Upon successful completion of this article, the pharmacist should be able to

Transcription

1 Linking OTCs and the Pharmacy Department Upon successful completion of this article, the pharmacist should be able to 1. Identify prescription medications that lend themselves to OTC companion purchases 2. Describe techniques to introduce this concept pharmacy-wide 3. Review the financial impact of utilizing this technique 4. Uncover potential pitfalls to linking the front- and back-ends of the pharmacy Introduction According to the Gallup organization, pharmacists rank third among all professions as being the most trusted by Americans; this rank places pharmacists behind nurses but ahead of medical doctors. Americans rely on pharmacists to assist with their day-to-day healthcare in a very different way from other healthcare professionals. Pharmacists in general are more accessible, more approachable, and more aware of common health concerns within a community and among their patients. As a result, a Harris Interactive poll conducted in 2008 found that 80% of consumers would purchase an over-the-counter (OTC) product if it were recommended by their pharmacist. 1 This acceptance is good news for community pharmacists. Not only are they having a clear impact on the health of the average American, they are engaging in a practice that is a winning profit-builder for community pharmacies. Consumers requests for product recommendations are also evidence of a developing shift in consumer packaged goods (CPG) spending to drugstores from grocery and other retail outlets. CPG industry research and sales tracking firm Information Resources, Inc. (IRI) has demonstrated that consumer spending in drugstores increased steadily from 2005 through 2007 (see Figure 1). Figure 1. According to IRI Consumer Network as documented in Times & Trends, July Most significantly, consumers are spending more of their drugstore dollars on front-end merchandise, particularly health, beauty and wellness products (which includes OTC medicines and remedies). Figure 2 illustrates that the health and beauty point share increased by 2 points in drugstores between 2006 and In addition to improving patient care, community pharmacies can increase their revenue and decrease their dependence on prescription reimbursements with a deliberate plan to enhance their patients purchase of OTC products to complement their prescription regimens. Figure 2. According to IRI Consumer Network as documented in Times & Trends, July Accessible Pharmacists Have Great Influence Through OTC Product Recommendations, July 7, 2008.

2 Understanding the Opportunity for Community Pharmacy Consumers facing rapidly increasing costs of energy, food, healthcare, luxury items, entertainment, and other items are looking for ways to decrease their cost of living. These same consumers are often timestarved, with heavily scheduled days and competing priorities. These pressures create opportunities that community pharmacy can seize to improve patient care and pharmacy profitability at the same time. The Convenience Factor One of the techniques American consumers are using to simplify their lives is shopping trip consolidation. Convenience is the primary driver behind the choice of retail outlet that is made by drugstore shoppers, with 78% of those surveyed indicating that they chose to shop at a drugstore because it offered the element of convenience. Notably, these same drugstore shoppers chose convenience as more important than price (13%), service (11%), selection (8%), or promotions (8%). 2 Prescription Buyers One retail study indicates that the dropping off or picking up of a prescription motivates anywhere from 25% to 50% of drugstore visits by patients. These patients fail to purchase anything other than their prescription 42% to 63% of the time. 3 This opens an opportunity for pharmacists to engage patients and direct them to related areas of the front-end in 37% to 58% of pharmacy transactions. A separate study that asked all pharmacy customers which methods they use to fill or refill a prescription revealed that 86% of customers use the drop-off-and-wait method. 4 There is clearly a large majority of patients who enter a pharmacy every day, spend time waiting for a prescription, and can be influenced to make additional purchases. Current Patients Are Open to Suggestions Initiating conversations with patients, beyond the customary inquiry about whether the patient has questions regarding his or her prescription, is the first key to identifying add-on sale opportunities. A survey conducted in 2007 among 1,080 pharmacists nationwide indicates that, among all OTC-related conversations between patients and pharmacists, the pharmacist initiated the exchange only 13% of the time. However, 58% indicate they counseled more patients in 2006 than during the previous year. 5 These same pharmacists indicate they counsel from 15 to 75 patients per week regarding OTC purchases. By inference, potentially more than 75 opportunities to suggest an added OTC purchase confront the average community pharmacist each week, were the pharmacist to initiate more than the reported 13% of OTC-related conversations. A Patient in the Store is Your Best Customer Retailers often make the assumption that their first priority ought to be attracting new customers. This can have the unintended effect of shifting too much focus away from the patient already in-store. Interesting product displays, clear shelf signage, special call-outs for best-selling or new products, or even a voiceover announcement playing on the store s sound system can encourage patients to consider an OTC product or ask for more information at the pharmacy counter. While no merchandising tool can take the place of interaction with pharmacy staff, they can help open a line of communication that may otherwise have remained closed. Benefits of OTC/Prescription Linking Improved patient care A well-considered OTC recommendation paired with a prescription can help improve patient compliance with the prescription therapy. For example, therapy with a prescription medication that causes nausea as a side effect may be prematurely discontinued by a patient who cannot tolerate the side effect. An OTC WilsonRx Pharmacy Satisfaction Report, Wilson Health Information, LLC, Pharmacist knows best: OTC Recommendation Survey 2007, Drug Topics, May 7, 2007.

3 anti-nausea medicine can mitigate the side effect and encourage the patient to continue the prescribed course. OTC therapy can help improve the efficacy of a prescription. A prescription pain reliever paired with a cold compress or heating pad can relieve pain more effectively than either therapy practiced exclusive of the other. The suggestion and purchase of an appropriate OTC product can also help a patient save money, particularly when it improves the efficacy of the prescription to the extent that the duration of prescription therapy can be reduced. Moreover, patients who are enrolled in a flexible spending account (FSA) through their employer can purchase OTC products with FSA dollars, thereby reducing their cost of healthcare even further. Improved patient loyalty A patient who receives prescription medicines and valuable OTC counseling from a pharmacist forms an important bond with that pharmacist with each interaction. Yet a survey conducted in 2007 on behalf of the American Pharmacists Association revealed that 57% of consumers surveyed are hesitant to ask pharmacists about their healthcare needs. 6 Pharmacists can have a positive impact on their relationships with patients and their pharmacies performance, by initiating more conversations. Patients already hold pharmacists in high regard as healthcare professionals, and they are very willing to accept pharmacists product recommendations. In many cases, all that is needed to improve upon that relationship is for the pharmacist to reach out to patients more proactively. Improved profitability Retail purchases are quantified in terms of market-basket, or the averaged amount of total purchases per customer. During 2001, the average drugstore non-pharmacy market-basket purchase totaled $ In this case, the suggestion by the pharmacist or staff member of an additional $2.00 item increases the market-basket total by 10%. In terms of pharmacy-specific purchases, according to a study released in 2007, independent pharmacy customers spent an average of $87.00 on prescription medicines per month. 8 Similar to the add-on OTC purchase scenario described in the preceding paragraph, the suggestion by the pharmacist and the purchase by the customer of one $5.00-$10.00 OTC product as a complement to that prescription increases the pharmacy market-basket by approximately 10%. Recalling that pharmacists encounter up to (or possibly in excess of) 75 OTC counseling opportunities per week, if those 75 patients each add an OTC item worth only $5.00 to their prescription purchase, and if each consultation lasts just five minutes, 9 the pharmacy earns $ per week in additional OTC sales for an investment of approximately six hours of time. The increased revenue is, in practice, even higher, because margins on OTCs particularly store branded items are wider than on prescription medicines. Moreover, the relationship with the patient is improved and loyalty is built adding unquantifiable yet undeniable incremental revenue to the pharmacy. An Action Plan for the Pharmacy Staff Training 1. Help all staff recognize that while prescription dispensing and counseling are the primary purpose of the pharmacist and pharmacy staff, the pharmacy must also maintain a profitable front-end in order to remain competitive with other retailers. 6 Pharmacists Continue to Rank High in Gallup Poll, USA, Medical News Today, December 18, Boehringer Ingelheim Pharmaceuticals, Inc./WilsonRx Survey, Pharmacist knows best: OTC Recommendation Survey 2007, Drug Topics, May 7, Most pharmacists surveyed reported that they spend 2-5 minutes per conversation with a patient.

4 2. Have all staff review the Prescription/OTC links table included with this lesson. Consider posting it behind the pharmacy counter for easy reference. Merchandising 3. Use the pharmacy counter and the surrounding area to display high-impulse items that are related to common symptoms or prescriptions. Examples are cough drops with vitamin C during the cold and flu season and chewing gum or moistening drops to treat medication-related dry mouth. Communicating 4. Ask questions or otherwise interact with patients who are filling a prescription. According to a consumer study conducted in drugstores and grocery stores with pharmacies, pharmacist interaction with patients and subsequent recommendation of a product was the most effective driver of an unplanned OTC purchase Use your shelf space to do the talking for you. As patients browse the pharmacy area while waiting for their prescriptions, the silent salesperson of written communication tools can help make an extra sale. Effective tools include shelf signage that promotes a new item or compares a store brand s price to a popular brand, and educational leaflets pertinent to common medication side effects and their OTC remedies. Useful Web Sites The Pharmacy Times OTC Supplement for 2008, available in its entirety at The Consumer Healthcare Products Association, particularly OTC Facts and Figures and Consumer Survey on Self-Medication, Case 1 TF is a 57-year-old male who is diabetic. He is obese, with a body mass index of 36. His walking is characterized by a labored shuffle; occasionally he relies on a cane. As his mobility has decreased, his weight has increased rapidly. TF visits the pharmacy counter at least twice per month to pick up medications to treat his diabetes, hypertension, and joint pain. Assuming you have reviewed his prescription medications, what OTC products might you recommend to TF to help treat his various conditions? a. diabetic foot care products b. sugar free products, including OTC medicines and candy c. a new cane, cane tips d. all of the above Case 2 MJ is a 27-year-old female who is visiting the pharmacy to pick up her prescription for an antibiotic to treat a sinus infection diagnosed by her physician. MJ is clearly uncomfortable, presenting symptoms including a runny nose, watery eyes, flushed complexion, and a non-productive cough. As she is paying for the prescription, you ask her if she has any questions. She answers no, thank you, and prepares to leave the pharmacy. Had you initiated the conversation in a different way, what OTC products might you have discussed with her to help alleviate the symptoms evident to you? a. cough suppressant 10 Effective shelf signage and pharmacist can influence unplanned OTC sales, Drug Store News, June 21, 2004.

5 b. acetaminophen c. anti-diarrheal d. both a and b Table 1: Commonly Recommended OTC Add-on Sales Common Side Effects and Prescription Drug Examples OTC Complement to Rx Therapy Sun sensitivity isotretinoin, naproxen Dry mouth tadalafil, hydrocodone, nortriptyline Diarrhea metformin, amoxicillin, ropinirole Constipation buproprion, alendronate, narcotics Bruxism fluoxetine, haloperidol Headache erythromycin, progesterone Skin itching, peeling, rash nabumetone, isotretinoin Common Conditions Being Treated with Rx Therapy Pain High cholesterol Asthma or allergies Sinus infection/ear infection Arthritis Sunblock, sunscreen Mouth moistening gum, paste, rinse Probiotics Bulk laxative, stool softener Nighttime mouth guard/appliance Cold compress; topical headache relief (ingestible pain relievers may be appropriate depending upon the prescription being taken) Skin cream/ointment OTC Complement to Rx Therapy Topical cold or heat therapy Dietary supplementation Vaporizer/humidifier Cough drops, sore throat spray, vaporizer Cold compress, elastics, braces, heating pad About the Author The retailing experts at Hamacher Resource Group combine the art of creative and strategic development with the science of market analytics to enhance the profitability of health, beauty and wellness manufacturers, distributors and retailers, including more than 20,000 independent pharmacies operating nationwide. Pioneers in category management and offering strategic business development solutions including store assessments and insights for performance improvement, objective data analysis, targeted market research, creative marketing services, retailing strategies and more, HRG is headquartered in Milwaukee.