Aug 5, 2003
WASHINGTON, DC — August 5, 2003 — As American consumers sought more health products and information from their local food retailers, supermarket pharmacies continued to experience the fastest retail pharmacy growth rate in 2002, according to a new Food Marketing Institute (FMI) study, Report From the 2003 Supermarket Pharmacy Survey. The report also finds substantial changes to the supermarket pharmacy environment due to the Health Insurance Portability and Accountability Act (HIPAA) enacted last year.

“American consumers are increasingly finding that their neighborhood supermarket is the ideal source for all of their health and wellness needs,” said Anastasia Jafari, FMI research analyst. “The health-based relationship that supermarket pharmacy professionals have with consumers allows them to recommend products and services throughout the store, making this department an important health and information destination for consumers.”

Supermarket Pharmacies Expand and Prescription Prices Climb as Weekly Sales Dip

The number of supermarket pharmacies increased 3 percent last year for a total of 9,537 — nearly 18 percent of the retail pharmacy marketplace — according to data from IMS Health referenced in the survey. Survey participants project that the number of outlets will increase an additional 8.6 percent this year.

Supermarkets reported average weekly prescription sales of $37,000, a slight decrease from 2001. Still, sales have increased 15 percent in the last five years and supermarket prescription sales now make up 9.1 percent of total store sales.

The median number of prescriptions dispensed per day also dipped, from 125 last year to
120 this year. Larger supermarket pharmacies with greater capacity typically dispensed more prescriptions per day. Supermarket companies with pharmacies of 500 square feet or more dispensed 170 prescriptions per day, whereas smaller ones dispensed 120 prescriptions per day.

The median retail prescription price in 2002 was $48 — an increase of 10 percent from the year before, but the smallest change in five years. The survey suggests that the smaller price increase may be due to the fact that many higher-priced branded prescription drugs are now available in the less costly generic form.

HIPAA Impacts Supermarket Pharmacy Operations

This year, HIPAA required food retailers to rethink how the pharmacy department does business and protects consumer privacy. Determining how to comply with HIPAA’s extensive and complex mandates caused 49 percent of food retail companies to seek out an outside consultant. As a result of HIPAA, nearly 64 percent of supermarket companies implemented physical changes to the pharmacy department in an effort to protect personal health information, and half of the companies developed an internal training program to address HIPAA issues. The other half employed outside training firms.

Physical changes included modifications to the prescription will call section, document storage areas and wait area signage. In addition, more than three-fourths (77 percent) of the companies added a paper shredder, nearly a third (31 percent) established a private consultation area and more than a quarter (26 percent) removed the pharmacy department’s telephone and fax machine from the viewing and hearing area of customers.

Pharmacies Utilize Interactive Voice Response to Enhance Operations, Customer Access

Seeking to enhance operating efficiencies while improving customer access, more than six in 10 supermarket pharmacies now use interactive voice response (IVR). Of those companies that do not use IVR, 40 percent plan to install it by 2004. The more pharmacies that a supermarket company operates, the more likely they are to use this technology.

However, while supermarkets have increased use of IVR, the development of central fill facilities has slowed. In 2002, 9 percent of companies surveyed said they had a central processing facility, call desk set up or central fill facility, compared with 13 percent in 2001.

Supermarket Pharmacies as a Whole Health Solution

With consumer interest increasingly focused on the supermarket as a primary provider of health products and services, supermarket pharmacies continue to expand opportunities to educate consumers about wellness issues and to serve their needs for health-related information, according to the survey. Many stores now regularly offer in-store health service programs, with blood pressure testing, flu vaccinations, cholesterol testing, blood glucose monitoring and store “wellness” tours being the most popular programs.

To meet the growing demand for whole health, over 40 percent of the companies surveyed said they offer some type of disease management program in at least one in-store pharmacy. Additionally, almost 20 percent of companies say their pharmacists are involved in a national credentialing program for disease state management and 15 percent participate in a manufacturer-sponsored compliance program.

Diabetes, smoking cessation, hyperlipidemia and hypertension are the most popular disease management programs offered. Programs addressing the specific health needs of women are also key, with nearly 20 percent of companies offering such programs.

E-Prescribing Ability Grows as Pharmacy Web Sites Become More Interactive

E-prescribing is becoming a more widespread among supermarket pharmacies, with nearly 20 percent now set up to receive e-prescriptions and more than half planning to have this capability by the end of the year. In an effort to make the pharmacy more accessible than ever, 16 percent of supermarket pharmacists are available online via e-mail and chat rooms to answer questions.

Supermarket company Web sites are increasingly providing virtual support to the pharmacy department and convenience to their online customers. Nearly 80 percent of the companies surveyed have a pharmacy page as part of their Web site. Pharmacy locations, hours
of operation, health information and links to health-related sites still remain a popular way the department serves and informs the grocery shopper.

To purchase Report From the 2003 Supermarket Pharmacy Survey ($25 members, $50 associate members, $60 nonmembers), visit the FMI Store online at www.fmi.org/pub.