Future of online pharmacy purchasing outlined in Schering Labs report

Drug Store News,  June 26, 2000  by Kim Roller

• E-mail
• Print
• Link

KENILWORTH, N.J. -- Schering Labs has issued its annual state-of-the art survey on pharmacy, this year tackling the Internet and its effect on consumer behavior, pharmacy practice and pharmaceutical care.

The report--Schering Report XXII: Pharmacy.com: A Virtual Reality--is the latest in a series of annual investigations of pharmacy issues and trends initiated and commissioned by Schering.

Among the highlights of this year's report, the study found that just 2 percent of U.S. patients now order pharmaceuticals and OTC products via the Internet, but that this market should expand rapidly over the next four years. The study projects that online pharmacy sales will grow to between $20 billion and $25 billion from $1.9 billion in 1999 over this period.

The report, based on 1,000 telephone interviews with pharmacists, physicians and members of the general public, found that 83 percent of consumers who already had purchased prescriptions online and 72 percent of those who ordered OTCs expect to continue buying via the Internet. About one-third of those queried in the general population anticipated using online pharmacy in the near future, if they had not already.

While the survey found certain assumed disadvantages of online pharmaceutical purchasing continue to exist among consumers--with concerns ranging from privacy to reimbursement--most of those disadvantages were not borne out on questioning people who had actually utilized the Internet for drug purchases.

For the most part, ordering prescriptions online was judged to be easy, convenient and fast by those who have done so and without any loss of privacy. In fact, the majority of purchasers rated privacy and delivery speed as excellent or very good.

When those patients who had made online purchases of either prescription drugs or OTC products were asked what situations might cause them to use an online pharmacy again, the four most common responses were price, long lines at the drug store, the need to pick up medications rather than have them delivered and poor rapport with their community pharmacist

Some definite perceived advantages to ordering online emerged, with 71 percent of respondents saying that the online channel was very convenient and, not surprisingly, 67 percent found it a desirable way to order refills. Yet, several "assumed negatives" continued to bother consumers.

Perceived downside

It was assumed, for example, that the Internet is too impersonal a method for receiving medication because there is little opportunity for being counseled by a pharmacist; that online pharmacies without standard bricks-and-mortar outlets would have trouble obtaining reimbursement from insurers or managed care plans and that privacy-sensitive patients would be loathe to share personal health information online. Another "assumed negative" was that patients would not tolerate waiting three to five days for delivery, along with paying shipping charges.

The report commented on some of these assumed negatives. The lack of an available pharmacist was borne out, for example, as just 35 percent of buyers were "very satisfied" with the pharmacist's availability online. Most respondents indicated that adequate information on drug interactions was lacking online.

Reimbursement was deemed excellent or very good by 47 percent of buyers. But despite the low-price claims made by Internet pharmacies, the report noted the majority of patients found that prices were not significantly lower than those charged in community drug stores.

The report also analyzed the merits and differences between pure-play Internet pharmacy and the clicks and-mortar variety, which the survey defined as having at least one physical storefront together with an Internet presence. "In many ways, the Internet is the great equalizer, as huge chains and small independents can have the same appearance online," the report noted. "By this reasoning, the tiniest store may look as impressive as a large chain."

Enlarging on this point, the researchers emphasized that owners of independent drug stores "have much to gain by establishing a Web site. They can bolster relationships with customers in the community by providing the convenience of online ordering, while maintaining their ability to provide personal service. Furthermore, exposure on the Internet gives independents an opportunity to gain additional customers, and to be more competitive with area chains."

The report noted that while pure-play pharmacy has the advantage of low overhead, clicks and-mortar retailers enjoy better drug reimbursement through existing contracts, brand recognition and a greater degree of flexibility in ordering, dispensing and providing information online.

Few respondents felt that the pharmacist-patient relationship would be improved by online pharmacy. Most of the pharmacists and physicians--76 percent and 72 percent, respectively--said the relationship would be further strained. The majority of patients, however, envisioned no effect at all.