NEW YORK Walgreens is serious about cutting its operating costs — nowhere more so than in its pharmacies. It’s no secret that professional salaries are one of the biggest single expense lines in any chain drug store operating budget, and Walgreens brass have made it clear they’re looking to the company’s “Power” initiative to restore some of the profitability to retail pharmacy that PBMs and shrinking prescription dispensing margins have bled out of the industry over the past two decades.
Power is a workload-balancing project that offloads dispensing duties from individual Walgreens pharmacists to centralized processing centers. Company leaders predict the project will free pharmacists and even pharmacy technicians from some of the mundane dispensing tasks so they can migrate to a broader role in patient oversight, clinical care and integrated health care alongside physicians, PBMs and corporate health plan sponsors.
Walgreens president and CEO Greg Wasson has high hopes for the Power project, even calling it transformative to the practice of pharmacy.
“We are… removing as many administrative tasks from our stores as we can and moving these to a more efficient, centralized location,” Wasson said earlier this year. “And we are also using our existing mail service facilities to centrally fill prescriptions.
“With our government and employers… looking to control rising health care costs, we are seeing continued pressure on pharmacy reimbursement,” Wasson added. “As a result, we must lower our pharmacy operating costs while improving service levels. This also allows our pharmacists to play a pivotal role in this nation’s health care reform.”
In any state where Walgreens centralizes dispensing activities, it will have to first obtain a waiver from state pharmacy regulators to clear away restrictions on the use of remote data entry for prescription filling, Washington confirmed.
Tellingly, some patient advocates are raising concerns about the impact the central-fill initiative will have on the level of pharmacy care available in the future at Walgreens pharmacies, according to local news reports from Arizona. A story that ran in the Arizona Daily Star, in particular, cites concerns among local pharmacy workers and about possible job losses and leaner staffing levels in local pharmacies.
A source at Walgreens indicated those fears are overblown and misplaced but acknowledged that some pharmacy staff in Florida, where the company first rolled out its Power central-fill initiative, have chosen not to relocate to the centralized administration and dispensing center in Orlando.
Nevertheless, fears about fewer pharmacists and lower customer service levels at Walgreens pharmacies in Florida and Arizona seem to miss the mark. They’re an ironic counterpoint to what Walgreens says will be one of the benefits beyond cost-savings that flow from Power: the reducing of administrative burdens on pharmacists so they can spend more of their time serving patients with face-to-face counseling, medication therapy management and other services.
If it achieves its goals, Power could be a win for both Walgreens and its customers. There will be fewer pharmacists in the stores, but patients may find them more accessible, less stressed — and more willing and able to talk to them about their health questions and other concerns.