In a recent study of more than 1,000 consumers, the results were clear: 91% of those surveyed said technology aimed at improving their experience will help pharmacies retain their business. And 47% rated technology and modern communications as top requirements for return pharmacy visits – even outranking “low costs.”
But of the 341 pharmacy decision makers surveyed in the same study, 40% said they were not currently using technology to its fullest potential.
That’s money left on the counter. I hear this refrain at every pharmacy convention and policy meeting I attend: Pharmacies must adopt new technologies. Even with all the strong headwinds pharmacies are facing, technology can be the key that unlocks new potential.
Consumers value technology. Pharmacists need to adapt to survive.
Healthcare consumerism remains on the rise: In the study, 85% of pharmacists said consumer shopping will increase in the next one or two years, and 74% said they appreciate consumers’ ability to compare prices between pharmacies.
Already 72% of consumers said they would use their mobile phone to compare drug prices and “shop around.”
Consumers indicate a desire to have a higher level of prescription power and control, driven and delivered by technology, so it will be up to pharmacies to adapt. This may feel unnerving, but with the right technology, pharmacists can become more valuable and discoverable to customers.
The discount-card conundrum expands, further hurting pharmacy profits.
In 2021, nearly 10% of prescriptions were paid with cash discount programs— up from 6% in 2016—and half of those payments were made with discount cards. This creates a significant burden for pharmacy decision makers due to exorbitant fees frequently associated with such programs. One study respondent put it this way: “The fee to process discount cards coupled with the low copay rate leads to a financial loss for the pharmacy the majority of the time.” Another put it simply: “Our prices are usually cheaper than the prices they offer.”
What’s more, pharmacy customers are in the dark about the impact. Of the study respondents, 69% weren’t aware that discount cards may be harmful, but 75% said they’d be willing to pay slightly more for a drug by using a discount program that did not harm the pharmacy.
As high deductible health plans continue to drive more consumers to look for options for paying for their prescriptions, many pharmacies feel pressure to offer the cheapest prices – although determining those prices can create a separate burden. In the study, 55% of pharmacy decision makers said they spend two to six hours reviewing drug prices weekly, and 42% said that time has increased from two years ago.
But within the cash-paying conundrum lies opportunity: A pharmacy that adopts the right technology can solve cash pricing and attract new customers in the process. Enter artificial intelligence, or AI.
Using an AI pricing model can help pharmacies get real-time data to stay competitive while providing value for consumers. How can it work? Well, all pharmacies and their patient demographics are unique. A small store in a town of 1,200 has a different set of attributes and challenges than a major chain in the middle of Chicago. AI has the power to analyze a multitude of dimensions and come up with data-driven insights that lead to opportunities and solutions that a lone pharmacist or small team may never even consider.
AI does this by ingesting and processing massive amounts of information and analyzing for trends based on any number of inputs, including location, demographics, seasonality, and, in the case of prescription drugs, therapeutic type and usage. Applying this intelligence to the guesswork of drug pricing can increase profitability and efficiency while still balancing what patients want and need.
The cash-paying revolution may also be a boon to pharmacies by opening up long-held pricing data that’s locked behind closed doors by pharmacy benefit managers, or PBMs. With this much needed transparency, AI can make pharmacies more competitive.
Stepping into the future requires a true technology partnership
Consumers crave more convenient, empowering, and transparent technology for their pharmacy experience. But they also feel a strong sense of loyalty to their independent pharmacies. A majority of consumers we surveyed would be willing to pay slightly more for their medications if it meant the solution was “pharmacy-friendly.” Pharmacists, read that and take heart: Consumer sentiments coupled with a desire for technological investments suggest a clear path to profitability for pharmacies that embrace technology-driven cash pricing solutions.
The challenges facing independent pharmacies are great, but the opportunities for innovation are even greater. For independent pharmacies that truly embrace modern technology to meet consumers’ needs, the future is promising.
Paige Clark, RPh, is the VP of Pharmacy Programs and Policy at Prescryptive, overseeing the company’s policy work to drive awareness, utilization, and scope of trusted independent pharmacists nationally. Prior to Prescryptive, Paige spent 11 years at Oregon State University’s College of Pharmacy, driving policy initiatives for the state’s licensed pharmacists, including the prescribing of birth control and tobacco cessation services. Paige also worked as the Staff Pharmacist Consultant for the Oregon Board of Pharmacy, managing rule writing, legislative endeavors, and regional and national policy work. She is a frequent speaker and presenter at national industry conferences and a multi-award winner, including several Pharmacist of the Year recognitions.