Refilling a prescription is increasingly becoming a point-and-click online reality for consumers, which begs the billion-dollar question: How can providers tap into this ever-expanding world of e-pharmacies and online drug stores.
Surging consumer demand and Wall Street's increasing investment dollars are making this area of healthcare e-commerce among the fastest growing category on the Internet.
Consider the market:
- Yourpharmacy.com, Soma.com, Drugstore.com and PlanetRx.com are just a few of the new kids on the block with more online drug stores expected to join them.
- 23 percent of those who surf the Web are interested in purchasing prescription drugs online, according to a Cybercitizen Health study, commissioned by Cyber Dialogue.
- Drugstore.com is worth $2.1 billion after its shares surged 179 percent to $70 last week - 35 days after its initial public offering announced in June.
- CVS paid $30 million for Soma.com in May and soon will be changing the site's name to cvs.com.
For now, the answer may be in partnering as a credible health information provider.
Last month, the Mayo Clinic seized this opportunity with Walgreens' new Internet pharmacy, http://www.walgreens.com, that will launch in September. Mayo will provide a health library for the site composed of 100 major health topics and other features, that will include:
- Healthy Lifestyle Centers;
- Headline Watch, which features perspectives on current health issues;
- First aid information;
- Health quizzes and preventive health schedules; and
- A glossary of routine screening tests.
This information will post links to Mayo's health news site, the Mayo Clinic Health Oasis at http://www.mayohealth.org which also provides content to other online organizations like America Online, My Yahoo! and CNN Interactive. Walgreens is Mayo's only pharmaceutical partner.
Hospital/E-pharmacy Partnership
So far, Mayo is the only hospital known to partner with an e-pharmacy as an exclusive health news content provider. Other online pharmacies including PlanetRx.com and Yourpharmacy.com are using third-party news providers like Reuters Health to fill their health information voids.
But as these ventures expand, the need for more customized information is expected to grow. Disease management and alternative healthcare are two areas that immediately come to mind, says Joe Barone, chairman of VirTu, an Internet marketing firm in Philadelphia. "With doctors spending less time with patients and the need for unbiased [online] information on managing chronic diseases like cancer and diabetes, there are some real interesting opportunities for hospitals and e-pharmacies to partner."
Mayo's nationally respected name and its ability to provide original and continuously updated health information to Walgreens are what makes the hospital an attractive partner, says Michael Polzin, Walgreens' manager of media relations. Initially Mayo will provide information on 100 health topics. That is expected to jump to 250 in the first year.
For Mayo, the Walgreens partnership is part of its overall marketing strategy to position the Health Oasis as a "pure" health information provider, says Suzanne Leaf-Broch, Mayo's communications manager.
To this end, you won't find Mayo's contact information featured on any of the health information provided and yet it invests significant resources into this service. At least three writers crank out Mayo's health news and as it continues to strike up informational deals with other organizations, this team will probably expand.
Although these deals are more than likely generating revenues for Mayo, Leaf-Broch won't confirm it. She does, however, hint that any money that may be generated from these arrangements is used to support education and research.
Aside from the revenue-generating potential of hospitals teaming up with e-pharmacies, these deals can represent exciting regional opportunities to build online awareness. "The Internet is becoming more fragmented and people like the idea of purchasing things locally," says Barone.
Managed Care Opportunities
On the HMO side, e-pharmacy collaborations are starting to take shape, albeit cautiously.
HMOs are in a catch-22 when they consider covering online prescriptions: they don't want to run the risk of taking business away from traditional brick-and-mortar drug stores. But as traditional drug stores like CVS and Rite Aid take the online leap, this concern will become less of an issue. For instance, Soma.com was able to leverage CVS' payment arrangements with close to 9,000 regional and national health plans, according to Mitchell Reed, Soma.com's spokesperson.
Perhaps the most attractive perk for health plans is how e-pharmacies can improve patient non-compliance incidents - the direct cause of 10 percent of all hospital admissions and 125,000 annual deaths from heart disease alone. It is estimated that of the nearly two billion prescriptions filled annually, half of them are taken improperly, according to the Healthcare Compliance Packaging Council in Washington, D.C. The convenience of filling prescriptions online is considered an exciting way to help reverse this trend.
Online features like e-mail refill reminders to patients and e-mail notifications to physicians of a patient's prescription status also hold exciting potential for HMO-focused disease management initiatives, says Reed.
(Mayo Clinic, Suzanne Leaf-Broch, 507/284-1114; Walgreens, Michael Polzin, 847/914-2925; VirTu, Joe Barone, 215/790-3250; Soma.com, 206/615-2900)
E-Pharmacy Fast Facts
- 23 percent of adult Web surfers are interested in purchasing prescription drugs online.
- 22.3 of all adults online rely on the Web for health information. Among this group, 30 percent are interested in buying prescription drugs, 23 percent in over-the-counter drugs and 33 percent in vitamins and supplements.
- There are at least 14 online pharmacies so far, according to the National Association of Chain Drug Stores.
Source: Cyber Dialogue's Cybercitizen Health study