Online Pharmacies vs. Corner Drugstore - use of online pharmacy services - Brief Article

Kiplinger's Personal Finance Magazine, July, 1999 by Jane Bennett Clark

* Why should you buy medicine and mouthwash the way you buy books?

It's the middle of the night, your child has a raging fever and you're out of Tylenol. You leap out of bed and rush to ... your computer?

That's only a bit of a stretch from the pitch that online pharmacies have been making in recent months, as new companies--including Drugstore.com, Soma.com and PlanetRx (www.planetrx.com)--have tried to persuade consumers that what works for books and CDs makes just as much sense for drugs, deodorant and disposable diapers.

Among the benefits, the companies say, are 24-hour access, links to medical information, and vast inventories. "Brick-and-mortar stores have to decide to carry only the fastest-moving products," says Suzan DelBene, vice-president of Drugstore .com. "Compared with the average drugstore, we have three times the number of products." Privacy is another plus, says Stephanie Schear, co-founder of PlanetRx. "People really don't want pharmacists shouting over the counter, `Mr. Smith, here's your Viagra!'"

Such advantages may eventually pose stiff competition to earthbound merchants--or make the online stores likely takeover targets. One of the largest drugstore chains, CVS, announced in mid May that it would buy Soma.com to bolster its online capabilities. Other chains--among them Rite Aid and Walgreen--are also gearing up on the Web, at this point mostly to take orders for refills that customers will pick up.

About half the $110 billion consumers spend annually on prescription drugs is for emergencies that can't wait for delivery via mail or overnight express, according to a Salomon Smith Barney analyst's report. "This business logically should remain with the corner drugstore."

Rx FOR ORDERING. Filling a prescription online for a chronic condition makes a bit more sense, assuming your insurance plan agrees (to find out, you'll have to submit insurance information online). The online pharmacies say they've made progress in negotiating insurance coverage.

But Blair Jackson of PCS Health Systems, the largest drug-benefits manager, says his company is debating whether to work with online pharmacies. "Most card plans already have some mail-order or online capabilities," he says. "From the health plan's perspective, there will have to be some cost advantage." Patients with card plans generally pay the same price no matter how they get their drugs.

Once coverage has been verified, your doctor will be asked either to call ]n your prescription or send it by snail mail. And cooperation is not a foregone conclusion: Dr. Donald Palmisano, a trustee of the American Medical Association, says the AMA is "quite concerned" about Internet security issues, as well as the potential for fly-by-night Web sites to bypass real-time diagnosis and treatment.

"We can use the Internet to enhance good medicine," he says. "But we don't want to short-circuit the time-tested relationship between physician and patient."

Pharmacist groups have expressed similar concerns about unlicensed drug dispensers that have come online within the past year. In February, the National Association of Boards of Pharmacy announced plans to develop a program that would verify the licensing of Internet pharmacies and confirm the identity of both patients and doctors.

Even if you can get your prescription cheaper at an online outlet, you may find that shipping charges--a minimum of $2 at Soma, $3.95 at PlanetRx and $4.95 at Drugstore .com--offset your savings. (Prescription drugs are exempt from sales tax in most states.)