Supporting the Evolving Retail Pharmacy Landscape While Improving Medication Adherence

The retail pharmacy market is experiencing extraordinary changes in consumer preferences and market dynamics. For example, the surge in eCommerce is altering how pharmacies serve their consumers. Plus, the market entry of Amazon, coupled with rising pharmacy dispensing costs, is putting extreme pressure on retail pharmacies stuck in the middle.

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Effectively competing in this changing market necessitates that retailers find new methods to differentiate themselves from the competition in ways that are valued by their customers. Implementing innovative strategies, technologies, and services that create new customer experiences, offer convenience/choice, and improve wellbeing can be integrated and placed at the customer’s fingertips daily.

ePharmacies on the Rise

The global pandemic transformed consumers’ buying processes. Risks associated with visiting brick-and-mortar stores caused consumers to pivot to online purchasing for all their needs and desires, including medication. Even consumers who, before the pandemic, may not have shopped online after experiencing the convenience of home delivery are sticking with it. Consumers enjoy the ease, availability, often lower prices, and easy access, even from rural areas, that pharmaceutical eCommerce delivers.

According to Precedence Research, the global market for ePharmacies is anticipated to rise considerably through 2030, which predicts that the market will increase from $59.93 billion in 2021 to $256 billion by 2030.

Mobile Apps Fuel Prescription Refills

Another ingredient of the eCommerce pharmacy surge is the use of mobile apps for ordering medications. Mobile apps provide unprecedented ease and accessibility for online shopping. A JD Power study reports that 59% of pharmacy mobile app users use an app to manage prescription refills, and 57% use an app to view prescriptions.

Consumers love the ease of mobile apps. But although these applications help consumers acquire medications, few help with adherence beyond automatic refills or medication synchronization.

Patients Expect Engagements on Their Terms

Across the health care continuum, patients expect their experiences to resemble their other consumer retail journeys. The penetration of smart devices is fueling eCommerce growth. The mobile economy 2020 projects smartphone usage to increase to 80% by 2025.

Most customers expect companies to accelerate digital engagement because of COVID-19. Additionally, reports indicate that 40% of consumers won’t do business with a company if they can’t do it via their preferred channel. Further, 58% of consumers expect to do more business online after the pandemic than before.

Amazon Effect

Amazon has been a market disrupter since its inception, and its expansion into pharmacy is no exception. The company has taken a phased approach in its foray into the prescription drug market. Starting with its acquisition in 2018 of online mail-order pharmacy PillPack for nearly $1 billion.

More recently, it rolled out Amazon Clinic (2022) virtual health care service, One Medical (2023) 200 brick-and-mortar physician offices, and RxPass (2023), which allows Amazon Prime members to fill as many prescriptions as they need for a flat monthly fee, including free home delivery. The prescription program covers a range of generic drugs that cover common conditions such as allergies, diabetes, high blood pressure, kidney disease, and migraines. Amazon’s 200 million Prime subscribers give Amazon Clinic, One Medical, and RxPass a vast consumer reach.

Rising Pharmacy Costs

The costs of operating a pharmacy continue to rise. In 2020, an NACDS-commissioned study estimated the average cost of dispensing medications at $12.40. Payroll costs were the biggest drivers of the overall cost, accounting for roughly 58% of dispensing costs.

Plus, like most industries, pharmacy is experiencing a labor shortage, and the industry is reacting. For example, to encourage workers to join its labor force and retain current staff, Walmart recently said it increased the average pay of its pharmacy workers to more than $20 per hour and promised to offer more frequent and automatic pay raises. Walmart and CVS have also cut pharmacy hours because of staffing challenges.

With the population aging, chronic diseases are more prevalent in the total population. This is increasing the number of prescription transactions, along with the introduction of new medications—some replacing existing treatments and others treating conditions for which no treatment was previously available—is increasing the complexity and stress on the pharmacy.

Medication Adherence Issues Persist

Although drug discovery has made dramatic strides in treatments, adherence to those medications remains a compelling healthcare issue. Nature reports that the benefits a drug seemingly affords in a highly controlled setting will not translate to real-world use if patients do not take their medications as prescribed. Poor medication adherence is the most common reason for the disparities in clinical trials and is experienced throughout the drug and patient lifecycle, impacting real-world outcomes, and is responsible for approximately 125,000 deaths per year in the United States.

So how is it that today we have made so much progress in developing improved medications, yet fail to effectively enable consumers to maintain adherence? Could part of the reason be that in the United States, we are still dispensing medications for the most part in bottles, which is the same way we have done so since Andrew Jackson was president, meanwhile, the steel plow was invented during the 19th century?

When asked how they support patient adherence, many retailers point out services such as refill reminders or automatic refills. In fairness, this does help prevent customers from running out; however, what does that really do to help them take the right dose, at the right time, over the right period of time?

Medication adherence programs can do so much more and reach so much further to provide value added benefits. Calendarized blister packaging that is persistent, in the hands of the customer every day, keeps them adherent in a very tangible and simple way. When paired with a carton that has the real estate to effectively lead the customer to a QR code that is a dynamic gateway to an integrated e-commerce platform, the opportunities to create new experiences, drive eyeballs to websites or foot traffic in stores, and points of differentiation are only limited by the imaginations of the team.

Medication adherence programs that leverage calendarized packaging have been studied over the years and demonstrated not only improved adherence, but also more timely refills and enhanced customer loyalty. By no means does this suggest that these types of packages are a one-size-fits-all solution. In fact, some individuals who use pill organizers have found the blister packs undesirable, which makes it very important to have the right processes in place for those who wish to receive their medications in a different way.

This type of packaging can also facilitate operational benefits. Because the drugs are pre-packaged, there is no need to spill-and-fill, which reduces the opportunity for human error or crosscontamination. The time saved in the prescription fulfillment process can be better spent interacting directly with customers and providing many of the new healthcare offerings retailers are developing.

To keep up with these changing market dynamics and customer preferences, pharmacies must implement new technologies to offer competitive solutions for improving consumer experiences that affect refilling prescriptions and facilitating medication adherence. Competing only on price has been a race to the bottom, ruining many markets. Adherence programs that leverage packaging integrated with web resources and SMART applications offer the opportunity to simplify, add value, and differentiate consumer experiences throughout the healthcare journey.

About the Author

Terrence O’Neill serves as director of Business Development at Covectra, a leader in track & trace solutions.