August 26th, 2022
Written by George Lazenby
The pandemic shone light on the burdens pharmacists’ face, but if we zoom out, we can understand how COVID was just a milestone on a more than 30-year timeline of industry evolution characterized by historic M&A.
Pharmacy’s New Era
Pharmacists were at the heart of making sure COVID-19 vaccine administration – one of the most gargantuan efforts in the history of public health – was successful. And shortly after the vaccine rollout came a mass, industry-agnostic resignation, forcing still-employed pharmacists to do more work with fewer resources. Overworked and burnt out pharmacists’ ability to provide quality patient care suffered.
And while the pandemic highlighted the importance of pharmacists and shone light on the new burdens they faced, if we zoom out, we can understand how COVID was not the beginning of this current period of upheaval. Rather, it’s a milestone on a more than 30-year timeline illustrating significant industry evolution characterized by historic M&A.
This Washington Post article parcels the modern history of pharmacy industry M&A into three waves, the most recent wave beginning around 2010. While each period possesses unique characteristics, the consensus about the impact of M&A on pharmacists is uniform: it’s made their day-to-day more complicated and taken away from their ability to counsel patients. The pandemic was the straw that broke the camel’s back.
New Market Entrants
Digital startups Ro Pharmacy and Capsule go beyond cutting costs by bringing prescriptions to consumers’ doorsteps. MavenRx partners with specialty pharmacies to provide its members traditionally expensive fertility medications at up to a 60% discount and offers free shipping.
Something all three industry disruptors are doing differently? Targeting a younger demographic, meaning brick and mortar pharmacies need to find ways to maintain customer loyalty, avoid leakage and drive sales.
Another significant disadvantage traditional pharmacies face is managing physical inventory. Accurately forecasting, ordering and shipping product between stores to ensure that shelves are adequately – but not overly – stocked is time and labor-intensive.
In an industry rife with innovation, pharmacies that fail to innovate to keep pace with the mounting competition will fail.
The top 4 pharmacy companies in 2015 earned two-thirds of all pharmacy-dispensed specialty drug revenue, and these mergers and partnerships continue today.
Succeeding in the New Environment
- Exploring new service offerings and revenue streams: While new market entrants are focused on millennials and Gen Z, brick and mortar pharmacies should consider how they can best support the country’s aging population. The number of U.S. seniors will balloon to 80 million in less than 20 years, equating to 1 in every 5 Americans being 65-years-old or older by 2040. This population is more likely to take multiple medications and seek information about their healthcare from longstanding, reputable sources. Given the success of COVID testing and vaccine distribution by pharmacies, pharmacies should also consider expanding in-store testing for common ailments and in-demand vaccines, including ones required by schools to admit students. Other revenue streams to consider pursuing are pharmacist-led classes and specified diabetes care.
- Reimagining day-to-day operations: Reevaluating how the pharmacy is run – from the processes in place to the systems in use – is necessary to make impactful change. The best, most worthwhile available technologies will streamline and automate operations, relieving pharmacy staff from administrative burdens.
Today’s pharmacies face a myriad of challenges that hinder their mission of helping patients. We offer a suite of tools to lighten workloads, empower staff, and enable pharmacists to work at the top of their license. One of our newest products, Guardian, intelligently monitors orders to identify suspicious items so pharmacists can return their focus to what matters the most – the patient.
Download our no-cost playbook to learn about Guardian, end-to-end management software used by more than 6,000 pharmacies across the U.S.