Bill Lockwood, Chairman/PublisherThese are relatively quiet times in the pharmacy technology sector. We are not seeing breakthrough advances like we once did. Think robotics, interactive voice response (IVR), mobile apps. But since it is now a lot easier to transfer the data from one system to another, pharmacy owners are not tolerating inadequate system support. There is less reluctance to go to a new vendor, knowing that data transfer can be safely done. In addition, there is still interest in upgrading software or adding interfaces if it means providing a new service. Medication synchronization is a good example here.

On the downside, we do know how DIR (direct and indirect remuneration) is having its unintentional impact on community pharmacy, and I include chains as well as independents. I am amazed that the federal government hasn’t done something to put a halt to the financial damage this has inflicted on pharmacies. If the PBMs (pharmacy benefit managers) aren’t careful, they will have a shrinking network of pharmacies for their plan sponsors. Not so much perhaps in the heavily populated areas where chains enjoy a big footprint, but in the rural areas where the large chains lack a major presence.

And Amazon poses a new threat with its PillPack acquisition and free shipping. Amazon has now formed a partnership with JPMorgan Chase and Berkshire Hathaway for the prescription benefit. Amazon is also going after sales of glucose monitors and blood pressure cuffs. The company has already siphoned off a lot of pharmacy business, selling health and beauty aids and over-the-counter products at very low prices.

The big chains are vulnerable to the shifting tides. A recent Bloomberg Businessweek article (April 22 issue) stated that, “insurers are pitting pharmacy chains against one another as they seek to lock in low prescription costs. In the past, if a health plan left a major chain out of its network, it risked alienating members who may have fewer pharmacies nearby. Now there’s no such reluctance.” The thinking is that there are plenty of pharmacies around to pick up the slack — true in the major metropolitan areas.

And with generic drug prices, pharmacies are losing the high margin cushion they once enjoyed with these products. Then we have consumers who are more price-sensitive. They don’t have the pharmacy loyalty they once may have had. They will go where they can get the best price.

The one bright spot for pharmacies is on the technology side. Without the technology being used to increase efficiency, reduce errors, improve adherence, and provide sundry other benefits, there would be far fewer pharmacies open for business these days. CT