Drop in visits a bad Rx for pharmacy

NEW YORK —Americans staggered by recession, loss of income and job worries have been making fewer trips to the doctor, and it’s having an impact on the U.S. prescription and healthcare marketplace, researchers and industry leaders asserted.

A survey of more than 4,000 adults from the Deloitte Center for Health Solutions painted a stark picture of the recession’s impact on primary care. And the decline in doctor visits, some pharmacy experts said, has put a squeeze on new prescriptions—and on the retail pharmacies that fill them.

That’s the view of CVS Caremark chairman and CEO Tom Ryan, who told Wall Street analysts in late July that a significant drop-off in patient visits both to primary care physicians and specialists affected the company’s prescription business in the second quarter. The same factor could explain a recent surge in patient visits to CVS’ in-store MinuteClinic health centers, which Ryan said jumped 36% during the same period.

The economy’s impact clearly is seen in Deloitte’s recent survey. “With unemployment rates remaining at an all-time high, 1-in-5 Americans chose not to seek medical care for a recent illness or injury, with 4-out-of-10 citing cost as the primary factor,” researchers noted. The poll “also revealed a decline in the number of consumers reporting to have visited a physician or healthcare professional in the past year.” Indeed, Deloitte noted, “79% of respondents sought medical attention in 2010 as compared with 85% who did likewise in 2009.”

Morgan Stanley Research analyst Mark Wiltamuth cited the trend in a July 28 report on CVS Caremark. He noted the company cut its own earnings projections for 2010, “citing macro pressures and a decline in doctor visits as a driver to weaker Rx sales,” along with other factors, such as a shift to over-the-counter status of some big-selling prescription drugs, “headwinds from lapping the swine flu outbreak a year ago and margin pressure from the Medicaid channel.”

Analyst Meredith Adler of Barclays Capital noted, “on their second-quarter earnings call, CVS lowered their guidance for the year and specifically said maintenance medications were not doing as well. That’s a little concerning,” she acknowledged in an interview on Aug. 11.

“The only explanation I might have is that I think the population of the United States has become even more bifurcated.… There are an awful lot of people in this country who haven’t seen things improve at all, and they have that much less money. And the medication slowdown seems to be in hypertension, cholesterol and maintenance meds like that,” Adler added.

In a July 28 report, Credit Suisse research analyst Ed Kelly called current prescription trends “disappointing,” and noted, “underlying growth remains lackluster, with the four-week rolling average increasing only 1% through July 16…below the 1.5% gain reported in July [2009].”

Recent sales trends at the nation’s top drug chains bear out the trends reported by IMS Health, with same-store pharmacy sales flat or down for July at Walgreens, CVS and Rite Aid.

Tim McGee, associate director of client solutions for SDI, noted that the downward trend in doctor visits by patients is reversing again, after a 5% drop in visits during the 12-month period ended June 2009, according to SDI’s Physician Drug & Diagnosis Audit.

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