2016 Retail Outlook: Pharmacy’s reach to expand

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Industry execs give their take on what's ahead for drug chains

Pharmacy dept_Rite Aid Harrisburg_Oct2015

The practice of pharmacy continues to gain recognition as an integral part of the rapidly changing health care system. As 2016 gets under way, chain drug retailers are seeking ways to elevate the status of the profession even more — getting the most out of its continued ­movement away from a dispensing foundation toward a professional service model that is focused on improved ­outcomes.

With the Affordable Care Act bringing millions of newly insured patients to prescription counters, pharmacies are winning new respect for their roles in providing accessible and affordable care. But they must continue to cope with the pressures on the business from ever-diminishing third-party prescription reimbursements.

Outside of government action, demographic changes and an economic recovery that has yet to be felt by all will have their own part to play in the industry’s performance. The ability to serve a budget-conscious, increasingly multicultural population and growing numbers of seniors will go a long way toward determining chains’ results this year.

In any event, executives say, chains will keep doing what they do best: provide accessible, trusted care and serve as a convenient source of ­nonprescription products, beauty items, consumables and other consumer packaged goods.

Here’s a sampling of what some chain drug and pharmacy industry executives had to say about the coming year for their business and for the sector as a whole.


“With the New Year come new opportunities to overcome challenges facing our industry. The way the health care community communicates patients’ records and how our industry manages government regulatory issues and deals with Medicaid changes and other ongoing challenges can all become opportunities for improvement if we remain focused on the patient.” — Randy Edeker, chairman and CEO of Hy-Vee and chairman of the National Association of Chain Drug Stores

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Randy Edeker, Hy-Vee

“The retail pharmacy environment continues to evolve, with increased reimbursement pressures, more consolidation and competition, accelerated expansion of narrow networks, and a greater payer/pharmacy benefits manager focus on pharmacy networks’ clinical and operational performance. To grow their businesses, pharmacies must consistently deliver clinical interactions that improve patient health while managing costs and elevate their role as a health care provider.” — Steve Courtman, president, Health Mart

“With patients continually becoming more engaged in their health care and outcomes, with provider status and collaborative practice arrangements evolving at federal and state levels and the continual work needed to maintain and gain access to patients through network participation and relationships, the new year will be an exciting time of continued building of partnerships, relationships and new opportunities with all facets of pharmacy: vendors, manufacturers, and state and federal government and, of greatest importance, the patients we serve.” — Timothy Weippert, chief operations officer, Thrifty White Pharmacy

“Three key factors that will impact the community pharmacy business in 2016 are increasing movement towards a pay-for-performance environment among third-party payors, improved patient accessibility via telehealth, and pharmacists gaining momentum with regard to provider status.” — John Figueroa, CEO, Genoa


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Michael Wysong, Care Pharmacies

“The myriad of consolidation in our industry only further underscores the economic pressure being felt by payers, providers, consumers and manufacturers. While it is easy to deduce that the result from these merging parties should be increased efficiencies and reduced costs, the consumers won’t see any of the value unless those savings are guaranteed to be passed through. In addition, patient choice and true competition could actually be hampered in these partnerships because of the restrictions on medication and provider access.” — Michael Wysong, CEO, Care Pharmacies

“Consolidation not only in the chain drug industry but throughout all of health care is another concern, especially as restrictive networks intensify efforts to keep regional pharmacies from participation and thus impeding patient choice and access to care.” — Brian Unmacht, president and CEO, Bartell Drug


“One refreshing change is the increasing recognition by legislators and others of the important role that pharmacists can play in the nation’s health care system not only in terms of improving and saving the lives of patients but in saving health care dollars as well. Give credit to NACDS and other organizations for drawing this increased attention.” — Mark Griffin, president and CEO, Lewis Drugs

“Provider status is the official recognition of pharmacists as health care providers. This recognition is the first step in allowing insurers to pay for health care services rendered.” — John Fiacco, vice president, Medicine Shoppe Pharmacy

Mark Griffin, Lewis Drug

Mark Griffin, Lewis Drug

“Quebec pharmacists are now in a position to play a bigger role in helping their patients. Since Bill 41 came into effect, they are now allowed to prescribe medications for minor conditions, prescribe laboratory analyses, extend or adjust the term of a prescription and so on. This major breakthrough — which pleases both pharmacists and patients — should have a major impact in 2016.” — Philippe Duval, president and CEO, Uniprix Group

“The face of neighborhood care has changed. Great strides have been made in expanding the scope of pharmacist practice in Canada. Increasingly, Canadians are turning to pharmacists for health and wellness advice and clinical services like vaccinations. ” — Richard Brennan, senior vice president of retail banner management services, McKesson Canada

“With pharmacists on the brink of achieving provider status, the practice of pharmacy is coming full circle. Pharmacists are once again valued as health care providers. For community pharmacists, it is more important than ever to position their pharmacy to meet this shifting role. That means doing things differently than they did even a few years ago.” — Steve Lawrence, senior vice president of retail independent sales, Cardinal Health, and Steve Mason, senior vice president and general manager, Kinray (a Cardinal Health company)


“After exiting tobacco, the No. 1 thing we heard from our customers was they wanted healthier food options in store. Driven by our ‘think customer’ mind-set, we introduced a new layout in 450 stores featuring an expanded selection of healthier food offerings. … Today’s consumers are more health-conscious, and we realized we have a huge opportunity to be a partner for customers looking for healthier options who need and want convenience. We will continue to expand our assortment of healthier food to more than 2,000 stores in 2016.” — Helena Foulkes, president, CVS/pharmacy

Helena Foulkes_CVS

Helena Foulkes, CVS

“Operating in such a dynamic industry as health care, major participants including Walgreens are seeking new ways to partner and collaborate and, most importantly, to anticipate and respond to America’s growing health care needs. As part of Walgreens Boots Alliance, we are determined to continue to show the way and serve at the forefront of innovating health care.” — Alex Gourlay, president of Walgreens and executive vice president for Walgreens Boots Alliance

“Competitive retail pharmacies are expanding overall wellness services to become a trusted source for clinical advice, prescriptions and companion over-the-counter products. As patients seek counsel from pharmacists on their treatment, pharmacists need to be equipped to drive medication adherence and share guidance on getting the most from a prescription therapy.” — Robert Mauch, executive vice president, AmerisourceBergen

“The company’s goal is to create pathways to upward mobility and economic opportunities as we continue to have a positive impact in transforming the lives of our customers, enhancing the health of our community and positively impacting people’s lives.” — Alpesh Patel, president, Benzer Pharmacy


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Lynne Fruth, Fruth Pharmacy

“On the Affordable Care Act front, we continue to see that “affordable” is a relative term. Costs are rising each year, and participants are getting less coverage for their money. This trend is impacting the ability of families to afford the coverage and for employers to be able to afford to hire full-time employees eligible for benefits. There has been a decided shift in our market toward hiring more part-time employees. There is also the concern in our states over the cost of expanded Medicaid and whether our states can afford to support it. All of these factors will likely impact Fruth in 2016 and beyond, but we remain focused on finding solutions to these issues and capitalizing on the new opportunities that will present themselves in the coming year.” — Lynne Fruth, chairman and president, Fruth Pharmacy

“In an environment that continues to be affected by regulatory shifts, Pharmasave is very active in working to influence and shape the future of the pharmacy profession through ongoing engagement and collaboration with industry stakeholders. The sustainability of Canada’s health care delivery system should focus on ensuring that optimal patient outcomes are achieved through cost-effective community health care services, ensuring the ongoing viability of dispensary operations and the inclusion of a full suite of patient care services.” — Carmen Churcott, CEO, Pharmasave Drugs National


“It’s important to address the integral role that the acceleration in drug development will have in the market. New drugs coming to market tend to be more effective treatments and are focused on new therapeutic options for otherwise untreated conditions, and they will continue to play a major role in the future of the specialty pharmacy industry into 2016.” — Phil Hagerman, chairman and CEO, Diplomat Pharmacy


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David Neu, Good Neighbor

“While reimbursement rates will continue to be a challenge for community pharmacies in 2016, having strong financial data to support reimbursement discussions with payers will be an asset for community pharmacists. … Employing the latest in analytics technology helps pharmacies make improved business decisions that can lead to increased profitability, operational efficiency, brand awareness and, most importantly, improved patient care.” — David Neu, president, Good Neighbor Pharmacy

“The coming year provides a tremendous chance for our pharmacies to leverage their existing strengths, improve their overall pharmacy performance, and maximize their reimbursement by interacting with their patients and providing care. It is now more important than ever to become top performers by making investments in tools and services to increase customer and patient engagement like EQuIPP, medication synchronization solutions and access to a team of performance advisors who provide routine guidance.” — Eyad Farah, vice president of business development and strategy, AccessHealth

*To read the full 8-page Retail Forecast report, please see the Jan. 4, 2016, print edition of Chain Drug Review.



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