A shot in the arm for pharmacy
There has been a flurry of activity in US and UK pharmacies, as chains capitalise on millennial digitisation and ageing boomers become the ‘front door’ for healthcare and patient care.
The number of pharmacies is increasing in many Western markets, as is the expenditure on healthcare. In Australia, a 2018 Bankwest report on the pharmacy sector pegged annual healthcare expenditure growth at 9.5 per cent between 2007 and 2017.
An ageing demographic also means an increase in chronic diseases. A Bankwest report states the Australian chronic disease incidence rate increased 5 per cent in the past 10 years to 47 per cent. KPMG’s Healthcare 2030: Consumer at the Center report contends that consumers with five or more chronic conditions comprise 12 per cent of the US adult population, but account for 41 per cent of total healthcare spending.
On the other hand, millennials – now the largest consumer group in a number of markets – have a focus on prevention and on holistic wellbeing, enabled by digital tools such as predictive analytics, virtual healthcare, wearables and support services such as phone and live chat. They have a preference for retail healthcare and expect convenience. KPMG’s report indicated that 30 per cent of US millennials had used a walk-in clinic in the past 12 months, compared to only 14 per cent of babyboomers.
This means that there will be an increase in the need to manage chronic disease with convenient symptom monitoring tools, and that there’s a role for pharmacies to play as a local health centre for both preventive and chronic healthcare management.
The trends and demands of these two cohorts, along with the growth of the beauty segment, are driving some shifts toward pharmacy channels in healthcare provision. Pharmacies are responding with models that include digital and ecommerce partnerships and instore patient care and health clinics.
The US: Patient care and digitisation
In the US, a number of the large drugstore chains are investing in new technology and digital healthcare. CVS Health plans to spend more than US$2billion over two years, with Walgreens spending US$1billion.
Some of the developments in the past 12 months may have been further motivated by the entry of Amazon into the healthcare market with its US$753 million acquisition of digital pharmacy PillPack.com in 20189, bolstered by its network of more than 88 Whole Foods stores.
CVS: The new front door to health
CVS operates more than 1,100 MinuteClinics, walk-in stations staffed by nurses, which focus on basic services such as cold and flu care and immunisations.
Now CVS is upping the patient-care ante with the launch of HealthHUBs, five of which are piloting in Houston, Texas with plans for 1,500 locations US-wide by 2021.
HealthHUBs devote 20 per cent of store space to health-related services. A care concierge guides consumers to services, helps them understand their health insurance and how to operate various health and wellness devices including health apps and games. Hubs are staffed by nurses and physicians’ assistants and offer chronic disease management with services such as blood testing and sleep apnoea assessments.
The hubs also offer insurance as a result of CVS’ acquisition of health insurer Aetna, and medical equipment such as walkers. Wellness rooms allow CVS employees to host fitness and nutrition classes and provide insurance education
Walgreens pursues partnerships
About 400 Walgreens stores include retail clinics providing treatment of minor injuries and illnesses and consultative advice on preventive methods and management of ongoing health conditions.
The chain has recently partnered with a number of primary and urgent care providers. LabCorp is providing instore bloodwork and blood tests, with 600 LabCorp patient service centres planned by 2022. Walgreens also deals with Verily Life Sciences (a division of Google parent Alphabet Inc), and with cosmetics retailer Birchbox.
Walgreens is working with Microsoft to design digital health corners instore for customers with chronic health issues, beginning with a 12-store pilot project.
THE UK: Patient care plus experiential beauty
Recently, the UK government has been running consumer communications campaigns to position pharmacies as the first port of call for patient health.
Instore patient care isn’t a new idea in the UK. In 2014, AS Watson-owned Superdrug – a health and beauty chain with a pharmacy offer similar to Priceline in Australia – opened its first wellbeing pharmacy staffed by two pharmacists and a healthcare nurse. Specialist nurses are also on hand to speak to patients and carers about end-of-life care. Services include blood pressure checks, travel advice and vaccinations and HIV testing. About 70 per cent of the stock in the store is healthcare products, compared to around 30 per cent in other Superdrug stores. The wellbeing offer is designed to realign the value and fashion beauty pharmacy as a healthcare destination as well and the concept has been extended to several dozen stores.
Unashamedly a beauty pharmacy, international health and wellbeing chain, Holland and Barrett in 2017 opened its largest natural beauty store in the UK. The ‘More Store’ offers products such as snail slime anti-ageing cream, charcoal face masks and seahorse plankton face oils.
But now an array of other experiences are on offer. Shoppers can make their own natural body scrubs. There are protein shake, cereal, nut and pick ‘n’ mix stations, a skin and weight diagnostic centre and even vegan nail bar. The store features under-the-radar ethical beauty brands to give customers alternative options to products from large corporate brands.The business also claims to be the first UK store to ban parabens, sodium lauryl sulfates and micro plastics from beauty products.
In June this year, pharmacy behemoth Boots opened a new concept store at London’s Covent Garden. Designed by Dalziel and Pow, it features 36 wellness brands with more than 300 new lines including sustainable toiletries and eco-friendly sanitary protection. An Innovation Studio showcases health and fitness technology such as FitBit, and eco brand Beauty Kitchen customers can refill their empties with its natural skincare products.
Other new-to-store beauty inclusions include a Mask Bar, Josh Wood Colour consultations and a skincare zone ranging edgy brands such as BYBI and Skyn Iceland. A dedicated area features trends and live demonstrations by store staff and a zone for customers to share their purchases via Instagram.
Beyond beauty, the Covent Garden store’s pharmacy area has been revamped with seating and carpets and now offers UTI testing and treatment which allows pharmacists to prescribe antibiotics and a first-to-UK skin scanning service. Customers can refill water bottles at a Rehydration Station, and the store is the first for Boots in which single use plastic bags are replaced with unbleached paper bags.
In Australia, given the constrained profit margins driven by supermarket and discount pharmacy competition, declining revenue from the PBS, and the growth of cosmetics and toiletries, it remains to be seen what type of form and scale innovation in the pharmacy channel takes here.
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