of patients with chronic conditions. Payers are increasingly focused on chronic care and disease management—driven in part by the shift toward risk-bearing and integrated-care-delivery models—and are often willing to reimburse for in-home clinical services. 16 16. Christian Worstell, “Does Medicare cover home health care?,” MedicareAdvantage.com, February 23, 2021, medicareadvantage.com.
Success in this space will likely require core pharmacy assets (for example, the ability to sort and repackage medication, to deliver directly to patients at home, and to provide on-demand pharmacist consultations) coupled with direct-to-home assets and access to home health agencies and providers, for example.
Systemic changes have fueled new types of services for key patient archetypes and focus areas for stakeholders across the pharmacy value chain. While near-term pressures may exist for both incumbents and new entrants, those that move quickly will be able to make substantial progress in these focus areas.
About the author(s)
Adam Apfel is a partner in McKinsey’s Boston office; Sarah Lorenzana is an associate partner in the Washington, DC, office; Alec McLeod is an associate partner in the Miami office; and BJ Tevelow is a senior partner in the Miami office.
This article was edited by Elizabeth Newman, an executive editor in the Chicago office.
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Amazon Pharmacy: Distraction or Disruption?
- Bradley Boucher, PharmD
After years of anticipation, Amazon Pharmacy launched in November 2020. The question is now: Is this market entry a disruption, a distraction, or something in between?
After years of anticipation about Amazon’s rumored entry into pharmacy, Amazon Pharmacy launched in November 2020. What is yet to be understood is whether this new Amazon offering is a true market disruption capable of upending the pharmacy industry. This commentary describes the epic rise of Amazon from bookseller to retail giant, leading to its entry into the retail pharmacy space. Amazon Pharmacy’s business model is described and its potential for industry disruption discussed.
Am J Manag Care. 2021;27(8):e251-e253. https://doi.org/10.37765/ajmc.2021.88719
Takeaway Points
Although the much-anticipated entry of Amazon into the pharmacy industry will undoubtedly force large chain and mail order pharmacies to revamp their “patient-centered” and “customer-friendly” approaches, it does little to affect underlying inefficiencies in the prescription drug supply chain. Amazon Pharmacy will likely:
- not be a crushing blow to brick-and-mortar pharmacies,
- represent a severe threat to traditional mail order pharmacies due to the brand loyalty and convenience of an Amazon platform, and
- challenge the status quo pharmacy customer experience.
After years of anticipation about Amazon’s rumored entry into pharmacy, 1 Amazon Pharmacy launched in November 2020. The question is now: Is this market entry a disruption, a distraction, or something in between?
Amazon’s path toward pharmacy began in the mid-1990s as a bookseller. Before Amazon, customers were limited to brick-and-mortar stores with limited inventory and no convenient means of searching for the book they needed. 2 Amazon grew rapidly through the late 1990s. This infrastructure allowed Amazon to expand into and eventually dominate other retail segments, such as electronics. 3 Today, Amazon is a $1.8 trillion company and is often hailed as an unstoppable giant and a threat to large and small businesses everywhere. Although this is largely a true statement, Amazon is not invincible—it has, in fact, retreated quietly from several industries, including restaurant and grocery order delivery and fashion, and failed to upend others like grocery stores. 4
To understand the potential impact of Amazon Pharmacy on US brick-and-mortar pharmacies, it is important to first dissect this new venture. Amazon Pharmacy is a combination of several existing business models: (1) retail mail order pharmacy, (2) discount card programs, and (3) membership programs. At its core, Amazon Pharmacy is a mail order pharmacy that offers consumers the ability to fill new and refill prescriptions through its existing Amazon.com platform (including the use of third-party payer contracts). The pharmacy operates under federal and state regulations and follows the same state board of pharmacy regulations as any other pharmacy. 5
Fundamentally, these elements are not a significant departure from the status quo; however, it is important to note that Amazon Pharmacy’s inclusion of a prescription discount benefit alongside its pharmacy services is a first. To fully appreciate what this means, one must first differentiate a discount benefit program from prescription drug discounts. A discount benefit program uses existing pharmacy benefit manager (PBM) network contracted rates with pharmacies (eg, Cigna, Express Scripts). Patients without insurance can use the program to access the same PBM negotiated prices as patients within that prescription insurance network. In this way, by leveraging these previously negotiated discounted rates, Amazon’s system essentially duplicates the GoodRx prescription discount card business model. In the case of Amazon Pharmacy, only the Express Scripts PBM network will be used to administer its discount benefit program.
This is in contrast to prescription drug discounts offered by the pharmacy on the list price of the prescription drugs that it sells. Amazon’s choice to not directly discount drug prices means that it was unsuccessful in its attempts to transform the drug distribution channel. Instead, it depends on a discount benefit program model that relies on existing PBMs, which ultimately may escalate overall prescription drug costs. 6 In other words, the foundation of Amazon Pharmacy is built firmly on the status quo.
A true supply chain disruption would focus on low-cost generic prices and pass discounts directly to patients—but this is not what Amazon has done. Rather, Amazon Pharmacy offers discounts through third-party PBM networks, which will still take a portion of sales and inflate the overall cost of pharmacy services. Disrupting supply chains by streamlining lean processes and eliminating waste to generate lower prices and a more customer-centric experience is what made Amazon a leader in other retail spaces; its inability to do so here may speak volumes.
When taken together, what Amazon has done here more than anything else is repackage existing business models into a presumably more attractive package with Amazon branding. This is not to downplay the impact that Amazon Pharmacy may have on the industry. To Amazon’s credit, it recognizes that a pharmacy encounter can be a confusing and non–user-friendly experience for patients given its odd, and sometimes unhappy, marriage of retail, health care, and strict regulatory duties. 7 Amazon’s obsession with customer experience may force other pharmacy industry leaders to follow suit with an equal focus on improving the overall experience of its patients. 8
Although Amazon Pharmacy is an attractive solution to what otherwise may look like a stale industry in need of disruption, there are reasons to believe that Amazon Pharmacy may not be a one-size-fits-all solution for patients. A product or service is more than just what it appears to be or do at first glance. In fact, it is a solution for several “jobs to be done.” This idea, popularized by the late Harvard Business School professor and author Clayton Christensen, postulates that a product serves 3 core dimensions: (1) functional, (2) social, and (3) emotional. 9 In other words, when someone purchases a car, for example, they do so not merely to travel from point A to point B. In truth, the car may also represent status (eg, Cadillac, Range Rover) or social desirability (eg, Ford F-150, Tesla, Toyota Prius).
Amazon Pharmacy may have a disproportionate focus on the functional component of the pharmacy while ignoring important social and emotional ones. For instance, community pharmacists are often touted as the most accessible health care professionals. 10 Despite sometimes negative media portrayals, 11,12 overall patient perceptions of community pharmacists as trusted and desired sources of information are high. 13 For other patients, the pharmacy itself is a social destination and the in-person experience is of more value than convenient mail order options. 14-17
This demand for multiple “jobs to be done” is likely a function of the various pharmacy customer segments. CDC data indicate that whereas 46.7% of those aged 20 to 59 years used a prescription drug in the last 30 days, the number rises to 85% of those 60 years and older. 18 Compare this with Amazon’s current customer makeup: Almost 50% are aged between 25 and 44 years, and less than 10% are older than 65 years. 19 In Amazon’s current pharmacy offering, assuming that prescription prices are essentially equal for most patients (ie, co-pays), then the battle for customers here will likely be over social and emotional jobs to be done.
Consumer data may truly point to a potential demand for an Amazon pharmacy but may overlook nuanced patient preferences. For example, a prescription refill service with doorstep delivery may be where voice-of-customer data lead Amazon, but what may be missed is the relatively high frequency with which a patient needs to urgently fill a prescription medication with short notice. Moreover, behind-the-scenes services that customers are unaware of, such as PBM prescription claim adjudication troubleshooting, are routinely resolved quickly and without a patient’s knowledge. Queuing problems using dedicated customer service representatives may not be an effective solution for customers who expect these problems solved in a matter of moments while one “waits.”
Lastly, Amazon Pharmacy ignores recent growth in demand for convenient, pharmacy-based clinical services. The number of health care services available via the community pharmacy has grown exponentially over the past decade, and overall satisfaction is high. 20-23 The accessibility of the community pharmacy as a place for acute care has been further emphasized during the COVID-19 pandemic as federal government agencies have continually granted traditional pharmacies expanded scope of practice and partnership to improve infectious disease testing and prevention through vaccination. 24-26 Such a response is driven at least in part by the ubiquity of these health care access points: In the United States, community pharmacies are health care destinations visited by patients more than anywhere else. 27
Herein lies the crux of the argument against Amazon Pharmacy as a force of disruption: Amazon Pharmacy imagines that the service that customers desire is a cheaper drug product delivered more quickly, whereas emerging data suggest that what customers desire is more convenient health care access in their community. 28 Rather than shifting the pharmacy industry to an Amazon delivery model, patients want a shift of the health care system to a convenient care model.
So if not a source of disruption, is Amazon Pharmacy simply a distraction? More than likely, Amazon’s move into the pharmacy space is somewhere between the two. It will likely not be a crushing blow to brick-and-mortar pharmacies as previously predicted. Nevertheless, it does represent a severe threat to traditional mail order pharmacies due to loyalty to the Amazon brand, the convenience of an Amazon platform, and a substantial proportion of the US population already choosing mail order as its primary pharmacy. 29 For both mail order and community pharmacy alike, Amazon will challenge the status quo pharmacy customer experience. The most likely of scenarios is not a contraction of brick-and-mortar pharmacy locations throughout America, but instead a forced period of reimagining a better pharmacy experience for patients. This may in the long run not be a bad thing for the pharmacy industry, which has struggled to adapt to 21st century technology. Overall, Amazon Pharmacy’s initial splash will likely be more a function of novelty rather than of a true change in patient preferences.
In conclusion, the much-anticipated entry of Amazon into the pharmacy industry will undoubtedly force large chain and mail order pharmacies to revamp their “patient-centered” and “customer-friendly” approaches. As such, this largely represents not a disruption in pharmacy but a “forced opportunity” to improve the overall pharmacy experience. Until the underlying inefficiencies and waste in the drug supply chain, including drug rebating and increasing administrative costs, are addressed, true innovative pharmacy disruption is only fiction. n
Author Affiliations: University of Tennessee Health Science Center College of Pharmacy, Nashville (KCH, JG) and Memphis (BB), TN.
Source of Funding: None.
Author Disclosures: Dr Hohmeier has received grants from Merck, GlaxoSmithKline, and the NCPDP Foundation. Dr Gatwood has received grants from Merck, GlaxoSmithKline, and AstraZeneca. Dr Boucher reports no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.
Authorship Information: Concept and design (KCH, JG); analysis and interpretation of data (BB); drafting of the manuscript (KCH, JG, BB); critical revision of the manuscript for important intellectual content (KCH, JG, BB); administrative, technical, or logistic support (KCH); and supervision (KCH).
Address Correspondence to: Kenneth C. Hohmeier, PharmD, University of Tennessee Health Science Center College of Pharmacy, 301 S Perimeter Park Dr, Ste 220, Nashville, TN 37064. Email: [email protected]
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6 Ways Amazon Plans to Disrupt the Pharmacy Business
Amazon’s pharmacy plans include rapid expansion into the trillion-dollar healthcare care and insurance sector, creating a buffet of healthcare-related acquisitions, rolling out expedited drug shipping, and drug discounting–and perhaps shaping the pharmacy of the future.
Established in 1994 by Jeff Bezos, Amazon has burgeoned from a little-known online bookstore to become the world’s largest e-retailer, with its product portfolio now including everything from diapers and baby food to healthcare and home cleaning services.
This Seattle-based retail giant is always at the forefront of technology and business innovation, with nifty projects like drone delivery service Prime Air and smart speaker assistant Alexa rocking the consumer and business worlds alike.
On its remarkable way to becoming one of the most valued brands in history, Amazon has made a vigorous foray into nearly every market, including logistics, apparel & clothing, electronics, cloud computing, government services, education … the list goes on and on.
More recently, however, Amazon has made major inroads into the heart of the American healthcare industry, causing a seismic shift in the world of the drug prescription and supply chain. It all started in 2018 when it paid a steep price of nearly $1 billion to acquire the mail-order online pharmacy PillPack , outbidding its closest rival Wal-Mart.
With the purchase of PillPack, Amazon not only set its eyes firmly on the retail pharmacy business, but it’s also slowly including branding.
Amazon’s branding strategy started with the online pharmacy’s name change to ‘PillPack by Amazon Pharmacy. ’ In this respect, PillPack is, in essence, being transformed into an Amazon Pharmacy brand, thus effectively becoming able to take on market leaders like CVS Health, Wal-Mart, and Walgreens Boots Alliance (WGA), amongst others.
We’ve put together this explainer article to present a holistic view of how Amazon is planning to cause major disruptions in the pharmacy industry.
The Pharmacy Market: Why Amazon Wants to Dig In
The US pharmacy market alone is worth a whopping $312.6 billion , with an uptick of roughly 3 percent from 2018. Across the pond, the UK pharmacy sector is estimated to be valued at $15.52 billion and is growing steadily at an annual rate of 2 percent.
Of all pharmacy industry sectors, the online pharmacy business is the one that’s driving rapid market growth almost exclusively. Today, the global online pharmacy business is a mammoth of an industry, expected to grow at a CAGR of 14.26 percent to reach $107.53 billion by 2025, according to Zion Market Research .
CVS Health, one of the market leaders, announced annual revenues of $64.81 billion after its acquisition of global health insurer, Aetna . The online pharmacy wing of the Fortune 500 Company has grown exponentially since adding Soma.com to its portfolio.
The remarkable growth of CVS Health in the past few years is a clear indicator that the US public has an insatiable demand for online pharmacy services.
However you look at it, the online pharmacy sector is a huge market worth billions of dollars, and Amazon wants its piece of the pie. Its major retail competitors Target, Costco and Wal-Mart have all implemented in-store pharmacies.
In each of the 50 US states, PillPack holds a pharmaceutical license, which will act as a perfect springboard for Amazon to establish its physical footprint faster and far more effectively. With Whole Foods in its fold too, the retail company will have no trouble setting up in-store pharmacies to complement PillPack’s online business.
Amazon’s foray into the pharmacy realm is, in part, because the US healthcare and insurance industries are riddled with inefficiencies. As a company that made its name primarily because of its hyper-focus on customer service and efficiency, Amazon is a match made in heaven for the retail pharmacy business.
Considering the market opportunity and size, as well as its dominant position as an innovator, it’s not difficult to understand why Amazon wants to dig into the pharmacy industry.
Why Would Amazon Take Over the Pharmacy Market?
Clearly, the e-pharmacy sector would be an excellent fit for the retail giant, and it definitely seems as though Amazon is gearing up to conquer the market. But the bigger question is: why would this e-commerce behemoth want to take over the pharmacy market?
Let’s find out why, shall we?
Amazon and PillPack are built for efficiency and superior customer experience .
Since its inception, Jeff Bezos has always pivoted Amazon on the principles of excellent customer service, unmatched efficiency, and greater choice. That’s exactly what the problematic pharmacy market needs right now.
The existing pharmacy supply chain in the United States is replete with middlemen , highly convoluted, and jam-packed with unnecessarily complex business models. For instance, did you know that a drug has to pass through at least three parties from the drug-maker to the patient?
The trouble is that each middleman hives off a percentage of the profit, inflating the final price that the payers and the patient will pay. The e-commerce giant has the technology, ethos, and framework to streamline the entire pharmaceutical supply chain and rally the overall experience for the drug makers, insurance companies and patients.
This is why Amazon paid top dollar for PillPack. The online pharmacy brand is a darling of the customer, scoring 80 points on the NPS scale , dwarfing a pharmacy median of 26.
Amazon has the capacity to greatly discount drug prices for cash-pay customers .
Cash-pay prescriptions account for about $250 million annually, a figure that Amazon is eyeing jealously, knowing they can capitalize on it by providing cash-paying patients with deeply discounted prices via PillPack.
As you might expect, cash-pay prices tend to vary from one pharmacy to another, which is why it’ll be a good ground for Amazon to test its pharmaceutical products. Of course, Amazon has to invest heavily in the hefty component of the supply chain to be able to offer cheaper cash-pay prices than health insurance companies offer.
Amazon can take advantage of Whole Foods’ ground presence .
As mentioned, Wal-Mart, CVS, Costco, and Target all have in-store pharmacies that can help them fill same-day prescriptions.
In order to reinforce PillPack’s mail-order pharmacy service, Amazon will have to set up in-store pharmacies in Whole Foods, or partner with retail pharmacies. Alternatively, the company can build an independent retail pharmacy.
Employers are urgently seeking better alternatives to the currently convoluted PBM model.
The PBM managers’ job is to negotiate rebates from drug manufacturers and design benefit plans. However, the existing PBM model is complicated by middlemen.
In a recent survey involving over 80 large US employers in the US, 70 percent of the respondents claimed that they were willing to switch to an alternative to the current PBM model. Approximately 30 percent reported they didn’t understand their contract with their pharmacy benefits managers .
Amazon can provide the same benefits and functions conventionally offered by PBMs to both healthcare providers and small health plans. The beauty of it all is that Amazon that can do this at a near-zero margin because these services are complementary to its retail pharmacy segment.
Amazon’s last-mile delivery network is its biggest perk.
The e-retail company has already developed an elaborate shipping and delivery system that will integrate smoothly into its pharmacy supply chain ambitions.
Amazon is almost DSCSA-ready.
The DSCSA (Drug Supply Chain Security Act) coming into force in 2023 requires that all pill bottles should be traceable from end to end. Additionally, all parties involved in the pharmacy supply chain should be part of a universal interoperable tracking system.
In addition to pharmacy licenses held by PillPack in all 50 US states, Amazon has also applied for wholesale pharma licenses. That means Amazon only requires a manufacturer’s license to be able to get medication from start to finish without stepping outside of its supply chain.
With a robust logistics framework and the requisite licenses, the company could run a fulfillment system for healthcare companies much like the existing Fulfillment by Amazon (FBA) service. More importantly, it can meet all interoperability and tracking requirements called for by the DSCSA.
No matter how you look at it, Amazon can easily take over the pharmacy market. Perhaps the only absent thing is the cold-chain system enabling Amazon to legally and safely transport pharmaceutical drugs.
Amazon Healthcare-Sector Acquisitions
Before Amazon can take over the pharmacy sector, it must first find its footing in the market. In the past few years, Amazon has been positioning itself to compete in the pharmacy space via strategic acquisitions.
PillPack is Amazon’s biggest acquisition in healthcare yet, with a reported price tag of $753 million. A mail-order e-pharmacy company with licenses in all fifty states in the US, PillPack’s target audience is patients with the need to manage chronic and complex ailments such as diabetes.
For a couple of years, PillPack has been cultivating an amicable relationship with this crucial patient segment and is expected to make an average of $5,000 per annum per patient for Amazon in both cash and insurance payments.
At the core of its business, PillPack fills prescriptions for these patients in single-dose, pre-sorted packages supplying all required medication. Furthermore, each package delivered by the company comes with a description of the appropriate dose, plus times and dates on which the meds should be taken. This helps with the growing headaches of medication adherence and over- or underdosing.
From a business standpoint, PillPack’s purchase is a clear step forward for Amazon to make its road into the pharmacy industry. It is no wonder the move triggered panic across the spectrum, from those in the supply chain to the actual healthcare systems.
PillPack services will also be extended to Amazon employees, helping the company reduce overhead, much akin to what health systems do for their staff. The pharmacy company will also put Amazon in a more advantageous position to negotiate with employers, PBMs, payers, and even healthcare providers.
Health Navigator
In October 2019, Amazon announced that it had reached an agreement to acquire Health Navigator for an unnamed sum. The healthcare start-up offers API tools for the medical sector.
Providing online symptom-pairing and triage tools to healthcare companies looking to direct patients to the right place–especially from call centers–the online retail giant will include Health Navigator in its Amazon Care clinics, as well as integrating it into PillPack’s existing pharmacy services.
Haven – A Joint Partnership with JPMorgan Chase and Berkshire Hathaway
For Amazon, Haven isn’t an acquisition per se. It’s a joint venture with JPMorgan Chase and Berkshire Hathaway and is focused on improving healthcare for their employees and reducing healthcare costs.
Amazon entered into this partnership and soon hired a raft of healthcare professionals including veteran cardiologist Maulik Majmudar as its CMO, and Martin Levine , Iora Health’s former medical director.
Haven will help guide future moves by Amazon into the space of pharmacy benefits management, drug-discounting, and much more.
The Amazon Pharmacy Differentiator
The timely purchase of PillPack seems more like Amazon’s first step toward disrupting the pharmacy business. With PBMs presenting the biggest challenge, it’s upon Amazon to differentiate itself in the market.
Amazon is already known for its razor focus on hassle-free experiences, personalization, and ease of use, but the following are additional ways the company would be different from other pharmacies.
1- Amazon Boasts a Large, Loyal Customer Base
Amazon’s hyper-focus on customer service, personalization, and creating never-seen-before experiences has paid off big time. With a market valuation of close to $1 trillion, Amazon certainly packs a punch when it comes to customer satisfaction.
Today, Amazon boasts more than 310 million active customers . Even better, it has over 100 million members in its much-hyped Amazon Prime. Following the acquisition of PillPack, that’s more than 100 million loyal customers to whom other pharmacy companies might have said goodbye.
In some ways, Amazon’s more notable differentiator is its interactive and fiercely loyal customer base. When the e-retailer needs consumer feedback and honest opinion, it can get it in a jiffy.
Other pharmacy firms, on the other hand, may have to spend oodles of cash on market research companies to find out if their business models work. So, in a broader sense, Amazon’s entry into the healthcare industry poses a major threat to pharmacy companies, PBMs, and healthcare systems at large.
2- Home Delivery of Pills
Amazon has one of the world’s more extensive and innovative logistics infrastructures. At the moment, 77.6 million Americans reside in an area where free same-day delivery is available via Amazon Prime, as per CB Insights . As if that isn’t incredible enough, more than 45 percent of US households live within a few miles of an Amazon fulfillment node, up from approximately 2 percent in 2005.
The allure of fast shipping services such as Amazon Prime same-day delivery is that it’ll allow for expedited home delivery of pills. This, in turn, could help remove the middleman from the pharmacy supply chain.
In other words, the huge logistics infrastructure of Amazon would easily enable the company to ship drugs directly to the patient, eliminating the need for them to go to local pharmacies and drugstores. They won’t even need to go to a drop-off point to pick up prescriptions.
This is a business luxury that existing pharmacy businesses don’t enjoy, giving Amazon the head start in the market.
3- Ability to Offer Discounted Drug Prices
Since day one, cheaper pricing has worked in favor of Amazon. In its formative days, the company helped dethrone sinfully expensive college-textbook business models, and the existing inflated pharmacy pricing won’t be a big deal, either.
In saying that, the company’s ability to provide cash-pay customers and payers with drugs at much cheaper prices will be a significant differentiator for Amazon.
First of all, the retailer could employ its vast purchasing power to offer discounted prices of both generic and brand-name medications, which will be especially attractive to cash-pay patients. Furthermore, the company has the upper hand when it comes to negotiating with health insurance companies and drug makers.
4- Superior Customer Experiences
As we’ve stated, personalization and the ability to create amazing customer experiences are perhaps the most lethal weapons in Amazon’s competitive arsenal. Coincidentally, the US healthcare industry is fast moving toward a patient-centric model.
In this approach, patients no longer see themselves as just patients . They view themselves as consumers of healthcare, and the same is true for the pharmacy industry. These patients want to be treated as part and parcel of the healthcare brand, just like Amazon Prime members. On the contrary, existing PBMs and pharmacy companies are not exactly known for their customer service or experiences.
Amazon has a bevy of cutting-edge technologies it can leverage to put patients right at the center of care, not to mention the convenience of virtual care options offered by Amazon Care clinics and PillPack.
5- Amazon’s Holistic Approach to Healthcare
Americans consumers are tired of a disjointed healthcare system where they have to get care and drugs from different entities. That’s where Amazon brings its A-game.
Already working tirelessly to create a wholesome or one-stop-shop for every healthcare need the patient might have, Amazon is rounding up its team, tools, and resources to cater to everything, from diagnostics and treatment to wellness and recovery.
For instance, Amazon has partnered with several developers and healthcare firms to empower its AI assistant Alexa to be able to help with chronic disease management. With PillPack, Alexa can help automate the entire process, scheduling prescriptions and the delivery of medications as required.
One of the company’s top priorities will most probably be to enhance the customer experience for patients looking to shop for drugs. Amazon can do this by allowing patients to buy or request prescription refills using Alexa.
Don’t forget that most shoppers looking to fill their prescriptions often pick up other wellness products and consumables. This is an area in which Alexa can come in handy.
When Alexa become HIPAA-compliant, this will be a huge differentiator for Amazon in the pharmacy space.
Amazon and the Pharmacy of the Future
Rising costs of care and pharmaceutical drugs are forcing patients and health plans to consider the available alternatives. The existing pharmacy supply chain is middlemen-heavy and prohibitively expensive.
The entry of newer, more agile and more ambitious players like PillPack by Amazon Pharmacy is both a huge wake-up call for the industry and a new dawn for consumer-centric healthcare per se.
The key strategy for provider-run pharmacies is to spruce up quality and lower costs through better healthcare continuity. On the other hand, insurer-owned pharmacy wants to create a central place for managing healthcare benefits and pharmacy in a holistic manner.
By refining PillPack and going on an acquisition spree, Amazon envisions a pharmacy market that prioritizes usability, personalization, and patient experiences. For instance, Amazon’s PillPack partnered with design company IDEO to craft the ultimate drug packaging that boosts medication adherence.
Of course, Amazon also wants to hinge its pharmacy business on efficiency and its customer-first approach. In this regard, the company will compete fiercely with other pharmacy firms on convenience and cost.
Amazon’s same-day delivery will help improve consumer experiences for patients. By undercutting middlemen currently bloating the pharmacy supply chain, it can also greatly reduce prices, a move that will appeal the most to cash-pay patients.
The pharmacy industry is a massive market worth more than a staggering $312 billion in the US alone, with a projected annual growth rate of 3 percent.
Comparatively, the UK pharmacy market is valued at a whopping $15.52 billion and is also anticipating steady growth by over 2 percent.
These are the outstanding numbers that Amazon was eyeing when it paid around $753 million to acquire PillPack, the premier mail-order drug delivery company. With this acquisition, Amazon plans to make a massive foray into the pharmacy industry.
There’s a myriad of plausible reasons why Amazon wants to take over the pharmacy market. First of all, the company has built a clean track record for focusing on experiences, personalization, and efficiency.
As a customer-centric brand, Amazon will be able to streamline the pharmacy supply chain that’s replete with convolutions, complicated business models, and expensive intermediaries.
Amazon’s acquisition of Whole Foods may also work in its favor when it comes to creating a physical presence in the pharmacy industry. The company is also an efficient cost reducer, a trait that’ll play a crucial role in bringing down the costs of pharmaceutical products.
To cement its position in the pharmacy market, Amazon has made a series of acquisitions in the healthcare space, most notably the close-to-$10-billion purchase of online pharmacy PillPack, acquisition of health tech startup Health Navigator, and Haven, its joint venture with JPMorgan Chase and Berkshire Hathaway.
What makes Amazon stand out in the pharmacy market? The key differentiators include its 100-million-strong army of loyal Amazon Prime members, the ability to offer expedited pill delivery, and superior customer experiences.
Amazon’s Alexa, its innovative line of smart speakers, and its massive logistics infrastructure will also help the company differentiate itself in the pharmacy market. It also helps that Amazon has a massive purchasing and negotiation power across several industries, a quality that will help the company offer highly discounted drug pricing.
It’s clear that Amazon will play a critical role in shaping the future of the pharmacy business. By availing prescription prices to patients through its platform, Amazon’s PillPack will entice consumers to shop around for prescriptions based on pricing.
Overall, Amazon Pharmacy could be a worthy partner for ‘med-to-bed’ healthcare systems. While this approach has been found to help cut readmissions, it can also be very complicated. This is where PillPack by Amazon Pharmacy’s next-day and same-day delivery capabilities will come into play.
Given its market opportunities and strengths, Amazon’s PillPack could also potentially form strong partnerships with health plans and provider organizations such as hospitals.
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What is the Role of the Mail-Order Pharmacy?
Although there are many great benefits of mail-order pharmacy, there are times when it may not be the right choice.
Prescriptions have been provided to patients by mail in the United States for more than a century. Once available in only remote or rural areas, mailing a prescription to a patient’s home has since become more widely accepted.
In 1946, the United States saw the first pharmacy dedicated to mailing prescription drugs to a patient’s home. The Veterans Administration (VA) was the first to offer services to eligible veterans. Today, the VA still accounts for nearly one-third of the mail-order prescriptions that are dispensed in the United States.
The American Association of Retired Persons and the National Retired Teachers Association formed a mail pharmacy that was not-for-profit and served only their membership. By 1963, for-profit entities began to market mail-order pharmacy services to corporate, government, and union employers. There was some opposition to this type of pharmacy throughout the 1960s.
The 1980s saw the most rapid growth of the mail-order pharmacy industry with revenues soaring from $100 million to $1.5 billion. The trend would continue to grow throughout the 1990s mirroring the growth of the internet. Mail-order pharmacy became more cost effective and convenient.
As more employers began to offer the mail-order pharmacy option, and in some cases mandated usage, we continued to see this trend increase. Although there was an increase in the number of patients using mail-order pharmacy services, there has been a slow-down in actual use over the past decade. A comparison of mail-order pharmacy use showed mail order accounted for 18.6% of prescriptions dispensed to in 2011 compared with 18.5% in 2012, according to research published by the Drug Channels Institute .
The Future of Mail-Order Pharmacy
Mail-order pharmacy has taken hold and grown over the last half century, currently mailing billions of prescriptions annually. Many employers offer a mail-order pharmacy option as part of their comprehensive prescription benefits. If a patient are unsure whether mail-order pharmacy is right for their needs, they should consider the following benefits to make an informed decision.
- The first step is to understand prescription drug benefits. Contact the health plan to compare the price difference between filling prescriptions via mail order versus a local pharmacy. Oftentimes a mail-order pharmacy can fulfill a 90-day supply at cost savings versus a 30-day supply at a local pharmacy.
- Ordering and refilling prescriptions is convenient. Mail-order pharmacies make it easy to manage medication ordering and refills using a computer or smart phone. There is even an option to synchronize multiple refills, a great convenience when managing chronic illnesses.
- Receiving mail-order prescriptions will save time. Gone are the days of driving across town to wait in line for a prescription.
- Quality is at the forefront, with a team of pharmacists and technicians ensuring the quality of the prescription. Every prescription is reviewed by a pharmacist prior to shipping, and they are only a phone call away if there are questions about your medication when it arrives.
Not Always the Best Choice
- Certain classes of medications, especially antibiotics, must be started immediately. It may be best to fill these medications at the local pharmacy.
- If a patient is adjusting to a new regimen or needs additional medical supplies in conjunction with their medication, it might be best to stop at the local pharmacy.
- For face-to-face interaction, questions about a prescription or counseling about adverse events, nothing beats the local pharmacist. An educated health care professional, pharmacists are one of the most accessible health care providers who can offer consultations with no appointment needed.
Professional Experience
Having worked in a mail-order dispensing pharmacy for more than 10 years, I can tell you first-hand, mail-order pharmacies provide accurate and efficient pharmacy services. Quality is our most important priority second only to customer service. Each prescription is reviewed by no less than 2 pharmacists to ensure accuracy of both the data entry and the verification of the product. A pharmacist is only a phone call away and available for any and all questions or concerns. If it is offered as a pharmacy benefit and a good fit for you, using a mail-order pharmacy can save you time and money without concession of quality or pharmacist availability.
About the Author
Nicole Kruczek earned her B.S. in Pharmacy degree from Temple University and is currently enrolled in the Masters of Pharmacy Business Administration (MPBA) program at the University of Pittsburgh, a 12-month, executive-style graduate education program designed for working professionals striving to be tomorrow’s leaders in the business of medicines. She has spent the last two decades in management roles in various pharmacy operations in long-term care, specialty, and PBM.
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How to Write a Retail Pharmacy Business Plan [Sample Template]
Are you about starting a pharmacy (chemist shop)? If YES, here’s a complete sample wholesale / retail pharmacy business plan template & feasibility report you can use for FREE. Okay, so we have considered all the requirements for starting a retail pharmacy . We also took it further by analyzing and drafting a sample retail pharmacy marketing plan template backed up by actionable guerrilla marketing ideas for pharmacies. So let’s proceed to the business planning section.
Being in the pharmacy trade is a very good thing. This is because of the great returns on investment that is being guaranteed. Starting a retail business is a very right step to take if you are looking to delve into the retail pharmacy business. It is important that you are a pharmacist ; this is so that you can get a proper hang of the business, as well as bring in your hands-on prowess into the venture.
A Sample Retail Pharmacy Business Plan Template
1. industry overview.
What really is the pharmaceutical business all about? The pharmaceutical industry is known for developing, producing, and marketing medicine (drugs). Retail pharmacy business is known to be involved in the sale (retailing) of generic or brand medications; some big pharmaceutical stores even engage in the sale of medical devices.
All over the world, the pharmaceutical industry is highly regulated. This is so because of the devastating effect of fake drugs and drug abuse which can’t be quantified. As a matter of fact, there are several universal laws and regulations that govern the patenting, testing, safety, efficacy and marketing of drugs.
For example; in the united states, new pharmaceutical products must be approved by the Food and Drug Administration (FDA) as being both safe and effective before they can be allowed to go into the market. Any entrepreneur (investor) who has a plan of starting his or her own retail pharmacy business must comply with the Regulation of Retail Pharmacy Businesses that was passed into law in 2008.
Anyone who wants to establish a retail pharmacy business must follow the regulations that guides the sourcing, storage, sale, supply and keeping of records, in respect of medicinal products. Other requirements that they are expected to comply with are; requirements that relates to staff, premises, equipment and procedures are also stipulated.
No doubt retail pharmacy business is indeed a profitable industry; at the end of 2011, there were just over 23,100 independent retail pharmacies operating domestically. For instance; in 2012 about 62,000 retail, mail and specialty pharmacies operating in America filled more than 4 billion prescriptions. As a matter of fact, in 2012 alone, statistics indicated that the total industry revenues was between $275 billion and $290 billion.
Statistics has it that global spending on prescription drugs grew to a whopping sum of $954 billion in 2011 and The United States accounts for more than a third of the global pharmaceutical market, with an estimate of $340 billion in annual sales.
It is on record that the retail pharmacy industry is growing at an annual rate of 1.6 percent. Retail pharmaceutical stores are amongst the top beneficiaries; they have experienced high sales growth in the first aid, eye care, sun care, smoking deterrent, foot care and home health care categories.
Over and above, the retail pharmacy industry is indeed a growing and a profitable industry and it is open to any aspiring investor (entrepreneur) to come in and establish his or her retail pharmacy outlet.
2. Executive Summary
Kingsley Greeno Retail Pharmacy Store will be located in one of the busiest streets in Baltimore, Maryland, U.S. We have been able to lease a facility for 5 years with the option of acquiring the property once the property is put up for sale.
The facility is well positioned and it matches the ideal picture of a community retail pharmacy store. We are not going to spend much to revamp the facility because before taking over the facility, it was used as a retail shop. Although the business is launching out with just one outlet, but we have plans to open other outlets in key locations around Baltimore, MD.
Kingsley Greeno retail pharmacy store will be involved in the retailing of prescription drugs and over-the-counter drugs. We will also be involved in the sale of beauty products, cosmetic, postcards (greeting cards), convenience foods and other related products.
We are in retail pharmacy business to retail a wide range of pharmaceuticals for our customers, at the lowest prices they can get anywhere in Baltimore, MD. Our employees are well trained and qualified to handle the wide range of customers that we are positioned to serve. We will engage in the sale of prescriptions at reduced prices both at the counter and online order.
Kingsley Greeno Retail Pharmacy will operate a 24 hours, 7 days a week pharmaceutical store. We shall also have customers like; walk – in customers and mail order customers. Our work force is going to be well trained to operate within the framework of our company’s corporate culture and also to meet the needs of all our customers.
Kingsley Greeno Retail Pharmacy Store will ensure that all our customers are given first class treatment whenever they visit our shop. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large the numbers of our customers’ base grows. We will ensure that we get our customers involved in the selection of brands that will be on our racks and also when make some business decisions.
Kingsley Greeno Retail Pharmacy Store is a family business that is owned and managed by Kinsley Greeno and Family. Mr. Kingsley Greeno is going to be the Chief Executive Officer of the business; he has a first Degree in Pharmacy and an MBA from Harvard University.
He has well over 10 years of experience working as a pharmacist with the United States’ government. His son who is an under graduate is currently studying pharmacy, with the hope of taking over the family business when he (Mr. Greeno) retires.
3. Our Products and Services
Kingsley Greeno Retail Pharmacy Store will retail a wide range of prescription drugs from different manufacturing brands to customers who are based in Baltimore, MD. We also engage in the sale of beauty products, cosmetic, postcards (greeting cards), baby products, convenience foods and other related products (small scale medical equipment / instruments et al).
4. Our Mission and Vision Statement
- Our vision is to become the largest retail pharmacy store in the whole of Maryland, U.S.
- Our mission is to establish a first class retail pharmacy store that will make available a wide range of generic and branded prescription drugs from top pharmaceutical manufacturing brands at affordable prices to the residence of Baltimore, MD.
Our Business Structure
Kinsley Greeno Retail Pharmacy Store is a business that will be built on a solid foundation. From the outset, we have decided to recruit only qualified people to man various job positions in our organization. We are quite aware of the rules and regulations governing the pharmaceutical industry which is why we decided to recruit experienced and qualify employees as foundational staff of the organization.
We hope to leverage on their expertise to build our business. When hiring, we will look out for applicants that are not just qualified and experienced, but honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders (the owners, workforce, and customers).
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. This are the positions that will be available at Kingsley Greeno Retail Pharmacy Store;
- CEO (pharmacy owner, superintendent pharmacist and supervising pharmacist)
- Pharmacist (Manager)
Merchandize Manager
- Pharmacist technician (3)
- Information Technologist (Contract)
- Sales agents (3)
- Cashier (Counter Agent).
5. Job Roles and Responsibilities
Chief Executive Officer – CEO:
- Responsible for providing direction for the business
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for recruitment
- Responsible for payment of salaries
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
Pharmacist (Manager):
- Responsible for managing the daily activities in the restaurant
- provides advice about health issues, symptoms and medications in response to customer enquiries
- recruits, trains and manages staff
- processes prescriptions and dispensing medication
- orders, sells and controls medicines and other stock
- meets medical representatives
- manages budgets
- keeps statistical and financial records
- prepares publicity materials and displays
- markets services
- Interfaces with third – party providers (vendors)
- Controls the sales floor inventory
- Supervises the entire sales staff and workforce
- Any other duty as assigned by the CEO
- Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
- Helps to ensure consistent quality of drugs and products on our rack
- Responsible for the purchase of goods and products for the organizations
- Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
- Ensures that the organization operates within stipulated budget.
Pharmacy Technician
- Ensures that the store facility is in tip top shape and conducive enough to welcome customers (This includes turning on equipment such as computers, scales, printers and fax machines)
- Ensures that goods and products are properly arranged
- Responsible for processing prescriptions
- Responsible for sterilizing the counter tops, scales, pill counting trays, and other medication measuring devices.
- Handles administrative and bookkeeping tasks, inventory control, stocking shelves, and data entry
- Performs monthly inventory counts, file paperwork, and stock inventory
- Handles any other duty as assigned by the floor manager (Pharmacist)
Sales Agents
- Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
- Models demographic information and analyze the volumes of transactional data generated by customer purchases
- Sources for clients for the company
- Responsible for promoting the company’s image
- Responsible for creating marketing and sales strategies, etc.
- Represents the organization in some strategic business meetings
Information Technologist
- Manages the organization website
- Handles ecommerce aspect of the business
- Responsible for installing and maintenance of computer software and hardware for the organization
- Manage logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
- Manage the organization’s CCTV
- Handles any other technological and IT related duties.
Cashier (Counter Agent):
- Receives payments on behalf of the organization
- Issues receipt to customers
- Prepare financial report at the end of every working week
- Handles financial transaction on behalf of the company
- Interfaces with our bankers
- Responsible for payment of tax, levies and utility bills
- Responsible for cleaning the pharmacy facility at all times
- Ensures that toiletries and supplies don’t run out of stock
- Cleans both the interior and exterior of the pharmacy facility
- Handle any other duty as assigned by the floor manager (Pharmacist)
6. SWOT Analysis
Kingsley Greeno Retail Pharmacy Store is not looking forward to operate a regular retail pharmacy store, because we want to become the biggest retail community pharmacy in Baltimore. We want our pharmacy to be the number one choice of all residence of Baltimore.
We know that if we are going to achieve the goals that we have set for our business, then we must ensure that we build our business on a solid foundation. We must ensure that we follow due process in setting up our retail pharmacy store.
Despite the fact that our CEO (owner) has a robust experience in retail pharmacy business, we still went ahead to hire the services of business consultants that are specialized in setting up new businesses to help our organization conduct detailed SWOT analysis and to also provide professional support in helping us structure our business. This is the summary of the SWOT analysis that was conducted for Kingsley Greeno Retail Pharmacy Store;
Our location is one of our strength. The Business model we will be operating on (physical store and online store) will be opened for 24 hours daily and 7 days in a week. There would be multiple payment options; wide range of prescription drugs, home delivery services and our excellent customer service culture will definitely count as a strong strength for us.
Our perceived weakness is the fact that we are just starting out and we may not have the required finance to sustain the kind of publicity that we intend giving the business.
- Opportunities:
The opportunities that are available to retail pharmacy business is unlimited and we are going to position our business to make the best out of the opportunities that will be available to us in Baltimore, MD.
Just like any other retail business, one of the major threats that we are likely going to face is economic downturn and unfavorable government policies (healthcare reform). It is a fact that economic downturn affects purchasing power. Another threat that may likely confront us is the arrival of a new retail pharmacy outlet in same location where ours is located (Baltimore, MD.).
7. MARKET ANALYSIS
- Market Trends
The market trend in retail pharmacy industry is directly influenced by a country’s healthcare reform policies. The fact that the pharmaceutical industry is highly regulated means that any entrepreneur who wants to run a retail pharmacy store must be ready to play by the book.
Loads of other factors influences the market trend in the industry and it is normal to see bigger retail pharmacy stores (especially those with chains of outlets) weathering the storm whenever there are major shaking in the industry. In essence, the easiest way to build a solid and highly profitable retail pharmacy business is to engage in opening various outlets in key cities around the U.S. and the
No doubt the industry will continue to grow and become more profitable because the aging baby-boomer generation in Unites States are expected to drive increasing demand for prescription drugs.
Retail Pharmacies are now making use of technology to effectively manage their business by plugging financial leakages which happens to be one of the biggest challenges that retail businesses faces. The use of technology, i.e. CRM software et al are very effective in helping retail businesses manage their clientele base.
8. Our Target Market
Kingsley Greeno Retail Pharmacy Store is in business to service a wide range of customers in Baltimore, Maryland. We will ensure that we target self – pay customers (who do not have drug plans), mail order customers, and walk in customers et al.
The fact that we are going to open our doors to a wide range of customers does not in any way stop us from demanding and screening prescriptions as required by the law. Our staff are trained to effectively service our customers and still play by the rules governing the industry. Our customers can be categorized into the following;
- Corporate Executives
- Business People
- Elderly people
- Expectant Mothers
- Sports Men and Women
Our Competitive Advantage
The retail pharmacy industry is known to be highly competitive in the U.S and in most parts of the world. The industry is growing and there are alternative ways through which clients / patients can get their medications / prescriptions / drugs.
There are alternative provides like mail-order firms, grocery chains, mass merchants and dollar stores; these are the real competitors in the industry. These competitors ensures that they do all that lies within their powers to gain favorable market share of the available market in any given region.
It is a fact that small retail pharmacy stores will always struggle with larger pharmacy chains when it comes to pricing power and brand recognition, which is why smaller retail pharmacy store always go out of their ways to deliver excellent customer service. It is through top notch customer service that they can secure a fair share of the available market.
Smaller retail pharmacies ensures that each order carries a printout. The printout accompany the medications providing directions on how patient are expected to take the medications, other drugs that should be avoided concurrently, and other useful information.
Kingsley Greeno Retail Pharmacy Store is coming into the market well prepared to favorably compete in the industry. Our pharmacy is well positioned and visible, we have enough parking space with good security. Our management staff are well groomed in retail pharmacy and all our employees are trained to provide customized customer service to all our clients.
We are going to be one of the few retail pharmacies in Baltimore that will be opened 24 hours a week and 7 days a week. We have enough staff that are ready to run a shift system. Kingsley Greeno Retail Pharmacy we will ensure that we have a wide range of products (prescription drugs and over-the-counter drugs.
We will also be involved in the sale of beauty products, cosmetic, postcards (greeting cards), convenience foods and other related products) available in our store at all times. It will be difficult for customers to visit our store and not see the product that they are looking for. One of our business goals is to make our pharmacy a one stop pharmacy shop.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Our source of income will be majorly in the retailing of prescription drugs and over-the-counter drugs. Kingsley Greeno Retail Pharmacy will also generate income from the sale of beauty products, cosmetic, postcards (greeting cards), convenience foods and other related products.
10. Sales Forecast
It is important to state that our sales forecast is based on the data gathered during our feasibility studies, market survey and also some of the assumptions readily available on the field.. Below are the sales projections that we were able to come up with for the first three years of operations;
- First Year-: $200,000 (From Walk – in customers) + $250,000 (From Mail Order customers)
- Second Year-: $450,000 (From Walk – in customers) + $470,000 (From Mail Order customers)
- Third Year-: $700,000 (From Walk – in customers) + $800,000 (From Mail Order customers)
N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and natural disasters within the period stated above. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
The marketing and sales strategy of Kingsley Greeno Retail Pharmacy Store will be based on generating long-term personalized relationships with customers. In order to achieve that, we will ensure that we offer medications at lower prices, compared to what is obtainable in Baltimore. We will also ensure that we have a wide range of drug supplies in stock for both quick shipment and store front pick up.
All our employees will be well trained and equipped to provide excellent and knowledgeable customer service. We know that if we are consistent with offering high quality drugs and excellent customer service we will increase the number of our customers by more than 25% for the first year and then more than 30 percent subsequently.
Before choosing a location for our pharmacy store, we conducted a thorough market survey and feasibility studies in order for us to be able to be able to penetrate the available market and become the preferred choice for residence of Baltimore, MD. We have detailed information and data that we were able to utilize to structure our business to attract the numbers of customers we want to attract per time.
We hired experts who have good understanding of the retail industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Baltimore, Maryland. In summary, Kingsley Greeno Retail Pharmacy Store will adopt the following sales and marketing approach to win customers over;
- Introduce our business by sending introductory letters to residence, business owners and organizations
- Advertise our business in community based newspapers, local TV and radio stations
- List our business on yellow pages ads
- Leverage on the internet to promote our business
- Direct marketing
- Word of mouth marketing (referrals)
- Enter into business partnership with hospitals, health care provider and health insurance companies.
- Attend pharmaceutical related exhibitions / expos.
11. Publicity and Advertising Strategy
Regardless of the fact that our retail pharmacy store is well located in Baltimore, MD., we will still go ahead to intensify publicity for the business. We are going to explore all available conventional and non – conventional means to promote our retail business.
Kingsley Greeno Retail Pharmacy Store has a long term plan of opening outlets in various locations all around Maryland which is why we will deliberately build our brand to be well accepted in Baltimore before venturing out. As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand to the general public. Here are the platforms we intend leveraging on to promote and advertise Kinsley Greeno Retail Pharmacy Store;
- Place adverts on both print (community based newspapers and magazines) and electronic media platforms
- Sponsor relevant community programs
- Leverage on the internet and social media platforms like; Instagram, Facebook , twitter, et al to promote our brand
- Install our Bill Boards on strategic locations all around Baltimore, MD.
- Engage in road show from time to time
- Distribute our fliers and handbills in target areas
- Position our Flexi Banners at strategic positions in the location where our retail store is located.
12. Our Pricing Strategy
Kingsley Greeno Retail Pharmacy Store will work towards ensuring that all our products (prescription drugs and over-the-counter drugs and beauty products, cosmetic, postcards (greeting cards), convenience foods and other related products) are offered at highly competitive prices compare to what is obtainable in Baltimore.
The fact that we are going to be offering our products at cheaper prices does not in any way means that we will sell sub – standard goods. Selling our products at a lower price than what is obtainable in our competitors store means that we will only reduce our profit margin.
- Payment Options
At Kingsley Greeno Retail Pharmacy Store, our payment policy is all inclusive because we are quite aware that different people prefer different payment options as it suits them. Here are the payment options that will be available in every of our outlets;
- Payment by cash
- Payment via Point of Sale (POS) Machine
- Payment via online bank transfer (online payment portal)
- Payment via Mobile money
- Check (only from loyal customers)
In view of the above, we have chosen banking platforms that will help us achieve our payment plans without any itches.
13. Startup Expenditure (Budget)
This is the key areas where we will spend our start – up capital on;
- The Total Fee for Registering the Business in Maryland – $750.
- Legal expenses for obtaining licenses and permits- $1,500.
- Marketing promotion expenses for the grand opening of People’s Choice Retail Store in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- Cost for hiring Consultant – $2,500.
- Cost for Computer Software (Accounting Software, Payroll Software, CRM Software, Microsoft Office, QuickBooks Pro, drug interaction software, Physician Desk Reference software) – $7,000
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $3,400.
- Cost for payment of rent for 12 month at $1.76 per square feet in the total amount of $105,600.
- Cost for Shop remodeling (construction of racks and shelves) – $20,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
- The cost for Start-up inventory (stocking with a wide range of products) – $150,000
- Storage hardware (bins, rack, shelves,) – $3,720
- The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
- Cost for Supplies (Assorted bottles, boxes, envelopes, etc. for dispensing and shipment)- $3,000
- Cost for store equipment (cash register, security, ventilation, signage) – $13,750
- Cost of purchase and installation of CCTVs: $7,000
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, tables and chairs et al): $4,000.
- The cost of Launching a Website: $700
- The cost for our opening party: $7,000
- Miscellaneous: $10,000
We would need an estimate of $500,000 to successfully set up our retail pharmacy store in Baltimore, MD. Please note that this amount includes the salaries of all the staff for the first month of operation.
Generating Funding / Startup Capital
Kingsley Greeno Retail Pharmacy Store is a private business that is solely owned and financed by Kingsley Greeno and family. They do not intend to welcome any external business partners which is why he has decided to restrict the sourcing of the start – up capital to 3 major sources. These are the areas Kingsley Greeno Retail Pharmacy Store intends to generate our start – up capital;
- Generate part of the start – up capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from my Bank
N.B: We have been able to generate about $200,000 (Personal savings $150,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $300,000 from our bank. All the papers and document have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
14. Sustainability and Expansion Strategy
The future of a business lies in the numbers of loyal customers that they have the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it may not be too long before the business closes shop.
One of our major goals of starting Kingsley Greeno Retail Pharmacy Store is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to sell our product a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin.
Kingsley Greeno Retail Pharmacy Store will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List / Milestone
- Business Name Availability Check:>Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of facility and remodeling the shop: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- writing of business plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the Needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party / launching party planning: In Progress
- Compilation of our list of products that will be available in our pharmacy store: Completed
- Establishing business relationship with vendors (wholesale pharmaceutical companies): In Progress
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The 5 New Pharmacy Care Models
As pharmaceuticals grow to consume more and more of the healthcare dollar, traditional care models need to change in order to deliver the best healthcare outcomes and real value. Here are five new models on the rise.
U.S. healthcare had quite a year in 2018. Employers, the federal government, and patients are not happy with the way healthcare is delivered and financed. Hospitals, physicians, and pharmacies try to remain relevant as new technologies are developed to commoditize healthcare services and enable patients to become true consumers.
Pharmaceutical companies continue to improve healthcare with new therapeutic agents. The value of these new drugs can benefit society, but even more so, their impact on healthcare economics is staggering. Specialty drugs to treat certain patients present new challenges for health plans and pharmacy benefit managers (PBMS).
As pharmaceuticals grow to consume 30% of the healthcare dollar, traditional care models need to change in order to deliver the best healthcare outcomes and real value or they will become obsolete.
Currently, drugs covered under the pharmacy benefit are distributed through community pharmacies, mail service pharmacies, and specialty pharmacies. PBMS utilize proven systems (e.g., online drug claims processing, pharmacy network contracting, and drug rebates) to manage unit drug cost.
In the future, drugs covered under the medical benefit, many of which are specialty drugs, will need new systems and processes to manage these drugs administered through the physician office, home infusion, and hospitals.
Current and new models
This creates a need for new care models.
The current care models in pharmacy are:
- Community (e.g., CVS and Walgreens)
- Hospital (e.g., Cedars-Sinai)
- Long-term care (e.g., Omnicare)
- Mail order (e.g., CVS and Express Scripts)
- Specialty (e.g., Diplomat).
These models are: facility driven by site of care, healthcare-professional driven, expensive, and inefficient.
The key shortcomings of the current care models are that they:
- Do not use a population health approach to identify the patients to treat
- Make the patient come to the site of care (e.g., hospital, pharmacy, or physician office) to receive care
- Dispense pharmaceuticals with a “one-size-fits-all” approach and creates excessive waste
- Make minimal use of information technology
- Require each facility work in its own silo with no integration of overall patient care activities
New care models are being created that are patient driven, leverage technology, and improve accessibility.
These new care models in pharmacy are:
- Dispensing kiosks (e.g., MedAvail)
- Multi-dose strip packaging (e.g., PillPack, Pack4U)
- Patient-centered home (e.g., ExactCare Pharmacy and MedAppropriate)
- Precision medicine (e.g., Myriad)
- Telehealth (e.g., Catalyst).
The key benefits of the new care models are that they do one or more of the following:
- Use data analytics to identify the patients that would benefit the most from these new services
- Deploy pharmacists into the patient’s home to provide “high-touch” care
- Dispense pharmaceuticals in the most effective way to minimize waste
- Leverage information technology (e.g., Bluetooth, wireless communications, and smartphones)
- Integrate pharmacy with the overall patient care activities
Additionally, online retailer Amazon, is disrupting the current business model in the retail and grocery industries and will do the same in the community pharmacy industry.
This will give employers and the federal government new choices in how healthcare is delivered. However, they will need a digital health strategy to leverage these new services to make sure the sickest patients can be treated in the patient care setting that can deliver measurable health outcomes improvement.
As a result, there will be new benefit designs and ways to finance care.
Perry Cohen, is an editorial advisor for Managed Healthcare Executive , and is chief executive officer, The Pharmacy Group.
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The future of retail pharmacies: From filling scripts to fulfilling consumer experiences
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By George Van Antwerp , managing director, and Greg Myers , manager, Deloitte Consulting LLP
Retail pharmacies are being challenged by closed-door pharmacies (i.e., mail order and digital pharmacies) that offer fast contactless delivery (direct to a patient’s home), around-the-clock pharmacist support by phone and text, user-friendly mobile apps, and platforms that provide real-time pricing information and access to coupons. What closed-door pharmacies can’t offer is the personalized touch of a local pharmacist.
Local pharmacists, however, often struggle to find time to offer that personalized touch. According to one study, pharmacists across all sites of care estimated that just 10% of their time was spent counseling patients. 1 Much of their time is typically devoted to conducting pre-authorizations, clarifying information with physicians over the phone, and filling prescriptions. Many of our retail-pharmacy clients are looking at ways artificial intelligence (AI), advanced analytics, and other technologies (e.g., central fill, workload balancing via tele-pharmacy, and automation to improve dispensing and quality assurance) could be used to give their pharmacists more time to focus on the consumer experience. For example, if electronic pre-authorizations (ePAs) are included in a patient’s electronic medical record (EMR)—and shared through a data-exchange agreement—pharmacists could review the physician’s notes themselves (or have the process fully automated similar to step-therapy edits) and spend less time on the phone.
The traditional pharmacy model is ripe for disruption
Mail-order pharmacy had been declining for much of the past decade, driven in part by the growth of 90-day retail prescriptions. Between 2018 and 2019, the number of prescriptions filled by mail order fell from 214 million to 205 million. 2 The COVID-19 pandemic reversed that trend as many people avoided going into stores. While mail-order prescription fills are on the rise, the retail-pharmacy business remains flat or down slightly. Last summer, weekly mail-order prescriptions increased by an average of 6.5% over the same period a year earlier, according to IQVIA data. Some venture capitalists and private equity investors have noted that the future of medication fulfillment and delivery is ripe for digital disruption. As of February, 11 digital pharmacies had collectively raised $1.6 billion from investors. 3 These new entities have built their processes and tools from the outside-in, focused on consumer behavior or tailored their models to meet the needs of specific consumer segments. In addition, the legacy platforms used by many pharmacies are decades old, which makes it difficult to incorporate omni-channel engagement models, new data sets, and the shift toward clinical programs.
Last year, we outlined the changing role of retail pharmacies and pharmacists in our paper on the Future of Pharmacy . We believe the COVID-19 pandemic has accelerated this transformation. Patients are generally more accepting of telehealth than they were prior to the pandemic, and they have grown more comfortable with talking to someone over the phone about prescription drugs.
We have recently seen some impressive clinical innovations, such as the mRNA platform used for several COVID-19 vaccines. We have also seen retail pharmacies and pharmacists take on expanded roles in COVID-19 testing and vaccination efforts. This builds on our blog last summer , which discussed how pharmacists of the future could play a bigger role on care teams by counseling patients, supporting transitions in care, and by working directly with physicians to close gaps in care (e.g., missing vaccinations or a person with diabetes without a statin prescription).
Four ways pharmacies can improve the human experience
Companies that focus on the human experience are twice as likely to outperform their peers in revenue growth over a three-year period, according to Deloitte research on quantifying the value of human experience .
Retail pharmacies should look for ways to transform themselves—from a focus on pill dispensing to a focus on human-centered health. People might visit these retail pharmacies of the future for prescriptions and/or wellness coaching. They might leave with insights into managing their condition, an understanding of what side-effects to watch for, or strategies for navigating our complex health care system. People who take advantage of health and wellness services available at a retail pharmacy tend to have higher satisfaction levels and brand loyalty. 4 They also might spend more money at the store.
Future changes in reimbursement could also provide a financial incentive for pharmacies and pharmacists to perform more consumer-facing functions. This will likely require retail pharmacies to have physical, virtual/digital, and home health strategies that elevate the human experience and builds upon what happens within their four walls. Here are four strategies to consider:
1. Use data to personalize interactions: Integrated data (i.e., medical, pharmacy, lab) can be used to provide intelligent clinical interventions and more personal patient-pharmacist interactions. These types of tailored experiences could help pharmacies create stickiness with consumers and become an integral part of new care models. Pharmacies that can do this successfully will likely emerge as leaders in a post-COVID world where personalized, in-person care is highly valued.
2. Develop actionable and dynamic segmentation: Technology can be used to segment consumers by demographic and clinical data. It can also be used to leverage genomic, social, and other consumer attributes as available. The key is to develop actionable segmentation that can adapt with the consumer. Recent Deloitte research shows how actionable segmentation can provide valuable insights about health care customers. Once consumers are segmented, pharmacists can tailor the way they engage with each unique group to help create an emotional attachment to the brand. For example, knowing which consumer segments are most susceptible to COVID-19 infections could help improve responses to future infectious diseases. Segmentation could also help pharmacists coach patients in a more culturally sensitive and clinically appropriate way while also understanding how their needs might vary as their disease progresses or based on other barriers to care.
3. Enhance the algorithms: Algorithms can be used to determine when patients are likely to become non-adherent to a prescription, but they need ongoing input to learn over time (e.g., why a patient isn’t being adherent). By complementing the data-driven insights with face-to-face discussions, pharmacists can create a memorable and emotional experience for consumers. Additionally, pharmacies that use such algorithms could have a meaningful impact in reducing health issues that can result from deferred and delayed care. The algorithms can help pharmacists understanding how to be proactive and when to coordinate care to address key risks for disease progression.
4. Localize care: Health care is often local and requires a multi-faceted approach to meet consumers where they are. Pharmacists can play a role in helping members of a community to understand and help improve drivers of health such as access to reliable transportation or healthy food. There is extensive evidence that these factors all have an impact on health. Helping consumers overcome these barriers is important and often requires a hands-on approach.
Adopting these four strategies will likely require time and attention from pharmacists, which is often in short supply. Around-the-clock service, centralized dispensing automation, and other technologies used by closed-door pharmacies could be perceived as a threat to brick-and-mortar stores. But they could also be an opportunity. Those same technologies could help free up time for pharmacists so that they can focus on the consumer experience to help secure the future of the retail pharmacy.
Traditional retail pharmacies will likely struggle to fend off digital entrants when it comes to the cost and efficiency of dispensing and delivering medications. They can learn from them to think about how to use data and technology to create a hyper-personalized and human-centered consumer experience. Embracing the technical, operational, cultural, and financial changes to embrace this new model will likely be essential.
1. Pharmacy check-up: Activities and barriers to care analysis, AmerisourceBergen, October 2018
2. Mail-order prescriptions said to flow without major disruptions, Bloomberg, August 25, 2020
3. The promise and limits of digital pharmacies, Drug Channels, February 16, 2021
4. Retail health gains consumer kudos in the pandemic, HEALTHPOPULI, 2021
Return to the Health Forward home page to discover more insights from our leaders.
Specialty pharmaceuticals make up a growing share of the pipeline for many biopharmaceutical companies. discover five key questions that can help in developing a pharmaceutical channel strategy that integrates with market access strategies, and aligns with the future of specialty pharmacy., subscribe to the health forward blog via email, get in touch.
George Van Antwerp
George Van Antwerp is a managing director within the Strategy & Operations practice of Deloitte Consulting LLP. He focuses on pharmacy strategy and the convergence of specialty pharmacy across payers, providers, and life sciences.
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Finally, payers have the opportunity to bundle intensive clinical-care models with mail-order pharmacy capabilities, meeting the needs of patients with chronic conditions. Payers are increasingly focused on chronic care and disease management—driven in part by the shift toward risk-bearing and integrated-care-delivery models—and are often ...
To understand the potential impact of Amazon Pharmacy on US brick-and-mortar pharmacies, it is important to first dissect this new venture. Amazon Pharmacy is a combination of several existing...
experience in pharmacy benefit management (PBM) administration, hospital pharmacy, and retail pharmacy operations. He is responsible for all outpatient pharmacy systems and dispensing technologies as well as customer service and dispensing operations of FPS' mail order, specialty, home infusion and community infusion pharmacies.
Today, the global online pharmacy business is a mammoth of an industry, expected to grow at a CAGR of 14.26 percent to reach $107.53 billion by 2025, according to Zion Market Research. CVS Health, one of the market leaders, announced annual revenues of $64.81 billion after its acquisition of global health insurer, Aetna.
What is a business model? The term “business model” is used to encompass a wide range of formal and informal descriptions of the core elements of a business. We have used the term in the following sense: “A company’s business model is the means by which it makes a profit – how it addresses its marketplace, the offerings it develops ...
Oftentimes a mail-order pharmacy can fulfill a 90-day supply at cost savings versus a 30-day supply at a local pharmacy. Ordering and refilling prescriptions is convenient. Mail-order pharmacies make it easy to manage medication ordering and refills using a computer or smart phone.
Revenue Optimization and New Pharmacy Business Models
A Sample Retail Pharmacy Business Plan Template Table of Content 1. Industry Overview 2. Executive Summary 3. Our Products and Services 4. Our Mission and Vision Statement 5. Job Roles and Responsibilities 6. SWOT Analysis 7. MARKET ANALYSIS 8. Our Target Market Our Competitive Advantage 9. SALES AND MARKETING STRATEGY 10. Sales Forecast 11.
The current care models in pharmacy are: Advertisement Community (e.g., CVS and Walgreens) Hospital (e.g., Cedars-Sinai) Long-term care (e.g., Omnicare) Mail order (e.g., CVS and Express Scripts) Specialty (e.g., Diplomat). These models are: facility driven by site of care, healthcare-professional driven, expensive, and inefficient.
Here are four strategies to consider: 1. Use data to personalize interactions: Integrated data (i.e., medical, pharmacy, lab) can be used to provide intelligent clinical interventions and more personal patient-pharmacist interactions.