Even before the pandemic, large e-commerce companies have led people to speculate the death of physical pharmacies and other brick-and-mortar businesses. However, with COVID-19 hospitalization rates decreasing and a larger portion of the population becoming vaccinated, people have rushed to brick-and-mortar businesses.
The combination of vaccine distribution, fiscal stimulus, and businesses capitalizing on the current landscape has put millions of people back to work and stimulated our economy. The National Retail Federation projects an anticipated 10.5 to 13.5 percent growth in retail sales in 2021.
This places pharmacies in a great position to capitalize through the retail side of business, but only if pharmacists adapt to something more than just a drug dispenser.
The pandemic did not only lead people to shop online more, but also led many to experience virtual healthcare for the first time.
The COVID-19 pandemic forced most providers and many patients to experience some form of virtual healthcare. In 2020, 97% of primary care providers engaged in some form of telehealth and about 44% of Medicare beneficiaries’ primary care visits were provided by telemedicine compared to 0.1% the year before.
While in-person visits are inconvenient, they are sometimes needed for more complex patients or when the diagnosis is not clear. The adoption of telemedicine during the pandemic will open avenues for hybrid models called “click-and-mortar” that encompass the best parts of virtual and in-person care.
Virtual care has shown to outperform in-person care in the management of chronic conditions such as Type 2 diabetes. On the other hand, virtual care makes it impossible to perform a urinalysis, step test, or any other point-of-care testing.
As many primary care physicians may shift to providing online consultations, pharmacies may fill the role of in-person point-of-care testing.
When retail businesses closed, pharmacies remained open to care for their patients establishing the importance of their brick-and-mortar locations. However, importance does not always equal a profitable business.
Most pharmacies were already adopting a mix of virtual and in-person care before the pandemic. Many people already requested their prescriptions through an app, then had their prescriptions delivered by their community pharmacy even before Amazon purchased PillPack in 2018. A report by Business Insider claims that Amazon will be opening stand-alone retail pharmacies or may be adding them to Whole Foods stores.
The report states that the decision to open up retail pharmacies is still in the early stages and could take over a year for stores to start opening. While there are pharmacy models that strictly offer virtual services and delivery, even an e-commerce giant like Amazon recognizes the importance of a brick-and-mortar location.
With prescription reimbursement on the decline, brick-and-mortar pharmacies will need to look at other avenues of profit.
Walgreens has focused on convenience services such as curbside pick-up and home delivery while Rite Aid has refreshed their stores with new signage and products. On the other hand, CVS is shifting to provide more health-care services.
Providing health-care services is a very promising avenue of revenue as most patients visit their community pharmacy more frequently than their primary care physician.
Health-care services include but are not limited to providing patients with vaccines, point-of-care testing, and even patients visiting their pharmacist for a prescription in some states.
The brick-and-mortar pharmacy is not dying, but will need to adapt past the old model of simply filling prescriptions. Pharmacists will need to use their medication expertise to not only care for their patients, but also be reimbursed for their services.
Indeed, many leaders in the pharmacy industry see clinical services as the future of the pharmacy. In their 2021 Pharmacist of the Future report, Deloitte projects that community pharmacies can help to fill many gaps in our health system. In this report, their experts call for pharmacists to practice at the top of their licenses and move beyond pill dispensing as a primary role, noting that 53% of US pharmacists receive as much clinical instruction in the classroom as MDs.
After a pandemic that proved the importance of in-person pharmacy and with a physician shortage looming on the horizon, the time is right for pharmacies to begin transforming their business models away from reimbursement and toward point of care.
Brick-and-mortar pharmacies are not doomed — far from it — but the pharmacies that fail to innovate are likely to struggle in the coming years.
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