Mail Order Brings Bad News to Walgreens
By George Anderson
You’ve probably seen the commercial where a ton of bricks is dropped in the flatbed of a pickup truck to demonstrate its ruggedness and strength.
Today, Walgreens management may be feeling like something was dropped on them after learning General Motors Corp will no longer permit many of the 1.1 million employees, retirees and eligible dependents to fill their prescriptions at the drugstore chain.
The Detroit News reports Medco Health Services, which manages GM’s prescription plan, is requiring members who need to take medications for long periods to order them through mail order services.
Walgreens and other drugstores, chains and independents alike, have continued to see market share of the prescription business shift to mail order. Many have moved into mail order themselves, including Walgreens with its Walgreens Mail Service.
The chain, however, has opposed mandatory requirements for consumers to use mail order services. As an alternative, the company’s pharmacy benefits manager program, Walgreens Health Initiatives, began offering Advantage 90, an in-store prescription service that would allow consumers to get their medicines for long-term use in the store at a savings.
Back in December in a released statement, Dennis O’Dell, Walgreens vice president of pharmacy services, said, “For some patients, ordering a 90-day supply through the mail works well and is a good option. But for others, mail service isn’t as convenient or they prefer face-to-face interaction with their local pharmacist. That’s why Walgreens believes patients should have the option of getting their 90-day refill through either a mail service or retail pharmacy.”
Moderator’s Comment: What is your reaction to this story and its implications for the retail pharmacy business? –
George Anderson – Moderator
I agree with many of the previous comments that this has been going on for some time and that the snowball is gaining momentum. My concerns are threefold: 1) restricted access – consumers have very limited options and a monopoly may develop; 2) patient care – can a mail order forum effectively counsel patients … including information on their over-the-counter medications; and 3) value of the pharmacist – this appears to have been diminished significantly and unfortunately it has become commoditized.
Hopefully this delicate equation of patient care and healthcare costs will be resolved soon – for the sake of public best interest.
I remember when Rite Aid bought Drugstore.com back in the “the internet is gonna kill retail drug stores” days. Eventually, drug retailing companies are going to have to embrace direct mail themselves. The benefit would be fewer in-store pharmacists (lower cost operations) and having pharmacists that can counsel customers on the various over-the-counter medications and alternative supplements, which bring more to the bottom line anyway.