Drug Topics - Chains ponder responses to mandatory... -
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Published on: 4/18/2005
Last Visited: 5/22/2005
Another speaker, David R. Bellaire, of the consulting firm Bain & Co., pointed out that pharmacies will continue to lose not only prescription business, but also whatever front-store sales Rx-related foot traffic brings in. Under fairly conservative estimates, some pharmacies could be facing revenue losses of up to 40% over the next several years, he said.In 2001, 6% of employer drug benefit plans included some form of mandatory mail-order provisions.That figure rose to 24% in 2004.
Furthermore, pharmacies can anticipate little support from drug manufacturers, which are facing a spate of their own problems, Bellaire noted.
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Assuming PBMs pass at least 90% of these rebates on to the health plan payers, it is virtually impossible for retail pharmacies to compete on price with PBMs and turn a profit, according to Bellaire.
Retail pharmacy chains should adopt a long-term strategy of partnering with a PBM that has a mail-order facility, Bellaire suggested.In his model, prescriptions would be dropped off at the retail pharmacy and faxed to the partner mail-order facility, which would fill the Rx and label the bottle with the chain pharmacy's brand name.