WAG bets 90-day fill has ‘medicinal’ effect
DEERFIELD, Ill. With an eye on driving trips, increasing basket size and ultimately giving its customers what they want when they want it, Walgreens unveiled two major initiatives late last month when the company announced its fiscal fourth-quarter earnings. Perhaps most notably, Walgreens introduced a new 90-day prescription program for all chronic care and maintenance medications — prior to that, the 90-day option had only been available to Medicare Part D patients — a move that the chain bets will drive utilization, bringing new pharmacy customers to Walgreens and improving patient adherence.
Meanwhile, to help drive front-end sales, the chain plans to “hit the bottle,” so to speak, confirming plans to add beer and wine to all of its stores “over the next 12 to 18 months,” president and CEO Greg Wasson told analysts during a Sept. 29 earnings call. For Walgreens, which had been in the liquor business from the end of Prohibition until a little more than a decade ago, the move marks a bit of a “back to the future” approach for the chain as it looks for areas to help improve the overall shopping experience for its customers. While the addition of beer and wine will only impact about 1% of the shelf space in a typical store, Wasson said the company believes “it will increase basket size and drive traffic to our stores.”
On a much larger level as it relates to the subject of the customer experience, Walgreens has begun rolling out its new CCR prototype in more than 400 stores in Texas. “The stores have better sight lines, less clutter and a brighter look. We expect CCR will not only improve comparable store sales and customer experience, but will also increase customer visits and basket size,” Wasson said.
And while all of this may have impressed the business news media and Wall Street analysts, not to mention the company’s own shareholders, Walgreens had another important message to deliver to another critically important constituency: Big Government. As Congress and the White House try to hammer out a solution to the nation’s healthcare crisis that both Democrats and Republicans can agree upon, Walgreens wants lawmakers, policy advisors, big payers and anybody else with a stake in any of this, who might be listening, to know that it can help.
“With nearly 170 million Americans currently insured by their employer, Corporate America will undoubtedly continue to play a vital role in the reform of the healthcare system,” Wasson explained of health reform “in the context of our strategy.” Walgreens supports the Obama administration’s “guiding principles of improved access, greater affordability and higher quality as part of any reform platform. And we agree with the need to shift focus to preventing and managing chronic disease, and emphasizing health and wellness.”
And if you think that’s just some public service announcement said to make Walgreens look like some kind of corporate hero, it’s not; it is much, much more than that. It speaks volumes to the way the company has reengineered its business and is helping to redefine the business of retail pharmacy in the exchange. It’s strategic.
“We are on the frontline of healthcare with over 68,000 professionals who can impact people’s behavior with direct face-to-face interaction,” Wasson continued, citing results from the company’s recently introduced flu shot program as a prime example of “how we are advancing the profession of pharmacy as a valuable resource on health care’s front line.”
“We have already provided more than twice as many flu shots to patients this fall compared to the total we delivered in all of last flu season. And all of that is thanks to our nearly 16,000 pharmacists and Take Care Health providers who are certified to administer flu shots,” he said. “No other retailer has that many health professionals immunizing the public.”
Indeed, the new 90-day at retail initiative is another example of how Walgreens is leveraging its expertise in pharmacy for the benefit of patients, payers, providers and, of course, Walgreens itself.
“Patients want the choice to fill their prescriptions through the mail or at retail. And when they have that choice, more often than not, they choose the retail pharmacy,” Wasson said. “That increases patient interaction with their pharmacist, and studies show that interaction leads to greater adherence to medications.”
According to Wasson, the proof is in the pudding — and its experience with Medicare Part D. “Part D has included a 90-day retail option since its inception. And today, more than 24% of our Part D beneficiaries’ volume is filled in 90-day quantities at our retail pharmacies,” he said. “When a 90-day retail option is added to a prescription plan, total 90-day utilization increases. That benefits overall healthcare spending and lowers costs for both the patient and the payer.”
According to the company, medication adherence has increase about 15% increase among patients receiving a 90-day retail prescription versus those receiving a 30-day supply.
And for Walgreens, on average, a 90-day prescription delivers helps improve gross margins by eliminating its cost to fill the two extra 30-day scripts, Wasson told analysts.
Certainly, analysts had to have liked what they heard, as the company beat Wall Street earnings estimates, posting a profit of 44 cents a share on sales. According to a poll of analysts surveyed by Thompson Reuters, analysts had projected Walgreens would return 39 cents a share on revenue of $15.68 billion. As the revenue projection was more or less in line with Walgreens’ actual performance, early results from the “Rewiring for Growth” initiatives it introduced earlier this year are already taking hold, contributing about 7 cents per share at a cost of roughly 3 cents a share. (For more financial results on Walgreens’ fourth quarter, log on to www.drugstorenews.com.)
But make no mistake: The bigger message was for big payers and big government, and the role Walgreens can play in reducing costs and improving outcomes with its Complete Care and Well Being programs. “Our platform for delivering pharmacy and health-and-wellness services now extends to 7,000 drug stores, a specialty pharmacy and home infusion network and worksite health centers and retail clinics,” Wasson said. “With that foundation, we’re taking Walgreens directly to employers, government entities, managed care companies and PBMs.”
Its new deal with Caterpillar, announced in late August, under which Walgreens is providing the company’s beneficiaries with special pricing, is a prime example of that, Wasson added. “We are certainly encouraged by the traction this approach is getting in the market,” he said. “Plenty of other companies are talking to us about similar programs because of this compelling offer.”
Late-stage clinical trial results: MS drug is effective
ALISO VIEJO, Calif. Patients taking an investigational drug for multiple sclerosis fared better than those taking placebo, according to late-stage clinical results presented Friday at a neurology conference.
Avanir Pharmaceuticals said MS patients taking Zenvia (dextromethorphan and quinidine) in 30 mg/10 mg doses experienced a 11.9% greater reduction in pseudobulbar effect – an MS-related condition also known as PBA that causes sudden, uncontrollable episodes of laughter, crying and other emotional outbursts – than those taking placebo in a 12-week phase 3 trial, results of which the company presented at the 3rd World Congress on Controversies in Neurology in Prague, Czech Republic. Patients taking the 20 mg/10 mg dose did not do better than the placebo group.
“PBA represents an area of high, unmet medical need with no FDA-approved treatments currently available,” study presenter and trial steering committee member Daniel Wynn of the Consultants in Neurology Multiple Sclerosis Center stated. “Although the involuntary emotional outbursts of PBA cause considerable impairment for millions of individuals in the United States, it is under-recognized and commonly misdiagnosed.”
New report projects 12.6% increase of probiotics market
NEW YORK The two takeaways from this story are “the [U.S.] market is expected to grow at a rate of almost 14%” and “the early movers in the industry will benefit in terms of market share.”
That about describes the opportunity in a probiotic nutshell.
The rising interest in probiotics can be credited in part to Dannon’s Activia brand, a line of yogurts and yogurt drinks, which has been heavily advertised to the American consumer with the message that not all bacteria is bad for you — and in fact some bacteria taken on a regular basis can impart some pretty significant health benefits. That advertising message — that probiotics can be an important piece in a healthier-for-you diet — has been all the more reinforced as Bayer supports its probiotic Phillips Colon Health, and as Procter & Gamble rolls out its Align probiotic.
And the consumers already are core drug store shoppers. The ratio of women to men in search of a product delivering digestive benefits is about 2-to-1, according to industry experts. When women hit their 30s and 40s, that’s the point in their lives when they’re looking for a strategy in life to help them manage their digestive issues.