Independent Pharmacies in a Changing Market

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By Delia Lewis

"Quality" and "service" are no longer the buzzwords of the pharmacy industry; instead, "volume" and "merger" have taken their places. Estimated figures of 3 million prescriptions this year reflect an aging population, new drug developments and increased drug insurance coverage. Chain drugstores are expanding and pharmacy corporations are benefitting from this market boom in the largest percentages; independent pharmacies have a cloudy fate.

Pharmacy schools can't keep up with chain drugstores' demand for pharmacists. As a result, corporation executives are asking state pharmacy boards for less stringent regulations so that chain stores can use more technicians and fewer pharmacists. More competitive pharmacist positions could mean higher pay and better working conditions, which would allow pharmacists to give better service to customers. As chain stores grow, they will compete, collide, downsize and free up more pharmacists for the entire market.

Another important phenomenon in the pharmacy industry is the merging of alternative and medical therapies. Studies estimate that more than one-third of the US population is now using some form of alternative medicine. In January 1999, GNC health food stores formed an alliance with Rite Aid drugstores, and Walgreen's stores have added new vitamin centers and dramatically lowered their prices in order to hook interested baby boomers.

While chains can offer more locations and lower prices on both prescriptions and alternative remedies, it is hard for them to provide educated staff and resources to inform their customers about new alternative treatment trends. This is exacerbated by the fact that the medical community is lagging behind the consumer's desire for information about alternative medicine. Some patients won't tell their MD's they are taking herbs, or their herbalists they're taking prescriptions. These situations put community pharmacists in the role of "health consultants" for many patients, forcing pharmacists to be aware of interactions between pharmaceutical and alternative treatments. Independent pharmacies can offer services to patients that chain stores can't, but they cannot compete with corporate funding and volume discounts. While prices may be higher at an independent pharmacy, patients are more likely to interact with someone who knows their name and gives them more personalized service.

Industry growth insists that independent pharmacies find financial compensation by making a place for themselves in the market. Service is one way to keep customers returning. Independents can provide information not available elsewhere. Finally, independents can supply services like bulk goods, mail order and compounding of their own products. In the future, small stores will need to grow into other service areas like consultation and disease management (for asthma, diabetes, hypertension, smoking cessation, etc.) in order to keep up with chain stores.

Is there a place in the future for independent community pharmacies? If they can continue to provide unique service to both individuals and the community that a chain store can't provide, then chances look good.

Delia Lewis worked at CP from 1996 to 2002.

(Originally printed in Infused vol. 3 no. 3 6/99)

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