Drug store competition heating up

Drug store competition heating up

It seems as if every day another drug store is being built on every corner of the suburbs. It’s not surprising because health care is a thriving industry and pharmacies are one of its main beneficiaries.

As a result, the major drug store chains are involved in an ever-growing competition to lure not only consumers, but also pharmacists and technicians to fill growing shortages of trained personnel.

The top pharmacy chains in Illinois are CVS, Dominick’s, Walmart and Target, yet the largest drug store in the nation is Walgreens, which has over 6,479 stores in every state in the nation except Alaska—although the northernmost state in the U.S. will have one by 2009.

Fiscal sales for Walgreens in 2008 have already reached $59 billion. In addition, it has 250 take-care clinics, or nurse practitioner clinics, as well as stores at 364 corporate campuses.

Walgreens’ ubiquity is necessary, as the retirement of baby boomers is increasing the demand for pharmaceutical care, said Robert Elfinger, a Walgreens spokesman at its Deerfield headquarters.

“For peak prescription use years, new medicines are being developed for a variety of health conditions, so more drug stores and pharmacists are needed to meet this demand,” he said. “Basically, the number of prescription drugs being used in America is increasing because the baby boomers are coming of age.”

That spike in demand is already being felt, which means Walgreens is actively seeking site locations for new stores. This process involves identifying locations that are underserved or would be very successful.

“Part of those criteria is census information,” said Elfinger. “We’re gearing up for this aging population to come of age.”

A booming drug store industry engenders the need for educated and qualified pharmacists and technicians. Shortages are being felt around the country, which has created a bidding war for the services of skilled individuals.

In order to recruit needed technicians, Walgreens offers bonuses between $10,000 and $30,000.

“We also offer pharmacists a variety of places to work,” Elfinger said. “If a pharmacist wants to start in one part of the country and wants to move to another part at some point in their career, we offer a way to do that.”

With the economy in a nose dive, the bottom line is on everyone’s mind. As a result, those drug stores that can offer the cheapest products gain a competitive advantage.

To that end, Walmart pharmacies fill prescriptions for up to 350 generic medications at $4 for a 30-day supply, and $10 for a 90-day supply. This program began in 2006 and has saved Walmart customers and those of its affiliates—Sam’s Club and Neighborhood Market—more than $1 billion nationwide.

“In Illinois alone, customers have saved more than $42 million,” said Christi Davis Gallagher, Walmart senior communications manager, in an e-mail.

Additionally, Walmart is testing a direct-to-employer pilot program with Peoria-based Caterpillar in an effort to remove unnecessary costs from the health care system. Through the program, Walmart will contract with select employers in the U.S. to negotiate prescription costs directly with them.

“Just as our $4 prescription program has saved Americans more than $1 billion since its launch, this direct-to-employer program can bring savings directly to large employers,” Gallagher said.

The competition between major drug store chains is going to be beneficial to the consumer, which means health care customers will have the luxury of being able to bargain shop for their pharmaceutical needs while taking advantage of special programs and features.

Obviously, Walgreens and Walmart are leading the way, but it remains to be seen what tactics the other major drug store chains will employ to lure more customers and pharmacists, and how beneficial it will be to both.

Jeremy Stoltz, News Editor

Posted on Monday, November 17, 2008 (Archive on Monday, November 24, 2008)
Posted by jstoltz Contributed by jstoltz

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