The Future of Retail Pharmacies: From Filling Scripts to Fulfilling Consumer Experience | Deloitte US has been saved
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
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.