Lowe: There were quite a few different things, I think, which reflect how McKesson is really coming into its own in terms of the tools we have, and the depth and breadth of services we offer. What we’re doing is organized around what we call our three pillars for pharmacists: helping pharmacists attract new customers, maximize the value they bring to existing customers, and enhance the clinical services they can offer their patients.

CT: Give us some more detail.

Lowe: First of all, like any retail business, pharmacies need to have new customers coming in. This is where our Health Mart branding can come into play. We provide help with local marketing plans and we make national advertising investments for the Health Mart brand. There’s some real power in the leverage that we can create. You saw it in our Super Bowl commercials. This really takes advertising to a completely different level for the independent pharmacy. Both local and national branding efforts are critical to creating awareness and helping people understand that Health Mart exists as an independent pharmacy alternative.

CT:  OK. So you are getting people in the door. The next step, as you said, is holding onto customers.

Lowe: That’s right. A big problem in independent pharmacy is that people walk right to the back of the pharmacy, get their prescriptions, and walk right back out. As a customer, of that’s all you are doing, then you might decide you can pick up your prescriptions elsewhere. We want to help pharmacies broaden the reasons customers have for visiting, which should also broaden revenue sources for the pharmacists. This could mean having your pharmacy organized in an intelligent and appealing way that encourages customers to pick up one or two more items from the front of the store while they are there.

CT: And once they are there, this is where enhanced service comes in?

Lowe: Yes. We want to support pharmacies in providing enhanced care, for example by using our sponsored clinical services program. This is an initiative that continues to grow as we get more and more drugs on formulary, more and more interventions, and more and more potential revenue. Another example of something that can really help enhance the services pharmacists are offering is Web capabilities and Web portals, and these are areas in which we continue to invest.

CT: Are customers ready for more sophisticated pharmacy-oriented Web tools?

Lowe: I think that there’s an inflection point now with pharmacy like there was with online banking 10 years ago.  Today I think people are making real choices about where they bank based on the Web access they have.  For the pharmacy, people will be asking if they can process their prescriptions online and if they can manage their overall health using their pharmacy’s Web portal. This will be critical for pharmacies as we move to more of a mobile technology-oriented society.

CT: Let’s hear more about the sponsored clinical services program.  How does this work exactly?

Lowe: The Patient Intervention Program (PIP) is where we’ve been spending a lot of time. PIP is a manufacturer-sponsored clinical service where manufacturers reimburse pharmacists for their time delivering adherence coaching sessions to their patients. The ultimate goal is to drive improved adherence. Through PIP, pharmacists have seen a 44% lift in refill rates through the ninth refill. This means that people are adhering to their medications and staying healthy, there’s more revenue to the store, and it allows pharmacists to continue to play a vital role going forward. It also reinforces the clinical relationship that pharmacists have with their patients and helps patients understand that the pharmacist is a real knowledge base to help them manage their health.

CT: This sounds like it is part of the trend towards medication therapy management (MTM) services. Is that right?

Lowe: Where PIP is co-sponsored by pharmaceutical manufacturers, MTM is co-sponsored by the payer and employer groups. Clinical services delivered in the pharmacy are gaining momentum. It’s important to develop simple solutions that work within the pharmacist’s workflow. McKesson’s sponsored clinical services make it easy for pharmacists to execute on them so that they can collect the data needed to convince payers that MTM is a high ROI activity worth supporting.

CT: On the topic of demonstrating value to payers, that 44% increase in adherence is an impressive number.  What other ways are there for pharmacies to show the value of what they are doing?

Lowe: We are very interested in finding ways where we can help our independents be more widely accepted and included in healthcare plans. This is where the national branding plays a role, because then payers can easily direct patients to a Health Mart pharmacy. Next, technology comes in and helps you demonstrate that you are highly efficient and cost competitive. And then you can show that you can improve outcomes and adherence, which falls in to the area of sponsored clinical services. So, I think this is all coming into a strategy that helps payers understand why they should include an independent in their plans. A common platform such as EnterpriseRx really makes it possible to create benchmarks based on what independents are actually doing.  This is something we continue to develop with the goal of generating key metrics that independents can use to prove their value.

CT: You’ve got a few years of practical experience with what you are calling a common platform. Where is this model going right now?

Lowe: A major new element of our EnterpriseRx, pharmacy management system, is the ability to organize and drive workflow in a new way through Promise Time Workflow.  This generated a lot of interest at Trade Show. It’s different from the traditional workflow in many pharmacies, which we describe as clean counter workflow. This means that scripts are processed as the come in, which can end up creating a situation in which pharmacists have their heads down and are grinding away at dispensing. I think this hurts the overall perception of the value that pharmacists can deliver.

CT: Can you give me some more detail on what’s specifically different about your approach to workflow?

Lowe: Workflow is a pretty generic term and everyone has it at some level. What Promise Time Workflow does is prioritize scripts based on when the patient wants the script filled.  So, pharmacists in a retail setting can prioritize a critical script no matter when it comes in.  An important part of this is that Promise Time Workflow enables pharmacists to focus on the most critical and valuable tasks: prescription verification, patient counseling, and consulting with doctors. We think this is the next, evolutionary step in workflow and something that’s already being taken advantage of in a lot of the large chains to drive efficiency.  We’re bringing that same advantage to the independent segment.

CT: You mention distributing work. In the context of EnterpriseRx as a hosted, software-as-a-service pharmacy management system, does this mean that a multi-location retail pharmacy can workload balance among sites?

Lowe: Yes. In fact, Promise Time Workflow really shines when you have multiple locations. Yet it can also open up efficiencies even in single stores. McKesson built its Central Fill pharmacy next to its southern California distribution center to maximize the benefits of automating Promise Time Workflow queues. Refills that aren’t needed for several days can be removed from the pharmacy’s queues, filled off site at the Central Fill pharmacy and then shipped to individual pharmacies for patients to pick them up. So even if you don’t have another location, we can help you balance your workload by routing second-day scripts to our Central Fill pharmacy. 

CT: What’s the process for deciding which prescriptions can be processed for the next day and perhaps sent out to central fill, if it’s available?

Lowe: Refills are one obvious category. If you’ve got patients who opt into an automatic refill program, then you know when these prescriptions need to be ready and you can work on them in advance. In another case, if you were to walk up with a script in your hand, a pharmacy could have a protocol in which the tech asks “When would you like to have this?” Or you can even prompt them by asking “Would it be OK for you to pick this up tomorrow.”  Once you have this information, you can decide on the best way to route and process the prescription. If you are going to handle it in house and have the capacity to do that, you can.  If you are really busy and short on staff, then you can delay it for filling later in the day or send it out to a Central Fill pharmacy if you have one available to you.

CT: Central Fill as something accessible to independent pharmacy is probably not very common, but it could be very important. What’s the vision?

Lowe: I strongly believe that it’s very important to continue lowering the cost to dispense. When you look at the payer landscape, they are constantly looking for ways to reduce cost. We don’t want independents to be priced out of the ability to access their patients.  You can get efficient in a number of ways, but Central Fill is a critical way of doing this. We’ve proved from a technical standpoint that you can process multiple independents into a single Central Fill site, so we completely believe it’s possible technically.  Currently, the Central Fill model is showing very good results.  Cost savings can be as much as $5 to $6 per prescription due to the reduced onsite labor needs and inventory costs. It’s just a matter of setting up your operations to allow you to shift the work to where the capacity is.  These tools are out there now.

CT: OK, let’s move on to another topic. You mentioned earlier the need to have the right products and store layout to encourage customers to see a pharmacy as more than just a place to get a prescription filled.  What’s necessary to get a pharmacy’s front end into shape?

Lowe: The first piece might be around a front-end merchandising program.  We have merchandisers who walk into all our Health Mart pharmacies and make sure they are cutting in all the A items, which are the items being advertised and promoted. We also provide planograms to make sure the pharmacies have the full assortment of products shoppers are looking for. Even though the front end may only be 8% or 10% of your business, if it isn’t well designed and stocked, you’ve lost an opportunity to hold on to a customer.

CT:  To wrap up, anything else about the McKesson Trade Show that you found particularly striking?

Lowe: One element that I haven’t talked about is that we continue to grow our Health Mart University, which helps people become better operators and network with their colleagues.  We had over 1,400 attendees at the Health Mart University sessions and this was a great opportunity for participants to learn about best practices. 

We continue to be guided by the three pillars: attract, maximize, and enhance.  One final program that I want to highlight is our Health Mart Healthy Living Tour, which raises awareness of the growing diabetes epidemic and encourages people with diabetes to manage their condition with the help of their pharmacist. We are getting a lot of feedback about just how important independent pharmacies are to their communities.

CT: Thanks, Matt.