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Pharmacy in the Home Opportunity emerging

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	Neil Johnston articles by this author...
Introducing current ideas, perspectives and issues, to the profession of pharmacy

The following story published by Drug Topics mirrors a trend that has already commenced in Australia.
A more conservative customer/patient is emerging, in part driven by government attempts to convert branded drugs on the PBS to a cheaper generic version.
Harsher economic conditions have also played a major part.
As we all know, not all customer/patients are convinced of the value involved in changing from long established brands, no matter what arguments are offered.
That means two distinct classes of health consumers are forming up within Australian pharmacies.
Note also that the value-conscious health consumer illustrated in the article is less impulse driven and creates a shopping list before leaving home.
And in the background, high levels of government stimulus spending means that the ability for government to fund existing and future services is at risk, and resources will have to be rationed even more than they are currently.
But this trend opens up a range of opportunities for pharmacists to develop a range of services targeted for customers/patients within their homes.
Mark Coleman discusses a "Pharmacy in the Home" concept further along this article.

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Economic woes affect retail pharmacy sales

Aug 28, 2009

By: Christine Blank, Contributing Editor
Drug Topics E-News

 Consumer shopping habits have changed in the new economy and some of those habits will have an impact on purchases of prescriptions and OTC healthcare products for the next few years, according to Thom Blischok, president of consulting and innovation for Information Resources Inc. (IRI).

“By the middle of 2010 unemployment will have stabilized. But we will see a new, conservative shopper among all income segments,” Blischok said during an NACDS and IRI-sponsored webinar this week.

 He said the new conservative shopper consumes six percent to 10 percent less across all product segments, makes more of his or her purchasing decisions at home, is looking for the best value on products, and is buying more private-label merchandise. Already, the “best value” proposition is affecting shoppers' purchases of healthcare and beauty products.

Over the last six months, 23 percent of consumers who have incomes of $35,000 a year or less said they had decreased their spending on healthcare products. And 17 percent of people who earn $35,000 to $55,000 a year said they have cut back on buying healthcare products.

Personal-care product sales have also been affected: 25 percent of those earning $35,000 a year or less have cut back on spending for personal-care products and 19 percent of those earning $35,000 to $55,000 a year have cut back, according to IRI.

Consumers surveyed by IRI also made these statements about buying healthcare products in this economy: “I look at the specials a lot more,” “I use coupons,” “If I get sick, I don’t have insurance, so I just get something over the counter,” and “I try to buy in bulk or ‘buy one, get one free,’ especially antibiotic creams…”

Another factor affecting healthcare product sales is that shoppers across all income segments are increasingly making their shopping lists at home, rather than making impulse purchases in stores. A whopping 83 percent of Americans are making their purchasing decisions before they go into stores. In the OTC healthcare realm, 67 percent of consumers surveyed by IRI said they are making purchasing decisions about pain relievers at home, along with 66 percent of people deciding about digestive aid products at home, 65 percent choosing vitamins and supplements at home, and 54 percent choosing over-the-counter cold medications and antibacterial creams at home.

“What does it mean for the retailer? You have to recognize how you are going to get into the home more. The internet plays a much more important role in helping people make decisions. The FSIs [freestanding inserts in newspapers] have to be retuned to be relevant to shoppers…and in tune to overall health and wellness. And signage in-store must match what is given on the Web,” Blischok said.

The trend toward private-label purchases is also affecting many OTC healthcare categories, with shifts being seen primarily in OTC allergy and sinus medications, pain relievers, bandages, and antibacterial ointments.

For example, over the past year, 15 percent of healthcare shoppers said they have switched from branded allergy and sinus medications to private-label versions, and 11 percent switched to buying a lower-priced brand. Three percent of healthcare shoppers have stopped buying allergy and sinus products altogether.

Blischok expects the “conservative shopper” trends to last for the next 18 months to four years. The good news is, however, that the conservative shopper will be spending more on certain healthcare segments in the future.

This conservative shopper is focused on preventive-care solutions, such as healthy food choices and weight management. These represent a significant opportunity for retailers who offer a comprehensive preventive-care program. “Preventive care is [worth] $100 billion and growing, and no one [retailer] has centered around affordable preventive care,” Blischok said.

In other good news for drugstores, shoppers are turning to drugstores when they're ready to buy their healthcare products. Fifty-five percent of approximately 720 consumers surveyed said they will visit drugstores for their healthcare needs over the next year, while 65 percent will buy their healthcare products at supercenters.

“Drugstores are the new convenience stores for women. You can go pick up your healthcare products, get a drink at some places, food at some places, and your prescription,” Blischok said.

Shoppers who talked to IRI said they shop at drugstores because in some cases they provide better value. “You can earn CVS ‘Extra Bucks’… Every little bit helps in this day and age,” one shopper said. Another shopper said she shops for healthcare products at a chain pharmacy because she “trusts the people there.”

Mark Coleman
I have been asked to comment on the points made in the above article.
US trends usually lead Australian versions, but in this instance, both countries appear to be in parallel.
This, despite the difference in health models in both countries.
In the US all drugs have to be paid for privately, while in Australia, we have the PBS providing subsidised drugs.
Even so, cost is still an issue here in Australia as people on low or fixed incomes are beginning to find difficulty in paying for their drugs and OTC personal and health items, as economic conditions begin to take their toll with unemployment continuing to remain high for at least the next 12 months.

Because purchasing decisions are increasingly being made in the home before the decision to buy takes place in the pharmacy, it is obvious that more sophisticated efforts have to be made to communicate with customers/patients in their homes.
Pharmacists need to be able to influence consumers to make good decisions for their health care purchases.

And the trick will be to mesh communications with the flow of activities within the home so as not to cause any disruption or difficulties.

Add to this complexity, 2010 officially marks the year for the retirement of the "baby boomer" population. Within 30 years, this population segment will be up to 30% of the total population in Australia.
Before the credit crisis hit Australia, this group of people held most of Australia's wealth and had very high levels of disposable income. While some investments involved with this group have been frozen, and superannuation funds have taken a king-sized hit, there is still a lot of financial substance left in baby boomers, who will progressively become more medically intensive as they finish a lifespan to a higher age than previous generations.

Customer/patient communications will have to be a precise and planned two-way process:

1. Customer/patient to pharmacy utilising traditional methods culminating in a visit to the pharmacy. Convenience of location will still have a strong bearing on patronage, and store ambience, ranging and price will all determine consumer choices in the traditional manner.
However, the Internet will begin to play a more important role. This is a non-intrusive method of generating consumer to pharmacy communications, also a method of providing health information and prices. Email will be involved either through a panel on your Internet site or by the consumer using their own system.
Purchases will need to be linked to a delivery service and this service will have to be charged on to the consumer (not provided free as most pharmacies now do).

2. Pharmacy to customer/patient: these communications will need to be be performed at convenient times and as much as possible, be integrated with communications noted in (1) e.g. the delivery of a catalogue and tick box order form to stimulate pharmacy purchases, should be made preferably with a pre-existing delivery, leaving the consumer to make their choice in the convenience of their home.
Order taking can then occur by telephone (initiated by the consumer), customer visit to pharmacy or timed for the next pharmacy delivery to the home.

So what is there that is different?

Not a lot at first glance, but there is a quantum difference in how economic delivery and communications systems are put in place.
People have to be trained and dedicated to different work flow aspects, including pharmacists.
A dedicated 1800 or 1300 service number will need to be in place and the marketing of the entire process has to be planned.
As the population ages, the ability to communicate accurate and timely drug needs will increase.
For example, visit this site to see how a dose administration aid can transmit important and timely information:
http://www.boston.com/business/healthcare/articles/2009/08/30/new_gadgets_prod_people_to_remember_their_meds

The use of dose administration aids (DAA's) in private homes will dramatically increase as the ability of government to fund nursing home beds is outstripped by demand, because of retired baby boomers rapidly expanding in number. Electronic communications linked to all stakeholders (pharmacist, GP, Community Nurse) through a DAA is just one unobtrusive method of communication with patients in their home (or managed apartment or retirement village). This can occur without the need to be located in a regional shopping complex - the home is the last frontier in terms of convenience and service location.
And it can extend further.
Research into sensor technology can transform the DAA communications system into a form of pathology service, with readings for serum electrolytes, glucose, INR, cholesterol etc being able to be transmitted by exception, when a patients reference range is exceeded.
At this point specialist pharmacists will need to be part of the team for interpretation and for consultation with other health professionals.
At a time when the Pharmacy Guild of Australia appears to be excluding the welfare of clinical (non owner) pharmacists from their business model, the presentation of a unified profession seems very distant.
Politicians well know that a house divided is a weak one, and as we approach 2010, the Fifth Agreement and the potential for some form of deregulation, there is little time to get an appropriate and inclusive model together.
Savvy pharmacy owners need to prepare for this electronic revolution, even providing training and investment into specialist pharmacist service businesses to ensure that their pharmacies will at least move up into the next stage of primary care - or it could default to specialist nurses.

Issues of preventive medicine and anti-ageing medicine will require specialist knowledge.
Pharmacy owners have difficulty in delivering knowledge type services because of the pressure created by dispensing and infrastructure management.
The concept of a community pharmacy providing core dispensing services and a proportion of space sublet to a range of healthcare practitioners, is one that would appeal to consumers looking for a quality health service.

For the moment, immediate plans should include the ranging of product sizes down to small and medium, deleting large sizes if appropriate.
Websites need to be planned and designed to handle the markets you intend to develop.
There is no need to try and match a Pharmacy Direct or an ePharmacy site - simply match your "bricks and mortar" limited offerings and ensure that there is a high proportion of generic brands in the product mix.
Offer information services on the website that can be pointed to during consultations.
Ensure also that the "bricks and mortar" site drives people to the website and the reverse.
This can be achieved with incentives, coupons etc. in either location.
If the pharmacy has a loyalty club, review it so that it is focussed more on target markets and ensure that it genuinely attempts to reduce health costs.

Patient profiles should include email addresses and a concentrated effort made to update all patient details including date of birth, allergies etc.
While most pharmacies offer some form of a delivery service, it should now be revamped and costed with hard decisions as to how much your customers/patients will be charged.
Getting the physical delivery service and its costs under efficient control will determine the winners in the Pharmacy in the Home development.
So, just do it!

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