Industry Issues Summit: Health, Wellness and Tech Roundtable 2017
Editor’s Note: The Drug Store News Industry Issues Summit gathered a record crowd in December at the New York Athletic Club in Manhattan to discuss the most important issues facing the industry today. Three roundtable discussions took place at the event, one regarding chronic care (which appeared in the February issue of DSN), the front-end panel (which appeared in the March issue of DSN), and this health, wellness and technology panel.
During this health, wellness and technology roundtable, several topics were discussed among the 13 panelists, primarily the largest health-and-wellness challenge that the seven retail panelists are facing, as well as current solutions the six technology suppliers are working on to make the industry even better.
Chris Dimos, McKesson: A technology device that is capable of diagnosing at least 13 different health conditions being sold at retail. Think about the role of technology in revolutionizing how we diagnose and assess health and wellness. The focus on wellness increases and provides an opportunity for us to be the solution center for the healthy and the destination for the sick.
I have an esteemed panel today; if you’re not up here, I don’t know what you did wrong. I’m just kidding…. It is a great panel, I think we’ve got some great questions and we’re going to explore three different areas. We’re going to identify big health-and-wellness challenges that are being addressed by the retailers today in the community pharmacy setting, hear what solutions are being developed to address those challenges. Check for alignment currently, and assess if there are unmet needs either from a retailer perspective or from a technology perspective.
So I want to start with Tim Weippert. This is my definition of a lightning round, so we should be done in 40 minutes — slow-moving storm (due to the size of the panel) —Tim would you briefly describe your primary responsibility and what you think is the largest health-and-wellness challenge that you and your company are addressing today?
Tim Weippert, Thrifty White Pharmacy: Good morning everyone. I’m Tim Weippert, chief operating officer and EVP pharmacy for Thrifty White Pharmacies. We’re a Midwest chain; 95 stores in the upper Midwest. My primary responsibilities are oversight of all store and pharmacy operations including retail, long-term care and central site operations that we operate today.
I think the largest challenge today for us is the word access. I’ll take access and very briefly here just say it is access to patients and access to data because they go hand in hand and it’s what we need to continue to be able to engage at the highest level with our patient’s day in and day out. As we move from fee-for-service models to high quality, value-based performance models, it is of utmost importance for us to maintain patient access and not allow others that are seeming to carve away at our access to patients and services that we’re providing by limiting the patient’s choices of access. Secondly, the data we need to have to work hand in hand with all the different continuums of care with providers and patients today is also of utmost importance so we can make our engagements with our patients at the highest level of outcomes and hopefully leading to reducing total overall cost of care today.
Kevin Hourican, CVS Health: Good morning everyone, my name is Kevin Hourican, I help lead the retail pharmacy business at CVS Health. Additionally, I help lead our supply chain organization, which is our 18 distribution centers and our inventory management group. I would submit that there is not one specific challenge, but a confluence of events that are creating a set of enormous challenges. As everyone in the panel would agree, we are dealing with significantly reduced reimbursement rates from payers at the same time that we are increasing the services that we are offering our patients. This reality is putting significant pressure upon our business model. At CVS health, we would like our pharmacists to be able to operate at the top of their license. However, there are many regulatory or financial pressures that prevent that from adequately happening. We are interested in partnering with the industry to reduce unproductive legislation and also create avenues for financial reimbursement for services that we know our pharmacists would be able to perform at a high level. Pharmacists operating at the top of their license will improve healthcare access and lower healthcare cost.
Dimos, McKesson: Great, thanks Kevin. My job is to ask hard questions. Jocelyn?
Jocelyn Konrad, Rite Aid: Good morning, everyone. My name is Jocelyn Konrad and I am responsible for pharmacy operations at Rite Aid, which includes clinical services, government affairs, business initiatives, pharmacy innovation and acquisition departments. Top of mind for me is to protect the profession of pharmacy and ensure that pharmacists are seen as a pivotal part of health care across the continuum. As pharmacists, especially in the retail establishment, we see patients 12- to 15-fold more than other healthcare providers and are not often valued as a participant in the healthcare solution and we can do so much for patients. So protecting the profession of pharmacy, allowing our pharmacists to provide the services and be financially compensated for those services because they are impacting the total healthcare continuum is probably the biggest thing. And by doing that, all of those other pillars fall into place.
Craig Norman, H-E-B: Good morning, my name is Craig Norman, I am SVP pharmacy for H-E-B. The biggest thing that we’re dealing with at H-E-B right now is adherence and compliance. We have a demographic with a high percentage of patients that are not extremely compliant. We have to do everything that we can as a pharmacy provider to educate and increase compliance so that we can keep them as patients for the long term. Additionally it’s how we are then judged from a star rating perspective and how those ratings then translate into the DIR [direct and indirect remuneration fees] that we’re seeing clawed back from us on a regular basis in our pharmacies, challenging our profitability and our ability to continue to grow our services, especially in areas of the greatest need.
Philecia Avery, Kroger: My name is Philecia Avery, I’m VP pharmacy for the Kroger Co. My responsibilities include all things retail, mail, central-fill, as well as we have Kroger Prescription Plans, which is a PBM, and then a host of other clinical services, as well as procurement and logistics for pharmacy. We’ve had quite a few pretty impressive answers and I think I would say, ‘Ditto, ditto, ditto,’ all the way down.
The other thing that I would actually add, though, is to just to take a step back, let’s define health and wellness first. If you ask all of us the definition of health and wellness, we probably have a little spin on that definition; imagine the difference that our customers have when they walk in. For them, health and wellness could be anything from just the services that we could provide, it could be the information that we provide. It also could be that they walk in looking for actual tangible products. You know, are you selling FitBits? Are you selling hardware? Health and wellness can be food; it could be mind, body and spirit. Do you have those certain services there as well? That is something that I actually think is a big challenge for our industry right now because I think it’s about 80% of Americans right now are thinking about health and wellness. The problem is, we all think it’s something different.
So that’s definitely one of the challenges and then the other, I would agree completely right here, is once you’ve defined it and you have those services, having the fair pay for those services that you provide and, of course, the accessibility for your customers. So those would be the three that I would point out.
Rick Gates, Walgreens: Good morning: Rick Gates, VP pharmacy at Walgreens overseeing professional practice of pharmacy, pharmacy systems, and day-to-day operations in our stores. If I were to call out the biggest challenge, from my perspective, it would be the speed of change. Everything is changing so quickly in health care, the expectations on what we deliver at point of care for patients continues to change and is different by payer, PBM, and even patients. How do you deliver consistent high quality care for our patients every time they walk into the store? Going forward, this will be a challenge if you weigh expectations of all stakeholders vs those of payers. For us, it’s addressing ‘How do I make sure that the patient has great care every time [he or she walks] in?’ to make sure we’re meeting expectations.
Darren Singer, Shopko: My name is Darren Singer, I’m the SVP of all things retail, health and wellness at Shopko. We have close to 500 stores in the U.S. My teams and I run 270 pharmacies in 25 states, 140 optical centers and retail health clinics run by Regional Health System partners like Bellin FastCare. One of the nice parts about these events is the consistency that you hear in terms of the challenges that we’re all attacking. So for me, it’s very similar to what you heard but it’s a balancing act, and the balancing act is between the need for access to patient lives, the requirement of being in limited and preferred networks — particularly in my case, half of my pharmacies are Shopko Hometown stores in remote, rural, underserved areas where we are literally the closest access point for care — and the requirement of delivering five-star quality, exceptional patient care in these stores.
On the other side of that scale is reimbursement rate compression and DIR impact and the requirement to optimize cost to serve and cost to fill. When you put those two things together, if you can crack that code and drive out costs and reinvest those costs back into patient-facing care, I think we can accomplish incredible things in terms of improving the health and wellness and the lives of our patients through great adherence and control of their own health care. You have people on the stage today, Supplylogix, McKesson, higi, who all facilitate ways to drive out costs and empower our patients to take control in collaboration with our pharmacists, who provide a personalized level of care. And if we can accomplish that, I think we really can start to crack the code here.
Dimos, McKesson: Awesome, thank you Darren. I heard some key themes. I think Darren did a great job of summarizing. The first one is how do you define health and wellness? I think Philecia said it well. We need to examine that definition both internally as a company and also from the customer or patient’s perspective. ‘How do they think about it?’ I heard about reimbursement pressures; I heard about practicing at the top of the license. When you assess the cost pressures versus expansion of services, one of the key approaches that you could use to solve that challenge would be technology. It appears that one of the areas that technology could fill that gap is for the efficiencies to drive a better experience or a faster, leaner experience from an expense perspective.
So you heard from our retailers. I want to turn it over now to our technology partners. I’ll start with Doyle. Please describe your primary responsibility and the solutions that you’re working on and thinking about inside of your business unit. How are you trying to solve some of these challenges through a technology lens?
Doyle Jensen, Innovation: Chris, as a technology provider, we really see ourselves behind the scenes on these different areas of focus. We kind of separated the two areas when we look at centralized services where we can really empower the redeployment of the pharmacists; we hear over and over this evolving role and the question I like to ask the market is, ‘So what are you going to do at your local pharmacies?’ Does that mean you’re going to hire another pharmacist to provide all these new roles in this evolution? Right now, the one you have currently in your store seems to be pretty occupied. And even with that, not only occupied, I would say unengaged at the patient level; traditionally just back sequestered with the phone in one ear and a script in front of them doing what they’ve always traditionally done. For the last 10 years we’ve really worked hard behind centralizing a lot of that processing so we can empower the pharmacist to be able to get back out front and now we’re bringing a lot of the new technology advances to the front of the counter as well that can empower that same thing around OTC and other areas that impact so much of the profitability of the pharmacy.
Ashton Maraaba, PharmaSmart International: Good morning, everybody, my name is Ashton Maraaba. I am the chief operations officer for PharmaSmart. We are a health-screening kiosk manufacturer and distributor. Also, we manufacture and develop a health-screening software that integrates with the various software providers that pharmacies rely on to manage patient prescriptions and other elements that involve the patient. One of the things I think really impact pharmacy today and without a doubt, as Craig mentioned, are DIR fees, the direct and indirect remuneration. It’s also a VAT, a value-added tax, and today it’s not working the way it was intended to work, which is causing undue burden and stress on the financials of pharmacy.
The other issue I see is that the pharmacists who we rely on to be a med adviser, in today’s environment, is not always able to optimize that role, and that’s a problem. The pharmacist is tasked with being the ‘mediwitch,’ the tech guru and the scientific professional, all in one. And at the same time, they’re struggling to administer those services under the pressure of having to deal with a reduction in their remuneration as a result of DIR fees and other fees. So for a company like us, that’s actually an advantage in one sense because value-based medicine becomes key. Our goal is to help the pharmacist and the health-and-wellness groups inside a total-store environment control disease. And that’s what our health-screening kiosks and health IT solutions do. And it makes it easier for them within workflow to do that.
The third issue that I think impacts health and wellness today is the millennial world. Today’s business environment has a big challenge of taking that culture and adapting that cult-like feel into their environment. And one of the things that I’ve seen recently and read is that without a doubt, millennials not only rely on social media — we know that — but they also are very loyal to those health venues that offer a sense of compassion and consistency throughout the community. So that is something that we have to look at in terms of what does that really mean, and really trying to take advantage of that group. So … I would say those are the three biggest issues and what our company does in terms of technology-wise to try to resolve or try to help that issue.
Rick Sage, Supplylogix: My name is Rick Sage, I’m VP and GM of Supplylogix. Supplylogix offers a variety of inventory control and monitoring services for pharmacy. The services that we provide help to lower operational costs and improve working capital, which are both critical areas already mentioned this morning. We heard Kevin, Jocelyn, Darren, and Doyle discuss the tremendous amount of pressure to be able to not only continue to fulfill the role of a traditional pharmacy team but also to move toward the needs of today as well as the future requirements in pharmacy.
One of the key areas that we have to focus on is reinventing how workflow in a pharmacy should happen, and how using technology can assist the pharmacy team and their patients. We’re all challenged with how we bring in technology effectively to address our needs and opportunities, but at the same time, we need to be sure that we are taking advantage of efficiencies in our pharmacies, which sometimes means eliminating or changing our work process. All of us have a tendency to bringing new applications, tools and process, but we often times don’t want to let go of the things that we’re currently doing. So I think part of the challenge — and I think a lot of the conversation today will be around really rethinking and pushing the envelope to create new ways and opportunities to address health care technology today.
One of the things we focus on at Supplylogix is being able to create those cost controls and efficiencies in the pharmacy so that our customers can focus on doing some reinventing in the pharmacy, taking more functions centrally or taking them out altogether. We also focus on monitoring the inventory investment in the pharmacy, including loss prevention, diversion and suspicious ordering, all that can also trigger audits and other regulatory events that could be costly to our business. All of this is to say that we can’t forget what’s going on in the pharmacy; we just have to find different ways of working in the pharmacy. And I know all of us, being leaders in the healthcare community, are focused on addressing today’s healthcare needs while ensuring that there is a return on investment that makes good business sense.
Dimos, McKesson: Great, Rick. Dr. Siddiqui, I’m going to ask you to comment next. I find it interesting how you think about the overall health and wellness challenges inside of each of those continuums. So you’re looking for specific answers or specific solutions; I know you spend quite a bit of time with the wellness side of health and wellness and understanding the human behaviors, so please share a little bit about what you’re doing and your thoughts.
Khan Siddiqui, higi: Thanks Chris. I’m Khan Siddiqui, chief technology officer and chief medical officer at higi. We [are] a technology company and we do two things, one is provide self-service screening stations or kiosks that we put in retail pharmacy and grocery, as well as we provide cloud-based software solutions as a community platform to better engage with the patients and consumers. We provide solutions like population management; population screening; community connect, where we engage with the consumers; as well as wellness enabler for employees to better engage with their population.
I think one of the big things is if you think of how the Centers for Disease Control defines determinants of health, what we do from health care as a medical practicing physician is just 10% impact on your overall health care; 15% is genetics, 75% is all your social influence and the community that you’re interacting with, and retail becomes a big aspect of it because a typical adult frequently visits these locations. Our ability in retail locations to impact those health and wellness around health care, chronic disease management, as well as prevention and health-and-wellness point of view is much more than a typical healthcare system would do.
All of the things we are doing here, either from a pharmacy point of view or a technology solutions point of view, creates much bigger impact from a health-and-wellness point of view than a hospital would do. A chronic patient maybe visits a doctor three times a year, non-chronic every other year, but how frequently do patients come to our locations? So that is the bigger thing. One of the most important things when you’re building technology solutions is how do you close the loop? How do you actually provide — as Tim said — access, convenient access to data and then be able to share data to the right care provider or the right care team that is trying to take care of the patient, be it the pharmacist, be it the healthcare provider, be it the clinic in the retail location, that those are the types of solutions we are trying to create and address with integration with multiple different pharmacy systems, with clinical care systems, with EMRs and a lot more?
Dimos, McKesson: Fantastic, thank you. I found your comments interesting and they clarified some things for me; 75% of your influence is from your social network. So Dr. Mom probably is right, so all of you that went to Dr. Mom, and as a practicing pharmacist — some of you will get this — the patient that comes in and says, ‘My neighbor / mom said this,’ and they believe her more than they believe anything a healthcare professional will say now makes perfect sense to me on that 75% figure.
Jeff Key, PioneerRx: My name is Jeff Key. I am the president of PioneerRx. We build pharmacy software that is for independent pharmacy and smaller chains across the United States. Each feature within PioneerRx is garnered toward the challenges that the pharmacy industry faces today. There is one thing that I have noticed about all of the companies that are up front here today — I recently read an article in TechCrunch that pretty much describes it: All companies are technology companies. Look at how different pharmacy is today compared to three to five years ago; one of our biggest challenges is that none of the things that everyone up here is talking about today are possible without great technology. And I didn’t say good technology; we’re talking about great technology because every company here is a technology company. None of the things that we are bringing to your attention today are going to be possible without great technology. Our challenge is how to be agile in making those changes and how to help the companies that we deal with start thinking about themselves as a technology company — and, getting them to think about how we are going to solve these problems through technology.
Frank Maione, PerceptiMed: Good morning, I’m Frank Maione, I’m the chief business officer for PerceptiMed, we’re a Silicon Valley-based company and we’re focused on pharmacy technologies. My role is simply to utilize my 40 years of industry experience to help PerceptiMed commercialize our leading-edge technologies, and enable the pharmacies. From a technology perspective, all of the things that were talked about in terms of a need state or a desired outcome. There are many aspects that our leading-edge technologies can fulfill. We’re focused on quality outcomes, so both of our platforms support quality outcomes and liberate the pharmacist and the technicians to do other work through labor redeployment. Our leading edge technology grounded on proprietary Artificial Intelligence and Machine Vision quality attributes, are already freeing up the pharmacist from the mundane count and visual inspection by eye with virtually 100 % accuracy, not only freeing up the pharmacist, but creating a remote verification process that opens up the pharmacy of the future to begin to realize all those needs like Access, Counseling, Immunization, therapy etc.
Dimos, McKesson: Fantastic. Thank you all for the foundation of where we should take the discussion next. When you think about community pharmacy and you think about running a healthy community pharmacy, there’s really two areas that you can concentrate on. How do you make yourself more efficient? Your two most controllable expenses in pharmacy are labor and inventory, so what are things you’re doing to make yourself much more efficient? What are you going to do with that pharmacist as you become more efficient at your core fulfillment business that you can then redeploy those assets against more value added and more differentiating services?
Tim, I’ll start with you. What are you doing uniquely or what unmet need do you have, either way, around those two expense controls with respect to technology solutions? A unique technology solution for labor, a unique technology solution for inventory, what are those types of things you’re doing or other expense items that you’re looking to streamline your operations that will drive that efficiency side of the bucket? And after this conversation, then we’ll move to how do we grow the top line? How do we start to grow earnings and revenue on the other side of that equation?
Weippert, Thrifty White Pharmacy: Around the labor side, we’ve done a lot as one of the innovators of synchronization of medications. Through MedSync we’ve tried to find ways to enhance and bring time, more time, for our pharmacists to engage with patients, as it brings all the patient’s medication regimen to come due at one time and brings the patient into an appointment-based type environment, which allows the pharmacist to have this scheduled time to engage with the patients effectively.
Central fill certainly is another avenue that we’ve been doing for many, many years, and we have to continue to move toward more of those models, again, to enhance efficiency and enhance and bring more time for our pharmacists. Workflow opportunities — Jeff alluded to patient management systems and things that we can do in workflow. Everything needs to happen within that patient management system; we need to make it as simplistic as possible for our pharmacy and our pharmacists and our pharmacy team to have that time to engage with our patients. We can do that by having good workflow within our system of managing that prescription claim, be it edits, or be it MTM and CMR applications, be it synchronization applications, all of those type of things are needed.
Finally along the lines of centralization, we continue movement now to centralization of patient care. When we have pharmacies and pharmacy teams that are very, very busy, we need to also be able to direct some of the time with that patient to a central patient care center, which we operate today at Thrifty White through telehealth means. Nothing new as we’ve been doing telepharmacy for many years out in the rural areas that we operate in today but as demands for time grows and as telehealth continues to evolve, we need to continue to use this as an additional opportunity to enhance pharmacist time for patient engagement.
So those are on the labor side. On the inventory side, the challenge here ties to the reimbursement. It’s really maximizing and being able to buy correctly, efficiently and at the right time to maximize the return on investments while we’re challenged with those tough reimbursements. With the many complexities of our business that we have around specialty, around long-term care, around retail operations and around central fill, being able to have systems and processes in place to assure appropriate inventory levels and at the best costs are of great importance.
Maione, PerceptiMed: When I looked at this question, I thought, ‘Alright, what are we doing to help define the practices around labor and inventory?’ Our multiple platforms and research and development always begin with a focus on quality outcomes. However, when you think about what those quality outcomes can drive, inventory optimization and labor redeployment are the ‘money’ within the pharmacy arena, and those are key drivers to the financial health of retail pharmacy, and PerceptiMeds proprietary technologies deliver that.
As an example, our artificial intelligence in our IdentRx, that’s our quality pill verification device, is leading-edge technology and it’s a substantial labor savings. For instance, Schedule 2 drugs, they probably represent anywhere from 3% to 5% of all prescriptions that are delivered today, and if you think about it, in most all-pharmacy protocols, they’re counting them and recording it multiple times, We do it with one pour, it’s triple-counted and a Balance on Hand record developed. It’s now DEA-compliant from an audit perspective. So we take the redundancy out very quickly, free the pharmacist up and provide the retailer with labor redeployment optimization.
Our second platform is a will-call system called ScripClip, and through our time and motion studies we minimally increase productivity by 40% and reduce the wait-time by the consumer, in line or at the Drive Up, because there’s no alpha-lookup, it’s all done by a RF emitted light saves the retailer money, it redeploys the inventory, creates overall higher Customer Satisfaction outcomes. On a will-call perspective, think about the number of Garcia’s, William’s, Smiths and if you have HIPAA issues with wrong bag, wrong name given to the wrong person, this eliminates that.
Dimos, McKesson: Great, thanks Frank. Kevin, I know you have responsibility for supply chain and inventory.
Hourican, CVS Health: Thank you. At CVS we spend a great deal of money each year on RX inventory and RX payroll. Managing both efficiently is essential to our business and financial health. Our company purpose is helping people on their path to better health. Every dollar that we can save our company via improved supply chain management is a dollar that we can invest in helping better serve our patients. I think Doyle said that really well earlier in his comments; and we couldn’t agree more at CVS.
We look at our labor efficiency in two ways: pharmacy workflow and labor scheduling. We call our labor model WeCare, which is a pneumonic for ‘work efficiently’ so that we can ‘Care More.’ We have process engineers who wake up every day focused upon improving our RX workflow efficiency. They focus on everything from script intake to patient counseling. We also analyze how to improve the millions of phone calls we make every month to our patients to improve patient adherence. How can those calls be more effective? How can we improve patient outcomes and do so most efficiently? In a nutshell, WeCare workflow is focused on increasing efficiency so that we can invest labor into patient facing service offerings.
I have to admit we were late to the game on appropriate utilization of technology to help our labor scheduling efforts. We deployed, about two years ago, a very sophisticated staffing system to help us with labor allocation. The system ensures we are in managing the many intricacies of running a complex pharmacy at the highest level of patient care, and of course, in compliance with all staffing ratio requirements. We call the system ‘My Schedule.’ The system takes our pharmacy transactions of all forms and functions and allocates labor to match that workload demand. The system also tells us what work the staff should be doing … at what time. For example, sometimes pharmacy staff are busy doing script production despite being ‘hours ahead’ of customer pick-up. Often there are better things that the staff could be doing at that time, like calling patients to counsel them on adherence opportunities. We are proud of the work we’ve done with our My Schedule tool; it’s allowed us to improve the service that we’re providing to our patients.
Lastly, managing our inventory productivity is essential to our success. We spend a lot of money on inventory; we have 9,000 locations; we fill [more than] a billion prescriptions per year. Getting the right medication, to the right store, at the right time to maximize patient experience and minimize the inventory investment is a challenge. It is a complicated riddle to balance inventory carrying cost with patient service. We work hard on solving that riddle. To help us improve we have recently rolled out a new RX inventory management system. The system will help us get the right inventory to the right stores and establish the right guardrails regarding what can be ordered by stores. Historically, our challenge has been carrying too much inventory in our stores. In the past, our pharmacists had the license to order whatever they want, whenever they wanted, with or without a patient prescription to match the NDC requested. We would like to be able to sustain that level of patient Rx “in-stock” with a more appropriate inventory position.
Lastly, I would like to put a plug in for regulation change that would help everyone in the room. The state we’re sitting in today [New York] happens to be a mandatory e-prescribing state. We would like to see more states adopt mandatory e-prescribing. We have seen benefits of improved in-take efficiency and improved patient safety as a result of the progressive action taken by the state of New York. We have taken the efficiency improvement and re-invested the labor into patient facing service improvement. Patient service and pharmacy as a practice would improve if more states would follow suit.
Dimos, McKesson: Absolutely. Better technology, better health care for your patients. Rick, building on something that Kevin said is, as the product mixed shift changes, we are forced to look at inventory investment. We are pretty close to the highest generic penetration or utilization in community pharmacy right now. And we’re starting to see a mix shift away from branded products to generics and now more into specialty and high-cost products. As you think about inventory management and you think about this shift, how are you approaching not only the baseline of meeting the customer’s needs, but also, how are you managing these high-cost infrequent dispensings of specialty medications?
Sage, Supplylogix: Kevin hit on it very well. It’s getting the right products at the right location at the right time. We can’t afford to have inventory sitting on our shelves waiting for the customer or, from the other perspective, asking the patient to wait on the inventory. So the key, especially with the changing cost structures of our inventory, is more important than ever to support just-in-time inventory. Some of the things Kevin mentioned that are being implemented at CVS are very similar areas of focus in all of our pharmacies.
We can definitely take inventory out of our pharmacies. Supplylogix hasn’t found a pharmacy yet that doesn’t have that opportunity of improving their inventory investment by making sure we have the right product at the right place at the right time. The challenge is making sure that we’re not impacting service levels at the expense of the inventory. You can definitely take inventory out, but what oftentimes happens is the patient and compliance suffers. You are now partial filling, asking them to come back, hoping that they’ll come back, and you’re filling that prescription twice which also increases your labor per script.
Our service calculates the required inventory by individual pharmacy to maximize your investment without sacrificing service levels. We also make sure the pharmacy team is focused on the issues that I think everyone on the panel has brought up that are core to health and wellness moving forward. Let’s automate the administration functions and make sure that we have the right inventory at the right place; if we have inventory that’s in a particular pharmacy that’s not moving, let’s move it to a pharmacy that has that ability to move that inventory. We’ve got to figure out how to lower our cost of doing business while maintaining the core aspects of what we do in the pharmacy. Let also use our technology to create new efficiency opportunities, including electronic prescribing, electronic prior authorizations and more immediate filling and replenishment options. Working through central fill is another great opportunity to lower inventory at the retail pharmacy as long as we can take care of the patient on their first fill and other immediate service concerns. There are tremendous opportunities for us to service our patients as the mix and cost of drugs change, and I believe that this marketplace is developing exciting solutions to address this evolution.
Jensen, Innovation: I feel like I’m just going to be saying ‘ditto’ to most everyone else here on the panel, but we see a huge direct impact in central fill services and we’ve never really been more busy than we are currently helping the pharmacy world realize some of the highest efficiency rates we’ve ever seen in central fill. I had one of our customers say it best. It doesn’t do any good if I remove that cost from the store but still maintain the same revenues, the same labor model, now I just add it to my cost to fill. That redeployment is that part that we, as a technology provider, don’t empower that side of it, it’s up to the responsibility of the provider to really take that time, as Kevin said, and leverage that dollar in a different way that can either generate a better customer experience or generate, hopefully, more revenue.
I liken the experience to putting on a few airline miles in a year, maybe too many, and the differentiation between, for somebody who’s a frequent customer, one to the other really does make a difference. This quality of care that the customer can feel at retail is essential. We’re seeing such an evolution toward digital purchasing; all the brick-and-mortar today is at risk and a challenge and we saw one of the biggest Cyber Mondays ever here last week with a 12% increase. The interesting thing is that Google is now planning on opening their 12th retail store, so you’ve got digital going the opposite way now into brick-and-mortar. What this really suggests to me is there’s a coexistence that has to happen, but brick-and-mortar needs to evolve the experience itself. When I look at labor and inventory, we’ll continue to make our central fill solutions as efficient as possible. There’s a direct correlation from technology to labor savings and it’s pretty easy to point at automating every piece of that we can and, at the end of the day, we have one of the lowest cost to fills in the industry.
But what we’re excited about as well as the ability to impact retail through partnerships with Becton Dickinson. We’re bringing some new technologies from Europe that allow us to create a new digital experience for the customer in front of the counter. Revenue margins behind the counter continue to be compressed and the biggest opportunity can be in front of the counter now. There’s new solutions out there not only just in software but in hardware that provide improved efficiencies for inventory. Not to point out a deficiency, we are very good at managing behind the counter but what happens now in front of the counter? Kevin talked about this for a lot of this inventory system, you have the right inventory at the right time for the right level. It’s a very complicated equation. So we’re excited to bring this technology to the United States, we’re excited to get it deployed out there.
We see a lot of opportunity for brick-and-mortar to challenge themselves. We heard at NACDS Annual, I think it was three years ago, you’re either going to disrupt yourself or somebody else will. That’s our challenge, that’s our challenge at Innovation as a company. With a name like Innovation, continually we’ve got to challenge the status quo every day and say the way we’ve done things yesterday can’t be the way we do things tomorrow. And that’s a role as we deal with our pharmacy partners that we’re relying on them; what needs do they see [need] to be met and, ultimately, it’s not the solution that we’re selling, it’s the need that we’re filling. We may do it in a different way than they would ever imagine but ultimately it’s the result of giving that customer a unique superior experience that impacts this quality of care and compliance and all the areas that they’re being measured on today.
Dimos, McKesson: Great, thank you Doyle. You hit on a lot of great key points that have been raised. We’re going to move on now and change the subject a little bit. I’m going to mix up the panel. I’m going to combine a couple of different questions that we are thinking about. One of emerging trends is that consumers are getting much more involved in their health care. Some drivers of this either from a high-deductible health plan; from just pure consumerism, how are people competing against each other for their health care; they’re taking a much more active role in their own data and data provision, whether it’s a FitBit or whether it’s something that is adding into the healthcare ecosystem around themselves from a self-reported viewpoint. What types of technology, innovation should we be thinking about as community healthcare providers when we say the patient is taking much more of a role? What role will pharmacy be able to provide in this situation? How do we do differentiation, whether it’s additional disease-state management, whether it’s engaging the Amazon drone? We are seeing a changing ecosystem through technology around health and wellness and the consumer.
With all of that as a background, Craig, what are your thoughts about how you engage with that consumer and how do you change that dialogue?
Norman, H-E-B: This is a great example. My Fitbit just buzzed and told me that I need to complete more steps this hour! Customers have so much information available to them and our biggest challenge is, how do we harness all of this? How do I take the information from my health device that’s telling me more than I really am using on a regular basis, and integrate that with the types of activities that we’re providing at our pharmacies with screenings, immunizations, MTM, diabetes and hypertension education programs? How do I integrate that all into one spot so that my pharmacists have access and can then have meaningful conversations with their patients? Then more importantly, connect that back to their primary care physician to make sure that they’re getting the therapy they need on a regular basis. That’s the real challenge, and that’s where the technology must play a greater role for the future. We need a simple EMR system that can be used at retail, integrated with our pharmacy management system that will house everything done from a screening perspective on a monthly basis for patients, integrating in-store dietitian consultations, whether they’ve been through the diabetes education course, hypertension training, all of those types of activities. That’s where the future of our growth is going to be. Ultimately, we want to drive visits to the pharmacy and prescription growth, but it’s all those underlying activities that will take us to where we need to be from a top line and profitability position for the longer term, from my perspective.
Dimos, McKesson: Jeff, I want to come to you next and then Khan will follow up on that, but I know you’ve spent a lot of time around the technology, Jeff, and understanding this consumer and how the consumer’s role is going to change, so what are your thoughts on engaging the consumer?
Key, PioneerRx: One of the interesting things to think about — how many of you have a FitBit that you don’t use anymore? There’s tons of money being pumped into technology today for consumers around the health care space. One of the things we’ve seen is what happened to Google Health and Microsoft Health — the platforms where patients are going to manage their own health care record. Guess what happened? They’re gone. Why are they gone? Because long-term patients weren’t interested in managing their health care record.
Another thing we have looked at coming into development is an e-care plan — an electronic care plan exchange. PioneerRx is currently working with a group to develop an e-care plan for our customers. What happens when we start getting e-care plans from multiple providers and they’re all different? Who is going to reconcile that? The patient has 14 different health apps that they’re using. Which one’s going to have the right information? Which one is going to have the wrong information? So we’re headed toward a time when we’re going to be data-rich and information-poor. We see a role in pharmacy or reconciling that information. There are people that talk about the age of the mobile app is going away. There’s just going to be too many for people to find that there will be a shift back toward mobile web apps, etc.
We have to figure out: How are we going to consolidate those? How do we bring those things together? We see a role in pharmacy for consolidating that e-care record. We’ve got this guy who says the patient has good transportation and this one says the patient doesn’t have transportation; and this one says they have three allergies and this one says they have these five; and this health app said they did this and that health app [said] they did that. And all of that information is coming into the provider, who is overloaded as well. Who is going to be the person that is going to manage that? So we’re going to have to figure out how to use technology to clean it up and hopefully there’s a role in pharmacy for being the: ‘OK, this is the authoritative source; we’ve cleaned it up, this is the right e-care plan, this is the right health information.’
One more idea on those health apps: you increase the use of that health app if you’re engaged with somebody on it. You see a lot of those apps now adding social components. So if you’re on Strava, if you’re competing with somebody, if you go to a run on Strava — I don’t know if you’ve used the app or not — you can see the times that other people have had and compete with somebody on that. If you can engage someone through that tool, it’s much more likely for you to use it. Guess who you can engage, who we’re hoping you engage through that tool? The pharmacist. The pharmacists engage with you. If you get a message in that app that says, ‘Hey, we see you didn’t do this today, what’s going on?’ then you’re much more likely to use it long term.
Dimos, McKesson: Great. Sounds like a great opportunity for another provider service from pharmacy as a profession. So as we look at what are those new edges, what are those new differentiators, an opportunity through technology could enable a healthcare provider to get engaged. Khan?
Siddiqui, higi: Technology’s great. As we think about this stuff at higi — I don’t know how many people have read Bob Cialdini’s work on influence. His work was published in ’84 and since then, a lot of his students have really improved since then. Influence team at Amazon has taken this work and they’ve taken advantage of this social influence research to move the needle. We work with Dr. Agnis Stibe at MIT media lab to help us understand how social influence impacts the engagement side of things. There are seven different determinants from a social influence point of view that they’ve defined and researched from a psychology point of view what works. The two that work on engagement, engagement defined as repeat usage and coming back again and again, and one is social recognition — giving kudos that you did a good job today — or social competition, ‘How did I compete with others?’ those are the two determinants that have shown repeatedly with significant evidence that improve engagement. And that’s what we do.
We conducted a controlled trial, with a couple of thousand hypertensive patients in a challenge platform in our community portal and a couple of thousand hypertensive patients in a control environment and we ran a three month-long challenge, and the challenge was do your blood-pressure check-in on a regular basis. We incentivized patients by doing a weekly random drawing of $25 gift card — just a $25 gift card — and a grand prize at the end of three months of $100 only. So, it was not a lot of money. What did we learn? We learned that people who were in the challenge had significant improvement in their hypertension; those who were in control group went in the opposite direction, their blood pressure went up. The population, 55-plus males, which is the hardest to engage and [most difficult] to manage and costly, were the most effective and had the best outcomes. And the third one was that sustained engagement — challenge ended last year January — and we still are seeing the people who were in the test group still have significantly higher engagement even after the incentive is gone. There’s still higher engagement almost a year down the road.
Basically, what we’ve shown is by enabling social influence aspect, we’ve built that habit. Alone, technology doesn’t do anything. It’s once you get that initial conversation with the pharmacist, build the relationship, get them coming back again in the store and engaging with the patients. Just going and measuring your blood pressure is not enough. You need to be prescribed some medication, given guidance, given advice, and the medication refills and adherence; all that stuff come into play. But by building that social aspect of it is improving all those aspects of care delivery from care point of view.
Dimos, McKesson: It’s amazing what us 55 year olds will do for a $25 gift card, that’s all I’ve got to say. Jocelyn, I want to turn to you. I know you’ve spent a lot of time with your team around behavioral coaching — if you look at the coaching as a reward that Dr. Siddiqui talked about engaging with your patients on a different level and how do you become more of that health advocate and coach with them to walk along side on their journey. So can you share a little bit about how you see this consumerism and technology coming to life?
Konrad, Rite Aid: Sure. It’s very interesting what everyone is saying today because every one of our patients will react very differently to different catalysts. And technology can be a piece of that, but I don’t believe it’s the end all be all. As discussed we’ve spoken about the FitBit and we’ve talked about how many of us have had FitBits but don’t actively change our behaviors by wearing one. In fact, JAMA just published a study that showed that patients who use the FitBit and try to do a weight-loss program didn’t actually lose more weight than those that did not use a device. So it comes down to patient engagement and behavior change, and the patient’s willingness to change. A tool in and of itself won’t do that exclusively and I believe that’s where pharmacists can really play a role, face to face, interacting with their patient.
When we worked with Health Alliance, we focused on chronically ill patients. They did not become chronically ill overnight, so there were lots of behaviors we had to overcome to try to help them, and tools did help and did support those patients. As an example, we worked with Johnson & Johnson and Janssen’s Care4Today app for medication adherence and behavior reminders. I believe the biggest benefit of that particular app was that it had a provider functionality as well as a user functionality. The user utilized it for adherence or behavior modification, but we as the provider had a dashboard that delivered critical information; when a patient slipped, very quickly we could see that the patient was in need of help, coach them, and help drive appropriate behaviors to get the patient back on track. And I think you need that two-way connectivity when you’re trying to drive behaviors. An app can be utilized by a patient who’s highly engaged, but without the app they probably would be highly engaged and be motivated to do what they want or need to do to achieve their goals. I think we have to be very careful when we look at tools and we can’t cookie-cutter or peanut butter that tool and assume that it’s going to be the solution for everyone.
Technology can certainly play a role with using and creating other tools to help assist with change. At Rite Aid we have a We-Care program, too — I thought it was such a unique name but obviously not — our We-Care program uses technology to help our pharmacists identify and focus on non-adherent patients. Similarly, just like apps, we can use this data to personally support our patients with additional touch points when we see them, along with additional reminders for those patients who prefer to receive them through technology. We also recognize that by identifying patients through our proprietary Rx Score we can interact appropriately with those who need our help and identify those patients who our pharmacists can influence the most to drive adherence. This score can also be used to reinforce positive behaviors. This tool is built and is delivered to our pharmacists using technology but the Rx score drives a face-to-face conversation or a personal conversation. The tool helps support the activity.
I think utilizing multiple different types of tools, technology and innovation is key. But as Rick said earlier, it’s ever-changing so every time you think you’ve got the solution, our landscape changes again and additional hurdles arise, like the DIRs, and then we’ve got to find another innovative solution to help patients with their care, wellness and overall well-being.
Singer, Shopko: Partners on stage and partners in the room, everybody who knows me for many years knows I never think about script volume or immunizations or revenue. It’s not a shock to anyone. Those things happen when you provide that patient with the support mechanisms to drive loyalty and adherence and develop a relationship with their community pharmacist to drive those revenue-generating services. So for me, it ends up being a combination. The combination starts with that relationship with the pharmacist and then the ability to utilize technology-enabled platforms to support that patient in their wellness journey.
In my world, I’m lucky enough to have quality-focused pharmacies, great optical centers, clinics in many of our stores and an integrated OTC, diabetes, smoking-cessation environment — effectively, a store-within-a-store. And so it starts to simplify the journey for that patient because if we can show them that we can fulfill more of their health-and-wellness needs in a Shopko store by, as I say, connecting the dots, we earn their loyalty, we earn their trips and then you use fundamental mechanisms like the mobile application, the refills, the reminders, the dosage reminders. We use platforms like the Ateb medication synchronization. We tell the patient, ‘We’re going to simplify your journey; we’re going to help you be adherent to your medication; ultimately we will help you be healthy and well.’ All of the technology-enabling mechanisms that we utilize, including centralized data entry, centralized cognitive functions, centralized mining of those five-star measure, MTM and CMR — interventions that we deliver at the pharmacy but are being driven through technology-enabled platforms, ultimately that drives a teachable moment at the pharmacy. And I always go back to that.
Technology isn’t in and of itself, in my view, the solution. It’s a facilitator to earn back those minutes and partial minutes, and we all know it comes down to that. Central fill is a great mechanism simply because it enables you to earn back time when you can make eye contact and explain to that patient why they need to take their meds; why a Zostavax shot is appropriate for them and important for them.
We use a model at Shopko that’s very simple, it’s called WELL, W-E-L-L, and it’s a genuine ‘Welcome’ to that patient when they visit us, it’s a clear ‘E’ for ‘Explanation,’ and the ‘L’ and ‘L’ is ‘Look’ and ‘Listen.’ I don’t think we should ever forget this is a personal business. We’re all utilizing technology but, at the end of the day, the most essential relationship that exists in the entire healthcare system because of accessibility and because of trust is that relationship between the pharmacist and the patient. And I never neglect to bring it back to that. And as I said, I’m happy scripts are growing at Shopko and days of supply are growing and our immunizations are growing because we are literally linking the right intervention to the right patient need.
And then, finally, I need to ensure that I connect the dots. A great example is a patient with diabetes in a Shopko store must be served in both the pharmacy; the optical center, where we do retinal-camera imagery to identify risks of macular degeneration and glaucoma that diabetics and patients with hypertension are uniquely susceptible to; then we leverage into the main aisle and go out into the OTC aisle, the diabetes assortment. We work with J&J and BD and every partner to make sure that we’ve got the right assortment and the right access. Very simply, if I can connect the dots between the different locations in our box, again, particularly in these underserved communities — I mean, Hardin, Mont.; Gordon, Neb.; Andrews, Texas; you can’t get there from here, you know what I mean? But Shopko is there and when we say, ‘You can fulfill more of your health-and-wellness needs in our store,’ that’s a requirement for us to deliver. And at the end of the day, that ultimately helps that patient navigate a very complex healthcare system.
Dimos, McKesson: Great, thank you. Philecia, I want to turn to you now with this question. I know that you and Craig in your environments have the ability to look at everything that the consumer consumes. A big part of health and wellness is wrapped around not only just the medications they take or the disease states that they’re struggling with but also what’s in their basket in the rest of the store and how are you looking at that holistic consumerism and applying it back to your opportunities to play.
Avery, Kroger: You’re right, it’s really good to be able to see the entire spectrum, if you will; to be able to have the conversation with the patient right there in front of you to also have the connection with the physician, but to also find out what they’re not telling you. And that is that they had Oreos in their shopping cart the night before when they came to shop, although they say it’s for the kids, we know — I have two, if they’re in the pantry, chances are I’m going to pass by and I might have one or two. It is an advantage, I will say, to connect the dots — and that’s a great way to say it — because health care is a continuum, it is making sure that we’re all collaborating, whether it’s the payer, the physician, all of us connecting the dots. But we can’t forget that the customer or the patient should be and is the center of that. And so we don’t want to come at them with a velvet glove beating them over the head about the Oreos that they purchase, but we do want to provide them information. I think the entire panel has talked about that, it is about having the right information, having the right intervention for the right patient. And so I’m not stealing, I’m borrowing because I think we all agree.
It is something that we at Kroger are looking at. We are having programs that definitely involve the dietitians, the pharmacists, our nurse practitioners and physician assistants, reaching out to those in our health ecosystem to make sure that we’re connecting the dots because at the end of the day, if they’re discharged from the emergency room with an event, we provide them with the medication, they still go home with it and we trust that they’re taking the medication, we trust that they are following the right diet plan. But it does take a collaborative relationship, whether it’s through the electronic medical records, whether it’s through good old-fashioned pick up the phone, we definitely want to make sure that we do that. So I’d be curious to hear a little bit more about what my colleague is doing as well.
Norman, H-E-B: Well, from my perspective and from our company’s perspective, it’s all about education. We don’t necessarily try to tell people this is good food and this is bad food, it’s all food and with the proper education, choices can be made to incorporate everything that you love, all the stuff that your particular family has grown up with but in moderation. That’s really the key from our perspective that education piece to help our customers understand everything is good for you, we just need to do it in the proper way with the proper combinations and not over-consume.
Dimos, McKesson: Great, thanks Craig. I want to shift gears now a little bit. We heard about the consumer, we heard about some technology that we can use to leverage either the data, whether it be in insights to the consumer or to help them in their journey. Rick, I want to start with you and talk about now that we’ve reset the table on what is necessary, the conversation shifts to pharmacists practicing at the top of their license…we need to perform the value-added, the differentiated services, the healthcare provision…how do you differentiate? When we talk about practicing at the top of your license, what do you think about for your pharmacists? What should they be doing? How should they be spending their time? And how would they deliver the most value to the overall healthcare system?
Gates, Walgreens: It’s a great question. The challenge that we have is that everybody gets excited about technology. They think that technology’s going to solve the world’s problems. At the end of the day, we live in a highly regulated environment, so just because technology can solve a certain issue doesn’t mean that it can be applied within our healthcare ecosystem. You have to start with either federal provider status or states’ scope of practice changes, those types of things that are critical for us to really unlock our ability to play a bigger role within healthcare. There are three ways that we look at technology solutions in our stores, focused on unlocking time to allow our practitioners to spend more time with patients. Technology can help solve through efficiency, automation and predictive modeling.
First, you focus on basic counting and quality check technology within the department. How do we make efficient use of time, delivering the highest-quality product or services to our patients?
Next, we need to manage the demand patterns of patients coming into our stores. To be able to staff appropriately because they don’t tell us when they are coming, they just show up at our stores. And how do I really enable our stores to have assistance at the right time? Technology is assisting here with things like centralization of work during peak demand times; automation of tasks. A great example is the State of New York being a mandatory eRx state. How do I take information coming in and digest it in our systems and not have our employees manage it until a pharmacist looks at it? We have to be able to automate things to take time out of what we’re doing in the stores to enable our practitioners to do more as well.
And finally, you have to look at managing big data. Once we unlock federal provider status states or scope of practice changes, so that we can get paid for more of our services, we have to understand how to use data to help solve gaps in care. And how do we solve these gaps on the patient’s terms vs, a peanut-butter solution?
If we can tie together predictive and patient specific information, you have ability to do more on their terms. Technology can help free up our practitioners, and from a safety, quality perspective, the ability of technicians to do more within our store; we freed up time for our practitioners to really engage differently but at the right time on the patient’s terms. I think at that point in time we’re going to be able to do more, but it really starts with first unlocking the ability to do more than we can do today.
Dimos, McKesson: Doyle, I know you have some thoughts on what we could do once unlocked. We talked a lot about efficiency and how you can drive time to have a differentiating service. What types of things would you envision a pharmacist doing once they have the efficiency to create it?
Jensen, Innovation: We attacked technology for a little bit and I agree with everyone at the table, technology really is the enabler, so once enabled then what is that evolutionary role play? And Rick’s exactly right, federal provider status is absolutely essential, you’ve got to start getting paid for services to be offered. But I’ll go back ultimately to that customer experience. I keep referencing air travel — that’s because it’s something I seem like I do every day — I got off the plane yesterday. Before I got off I was thanked personally at my seat for my business; somebody came by and did that. What does that difference do for that customer? For my pharmacists at Walgreens to actually talk to them instead of the tech; what does that next step look like?
It may not generate more revenue on the top, but it really will on the bottom because you’re going to retain the customer. If it’s all about convenience then at some point drones will be surrounding my house like they’re surrounding your house. But it’s not necessarily about that, it’s this experience so that’s where I see the differentiation for the brick-and-mortar. It’s not going to go away, so then what evolves in a capitalistic economy is the best levels of service and value that can be delivered.
Dimos, McKesson: Great, thank you. Tim, I know your team has been doing an awful lot of work around differentiation with their pharmacy services, whether it’s through the synchronization program; you’ve created an opportunity to have a conversation with your patients and to be able to deliver more pharmacist value perhaps through that engagement. What are you seeing as kind of the top-of-the-license work for your pharmacists?
Weippert, Thrifty White Pharmacy: We talked earlier about fee-for-service moving to performance and quality. We’ve just launched an initiative in the last six months called ‘Own Your Community, Own Your Business.’ That’s really getting engaged with all the providers, the employer groups, long-term care facilities, and organizations in our communities to partner and collaborate together.
We’re spending a lot of time going out and doing a lot of education and teaching our pharmacists to become marketers. Everybody on our pharmacy team, everybody in our company, are now becoming marketers and we’re taking that marketing effort out into the community and having these conversations. We’ve have to find ways to increase our revenues and opportunities outside of just the product reimbursement and we’re going to do it through a grassroots, community marketing effort. It’s going to be a grassroots effort to educate your providers and these entities of all the services that you do.
We took that to a med sync level. We’re now taking that to many different other levels of disease state management and things like that with providers. We’re taking it to employer groups, asking them what their pain points are; it’s amazing what HR directors don’t know or do know when you have conversations with them, where’s their population problems might be around diabetes, or be it now specialty medications because we’re seeing increased costs arising there, it is what are they going to do about it and how can we help engage in those situations.
And that’s also around long-term care, which we do a lot within our company of providing for a little [more than] 25,000 residents today and it’s engaging with the long-term care facilities and hospitals because as people transition from hospital to a skilled nursing home and then to a home care, there’s a lot of integration for pharmacy and for pharmacists to work in all of those situations from bedside in a hospital to bedside in a nursing home to going home. We’re partnering with all of those type of avenues along with home healthcare agencies to find other avenues of revenue and streams of services and patient engagement.
It’s thinking out of the box again. We took the synchronization model — didn’t think that was going to go to the extremes that it did and now I think it’s risen very widely and I heard adherence a lot has greatly improved but we have a lot of work to do there yet. But it’s much more than all that. It’s all these additional services I just mentioned and how can you engage all these partners in your communities.
Dimos, McKesson: Great, thanks Tim. It’s interesting when you start to think about where are the opportunities to play? Where’s the blue ocean? For those of you that are familiar with blue ocean and red ocean, where are there areas to play that perhaps traditionally the pharmacist hasn’t played? When you talk about all of these different constituencies inside of that ecosystem seems like technology will play a big role in trying to understand and communicate in between those environments and have a role for pharmacy to play.
I want to shift a little bit to adherence and Ashton, I’m going to start with you. I think one of the interesting things about adherence, is that we have been talking, as an industry, about adherence forever. One man’s opinion, we have made some progress — we’ve gotten better at 90-day fills and some things that lead to adherence — but we really haven’t cracked the solution, we haven’t come up with how we really move the dial with regards to adherence. Medication adherence is one of the most cost-effective methods to increase the quality of health care. What are your thoughts around our inability to solve non-adherence? Is it lack of coordination? Is it coordination between front of the store and back of the store, total environment, other healthcare providers, payers? Where’s the opportunity? What are the areas that we maybe should be exploring to figure out how we crack the adherence nut?
Maraaba, PharmaSmart: I think it’s a great question and it also requires multiple exploration in terms of the different various responses somebody could give. Adherence is a complex issue and I think everybody knows that. You have patients that are adherent to their medication regimen, doing it right, but then you don’t have their condition under control. And when it’s not under control, chronic conditions worsen. What’s happening is you’re not getting enough data driven to the care provider timely to be able to intervene. There’s your typical adherence, which we all know, which has been going on for [more than] 100 years, where we just don’t complete our medication doses, we don’t pick up our medication on times. That we get. And I think the technology companies have done a great job in doing just about everything they can to improve that and the pharmacies are doing a great job as well. I receive my script reminder from my pharmacy regularly, ‘Pick up your script, it’s ready,’ or ‘Reply Yes, Reply No.’ those are things that didn’t exist back then.
The other issues that you can touch on is we talked a lot about consumerism and we talked a lot about technology, and you take those two together and you really have to look at the trust factor. I know Darren mentioned trust. You have to be able to trust your pharmacist but you also have to be able to trust the technology. And the pharmacist has to trust the technology; if the pharmacists trust the technology, they’re going to learn that technology better, they’re going to realize that that technology is something that I can utilize daily and efficiently. And as far as becoming and optimizing their role as a health adviser and as a behavioral coach, those are all the tangible items that go into servicing the patient on the MTM side or on the med adherence side and optimizing that.
The other issue is when you look at the total-store environment and you look at the food-pharmacy combos, for example, I thought this was brilliant, really working with the pharmacies and getting them, and as Tim mentioned, positioning them to be better marketers. But, that’s not their job to be a marketer, per se, in the sense of marketing a brand; it’s their job to market an understanding about what that patient is buying at the store and how that impacts their therapy overall. It’s a coordinated care effort. The technologies exist today that deliver data seamlessly to the care providers, whether it’s a physician or the pharmacist.
The biggest issue is how trustworthy are those technologies? And if they’re trustworthy, then the data is going to valid. And if the data is valid and the technology’s trustworthy, and the technology appeals to the clinical standards, then you’re going to find greater participation, a greater sense of trust on the consumer side to gravitate more toward that health provider. You will find a greater sense of trust on the pharmacist’s side to accelerate the therapy — not that they’re not but that is something that has to be thought about.
And at the same time, you will be able to find a combination of the other categories in a store environment buying into that as well and creating alert mechanisms — I mean, that’s what medication adherence is all about. It’s about taking advantage of your ecosystem, whether it’s in the store environment or whether it’s outside, and utilizing the technologies like the EMRs that exist, like the patient, the pharmacy systems where they speak to each other, generating quality data, triggers within workflow. The biggest thing that I always tell everybody here, and I think the retailers that I’ve spoken to have been hearing it from me for about 17, 18 years now, it’s that if it’s not built into workflow, it’s not going to work.
I spend a lot of time in pharmacies, so I understand those miles that you’re picking up on. And when you spend a lot of time in pharmacy, and those of you that do spend a lot of time on the floor and are part of the front lines of your organizations, you’ll understand. They’re strapped and they just don’t have a lot of time to do a lot of the things that we talk about, that we’ve been talking about. Obviously, when you wait your turn this long, you’ve got a lot inside of you. I think to tie it all together, there are multiple things that are going on within that ecosystem today to drive adherence, but you have to worry about those conditions where the patient is medically adherent, where their condition is not under clinical control, that’s very important. There are great technologies that exist today; we’re heavily invested in that, we spend an obscene amount of dollars on the research and development and on the clinical accreditation side of the business in order to optimize the trust side — that’s critical. There are great technologies, hands down, that exist today but you really have to weed those that make a difference in the care provider process in order to optimize — and we’re talking, look if you can lift medication adherence by 5% in a store environment, 5%, statistically speaking, you may not think that’s a lot but when these guys crunch the numbers, it’s a monumental difference to the bottom line. And those are the things that I think.
Dimos, McKesson: Ashton, thank you for your comments. We’re going to have to wrap up here. Sorry we didn’t get to spend more time on adherence, but I think it’s a great topic. Jeff talked about how do we get technology to facilitate? How is it part of the solution and then how can we take our pharmacist and have them do something different that’s differentiated and value-driven? But it’s a nice synergy between the human element and the technology element. Thank you all very much for your time and your preparation, and thank you all for your attention.
Healthy OTC growth: Consumers seek allergy switches, probiotics and protein
There is no question that one of the top nonprescription categories contributing to both sales and foot traffic right now is allergy. According to IRI data, sales of nasal sprays — the category that captures all of the latest nasal corticosteroid Rx-to-OTC switches, such as Flonase and Nasacort — are up 10.2% to $1.2 billion across total U.S. multi-outlets for the 52 weeks ended Feb. 19.
Meanwhile, sales of cold/allergy/sinus tablets — the category that captures all of the still-growing traditional allergy tablets, such as Zyrtec and Claritin — are up 1.9% to $4.6 billion during the same period.
One significant factor contributing to the steady growth of new OTC users is the steady migration of allergy sufferers from their doctor’s offices to the retail pharmacy with the regular stream of nasal corticosteroid Rx-to-OTC switches. It started three years ago with the switch of Sanofi Consumer Healthcare’s Nasacort Allergy 24HR, which today commands a healthy sales base of $118.4 million. That was followed one year later by GSK Consumer Healthcare’s Flonase, which now commands a solid sales base of $321.8 million.
Last year, McNeil Consumer Healthcare switched Rhinocort, and Bayer introduced its Bayer Clarispray to market.
This year, GSK Consumer Healthcare added to its allergy switch repertoire with the launch of Flonase Sensimist Allergy Relief, which was previously available by prescription-only under the Veramyst brand to treat symptoms associated with seasonal and perennial allergies. The upgraded allergy nasal spray features MistPro technology, delivering a finer and gentler mist spray.
Sanofi Consumer Healthcare recently switched the allergy tablet Xyzal Allergy 24HR from prescription-only to nonprescription status. In launching Xyzal, Sanofi recently revealed the results of a social experiment linking Its newest allergy remedy to better sleep, bridging allergy to another strong category In the OTC aisles. The study found that allergy sufferers had a harder time falling asleep and staying asleep than people without allergies, for example, and allergy sufferers were less rested and less physically active during the day than people without allergies.
Another category that Is performing well Is probiotics. Similar to bridging allergy and sleep, there are several co-merchandising opportunities across categories. For example, last year Premama launched Its Premama Digestive Aid targeting expectant moms with a formulation to help maintain digestive balance and boost the Immune system. Connecting the growing awareness around probiotics to pregnancy care Is a significant opportunity, Dan Aziz, president of Premama, told Drug Store News. “Capturing a new mom is extremely valuable, as it gives you the opportunity to provide the entire household with products if the mom trusts your brand,” he said.
Connecting to that new mom through such growing product categories as probiotics could lead to significant opportunities. Sales of mineral supplements, where many probiotic SKUs are captured by IRI, were up 6.4% to $3.5 billion across total U.S. multi-outlets for the 52 weeks ended Feb. 19. And that $3.5 billion opportunity could very well open the door to a $67.5 billion opportunity, which represents the total spend families make from the time they try to conceive to their child’s first birthday, Aziz said.
“A number of our retailers are creating a maternity/new mom destination, which takes products from vitamins, baby and fem care, and brings them all to one destination,” he said. “Creating these destinations, with proper education and support, will really allow retailers to win this new mom customer.”
A third burgeoning category is protein ready-to-drink shakes and meal replacement bars. According to IRI, sales of nutritional liquids are up 12.4% to $3.3 billion, while sales of intrinsic health value bars are up 4.2% to $2.4 billion. The trendline behind this growth is a gravitation toward cleaner ingredients and a breakaway from non-transparent proprietary blends.
“Clean foods have risen in popularity over the years as consumers have become more health conscious,” noted Eric Zaltas, VP research and development at Premier Nutrition.
Brand marketers also are breaking away from proprietary blends. That transparency gives consumers a firm grasp of exactly how much of what ingredients they’re ingesting.
Hearing the future
A new opportunity in OTC is hearing aids. There is legislation under consideration to create an over-the-counter class of hearing aids. The category wouldn’t compete with more complex hearing aid solutions for those with greater hearing loss, but rather create a new class of hearing aids and expand the market. “Getting [Personal Sound Amplification Products] on the same shelf as over-the-counter eyeglasses would be a major win for consumers,” said Gary Shapiro, CEO and president of Consumer Technology Association. “PSAPs can provide a less expensive, readily available array of products that can aid the millions of Americans living with mild hearing loss.”
Garden of Life gets Non-GMO Project verification for probiotics line
PALM BEACH GARDENS, Fla. — Probiotics brand Garden of Life has announced that its line of Dr. Formulated probiotics has been Non-GMO Project Verified. The company said the seal that it now adds to its boxes underscores its support of GMO-free crops.
"Chemicals such as glyphosate, used in the farming of genetically modified crops, are toxic to healthy bacteria,” Garden of Life Dr. Formulated product line creator Dr. David Perlmutter said. “While we don't know the long-term effects of genetic modification on our health, we do know that heavy loads of these toxic chemicals can harm our human microbiome, and that is why it's so important to look for products that have been verified non-GMO. I'm proud that the entire line of Dr. Formulated probiotics has become Non-GMO Project Verified."
The line of products, introduced in 2015, includes probiotics for men and women’s health, a once-daily, a once-daily ultra formulation, a once-daily prenatal, an organic kid’s probiotic, as well as formulations that work to help with mood, prostate health and urinary tract health, among others. According to SPINS data for the week ended March 19, the line of Dr. Formulated probiotics is the fastest-growing line in the natural channel.