Mail-order pharmacy biz may get thwarted by postal service

WHAT IT MEANS AND WHY IT’S IMPORTANT Community pharmacy never really was able to stop the mail-order juggernaut. Maybe the cash-strapped U.S. postal service will.

(THE NEWS: Plan to cut Saturday postal service draws heat from mail-order pharmacy. For the full story, click here)

The much-discussed plan by the postal service to scrap its Saturday delivery service for the first time in 147 years has pharmacy benefit managers and the people who run their mail-order prescription units fuming. But if the venerable but crippled agency follows through on its plan to curtail delivery service, it could arm neighborhood-based pharmacy retailers with another weapon in their fight to wrest market share away from their mail-driven competitors.

The reason is clear enough: If mail-order pharmacies have to pay more to get medicines to patients on weekends or on Monday morning via FedEx, UPS or other private-sector delivery companies, it will drive up costs for both the PBMs that own the mail centers and for the patients that rely on them. The result could be a gradual shift by some health-plan payers and patients away from mail deliveries of their prescriptions, and back to retail.

It’s no secret the post office is in big trouble. Hammered by e-mail, social media and such overnight delivery companies as FedEx and UPS, the agency is hemorrhaging money, to the tune of as much as $7 billion in 2010. But cutting weekend deliveries will hurt whole sectors of the U.S. economy, opponents of the plan asserted.

It isn’t just mail-order pharmacies that are crying foul. Newspaper publishers, Internet-based and catalog shippers, and other industries also are raising alarms about the higher costs they’ll have to bear to get their products to customers’ homes and businesses on a timely basis.

Prescription drug shippers may have the most compelling argument against the postal agency’s weekday-only proposal, however. It’s crucial that patients get timely delivery of their medicines, and for some homebound patients, there may be limited alternatives for easy access to those meds. Many Americans also like the savings that often go along with what they see as a convenience in getting chronic-care medicines shipped to their homes.

The mail-order pharmacy industry has traded on those advantages for years, reaping huge financial rewards and chewing up a share of the total U.S. prescription market that now easily exceeds 1-in-5 scripts dispensed. But if the post office ends weekend service, the industry’s growth curve could flatten further.

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