Retail pharmacies are facing a challenging economic climate that threatens their traditional business model. Gone are the days when pharmacies can thrive financially from simply filling and dispensing prescriptions to a stable pool of regular customers.

How Retail Pharmacies Can Expand into Clinical ProgramsThe new industry challenges that are putting pressure on retail pharmacies include:

  • Declining reimbursement rates for routine prescriptions
  • Expanding requirements to demonstrate improved patient outcomes
  • Growing service expectations by customers who make convenience a priority
  • Increasing competition from regional and national chain pharmacies

So how should pharmacies being impacted by these forces respond? The appropriate response – and one that addresses all four concerns – is building out the retail pharmacies’ roster of clinical programs and services for patients.

Consider Clinical Program Options and Financial Impact

The number of clinical programs and services that retail pharmacies can offer their patients range from basics like seasonal flu vaccines to the sophisticated like pharmacogenomics services that determine how a person’s genetic code affects their reaction to specific drugs.

Among the many options to be considered are:

  • Behavioral coaching
  • Chronic disease management (e.g. diabetes)
  • Comprehensive medication reviews
  • Medication adherence
  • Medication synchronization
  • Medication therapy management
  • Prevention and wellness education
  • Smoking cessation

Any and all of those programs could be custom developed by individual pharmacies or they could be off-the-shelf programs from third-party vendors. The programs could be branded or white-label with the pharmacy’s own name attached.

The clinical programs and services generate additional revenue for retail pharmacies in at least four different ways, including:

  • Direct reimbursement: The first and most direct is through direct reimbursement for the programs and services. If the program or service is a covered benefit, payment would come from the patient’s health insurance plan. If the program or service is not a covered benefit, payment may come from the patient out-of-pocket.
  • Bonuses: The second is through bonuses paid to the pharmacies from Medicare Part D health plans that receive star ratings based, in part, on the health plans’ medication performance, including medication safety and adherence standards.
  • Stakeholder partnerships: The third way is by partnering with other stakeholders like hospitals and medical practices to deliver “meds to beds” prior to patients’ discharge or to become the providers’ retail pharmacy of choice for discharged patients. Those partnerships can be straightforward or be part of value-based reimbursement models like bundled payment arrangements.
  • Front-end sales: The fourth way is through increased front-end sales resulting from more foot traffic through the pharmacies from patients participating in the new clinical programs.

The four sources of new revenue make growing and expanding into clinical programs and services valuable business model innovations for retail pharmacies.

Technology Enables Expanded Clinical Programs and Services

Those business model innovations are impactful, especially if they work. And the best way to make sure they work is technology. A pharmacist behind the counter must know when to ask patients if they would like a diabetes management class when they come in for their diabetic medications.

The challenge for pharmacists is knowing when an individual patient may be interested in or benefit from a specific clinical program or service now being offered through the pharmacy. Instead of relying on memory or logging into disparate vendor applications on unconnected computers or mobile devices, the more effective and efficient solution is integrating all those applications and systems into the pharmacy’s own pharmacy management system. The pharmacy’s pharmacy management system then becomes the hub of all clinical programs and services available and appropriate for each patient and each customer.

Some examples of when specific clinical services could be identified for individual patients include:

  • Medication synchronization: If a patient makes three separate trips a month into the retail pharmacy for three different medications, a medication synchronization application integrated into the pharmacy management system could flag the patient as a potential enrollee in the pharmacy’s medication synchronization program.
  • Smoking cessation: If a patient comes in to refill a prescription for nicotine patches, a smoking cessation application integrated into the pharmacy management system could alert the pharmacist of a potential patient for an upcoming class.
  • Medication adherence: If a patient is overdue for a prescription refill, a medication adherence application integrated into the pharmacy management system could flag the patient as a potential enrollee in an adherence program or for a follow-up reminder to refill the prescription.

Centralizing these opportunities at one point for each patient makes expanding into clinical programs and services much easier for time-strapped pharmacies and pharmacists. Only technology can do that effectively.

Other technologies like automated central fill systems and prescription benefit adjudication systems also assist with that transition to more comprehensive clinical offerings. Such business optimization solutions free up the pharmacists’ time to run their new clinical programs and services and to engage more customers on a face-to-face basis.

Making the Business Case for Clinical Integration

The transition from a fill-and-dispense operation to one that offers an array of technology-supported clinical programs and services can seem daunting for a retail pharmacy. The two biggest challenges are cost and culture.

The transition involves initial and ongoing outlays for the programs and services and for the technologies that integrate management of those programs and services into one pharmacy management system. And, people are resistant to change.

Retail pharmacies in the future are not going to be able to survive just by filling prescriptions. They will have to make this change, and they will have to find a way to focus on clinical activities that improve the health of their customers and their own financial health.

They don’t have to do every single thing that’s available out there in the market or possible for them to do. They should pick what makes the most sense for the demographics of the patients they’re serving and what makes the most sense for them within the context of their own business.

It’s an easy business case to make.

Related: Learn about McKesson’s Clinical Program Solution

Emilie Ray

About the author

Emilie Ray is president of McKesson's Pharmacy Technology and Services. She has more than 15 years of experience in the healthcare technology industry, having worked in both the hospital and retail pharmacy segments. She has held a variety of progressive leadership roles within McKesson's Pharmacy Automation and Systems business, including software development, product management and marketing, which has deepened her understanding of operations, customers' needs and the industry overall.