The title of an article I came across online today said, “Walgreen’s Buys drugstore.com. Is This the Beginning of a Trend?” It’s obvious that Walgreen’s thinks so, because they paid $409 million for the purchase – 102% more than the company is valued at. “The move,” says Laura Heller at Slate.com, “lets the traditional retailer gain a foothold on the Internet that it’s been unable to do on its own.” There is some difference of opinion among online business pundits whether the move will be good for Walgreen’s bottom line or not, but while the retail giant maneuvers for ever better profit margins, how will this move affect pharmacists and consumers?
The Journal of Managed Care Pharmacy reported that implementation of Medicare Part D resulted in lower reimbursement rates and delayed prescription processing time that hit independent pharmacies hard. The National Community Pharmacists Association (NCPA) wrote that while 12.4% of its pharmacies were operating at a loss before Medicare Part D, the number nearly doubled to 22.9% after it began. In 2006, 1153 independent pharmacies went out of business. And the problem can’t be blamed on government-run programs alone. Of the three sources of reimbursement, Medicare Part D, Medicaid and managed care programs, pharmacists believe all to be inadequate.
As independent pharmacies began to close, the business of filling prescriptions shifted to the big retailers like Walgreen’s, CVS, Walmart and Rite-Aid, where reimbursement problems have translated to reduction of staff and services in their pharmacies. There are fewer pharmacists in the big stores and more pharmacy technicians. Pharmacists don’t have time to counsel patients and techs don’t have the skills, so little is offered to consumers in the way of drug education or management. Pharmacy Benefit Managers (PBMs) have been funneling patients into mail-order services to cut costs. Despite complaints to the NCPA from customers about shipping delays, price confusion, incorrect orders and lack of personal service, the trend is increasing. It appears that Walgreens’s and all of its 7600 retail locations see the handwriting on the wall: the brick and mortar pharmacy as a business model is failing. Self-service online drugstores are the next big thing. Woe to the rest of us.
I have written several times in this blog about the wasted resource of the neighborhood pharmacist. She knows more about drugs than many of the physicians who prescribe them. Doctors in managed care spend an average of seven minutes with each patient – not a lot of time to review drug regimens. My doctor writes out prescriptions and hands them to me. I’ve learned over the years to go home and do my own research about the drugs I take and more importantly, the ones I won’t take. But I live with a nurse. I went to nursing school myself. My boss is a pharmacist. You might say I’m pretty savvy when it comes to medical issues. But the average Joe who doesn’t understand that his liver and kidneys process every little pill his doctor prescribes is at a distinct disadvantage. He trusts that prescriptions are written to allay his symptoms and improve his health – maybe even to provide a cure. Most folks don’t know anything about the possible side effects or interactions of the drugs they take. No one tells them to make sure to throw away the out-of-date drugs in their medicine cabinets or to make sure they take their anti-biotics for the entire 10 days and why. Half of us in the U.S. take prescription drugs and at least 81% of us take at least one kind of pill every day. Most of us know little about the pills we take. We could start to undo some of the damage by utilizing our drug professionals. Pharmacists need a structure which allows them to do what they do best – teach us to use prescription drugs correctly. Sparingly. Effectively. Wisely. If there is no room in the current business model for this, then we need a better model. Internet pharmacy is not that model. Walgreen’s may say they’re serious about protecting your health when they tell you they’re “on the front lines of health care” with more than 8,000 “points of care across the country”, but those are just words. The action of buying drugstore.com speaks much louder.
Once a way is found to provide prescription drugs that actually benefits the consumer and the pharmacy profession, you can bet the big chain stores won’t be behind it. They view drug delivery as a profit stream; education and management therapy aren’t part of the picture. Consumers will see Internet pharmacy as a boon: free shipping and no lines – what’s not to love? So pharmacists, through their national organizations and educational institutions, are going to have to change the system themselves. Otherwise, the only person left behind the counter to talk to when your asthma inhaler causes heart palpitations will be a robot.