Cover Story: Holding on to Pharmacy’s Pandemic-Era Gains

HOLDING ON TO PHARMACY’S PANDEMIC-ERA GAINS

PHARMACY’S POWER AND PROMINENCE GREW DURING THE PANDEMIC — NOW THE INDUSTRY WANTS TO MAKE IT PERMANENT

B Y M A R K H A M S T R A

Through their mobilization to administer testing and vaccina-

tions, retail pharmacies have been on the front lines of the nation’s response to the COVID-19 pandemic.

Now the industry is rallying to translate the vital role it is playing during the crisis into a more expansive one in the nation’s healthcare system going forward.

“Pharmacies have really shown what they can do, and have really delivered during the pandemic,” said Douglas Hoey, CEO of the National Community Pharmacists Association, citing the fact that more than 80 million vaccines — about a quarter of the total of vaccines given nationally — have been administered in pharmacies.

Now the NCPA, along with others in the industry, is seeking to make permanent some of the additional authorizations around vaccinations and testing that were granted on an emergency basis during the pandemic. For example, the Department of Health and Human Services authorized pharmacists to order and administer COVID-19 tests, and to leverage pharmacy technicians for COVID-19 testing, without state or local restrictions. In addition, HHS is also expanding the ability for pharmacy teams to provide immunizations to children more comprehensively.

Steve Anderson, president and CEO of the National Association of Chain Drug Stores, recently argued in a Senate Finance Committee hearing that these new capabilities and others, along with the payment mechanisms to

support them, should be made permanent.

“Doing so would help Americans continue reaping the benefits of care services at pharmacies they know and trust into the future,” he said at the hearing.

Dr. Sara Roszak, senior vice president of health and wellness strategy and policy at NACDS, said the industry is working at both the national and state levels to open the door to more comprehensive care services going forward.

“I think there’s a good opportunity to work at the federal level and see what we can make permanent, since we’ve made so many strides at that level,” she said. “But at the same time, we continue to do outreach and pursue efforts at the state level. We’re pursuing both angles.”

Retailers, meanwhile, have been reporting that they are seeing increased use of their healthcare services as a result of their ongoing COVID-19 testing and vaccination programs. In its recent first-quarter earnings call with analysts, CVS Health said it appears to be gaining customers because of those efforts. “We are successfully driving health services engagement among customers who are new to CVS Health through COVID testing and vaccines,” said Karen Lynch, president and CEO. For example, about 9% of customers who are new to CVS Health through its COVID testing have filled a new prescription at a CVS Pharmacy, she said.

Healthcare Destinations

A key outcome of the expanded testing and vaccine administration during the past year-plus is that drug stores continue to burnish their reputations as destinations for a wide variety of health services.

Pharmacists in particular have proven themselves to be trusted providers of factual information about the COVID-19 virus, its symptoms and treatment, testing for it and the vaccines, said NCPA’s Hoey. In addition, administering COVID-19 tests and vaccines has opened the door for patients to discuss other medical issues with their pharmacists, he explained.

“Pharmacies have been working to redefine themselves as healthcare destinations for decades, and slowly but surely that is happening,” he said. “The role of pharmacies has been changing in the minds of consumers.”

The fact that a quarter of the people who have received vaccinations have chosen to do so in their local pharmacies proves that consumers trust their local drug store to provide important medical services, Hoey said.

“Already quite a few patients were getting their flu shot in pharmacies. We think that this cements pharmacies as not just for once-a-year flu vaccination each fall, but as destinations throughout the year for vaccinations,” he said.

“And we think from there, other, mostly preventative healthcare services will stem off of that change in the consumer’s perception of pharmacies,” he said. “We think it’s been invaluable.”

Roszak of NACDS agreed that the past year has elevated the consumer perception of pharmacies as a vital cog in the nation’s healthcare apparatus.

“Even before the pandemic, study upon study showed the potential for pharmacies to improve routine vaccinations, chronic disease care, health outcomes for the underserved and all those issues,” she said. “During the pandemic, they didn’t go away. They were essentially amplified. So, it just gave pharmacy the opportunity to even further demonstrate what has already been proven through evidence-based studies.”

The widespread accessibility and convenience of pharmacies, with locations within 5 miles of 90% of Americans, have been key factors in terms of shining a light on the value that pharmacies provide in their individual communities, she said.

“At a time when Americans really needed a care destination to be at their fingertips, … pharmacies were really there for the public,” Roszak said.

She also credited pharmacies with helping reach minority communities with accessible vaccine sites, aiding in the nation’s efforts to reach the entire population.

Growing Consumer Interest in Health Services

James Beem, managing director of global healthcare intelligence at J.D. Power, which conducts extensive

“Pharmacies have been working to redefine themselves as healthcare destinations for decades, and slowly but surely that is happening. The role of pharmacies has been changing in the minds of consumers.”

— DOUG HOEY, CEO, NATIONAL COMMUNITY PHARMACISTS ASSOCIATION

consumer-satisfaction research across multiple industries, including pharmacy, said consumers appear to be interested in obtaining more health-and-wellness services from their local pharmacies.

J.D. Power’s research revealed that about 48% of retail pharmacy customers were using health-and-wellness services as of last year, up from 43% in 2019. In addition, 20% of customers spoke to a pharmacist during their visit to a retail pharmacy, up from 16% in both 2018 and 2019.

Perhaps most significantly, the research found that when customers use two or more health and wellness services at a retail pharmacy, their overall satisfaction and brand advocacy increases, and average spending doubles.

“We believe that trend is going to continue,” Beem said. “There’s an obvious satisfaction difference between a pharmacy customer that uses a health and wellness service compared with those that do not use health and wellness services.”

In addition, the number of people using health and wellness services from their local pharmacies increased about 6% from 2018 to 2020, he said. That bodes well for sales of other retail products that consumers can purchase from drug stores for which they are often paying out of pocket.

“I think we are going to see a lot more retail space being built out that addresses the clinical side of health care,” Beem said.

He agreed that vaccine administration has been a potential launching pad for local pharmacies to provide additional healthcare services.

“Consumers already automatically thought about a Walgreens or a MinuteClinic or a Walmart for their vaccinations, but the interesting thing we see is that consumers are looking for pharmacies to go ‘further up the fee schedule,’” Beem said, citing patients seeking diabetes care or even counseling around mental health issues.

“The vaccinations were just an affirmation that pharmacies are a destination for health care; the question is, what is the limit?” Beem said.

He said it appears that both pharmacists and pharmacy technicians are increasingly steering patients to their in-store primary care clinics, which customers appreciate, as indicated by their satisfaction scores.

One of the challenges retail pharmacies face as they seek to evolve into more well-rounded healthcare destinations is simply the constraints of the physical space in which they operate, he said. In many urban locations, retail pharmacies simply don’t have the room to offer the suite of clinical services that drug stores in suburban locations have been building in their stores. Retailers seeking to add room for more on-site clinical care may need to choose between space for retail merchandise and space for medical treatment and consulting.

Stronger Ties with Communities

Sandra Canally, founder and CEO of The Compliance Team, which offers certifications for pharmacies in vaccine

Growing Digital Connectivity Creates Opportunities

Drug retailers have significantly enhanced their digital connectivity with their customers during the past year, in part through the databases they were able to build up through COVID testing and vaccinations.

“There is a great opportunity to cultivate strong customer relationships, now that these new customers are known,” said Clay Heinz, group vice president of healthcare growth and strategy at TTEC, a customer experience technology and services company.

For example, pharmacies can reach out with information related to the customers’ health interests; or send reminders of upcoming prescription refills; and notify customers about generic drug availability, flu shots and more in digital channels, he said. “Showing customers that you have removed friction across the customer experience helps build brand trust and loyalty that lasts well beyond the pandemic.”

Heinz said he believes drug stores could benefit from more effectively developing their online strategies and building upon the “trusted advisor” model that had long been successful for retailers providing in-person pharmacy services, dating back to the soda-fountain days.

“By leveraging pharmacy data, and buying patterns across the online and retail experiences, personalized offers should develop as if the consumer was sitting at the counter and enjoying a chocolate Coke,” he said. One example of this type of opportunity is the development of “communities of interest,” which can be centered around different health conditions and can foster a curated social interaction with local consumers who have the same condition, he said.

“How powerful would it be if your drug store facilitated a social network for pregnant mothers with relevant content and a chance to speak with each other about their experiences?” Heinz said. “The drug store is in a unique position as it is agnostic to the payer and provider experience, and can help the consumer navigate a complicated ecosystem. The drug store can monetize this social group with in-person seminars, relevant products and a clinic that supports the routine aspects of the care plan.”

James Beem, managing director of global healthcare intelligence at J.D. Power, which conducts consumer satisfaction research across multiple industries, including pharmacy, said it appears that drug stores already have enjoyed strong success with their expanded digital connectivity.

“That seems to be paying dividends for pharmacies that engage around text reminders, follow-up appointments and other digital interactions,” he said.

The percent of pharmacy customers who reported receiving a digital reminder about their prescription rose to 73% in 2020 compared with 62% in 2018, he said.

“Bravo to the retail pharmacies because they are far ahead of their peers in that space today,” Beem said. “They tend to have greater mindshare with their customers than other areas of health care.” — M.H.

administration and other areas, said she believes retail pharmacies have strengthened their relationships with their communities, as well as with individual patients during the past year.

“The return to normal couldn’t happen without the vaccination of a large percentage of the population, and certainly no one in the healthcare sector is more responsible for that than the pharmacies,” Canally said.

The fact that retail pharmacies conducted point-of-care COVID-19 testing during the pandemic lays the groundwork for additional services in the future, she said.

“They’ve already put policies and procedures and processes in place for point-of-care as it relates to COVID, so they’ve readied themselves if they choose to expand pointof-care testing,” Canally said.

Beyond testing, retail pharmacies also have the opportunity to expand into offering more value-based care, such as

medication therapy management, she said, noting that the key to success in building these services for patients is the coordination of care with other healthcare providers.

“The more coordination you have with a prescriber and the more you show the doctor that you can better manage a patient with diabetes, for example, then that communication and coordination is going to evolve into an increase in prescriptions, which equates to more business,” Canally said. “You need to bring that extra value not only to the patient, but also to the prescriber. I think that’s key.”

While time constraints may be holding pharmacists back from expanding their value-based care offerings, Canally suggested that operators start slowly with a small group of patients who could benefit from such care and build from there.

“I think that in the future we will see more dependency on the pharmacist and the pharmacy as the place to go for health care,” she said. “We will still need physicians, of course, but I believe that the pharmacist has created and will sustain a much more active role in health care.”

Retailers can also benefit from having the quality of their services validated by a third-party accreditor, such as The Compliance Team, Canally said. The company has added certification for pharmacies that do point-of-care testing and COVID testing, as well as immunizations, which expanded to include pediatric immunizations as many retail pharmacies were unaccustomed to vaccinating children, she explained.

NCPA’s Hoey said that thanks to the expansion of COVID testing during the pandemic, more pharmacists also have become interested in point-of-care testing. NCPA offers a training program in point-of-care testing, he said, and has seen a “huge increase” in pharmacists taking the program.

He also noted that employers likely have taken more notice of the value that pharmacies provide, which could open up opportunities for pharmacies to offer additional services for workers, such as blood pressure screenings, through contracts with employers.

“Brick-and-mortar pharmacists are well positioned to be able to provide that service, and save millions of dollars and hundreds, if not thousands, of lives,” Hoey said.

He cited the Community Pharmacy Enhanced Services Network, or CPESN, as being well positioned to capitalize on this opportunity. CPESN, which was one of the independent pharmacy networks authorized to administer COVID vaccines, organizes networks of independent pharmacies to negotiate for the provision of such services as these.

Hoey said he is hopeful that pharmacists will gain ongoing authority to order and administer vaccines, as well as the payment mechanisms to support those and other services that pharmacies have proven well suited to provide.

“This should be a stark reminder for payers and legislators that if there’s not fair payment for the dispensing of the product, these pharmacies won’t be around for the next pandemic or for the next public health emergency,” he said. “You’ve got to pay the pharmacies fairly on the dispensing side, as well as engage them for their preventative services.”

Clay Heinz, group vice president of healthcare growth and strategy at TTEC, a customer experience technology and services company, agreed that the concept of using retail pharmacies as an efficient venue for simple healthcare solutions.

“The real question will be how the big chains develop strategy that builds on this momentum,” Heinz said, citing the opportunity for retailers to leverage their digital connections with customers.

He said he believes that drug stores will evolve to resemble urgent care facilities more closely.

“There is a big push in the provider ecosystem to meet the patients where they want, and this isn’t necessarily a big hospital with a marble foyer,” Heinz said. “The answer is providing simple health care in a wide variety of settings that meet the needs of different consumers. The drug store industry will leverage the ‘convenience’ strategy and massive real estate footprint for a more effective and efficient delivery of primary care.” dsn

“Even before the pandemic, study upon study showed the potential for pharmacies to improve routine vaccinations, chronic disease care, health outcomes for the underserved and all those issues. During the pandemic, they didn’t go away. They were essentially amplified.”

— SARAH ROSZAK, SENIOR VICE PRESIDENT OF HEALTH AND WELLNESS STRATEGY, NACDS