HEALTH

Drug stores’ success relies on customer service

BY Jim Frederick

WHAT IT MEANS AND WHY IT’S IMPORTANT In the never-ending battle for customer loyalty, independents rule and service is still king.

(THE NEWS: J.D. Power and Associates’ pharmacy study addresses cost, customer service. For the full story, click here)

The latest national customer satisfaction survey from J.D. Power and Associates showed that personalized, above-and-beyond service still outweighs price for a majority of consumers — even in a dour economy beset by economic uncertainty and joblessness. A majority of the more than 12,300 pharmacy customers polled by the big research firm in May and June of this year gave their highest satisfaction scores to pharmacists that took more time to answer their questions, help them find over-the-counter medicines and, perhaps, even remembered their names and family situations.

This, despite the growing cost sensitivity among Americans about the prices of their medicines and the out-of-pocket expenses they incurred at the pharmacy counter. As Jim Dougherty, J.D. Power’s director of the healthcare practice, put it in a conference call to discuss the survey results, “Pharmacies that are focused on service garner the highest levels of satisfaction … even in an environment where cost has become increasingly important.”

That’s good news for small-scale, owner-operated independent pharmacies. It’s also good news for the Big Three drug wholesale giants that operate the major networks of independents, franchised and otherwise, that scored the top results.

Again this year, survey respondents ranked independents tops in overall satisfaction. Customers gave their highest scores to Good Neighbor Pharmacy, the huge network of some 3,700 independents that operate under the buying, merchandising and store-support umbrella provided by distribution and health services giant AmerisourceBergen. The two largest groups of independent-owned franchises, McKesson’s Health Mart and Cardinal Health’s Medicine Shoppe Pharmacy, ranked second and third, respectively, in the poll.

Among mass merchants, Target’s pharmacy operation got highest satisfcation marks for the fourth year in a row, while Publix rated tops among supermarket pharmacies.

Efforts to give the best possible service pay off, both in additional revenues and in measurable customer loyalty. Highly satisfied customers can bring in an additional $227 each year in prescription business, researchers found. What’s more, J.D. Power reported, “brick-and-mortar pharmacy customers who are highly satisfied … are more than three times more likely to say they ‘definitely will’ return to their pharmacy and 10 times more likely to say they ‘definitely will’ recommend their pharmacy to others, compared to customers with low satisfaction levels.”

That’s a lot of free word-of-mouth advertising.

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HEALTH

Bionovo receives CMC approval for Menerba

BY Alaric DeArment

EMERYVILLE, Calif. The Food and Drug Administration has approved a manufacturing plan for a drug to treat hot flashes in menopausal women.

 

Bionovo said Thursday that the FDA had accepted its chemistry, manufacturing and controls plan for the drug Menerba. The decisions and agreements are considered binding on the company and the FDA.

 

 

“This CMC approval represents a revolutionary set of ‘firsts,’” Bionovo chairman and CEO Isaac Cohen said. “This is the first time that the FDA’s botanical drug development CMC guidance has been applied to an oral drug in a major indication.”

 

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Efforts to combat Medicare fraud draw mixed signals from indies, PBMs

BY Jim Frederick

WASHINGTON The independent pharmacy and pharmacy benefit management industries both praised new efforts by Congress and the Obama administration to end the fraudulent and abusive billing practices that plague Medicare and Medicaid and cost U.S. taxpayers tens of billions of dollars. But their recommendations for combating the problem are as different as their approaches to the pharmaceutical market.

The Centers for Medicare & Medicaid Services proposed new regulations to help prevent what the agency said is $55 billion in annual improper payments to providers and health plans. In a related development, the House Energy and Commerce Subcommittee on Health is looking at ways to attack the problem, and held a hearing Thursday titled, “Cutting Fraud, Waste and Abuse in Medicare and Medicaid.”

The National Community Pharmacists Association weighed in with a statement to the House panel that accused the pharmacy benefit management industry of responsibility for much of the abuse, which the group attributed to a “past record of alleged systematic chicanery.”

In its statement, the independent pharmacy lobby reminded lawmakers of numerous allegations of fraud by major PBMs, as well as “misrepresentation to plans, patients and providers; improper therapeutic solutions; unjust enrichment through secret kickback schemes; and failure to meet ethical and safety standards.” The group urged Congress to pass legislation “to rein in the waste being generated by the business practices of pharmacy benefit managers under Medicare and Medicaid,” and to increase the transparency of PBM audit practices.

Not surprisingly, the response from the Pharmaceutical Care Management Association, the main PBM industry advocacy group, was markedly different. Responding to new proposed regulations from CMS to combat fraud and abuse, PCMA president and CEO Mark Merritt said the government’s focus should be on preventing abuse rather than on pursuing wrongdoers after the fact for fraudulent billing practices. “Pharmacy benefit managers agree that prevention, not ‘pay and chase,’ is the key to fighting fraud,” Merritt noted. “Unfortunately, some public policies undermine the fight against fraud by requiring payers to include pharmacies in their networks that have been banned from federal programs.”

Merritt also reiterated PCMA’s call for legislation to eliminate legislative “prompt-pay” requirements that force pharmacy benefit plans to quickly pay prescription claims, raising again a major source of friction between the PBM and retail pharmacy industries. Policies that require payers to “accelerate payments,” PCMA’s leader charged, leave “less time to detect and prevent fraudulent Medicare claims before payments are made.”

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