Rite Aid wins, we all win

WHAT IT MEANS AND WHY IT'S IMPORTANT — You want Rite Aid to win. A Rite Aid win represents a proof of concept — that concept being the creation of an effective market-driven loyalty program that incorporates savings on the healthcare services and in fact cross-pollinates pharmacy patients and front-end shoppers; that concept being that generic waves need not wash out all pharmacy sales volume if a pharmacy retailer successfully can grow ancillary healthcare services, such as immunizations or Rite Aid's new Rite Care Prescription Advisor; that concept being that there is in fact a return on investment from placing a knowledgeable team member armed with a tablet of health information physically in the aisles to proactively engage patients. You want Rite Aid to win because a Rite Aid win means a retail pharmacy win.

(THE NEWS: Wellness+ loyalty program, Wellness format stores continue to lift Rite Aid performance. For the full story, click here.)

You need Rite Aid to win. Let's face it: Adjudicating prescriptions was certainly a more tenable business model back when pharmacists were adequately reimbursed for adjudicating those prescriptions. But those reimbursements are never going to be even adequate again. Not anymore. The reimbursement squeeze, especially across Medicare and Medicaid, has been going on for the past decade. And with the baby boomer population yet to reach the Medicare-eligible bell curve crest and a significant swelling in Medicaid rolls over the past few years, coupled with a declining tax pool and escalating federal government deficit, both Medicare and Medicaid directors will remain budget-cautious. They have to be.

Today's pharmacy business model is gravitating toward the drug store box as health-and-wellness destination — fresh and good-for-you food, an increase in disease prevention services that augment today's disease support services, a ready healthcare advocate and resource that patients/customers can tap into at their convenience. So when Rite Aid launches such new programs as its Rite Care Prescription Advisor; when Rite Aid reports a continued swell in its Wellness+ loyalty program that contributes to better performance; when Rite Aid reports that its Wellness format featuring that higher-overhead front-line health-and-wellness consultant is outperforming traditional pharmacy; when Rite Aid reports all of this is contributing to its sixth consecutive quarter of same-store sales jumps, that's not just a win for Rite Aid — it's a win for you, too.

WHAT DO YOU THINK? Do you agree that a Rite Aid win is a retail pharmacy win, or are the two mutually exclusive? Do you think that Rite Aid can maintain this sales momentum? Can Rite Aid's growth trajectory accelerate from here? Post your comments below.

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