NACDS Regional touts card, defines business opportunities

Drug Store News, Feb 16, 2004 by Bernadette Casey

PALM BEACH, Fla. -- A record-breaking 450 retailers and suppliers gathered at the Breakers here to attend the National Association of Chain Drug Stores' Regional Conference last week. Each day of the four-day event began with educational sessions and panel discussions on a range of subjects, including Medicare reform and the recently announced NACDS/Express Scripts discount card. In the afternoon, attendees divided into smaller groups for roundtable discussions and one-on-one business meetings.

In a departure from the conference agenda of years past, NACDS decided to forgo the scheduled State of the Association address from Craig Fuller, NACDS president and chief executive officer, and the Industry Update from NACDS chairman Mary Sammons, Rite Aid's president and chief executive officer, in favor of a panel discussion about the discount card. The two were joined on stage at the Monday morning business program by Barrett Toan, chairman and chief executive officer of Express Scripts.

An application was filed Jan. 30 to the Centers for Medicare and Medicaid Services seeking federal endorsement for the national discount card. Toan said retailers representing 44,000 stores had signed letters of intent to participate in the program, which is scheduled to go live in June.

According to Fuller, the discount card plan is "consistent with the principles that NACDS laid out in 2003" regarding Medicare reform, including providing a level playing field by offering 90-day refills on maintenance medication and protecting a patient's right to choose either retail pharmacy or mail order.

The card offers rebates on 30-day retail fills, 90-day retail fills and the steepest discounts for 90-day mail order. Toan explained there is no more than a 10 percent difference between 90-day retail and 90-day mail order rebates. Rebates overall most likely will fall between 25 percent and 30 percent. (For more information on the discount card, see page 5.)

The intent of the program is to offer mail order to patients who want it, but will not drive any patient to use mail order, Fuller noted. Toan added that "the card would have been at a disadvantage in the marketplace if it did not have a mail order benefit."

Sammons added that the best defense against growing competition from mail order is pharmacist-patient interaction. "The consumer has choices. There has got to be an important reason for that patient to stay with your pharmacy. You have got to be a critical part of their therapy and offer value-added services."

Pharmacy builds brand

A separate session entitled "What Patients Seek in their Pharmacy Experience" also emphasized the power of the pharmacy department in boosting customers' satisfaction in the stores they shop. Brent Walker from the Procter & Gamble Healthcare Consumer Institute told attendees that "there is an incredible opportunity to drive up your brand image if you can get the consumer to use your pharmacy."

In a national study of 17 retailers across food, drug and mass the institute conducted last November, consumers rated their satisfaction levels with retailers' pharmacy operations. An average rating fell at about the 52 mark. Not surprisingly, in the drug channel, Walgreens won the highest rating at 66. What did raise a few eyebrows among attendees were Wal-Mart's rating of 62--edging out CVS at 61--and HE Butt's whooping 73 rating.

"Within its geographic competition, HE Butt has been connecting more with the customer, and Wal-Mart has been making some amazing inroads into pharmacy," Walker said.

For shoppers in the drug channel, trust and reliability are the biggest drivers of pharmacy satisfaction, with value and store layout ranking much less in importance. Reliability and convenience were the top drivers among pharmacy shoppers in the food channel The mass channel did not register any drivers significantly above any others in influencing overall ratings.