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Vollaro
Class Action Lawsuit Filed Against Express Scripts for Stealing Customers and Unfair Competition
Ask Dr. Kondo, P.D. 5 THINGS TO DO BEFORE OPENING YOUR OWN DRUGSTORE
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4 Factors of Consumer Behavior 340B Drug Pricing Program Faces Uncertainty
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Mark
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LifeMD founder and CEO
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Wise Choice Pharmacy Summit
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Table of Contents Issue 07 / September, 2016
06
Presidents Message
22
08
LifeMD founder and CEO Mark Vollaro
340B Drug Pricing Program Faces Uncertainty
26
Ask Dr. Kondo, P.D. 5 THINGS TO DO BEFORE OPENING YOUR OWN DRUGSTORE
32
4 Factors of Consumer Behavior
34
Rethinking Retail: How Value-Based Healthcare is Prompting Hospitals to Open New Pharmacies
12
FisherBroyles - Class Action Lawsuit Filed Against Express Scripts for Stealing Customers and Unfair Competition
15
FisherBroyles – your choice for HEALTH & PHARMACY LAW
18
All Aboard!
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President’s message Joshua Pirestani We have made it our priority to provide our members with the latest developments and news in the pharmaceutical industry. In our issue this month, we are announcing an educational opportunity that is aimed to provide professional growth and empowerment. APPA will be hosting the Wise Choice Pharmacy Summit next month on September 24th, 2016. The summit will be held at the Holiday Inn Orlando- Disney Springs, 1805 Hotel Plaza Blvd, Lake Buena Vista, FL 32830 from 4 pm to 10:30 pm EST. The purpose of the event is to educate pharmacy owners pharmacists, pharmacy students, pharmacy vendors among others about the different aspects available in the pharmacy business including franchise and specialty information and opportunities.
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The Wise Choice Pharmacy Summit is aimed at addressing Pharmacy Compliance and Audit Investigations, PBM Strategies and Terminations, and new pharmacy marketing tactics. To register go to: http://joinappa.com/ events/wise-choice-pharmacy-summit/ For more information, contact info@ joinappa.com if you have any questions! As you read this issue, we hope that the information in it will inspire you, and help you improve productivity. Thank you for the support and for your service to the public.
Joshua Pirestani President.
LifeMD founder and CEO
Mark Vollaro LifeMD founder and CEO Mark Vollaro began his telemedicine journey over five years ago, when he started a new service focused on providing highquality medical consults from licensed physicians over the phone. Since then, LifeMD has grown to a network of over a thousand healthcare providers and served hundreds of thousands of patients through its telemedicine service. Over the past 2 years, the company has focused its efforts on the fastestgrowing area of telemedicine: the development of software and hardware that allows for secure, real-time, two-way video between healthcare providers and patient. Video telemedicine allows healthcare providers to interact with patients or each other remotely, removing the physical barriers to practicing medicine. These systems can be configured to meet the needs of any medical facility, organization, or institution. Telehealth stations include twoway video conferencing systems and a large variety of FDA-approved digital medical devices including stethoscopes, multi-purpose scopes, pulse oximeters, thermometers,
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If Elon Musk will allow us to send a telehealth station to Mars, we would be open to that too.
scales, glucose meters, EKG with spirometry, blood pressure cuffs, and more.
extend their reach with customdesigned LifeMD mobile cases, telehealth kiosks, and mobile carts.
“We see a lot of companies trying this out, rushing to market with hardware packages running third-party software” said Vollaro. “We decided to build our own platform so that we can customize LifeMD for each client to deliver a telemedicine product that makes the most sense for them.”
By developing such a flexible solution, LifeMD has been able to provide telemedicine services through its network of 1,200 doctors to assisted living centers, urgent care locations, doctor’s offices and hospitals. This fall, the company is getting ready to roll out of its telemedicine services to the Los Angeles Unified School District (LAUSD). With over 640,000 students in 900 schools, the LAUSD is the second-largest school district in the country.
LifeMD software and equipment connects providers and patients in real-time. The LifeMD telehealth platform uses an FDA-approved video codec, is HIPAA/FERPA-compliant, AES-encrypted, and allows providers to connect securely with a remote patient, delivering up to a Level 5 medical office consult. By utilizing LifeMD diagnostic equipment, a physician, nurse, or other healthcare professional can provide high-quality healthcare services from a distance. LifeMD technology incorporates a cloud-based multi-point video conferencing system with an embedded phone bridge. Patients can connect with a provider using their Windows, MacOS, iOS, or Android devices, and providers can
Traditionally, students with all but the simplest of health issues would have to be picked up by parents and taken to a doctor, urgent care center, or even the emergency room. Now, students of the LAUSD will have the ability to be seen virtually by a pediatrician within minutes, allowing parents to stay at work and the student with minor treatable conditions to return to class without losing valuable instructional time. The objective of school-based telehealth programs is to improve access to pediatricians, reduce wait time, improve quality of care, and provide
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convenience for families. “Often, families in underserved areas go without access to healthcare, and students will miss extended periods of class time when they become sick,” said Vollaro. “By providing better access to healthcare, LifeMD aims to help close the achievement gaps and reduce absenteeism while improving student grades and graduation rates.” Quoted recently in another story covering LifeMD, Kimberly Uyeda, director of student medical services for the Los Angeles Unified School District said that over the past year, LAUSD had “been looking at their commitment and technology platform”. The program was wellreceived by school officials, the deal was made final when LifeMD agreed to offer the same level of services to all students, regardless of their ability to pay. A signed parental consent form is the only requirement for a student to use the telemedicine service, and in cases where no insurance or payment method is available, LifeMD has agreed to absorb the cost, the company said. LifeMD agreed to make the system “as barrier-free as possible, for any child to receive care,” Uyeda said. “That is important in a school district where 10 percent to 20 percent of the student population doesn’t have health insurance.” Jason Faley, COO of LifeMD, also spoke highly of LAUSD. “They are very forward-thinking,” Faley said. “The biggest thing, after we ironed out the details, was to make sure every child got the same level of care, whether they have Medi-Cal (California’s Medicaid), private, or didn’t have insurance at all. No one is getting singled out and everyone gets the same care.”
The station would not be used if emergency medical help were needed, Uyeda added. The telemedicine units will be rolled out in phases, Vollaro said, with the first five telemedicine stations to be installed in mid-September.
experience that is an exact replication of a brick-and-mortar office visit. That way doctors and patients can both feel comfortable that the service is addressing the patient’s needs, and at LifeMD we have invested significantly in our platform to make sure that’s possible.” said Vollaro.
By all accounts, 2016 is the year telemedicine is about to go mainstream. Recent articles in the Wall Street Journal and the New York Times both cite a medical industry looking for ways to become more efficient and effective, and LifeMD believes it is poised to make that possible.
Unlike some competitors, LifeMD doesn’t vie directly for consumer business. LifeMD contracts with assisted living centers, hospitals, schools, correctional facilities, addiction treatment centers, urgent care providers, private-practice doctors and more.
“We didn’t set out to grow this business quickly by marketing the easiest telemedicine service possible,” said Vollaro. “Our goal is to make a difference by increasing access to quality healthcare, and we ensure that by putting our telemedicine hardware wherever people need a doctor.”
Vollaro sees so much opportunity for telemedicine he went so far as to offer up his services to another CEO: “If Elon Musk will allow us to send a telehealth station to Mars, we would be open to that too.”
Telemedicine programs are gaining in popularity because they in part because of the growing shortage of doctors in the United States. Research estimates show a shortage of approximately 14,000 healthcare providers in 2012, with that number growing to approximately 140,000 by 2050. Telemedicine can help bridge that gap by allowing doctors to see more patients in less time.
In April, the American Pharmacy Purchasing Alliance named LifeMD as the top of five telemedicine companies for its encrypted platform. Alliance President Joshua Pirestani said industry members chose LifeMD as the top telemedicine company based on its time in business, technological innovation and online reviews. “They have the cutting edge in technical equipment, and the prices were at market level or less expensive than competitors,” he said.
But while many telemedicine solutions consist of simple video conferencing solutions, LifeMD differentiates itself by offering a suite of hardware that medical assistants can use to give remote physicians a much better idea of what’s going on with the patient. “In order for telehealth programs to succeed, we have to create an
For more information on LifeMD, please contact Tom Dehnel – Director of Strategic Initiatives at info@lifemd.com or 866-954-8281 10 pharmacy edge
Class Action Lawsuit Filed Against Express Scripts for Stealing Customers and Unfair Competition Practice Area / INDUSTRY: Healthcare, White coller litigation and government investigations
On August 1, five pharmacies joined together and filed a class action lawsuit against Express Scripts Inc. (ESI), alleging ESI systematically stole customers to boost its mail order business. Initiated by Trone Health Services, Inc. (Idaho), Reddish Pharmacy, Inc. (Idaho), Jabos Pharmacy, Inc. (Tennessee), Oak Tree Pharmacy (Oregon), and Amrut JAL, LLC (Indiana), the lawsuit was filed in United States District Court Eastern District of Missouri on behalf of the plaintiff’s and all others similarly situated. The Plaintiff’s estimate the class action would include approximately 50,000 pharmacies. To download a copy of the complaint, click here. The complaint alleges ESI improperly used customer information and prescription data to divert customers to its own mail order pharmacy business. ESI is the largest Pharmacy Benefit Manager (PBM) in the U.S., responsible for processing prescription drug benefits of more than 25% of insured patients, processing an estimated 1.4 billion prescriptions per year. ESI has contracts with many of the largest providers of insured and pre-paid prescription drug benefits, including for example, the Department of Defense (TRICARE), UnitedHealth Group, and Wellpoint. Allegations against ESI include unfair competition, breach of contract, breach of implied covenant of good faith and fair dealing, interference with prospective economic advantage, violation of the Uniform Trade Secrets Act, and fraud.
ESI’s PBM contracts give them access to customer data to verify that beneficiaries are eligible for prescription coverage and to collect insurance payments. The lawsuit alleges that ESI has improperly used this information to divert pharmacy customers via a practice of prescription “slamming,” a practice that has generated billions of dollars in illegal profits for ESI and denied the pharmacies of revenue. (“Slamming” is a situation in which a consumer’s service is switched without the consumer’s permission, a practice the Federal Trade Commission has deemed illegal in the telecommunications industry.) Pursuant to the PBM contractual language and HIPAA regulations, ESI’s use of the customer data to divert business to its mail order pharmacy violates the both the PBM contract and HIPAA regulations. HIPPA requires that personal health information (PHI) data be used only for the purpose for which it was provided and, PBM contractual language states the PHI data is for two purposes: (1) confirm eligibility, and (2) collect payment for filling the prescription. ESI’s mail order pharmacy business has tripled since 2009, largely due to its “mail conversion program,” which generated 41.8 million prescriptions in 2009 with a revenue of $8 billion and grew to 141.2 million prescriptions with revenue of $37.6 billion in 2013. The lawsuit alleges all or nearly all of the $37.6 billion collected
by ESI’s mail conversion program in 2013 would have been collected by retail pharmacies. ESI’s contracts require pharmacies to provide customer and prescription information that is not actually necessary to confirm eligibility or collect payment. According the complaint, ESI has used the data to identify the most profitable prescriptions for their mail conversion program in order to switch refills without the customer’s knowledge or consent. Brand prescription drugs, particularly name brand drugs for chronic conditions, generally produce more net profit than generic drugs. Pharmacies understood that PBM contracts required the filling of generic drug prescriptions at very little profit or in some cases, at a loss. However, they also understood and relied upon the profitability of filling prescriptions for brand name drugs. By converting the more profitable prescriptions to mail order, ESI has effectively harmed the pharmacies ability operate a profitable business and in some cases, may have driven small independent pharmacies out of business. Pharmacies and customers typically learn that a prescription has been converted to mail order when a refill is requested by the customer and submitted to ESI by the pharmacy. However, rather than receiving a confirmation that the prescription is covered by the custompharmacy edge
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er’s insurance, as was the case when the prescription was originally filled, pharmacies are notified that the prescription has been switched to “mandatory mail order” and that only Express Scripts will be permitted to fulfill the prescription’s refills. The customer has no recourse to convert the prescription back to the retail pharmacy. ESI’s mail order conversion program does not benefit customers or insurers according to the complaint. In fact, the program benefits only ESI. State “Any Willing Provider” laws prohibit ESI from requiring patients to pay different co-pay, co-insurance or deductibles based on whether they fill a prescription at a local pharmacy or via mail order. Insurers do not gain any financial benefit either because the “Any Willing Provider” laws dictate that a licensed pharmacy that is willing to accept the same financial terms as ESI, must be allowed to fill the prescriptions. Also included in the complaint is the efficacy of mail order prescriptions due to exposure to temperature and humidity levels higher than FDA regulations for
Brian E. Dickerson, Esq. brian.dickerson@fisherbroyles.com fisherbroyles.com
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Anthony j. Calamunci anthony.calamunci@fisherbroyles.com fisherbroyles.com
storage of the same drugs. Most prescription drugs are supposed to be stored at temperatures between 68 and 77 degrees Fahrenheit and kept in relatively dry conditions, standards that cannot be controlled when mailing prescriptions. This is not the first lawsuit filed against ESI for unfair practices. In January several independent compounding pharmacies filed a lawsuit against ESI, CVS Caremark, OptumHealth, Inc., and Prime Therapeutics LLC, alleging they caused more than $100 million in damages and alleged the focus of their anticompetitive conduct was to drive the pharmacies out of business in favor of ESI’s mail order business. The complaint was later amended to ESI as the sole defendant. A copy of the amended complaint can be downloaded here. The FisherBroyles Pharmacy Law team will continue to follow both these lawsuits and provide updates as they become available. We are well versed in matters involving PBM litigation and welcome your questions. Please contact any one of the following attorneys:
Nicole H. Waid nicole.waid@fisherbroyles.com 202-906-9572
Amy L. Butler amy.butler@fisherbroyles.com
FisherBroyles – your choice for
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All Aboard! As United Rx Solutions celebrates it’s 1 year anniversary, we can reflect on the goals we set and the kind of company we wanted to create when we first decided to start our own pharmaceutical return company one short year ago.
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The four partners of United Rx Solutions have almost 100 years of combined experience in the reverse distribution industry, so we have seen it all…the good, the bad, and the ugly.
Two things motivated us from the start. Our families always come first, they are the main reason why we’re doing this. Also, we wanted to create a different kind of return company. A return company that’s not looking to squeeze as much money as possible out of its customers with hidden fees. A return company that will always go above and beyond to keep our customers happy, whether it’s tracking credits for you, giving you helpful tips on how to maximize your credits, or how to avoid being fined by government auditors. The four partners of United Rx Solutions have almost 100 years of combined experience in the reverse distribution industry, so we have seen it all… the good, the bad, and the ugly. We saw an industry that many pharmacists had very little faith and trust in, so we’ve been doing everything we can to restore that faith and trust in the pharmaceutical return process. We also saw an industry that needed transparency, so we’ve created the most transparent and easy-to-understand manifests and reports in the industry.
2. The “Batching Program” was created for customers who prefer or are unable to be invoiced for the return fee. Under this program, our customers get large, consolidated credits. The batching program is not as fast as the Traditional Program, but because we batch once a month instead of every two months, as most return companies do, it results in faster credits for you. United Rx Solutions’ inaugural year had the usual challenges of a new company, but we have risen to every challenge as we continue to build and improve the company we set out to create. There are many exciting things happening at United Rx Solutions, and we will continue to look for different ways to hone and improve the returned goods process for our customers. Finally, we would like to take this opportunity to give a heartfelt thank you to our customers for climbing aboard and trusting us with their returns. We invite anybody who is tired of wondering where their credits are, or what they’re getting credit for, to give us a try. You’ll be surprised at how transparent this industry can be once the smoke and mirrors are taken away. All aboard!
United Rx Solutions offers our customers two different programs: 1. The “Traditional Program” was created with retail pharmacies in mind. Your returns are not mixed, or “batched” with other stores’ returns, resulting in much quicker credits. This program enables you to see what you’re getting credit for, and the best part about it is our retail customers start to see their checks/credits in approximately 3 weeks!
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340B Drug Pricing Program Faces Uncertainty Healthcare in the United States has always been controversial, but it cannot be denied that the U.S. government has several programs in place to help Americans have access to medical services. One of these is the 340B Drug Pricing Program, which is under the Health Resources and Services Administration (HRSA). The program was put into place to ensure that facilities serving vulnerable patient populations will receive manufacturer discounts on covered outpatient drugs. These facilities include certain 22 pharmacy edge
types of hospitals (such as rural referral centers, sole community hospitals, and cancer hospitals and children’s hospitals exempted from the Medicare prospective payment system) as well as other non-hospital facilities like homeless clinics, hemophilia treatment centers, and tuberculosis and black lung clinics. Since the 340B Drug Pricing Program caters to patients who are in vulnerable situations, its importance cannot be over-emphasized.
Unfortunately, the future of the program has become uncertain because of several reasons, some of which are the changes in Medicare regulations that may affect its reach. The program itself might also be modified after the U.S. election in November since both healthcare facilities and pharmaceutical companies are clamoring for changes. The Bipartisan Budget Act of 2015 The Bipartisan Budget Act of 2015 does not even mention the 340B Drug Pricing Program, yet it can have a huge impact on it later. Section 603 of this act was passed to reduce the payments to hospital departments, which is expected to minimize Medicare Part B premiums and help lift the Federal debt ceiling. It will introduce site-neutral payment, which seeks to correct the unequal payment that happens today between provider-based health facilities and freestanding facilities, with the former getting higher payments from Medicare. Section 603 declares that all off-campus outpatient facilities (whether they’re providerbased or freestanding) that are not located within the same address as their “parent” facilities (e.g. hospitals) should be registered with the 340B Drug Pricing Program. It’s not yet clear how the Centers for Medicare & Medicaid Services will implement Section 603 but, depending on the approach it will take, the Health Resources and Services Administration may be forced to change how it determines eligibility for the 340B Drug Pricing Program. The worst-case scenario is that the HRSA would decide not to allow new facilities into the program which, in effect, will prevent the program from reaching the poor and vulnerable people who need it the most.
Congressional Action Aside from the Bipartisan Budget Act of 2015, the 340B Drug Pricing Program will most likely undergo changes through congressional and regulatory action. As mentioned above, both drug manufacturers and healthcare facilities are demanding modifications to the program. Pharmaceutical companies complain that many hospitals and clinics are getting duplicate discounts on drugs and that the program doesn’t have clear eligibility requirements. Healthcare facilities, on the other hand, suspect that they’re not getting the correct discounts from manufacturers. A few members of the congress are concerned that the 340B Drug Pricing Program allows healthcare facilities to collect inappropriate discounts for drugs that are given to fully insured patients. They also would like to investigate the fact that federal grantees under the 340B Drug Pricing Program have to abide by strict guidelines, which don’t need to be followed by non-grantees under the same program.
Final Note As of now, the future of the 340B Drug Pricing Program is unclear. The only thing that drugmakers, patients, and healthcare facilities can do now is to wait for the changes that would be applied to the program and hope that will have a positive effect on patients and on the industry as a whole.
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Ask Dr. Kondo, P.D.
5 THINGS TO DO BEFORE OPENING YOUR OWN DRUGSTORE (For New Pharmacists graduates) INTRODUCTION
Each year there is a brand new crop of pharmacy school graduates prepping to enter the job market. Today, everyone in the profession knows that there are more pharmacy schools graduating more pharmacists compared to the year 2000.
wet nose rookie in Detroit, Michigan, I graduated & passed my board exam. This world was mine to conquer. Really-really...and you’ve got to picture some sort of Chaku-Zulu-Mini Me... Yeah, that was me, yours truly! In those days, pharmacy chains lined up inside our pharmacy schools for months and sometimes years before graduation, to woo us to intern then work for them. Clearly, today’s professional job environment is different in measures of light-years.
Consequently, the supply of pharmacists has become much higher than the number of available pharmacist positions. “Some pharmacy schools are starting to show[......]warning signs as an increased number of graduates meet fewer employment opportunities”, states the Daily Tarheel’s article whose 26 pharmacy edge
link below will provide you with more detailed information on that subject. http://www.dailytarheel.com/ article/2015/02/pharmacy-schoolsjob-shortage With that problematic professional landscape in mind, I was taken back to 1989, where as a bushy tailed &
The new graduate Pharmacist must be proactive in her/his job search. Because in a National Pharmacist Workforce Survey, there has been a dramatic increase in the number of pharmacy school graduates. From 7000 new Pharmacists in 2000 to over 10,000 in 2008. So what if a new pharmacy school graduate decides to go on their own account? In other words, in order to bypass this gauntlet that finding a job has become, what if she/he resolves to open their
own pharmacy and become an Independent Pharmacy Owner? Back in 1989, although I was signed up, intended to and did work for a pharmacy chain, what I really wanted was to open my very own KONDO DRUG STORE. THE BIG QUESTION Being fresh out of pharmacy school, over-educated & inebriated with more medical/pharmaceutical knowledge than business sense, you ask: “How do I open my own pharmacy business?” To answer that very pertinent question, I could give you a mechanically dry list of specific steps. From the choice of your corporate name, how to incorporate it, the
acquisition of your pharmacy kits, how to obtain the various licenses & permits from your state as well as from your state Boards of Pharmacy. But that is not what I want to address today. Perhaps it will be for the time when such a specific question is posed to me. THE INTANGIBLES The Intangibles are those other factors too many new Entrepreneur Pharmacists overlook. Such oversights can be blamed upon the apparent insignificance of them. Or when their possible significance is acknowledged, they are rated as menial and their impact in the scheme of a successful pharmacy business in mistakenly minimized.
1)- Begin developing professional relationships with a good business lawyer, even before you graduate. Also make sure you maintain a money-for-service relationship with that Attorney. Because if you plan to bank on an Attorney friend to give you free legal business advice, based only on the currency of friendship, the quality of the advice you get will be directly proportional to the amount of money you paid that lawyer. Which will obviously be zero on both items! I speak from personal experience. In 1997, as I prepared to open my second pharmacy, I sought legal advice from an Attorney friend. He told me that I didn’t need to create a second corporation, distinct of the first: “Yao, just go ahead and “dba” your second pharmacy out of the first one.”
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His advice was free because he was my friend. But, it took only 3 years for me to realize how much that free legal advice was really going to cost me. That is when the hospital which owned the building within whose walls my pharmacy was located, decided suddenly to shutdown their clinic. As a “DBA”(Doing Business As), I found out that I could NOT declare bankruptcy for the closed pharmacy as I could have, if I had opened it 3 years earlier, as its own corporation. So, I had to carry that dead elephant on the back of the first pharmacy for the remainder of its business life. At the end, I got what I paid for. Lesson: Carrying a dead elephant is not good business! 2)- Volunteer your time during your internship & learn all you can from your Registered Pharmacists. Learn about due diligence in every 28 pharmacy edge
aspect of the pharmacy craft, from dispensing, compounding to patient counseling. When the time comes for you to run your own drugstore, your time and energy are going to be divided over all the obligations of your business. So if your pharmacist skills and instincts are not properly tuned, you will make dispensing and other errors that might destroy everything for which you have sacrificed so much for so many years. Because it is a different world, when the buck stops with someone else and not you. Lesson: Use the “cover” of your Registered Pharmacists & master your craft! 3)- Work for a year or two as a Registered Pharmacist. Because it is a different world when
now the buck stops with you. When you were a grad-intern, you surely noticed that everything your preceptor did, you knew you could do. Why not, you are a Pharmacist just like she/he is right? Well, on a hard day’s night in 1989, I could not sleep a wink. Fresh from being licensed from the state of Michigan, I had just completed my first day at the helm as THE Registered Pharmacist. The buck stopped with me! My initials were everywhere; in the computer, on every prescription hard copy and on every prescription label affixed on every Rx product leaving the pharmacy. My mind could not settle enough for me to fall asleep. Because my brain was frightfully reviewing and second guessing EVERY Rx dispensed... and I mean EVERY one of them.
Carrying a dead elephant is not good business!
I am happy to report that I made no error and continued as such thereafter. Lesson: Make all your dispensing errors when the buck stops with your Preceptor! 4)- Work another year or two as a Pharmacy Manager. Learn about the various aspects of that job. Absorb all you can on management of Rx/OTC drugs, HBA (Health & Beauty Aids), sundries, drinks & gifts ordering, receiving, returns & inventory control, shrinkage, etc... I remember training a new Registered Pharmacist on how to assess your fast-movers and the assessment thereafter of what to order and their quantity. The drug order list I handed him to key in the Telexon device included one drug whose cost of acquisition
was maybe $989 and its quantity needed was “×1”.
to product display and consequently to sales volume.
The gentleman keyed in “×10”. For all practical purposes, he had spent close to $10,000 of my drug budget on one line item.
Lesson: There is no job beneath you. Humility is greater a teacher than is arrogance.
Considering the time it takes to return the extra 9 package units of that drug and the time it takes for your account to be credited, an Independent Pharmacy on a much tighter budget, could be in serious cash flow trouble. But a big chain store can easily shrug such an error.
CONCLUSION Do not rush lightly into this endeavor. There are obviously many more things with which to stock your quiver before footing up the money to invest in your bow. For, once engaged in this hunt for success, know that the beast-of-business is akin to an African Cape buffalo:
Lesson: It is better to lear n with someone else’s money.
If you miss the mark and your quiver is empty, you will get gored.
(“someone” with deeper pockets than you). 5)- Get involved with the running of all the various departments of your store. I often shadowed the store manager, the Head of the Cosmetics department, that of the photo department etc... I even helped in receiving, have unloaded boxes and learned the diligence required to match your order sheets to the package invoices. Helping with the quarterly planograms gave me insight into what Industrial Psychologists bring pharmacy edge
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Simplifying the complexities of health system pharmacies. • Pharmacy Management • Transitional Leadership • Pharmacy Consulting
Learn more about how CompleteRx can help your pharmacy save. Visit CompleteRx.com or call toll-free 888-388-1196 today.
Living Pharmacy
CompleteRx.com
Continuing our look at the factors of consumer behavior, this month we dive into psychological factors. Remember, while we aren’t able to control these factors of behavior, we should always take them into account. Since this month’s topic greatly affects pharmacy customers, we are doing an overview this month and then diving into it more in future newsletters.
4 Factors of
Consumer Behavior
Each person has different factors that affect their purchasing behavior - cultural, social, personal, and psychological. There are 4 main psychological factors: motivation, perception, learning, and beliefs and attitudes. Motivational factors stem from needs such as physiological (hunger, thirst), safety, social, esteem (recognition, status symbols) and self-actualization - with the physiological needs being most pressing and the self-actualization being least. How a consumer acts is influenced by his or her own perception of the situation. People are exposed to a staggering amount of information every day. It is estimated that customers see between 3,000 and 5,000 ad messages daily. Most people are able to tune out the majority of the messages unless they perceive them to be relevant to themselves or their family. How they perceive your company determines
if yours is a message they pay attention to. That’s why it’s important to be consistently marketing your pharmacy. Learning refers to changes in a person’s behavior arising from experiences they have had. People are driven and motivated to act a certain way if they have had a positive (or negative) learning experience with something/someone (e.g. your pharmacy). Whether they realize it or not, if they learn something from you (good or bad), they have a connection with you that will affect their future behavior. Beliefs and attitudes are the most difficult psychological factors to change as they are deeply rooted in a person’s knowledge, opinions, faith or feelings. When marketing toward a certain belief or attitude it is better to fit the product or service into beliefs and attitudes that are already held, rather than try to change them.
Nicolle McClure Vice President 2929 Westown Pkwy., Suite 100, West Des Moines, IA 50266 515.440.1270 main | Web: www.grxmarketing.com
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Rethinking
Retail How Value-Based Healthcare is Prompting Hospitals to Open New Pharmacies By Dana Fox, Program Development Manager, CompleteRx
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While onsite pharmacies have long been an option (albeit expensive) to improve hospital customer service and care continuity, the recent rise in value-based healthcare has compelled many healthcare leaders to view them in a new light. Once considered, at best, a cost center, and at worst, financially infeasible, onsite pharmacies are increasingly regarded as strategic solutions to hospitals’ most pressing problems. For example, while they may be costly to launch, retail pharmacies often ultimately boost revenue by:
in today’s healthcare environment, the decision to open an onsite hospital pharmacy is less black and white than it may have been before. »» Improving medication adherence: Onsite pharmacies provide care continuity, which may help hospitals improve medication adherence – the lack of which, in the U.S., drives 11 percent of hospital readmissions and costs nearly $100 billion annually (NCBI). For example, onsite retail pharmacists may fill the prescriptions of patients who are about to be discharged, bringing medication to their bedside and delivering comprehensive counseling to ensure a proper drug regimen, post-discharge. This process may also help hospital staff assist patients who may not be able to afford their medications, while case managers work to enroll them in patient assistance and drug discount programs. »» Enhancing care integration: When patient prescriptions are filled at an onsite hospital pharmacy, pharmacists may leverage a wealth of information – including the patient’s hospital record, inpatient medications, lab results, physician notes, and more – to reduce the risk of adverse drug events, which result in more than 770,000 injuries and deaths per year and cost up to $5.6 million per hospital annually (AHRQ). Such data demonstrates the true costs associated with disparate processes. Should the patients return to the hospital in the future, attending staff will now have a more complete version of their medication history. This access, as well as physical proximity, enables enhanced care team collaboration, in turn improving patient outcomes. »» Boosting patient satisfaction: As with all businesses, quality customer service has always been critical to hospitals’ success; however, now that the government has tied patient satisfaction directly to hospital reimbursements, it’s arguably more important than ever. Onsite hospital pharmacies may boost patient satisfaction by allowing hospitals to provide more convenient and customized care. For example, hospitals may plan ahead to refill prescriptions and deliver them to patients with recurring appointments at the hospital. In another example, onsite pharmacies may provide highcost or specialty medications that have traditionally been supplied by mail order pharmacies.
In addition to these primary benefits, which may contribute to significant savings, onsite retail pharmacies may also grant hospitals a small profit (experts estimate a margin of 3-5 percent), which often grows with time and scale. It’s worth mentioning, while the scales are shifting in favor of onsite pharmacies, they’re far from a “one-sizefits-all” solution. Smaller hospitals may not have the volume to support one, and all hospitals struggle with lost revenue from patients who may find it more convenient to refill close to home. Still, hospitals of all sizes would be wise to keep an open mind and a close eye on their P&Ls – in today’s healthcare environment, the decision to open an onsite hospital pharmacy is less black and white than it may have been before.
Dana Fox serves as program development manager at CompleteRx, a pharmacy management company. In his role, Dana overseas the enhancement of current solutions and the launch of new services – such as onsite pharmacy implementation – to meet the needs of hospitals and pharmacists across the country.
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Transdermal Pharmaceuticals Clinically Proven
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Need help solving the marketing puzzle? At GRX Marketing, we specialize in offering marketing services to independent pharmacies across the United States. We are a hands-on, proactive, marketing team and we pride ourselves on presenting lowcost ideas to add new patients AND increase the spending of current ones. By operating as your personal marketing expert, you and your staff will have more time to spend with patients and focus on other tasks and goals.
GRX Marketing Full Service Program - Detailed 6-month marketing plan - Unlimited marketing consultation - Unlimited design services - Voice and email communications - Social media management - And more!
If you’re frustrated with marketing call 515-280-2913 or email nicolle.mcclure@grxmarketing.com
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