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Mental health, medicines 
top of mind for industry

BY Alaric DeArment

In July, the country’s largest trade group representing the drug industry released a report showing nearly 200 drugs under clinical development or Food and Drug Administration review for treating mental disorders.


The Pharmaceutical Research and Manufacturers of America released a report listing 187 drugs, including 52 for depression, 37 for schizophrenia and 26 for anxiety disorders.


“Mental illnesses do not discriminate and can have a profound impact on people’s lives,” PhRMA president and CEO John Castellani said. “They come in many different forms and impact patients in many different ways. That is why biopharmaceutical research companies are working on new and better paths of treatment for patients battling these disabling conditions.”


According to the National Institute of Mental Health, about 1-in-4 American adults has a diagnosable mental disorder, and serious mental illnesses cost the country more than $317 billion per year in lost wages, healthcare expenditures and disability benefits. And according to a report released by IMS Health in April, mental health disorders were among the five categories accounting for nearly one-third of total healthcare spending in the country. At the same time, a June report by the Kaiser Family Foundation found that 8% of respondents to a survey said they had problems getting mental health care in the past year due to the cost.


A report released in March by pharmacy benefit manager Medco Health Solutions found that women take mental health drugs at a much higher rate than men. The study found that 25% of women use psychotropic drugs, compared with 15% of men. The study was based on the pharmacy claims of more than 2 million Americans and measured the use of drugs for treating depression, anxiety, attention deficit hyperactivity disorder and psychotic disorders between 2001 and 2010.

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Wellness stores, ambassadors do well for RAD

BY Alaric DeArment

One of the most visible representations of Rite Aid’s efforts to make a comeback is its Wellness store format. The company first unveiled the format in several test markets in the Northeast last year, gradually expanding it to other states. Today, more than 420 stores have been converted, and the chain hopes to eventually make the format the norm. The company plans to have 780 stores converted by the end of the year.


Rite Aid’s vision for its Wellness stores is apparent upon first stepping through the doors: Lighter colors and lower shelves create a brighter, more open look for the store; updated signage, new ways of arranging SKUs and new sections give it a more modern, stylish look; and the store’s Wellness Ambassadors help make the store and pharmacy more accessible. In a conference call with analysts to announce the chain’s first quarter 2013 earnings in June, president, chairman and CEO John Standley said the Wellness stores have been outperforming Rite Aid’s core stores.


So far, it seems that the Wellness Ambassadors are a major part of what has made the Wellness format successful. The Wellness Ambassadors walk the aisles of the store with iPads, offering assistance to customers, information about various products and directing people to the pharmacy if they need further assistance. In the company’s third quarter 2012 conference call in December 2011, Standley said those stores that had Wellness Ambassadors were doing better than the ones without. As of June, the company had trained about 600 Wellness Ambassadors.

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Rite Aid leverages Wellness in comeback

BY Alaric DeArment

Everybody loves a comeback story, and it looks as though the pharmacy retail industry has one of its own in the making as Rite Aid’s latest earnings report showed another strong quarter for the Camp Hill, Pa.-based chain, which has been steadily growing its sales and narrowing its losses for several quarters already.


According to the report for first quarter 2013, announced on June 21, the company had sales of $6.5 billion and a loss of $28.1 million, compared with $6.4 billion in sales and a $63.1 million loss in first quarter 2012. Same-store sales for the quarter increased by 2.5%, including a 2.7% boost in front-end comps and a 2.4% increase in pharmacy comps.


One of the key ingredients to Rite Aid’s success has been the Wellness+ loyalty card program, which had 52 million members as of June 21. But while the program has been growing its membership for some time, the recently mended falling out between rival Walgreens and pharmacy benefit manager Express Scripts provided a laboratory of sorts for determining how well Rite Aid can attract new members and retain them. 


Much of the increase in pharmacy comps came from Walgreens customers who had moved to Rite Aid, and John Standley — Rite Aid’s president and CEO, who took the additional title of chairman in May following the retirement of former chairman Mary Sammons — told analysts in a call to discuss the first-quarter earnings that Wellness+ penetration among customers who had switched from Walgreens was on par with the broader Wellness+ numbers, meaning that more than two-thirds of customers who had moved their prescriptions over had signed up for the loyalty program.


In September 2011, the company launched Wellness+ for Diabetes, an extension of the loyalty card program designed for diabetes patients and caregivers, which by third quarter 2012 had more than 90,000 people enrolled and attracted more than 200,000 unique visitors to Rite Aid’s section of WebMD, which has partnered with the retailer in the program.


Immunizations have been another strong area for the chain and have turned out to be a major contributor to its pharmacy comps. In the third quarter, it had trained more than 11,000 of its pharmacists to administer vaccines to patients and immunized 1.4 million customers against flu. The retailer expected to immunize a further 1.5 million, for a total of more than double the number of people it immunized in 2010. The company’s efforts won recognition in December, when the American Pharmacists Association gave it the Immunization Champion Award in the national corporation and institution category.


That same month, Rite Aid announced a partnership with OptumHealth to become the first retail pharmacy to provide “virtual clinics” through the launch of NowClinic online care services at select stores in the Detroit area. The program is designed to allow Rite Aid customers to interact in real time with doctors and OptumHealth nurses. Customers use the Internet to have private consultations with doctors about symptoms and obtain guidance, diagnoses and prescriptions for certain medications. Customers also can have conversations with nurses who can provide basic healthcare education, information on common medical problems and identification of appropriate provider options. When announcing Rite Aid’s third-quarter results, Standley said the program had gained traction, and the company was considering expanding it.


Other programs have seen increases as well. The Rite Care Prescription Advisor, an opt-in program announced in April that allows patients to see what their prescription drug adherence looks like, had 300,000 members as of June 21, while the company has 423 Wellness stores in operation, with plans to have 780, or 15% of the store base, operating the format by the end of the year. The company also has trained 600 Wellness Ambassadors — iPad-armed assistants who walk the aisles to help customers who have questions about the store’s products and to direct them to the pharmacy as needed.


Beyond health and wellness, Rite Aid also has been a test bed for new retailing technologies. In December, for example, it made a deal with Chatsworth, Calif.-based Provision Interactive Technologies whereby it would place 3-D holographic kiosks in its stores. The kiosks include a display unit that shows 3-D images “floating in space” without the need for observers to wear 3-D glasses. According to Provision, the kiosks project images that look so real that people feel compelled to reach out and try to touch them. At the time, the company planned to install the displays in 200 stores, with plans to eventually roll them out to the entire chain.


In October 2011, Rite Aid became one of the first retailers to pilot Amazon Locker, a service that allows items purchased through the online retailer to be delivered to a secure, robotic locker for later pickup.

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