Can Independent Pharmacies Survive the Oligarchy?
This week CVS completed its acquisition of Aetna in a $70 billion deal. Meanwhile, the Cigna and Express Scripts $69 billion merger is still underway. And to top it off, Amazon continues to encroach on the pharmaceutical industry. All of these recent developments set the stage for a budding oligarchy, which may not bode well for the future of independent pharmacies.
Small, brick and mortar pharmacies are already getting ravaged by pharmacy benefit managers and their low reimbursement rates. Now they have to find creative ways to stay afloat as behemoths like Amazon drive the market to go digital with mail-order systems.
Some have adapted by finding other revenue streams, aside from dispensing pills. Independent pharmacies have begun getting more involved in integrated patient care, working with hospitals and health plans to ensure that patients adhere to their prescriptions.
Another effective strategy is to partner with healthcare insurers on programs for at-risk or underserved populations. Randy McDonough, the owner of an independent pharmacy in Iowa City, did just that when the biggest insurer in his state lowered its prescription reimbursement rates by 50 percent. McDonough wrote to the insurer’s CEO, and the two ended up developing a wildly successful program that allows McDonough to serve his community at better rates.
It seems the future of independent pharmacies depends on their aptitude for creative collaboration and finding a place within a more integrated health system. The industry may be going digital, but convenience can never replace quality when it comes to patient care.
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