Already, 2015 is shaping up as an eventful year

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The new year is just over a month old and already the chain drug industry has seen its fair share of noteworthy events.

cdr-filler-opinion-750Walgreens Boots Alliance had a coming out party, opening trading at NASDAQ and unveiling its new corporate logo; Brian Unmacht became the first person outside the Bartell family to serve as president of Bartell Drugs; and CVS Health was praised by President Obama in his State of the Union address for the educational opportunities that it provides to its employees.

Broaden the scope to include other chain pharmacy operators and purveyors of drug store merchandise and the list expands considerably. Target’s decision to shutter its troubled Canadian operations; Fred’s hiring of Mike Bloom, who spent most of his career at CVS, as president and chief operating officer; and Dollar Tree’s victory in its long battle to acquire Family Dollar all made headlines.

There’s no reason to think the dynamism exhibited by companies involved in retail pharmacy during a month that is often lacking in major developments will slacken as 2015 progresses. In addition to unforeseen events, drug chains and their competitors in other trade classes are sure to challenge the status quo.

The finalization of the merger of Walgreens and Alliance Boots will be a catalyst for, among other things, innovation in the beauty care sector. The dominant retailer in the United Kingdom in many beauty categories, Boots and its know-how is accelerating Walgreens’ drive to establish itself as a destination for color cosmetics, nail care, hair care, skin care and related product segments.

That should raise the bar for the entire mass market in a category where Rite Aid, Target and Walmart, among others, have made it a priority to develop new and better ways to connect with an important group of customers. Those efforts are urgently needed in light not only of the intense competition within the mass market, but the impressive performance of such specialty retailers as Ulta and Sephora.

The proliferation of in-store clinics and their growing role in health care delivery is another area to watch. Rite Aid is the latest chain to mount a major push in the sector. In the wake of its acquisition of RediClinic last April, the drug chain is on track to have 35 clinics in its stores in three markets — Baltimore, Philadelphia and Seattle — by early spring.

Rite Aid has some catching up to do in terms of sheer numbers. CVS and Walgreens already have hundreds of clinics in their stores, and the former plans to expand its MinuteClinic footprint to 1,500 in 35 states by 2017. Although the number of clinics it operates is also relatively small, Walmart is testing low-cost pricing models that have the potential to change the game for the industry.

In addition to ramping up their clinic offerings, retailers are looking to expand the part the pharmacy professionals who staff their stores play in health care delivery. Flu shots and other immunizations are now commonly administered at retail, and the major chains have extended their reach into such areas as routine diagnostic testing and chronic disease management, as well as forming partnerships with accountable care organizations and other providers that are creating new business paradigms.

The degree of success pharmacy operators have in establishing themselves as trusted partners within those models, which put a premium on outcomes and base reimbursement on tangible results, will go a long way toward determining what the profession and retail pharmacy as a whole looks like going forward.

Closely related to that effort is the ongoing bid to secure provider status for pharmacists from the federal government. Such a designation will help pharmacy operators obtain fair compensation for the services they provide, especially in areas that go beyond the traditional role of filling prescriptions.

The issue of provider status is high on the list of priorities for the National Association of Chain Drug Stores and its members, and it is sure to be one of the topics pharmacy advocates stress during meetings with federal legislators and policy makers at NACDS RxImpact Day on March 26. Those who are interested in ensuring a bright future for pharmacy would do well to support that effort.



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