(Newswire.net — December 16, 2020) — Many independent pharmacy owners have been alarmed by Amazon’s move into the pharmacy sector effective November 17, 2020. The Amazon Pharmacy may have the effect of squeezing out small players in the pharmacy field, using the same anti-competitive tactics that they have used in other business sectors.
While this situation may worry independent pharmacies, pharmacy owners should be aware that they have certain advantages in the market when compared to behemoths like Amazon. Winning as an independent pharmacy is all about taking these advantages and pressing them to their full effectiveness.
Advantages that the independent pharmacy can share include convenience, knowledgeable service, and exclusive medications. This article will explain how these three advantages can bring in a greater patient share and help an independent pharmacy compete against the big names in online business.
Challenges Facing Independent Pharmacies
Independent pharmacy owners are often faced with the double-edged sword of progress. The perspective and strategies that independents need to survive a high level of competition can be both a benefit and a disadvantage.
Independent pharmacists are continually forced to change their business models to keep up with industry developments. This is an exhausting process, and some independent pharmacies that can’t change with the times have to close down.
Another pressure that is causing distress to independent pharmacies is the pressure on reimbursement rates. Healthcare payers, whether they are the government, health plans, or individual employers, cannot continue to pay the same high rates of reimbursement that they paid in the past. This means that independent pharmacies’ profit margins are being squeezed.
The Convenience Factor
Many independent pharmacy owners believe that they can’t compete with Amazon’s convenience factor. While it is true that many customers, especially in younger age groups, prefer to receive items through online orders, the smart independent pharmacy owner can provide the same convenience as online pharmacies.
Independent pharmacies can start home delivery programs, and these programs can be quicker and more personalized than Amazon deliveries. Many elderly and shut-in patients enjoy having the convenience of home delivery.
Pharmacist Andrew Hanna explains that many patients also enjoy being able to visit the pharmacy in person, building a strong personal relationship with their pharmacist. This is the ideal situation for patients, since trusting their individual pharmacist can lead to better integration with their healthcare team.
Knowledgeable Service
The independent pharmacist is uniquely positioned to provide high-quality service to their community. Since independent pharmacists work with such a large cross-section of patients, they are familiar with drugs for all types of illnesses. They are likely to have strong connections with local physicians and to have a wealth of information for patients.
If patients see your pharmacy as a destination for health-related information and a place to receive solid, evidence-based advice, they are more likely to turn to you on a regular basis. A trusted pharmacist can stay in touch with the patient’s doctor, making sure that all treatment recommendations are being followed. A pharmacist’s collaboration with a physician stands to help patients recover faster and manage their chronic conditions more easily.
Pharmacists should be involved in all patients’ treatment plans. They can help to choose medications that will benefit the patient in all areas. Pharmacists know the best courses of drug therapy. They understand the drugs’ interaction with any over-the-counter preparations that the patient may be taking.
An independent pharmacist is also an expert when it comes to dealing with insurance companies. Pharmacists in independent pharmacies like Andrew Hanna, understand the specifics of the most popular health plans in their communities. They know which medications are covered under each plan and how the varying co-pays may affect patient care.
Adaptability
While adopting a business model depending on current economic conditions is difficult, it is much easier for a small independent pharmacy than it is for a chain. Many independent pharmacies are adopting a data-driven workflow, measured by specialized retail consultants.
Independent pharmacies must also set their pricing carefully, adapting their prices to match current market trends. Many pharmacies go a matter of years between price changes, meaning that they could be missing changes in wholesale prices. Setting pricing to the right point where it is still competitive yet profitable can be a challenge.
Exclusive Products
Andrew explains that some pharmacists may remember when Walmart came out with an inexpensive insulin prescription. Competing pharmacies were frustrated because they could not access this medication to sell it to their patients. While some large-scale pharmacies will always be able to undercut independent pharmacies with bulk prices, independent pharmacies can also access medications and formulations that large pharmacy chains and Amazon are not able to sell.
For example, Amazon Pharmacy is not able to sell Schedule 2 drugs in the United States. This includes opioids and synthetic opioids, as well as medications for attention deficit disorder like Adderall and Ritalin. It remains to be seen whether the Canadian counterpart to Amazon Pharmacy will be able to sell these drugs, but it is unlikely that there would be a large policy change between the two countries.
One of the biggest advantages that local independent pharmacies have when compared to large retail pharmacies like Amazon and Walmart is the ability to compound drugs for individual patients.
Compounding pharmacies are able to produce exact drug formulations in the type of medication that is safest for the patient. For example, if a patient is unable to swallow capsules, the medication can be presented as a liquid.
Preparation for Future Changes
While Amazon Pharmacy is not yet operating in Canada, Canadian pharmacists should keep a close eye on how this expansion affects the American pharmacy sector. Planning ahead can help Canadian pharmacists preserve their businesses when Amazon expands into their country.
The exact impact of Amazon on the Canadian pharmacy market is unclear at this time. In future articles, we will look into the specific advantages that independent pharmacies have when it comes to competing with Amazon and other large chains on the retail stage.