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March 2015, Vol 3, No 3 - Inside Pharmacy

In a recent interview with Inside Patient Care: Pharmacy & Clinics, David Neu, Executive Vice President of Retail Strategy, and President of Good Neighbor Pharmacy, discussed the role of independent pharmacies in the community and provided some tips to new and veteran community pharmacy store owners.

What is your background at Good Neighbor Pharmacy?

A: In my 30+ years with the company, I have had a long-standing and deep relationship with Good Neighbor Pharmacy, and have been its constant champion and close connection with our independent pharmacy customers.

With over 3000 member stores, Good Neighbor Pharmacy has been helping independent pharmacies for more than 30 years and has been named a top pharmacy group by J.D. Power for the past 3 years, as well as the highest in customer satisfaction for the second year in a row.

Over the years, our primary focus has been to build and operate branding, advertising, and patient care hubs for independent retail pharmacies to help them compete in a highly competitive marketplace. This includes backroom operations ranging from managed care to branding to patient programs, as well as training and equipping them to do that, primarily in areas where it doesn’t really make sense for member stores to invest in individually. With our scale, we can amortize that across the full base.

How are pharmacies transforming to become healthcare delivery companies?

A: There are several primary areas where retail pharmacies are transforming into healthcare delivery companies. Today’s community pharmacist may offer support for disease management or more specialized nonpharmaceutical products for diseases prevalent in the communities they serve. Services ranging from diabetes and nutrition counseling to chronic obstructive pulmonary disease (COPD) therapies, immunizations, to other preventive care measures.

The recent increase in interest and emphasis on medication therapy management is following the patient into the new healthcare environment. The Star Community Rating System that has hit the marketplace has emerged as the foundation for how payers will rate the ability of a pharmacy to drive medication safety and medication adherence with the patient, and be considered a high- performing, quality pharmacy in that spectrum. For us, there is a lot of focus on providing awareness, training, and resources to the independent and community pharmacies so they can improve that quality of service for the patient.

We also focus on what happens when a patient enters the pharmacy, as the pharmacies we work with are also merchants. We provide services that help them improve the profitability of their store for the different types of patients and different demographics they serve.

What new service offerings are being introduced in pharmacies?

A: We know that technology is very important to reaching the consumer and providing more information from our pharmacies. That’s not novel thinking; that’s industry thinking.

We have put together a Good Neighbor Pharmacy consumer mobile application that is available on Apple and Android devices where patients can refill their prescriptions. They can put together refill reminders on their phone to alert them when to take their prescriptions. One of the goals of the app is to provide an extension of the pharmacy to patients on the go: quick reference information, refill reminders, pharmacy contact information. We are continually releasing new versions of the app with expanded capabilities. They can get background information on certain disease states. They can also find a store that is close to them with the locator service that’s built in.

We also do some things with partnerships to make sure that they are ready to deal with things like Star Ratings. We use reporting services from EQuIPP to bring to life how each individual pharmacy is doing on the Star Ratings, and create a benchmark on which we can help them improve.

How are Good Neighbor pharmacists involved in clinical services?

A: This is an area where pharmacists really feel a connection. They want to contribute at a higher level clinically with patients. We provide training materials and resources so that they are prepared whether they are treating a patient with asthma who is trying to stay out of the emergency department, or a patient with type 2 diabetes who they are trying to help manage his or her total lifestyle.

It’s more than just filling the prescription. The trust of their patients is crucially important to them. Many have taken extra training and participated in clinical internships. At our annual gathering of Good Neighbor Pharmacy members, ThoughtSpot, we offer several continuing education courses for pharmacists and their technicians. The most highly attended session last year focused on Star measures. This year, we are once again offering certifications in immunizations, medication therapy management services, diabetes care, and cardiovascular disease risk management. Throughout the year, we also offer certification opportunities around the country.

Our goal is to help organize and enable our member stores to perform these emerging services in an efficient way, not just the initial touch in the store, but also the follow-up after the patient leaves, as well as training materials for them to have those same conversations with the physicians in their area who are prescribing. Business coaches work with pharmacies to identify their top prescribers and those who they can contact to potentially generate additional business.

What trends in pharmacies have you observed?

A: The trends that they are feeling are not branded, and pharmacies are feeling quite a bit of pressure on reimbursement. Part of that is because of the change in healthcare coverage. Part of it is the ongoing consolidation of various players in healthcare who are trying new ways of providing value to the employers, and of translating that down to a coverage model.

There is a lot of change, a lot of consolidation, taking place in the industry driving some of that. We try to help them with that reimbursement pressure, for example, by providing medication pricing. When medication prices are out of the norm, pharmacies call us, and if the medication pricing does not match the way they are buying that product, we reach out to the pharmacy benefit managers or the payers, and discuss adjusting medication prices.

Another component is the changing consumer. Consumers are moving toward a more electronic environment. The days that pharmacists can just market to and solicit people who walk in the door have really changed. I don’t say they’re changing, I say they’ve changed: how they connect through social media, how they connect electronically, how they understand how those patients made it into their pharmacy, and then the regimen that patients are on and the different choices that patients have for adhering to that regimen, whether it is through a mail order or other nontraditional healthcare providers. We try to capture as much of that information as possible, and get the pharmacist trained to be as efficient as possible.

The growth is interesting, although I think that the National Community Pharmacists Association would say that the number of independent pharmacies is within what I would call a reasonable flat range. We have had some stores that have been sold to chains, and in some cases, some stores have closed.

Right now we probably have as many closures as we do openings, but I see a trend that is moving up. I do think that retail pharmacies are looking at the different sites of care, or the different channels, such as long-term care or specialty. They are not coming in as just a traditional pharmacy, but they are trying to find ways to connect more broadly.

As one of the largest providers of specialty pharmacy, Good Neighbor Pharmacy helps these pharmacies finds ways to connect with them. We help them with long-term care. We help them with alternate care channels, which we also serve.

Could you describe a typical new pharmacy owner and the services provided to help a pharmacy be successful?

A: A new pharmacy owner is generally someone who is 5 to 10 years out of pharmacy school and who has some experience working, learning the business, as well as the profession of pharmacy itself. They are generally looking to get into a pharmacy that is in an area with some potential upside. We help them from a real estate perspective to do that.

They are generally looking to come into an established pharmacy, earning an equity piece over time, or just a fresh startup. In the fresh startups, they are looking for store setup and design services, which we provide. They are also looking for help advertising, kicking off their new store in the community, which we help them with generally through our cluster groups that operate in those areas.

They want to make sure that they get immediate access to the managed care plans, which we put them on in short order because we contract on behalf of all the pharmacies. We are their central point of managed care contracting. We get them in the loop immediately so that they can get up and running. Then they grow their business from there.

What are some essential tips new and current pharmacy owners should know?

A: It depends on the type of pharmacy that they are starting in. If, for example, they are starting in a small apothecary shop, I believe it is usually very helpful for them to try to pick a location that is close to some acute care settings, so that they have some access to the ambulatory patient who may be leaving a hospital outpatient facility and coming into their pharmacy as the next natural step. I think that they need to have a very high level of expertise and clinical training to provide those services that, in a small apothecary shop, are more sought after.

If it is someone moving into a larger store that has a more significant front end, we encourage them to get some experience from a pharmacy that is also a merchant, that has a big front end of over-the-counter health and beauty aids, and that understands how to manage inventory and margin.

Importantly, we get a business coach from AmerisourceBergen in there to help them set up the store in a way that the retail component can be as impactful as the clinical and quality-of-care aspect.

Could you discuss the 3 biggest challenges that you see in community pharmacy?

A: The number one challenge right now is reimbursement, because that really impacts community pharmacies. It is so much a part of their operating income that every dollar of reimbursement that is taken out is a net dollar, right out of their bottom line.

The second is not to get excluded from health plan networks. There is going to be more and more pressure on whether, in certain states, restricted or performance networks are allowed. In some cases, they will believe they don’t need to be part of a network because it is an open access state. In other areas, they have to join or they are going to be excluded. It is not one size fits all. Exclusion from healthcare networks is a tremendous pressure point, a fear area. If it is a large plan, they can lose 25% or 50% of their prescriptions overnight.

The third challenge is their competitors. They are competing with large chains that have a lot of resources financially in infrastructure. They need to have a competitive look and feel. How their stores are geared up so that they are as much of a clinical quality-of-care setting as they are a pleasurable and attractive retail storefront is important. They have to meet both of those needs to ensure that the patients keep coming in because the patients have a choice. They can choose from multiple pharmacies and groups that have those same plans.

In my opinion, those are the 3 biggest challenges that probably keep them up at night.

What are some opportunities in the industry?

A: I am really bullish about community pharmacy. They have a unique value proposition because of their agility, not only their learning agility but their ability to adapt to what's going on in healthcare.

Community pharmacy has a history of being resilient, of being leaders in their community in multiple ways. There are stories upon stories about what the independent pharmacies have done for communities, not only for healthcare but in times of crisis. The floods and hurricanes and the ways that they have been a call to action are really quite extraordinary.

I believe that with the right partners, if they really piece together their offering with the right people, they can have a very valuable value proposition. It is one that is time-tested. Some people want to go to chains and some people want a community proprietor feel. They want that kind of a local business owner feel.

There are consumers for everything. I am very bullish that as this is promoted more and more at the schools of pharmacy, we will see more people interested in getting into retail pharmacy.

How do you see the relationship between physicians, NPs, PAs, clinics, and pharmacists evolving?

A: The electronic transmission of prescriptions is finally starting to get some traction here. There has been quite a bit of activity through Surescripts and other partners in the industry as this evolves, but the recent changes in healthcare have really affected this in a much different way. I don’t think it’s an option anymore. People realize that they must get electronically connected. Of all the things that are going to happen, I think that is going to be a big influencer. I think that, because of the workload of the primary care physician, more and more patients are either going to be in clinics or pharmacies looking for care. It is, for me, the biggest growth area. They are trusted professionals, and I think the patients have said in surveys that they are going to be taking advantage of that in the future; another very bullish trend.

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Last modified: May 15, 2015
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