Retail Forecast 2020: Chain Drug Execs Look Ahead

January 6, 2020 by Chain Drug Review


DIR fees are again top of mind for pharmacy operators beginning another year without relief from these “phantom” expenses. At the same time hope springs eternal for retailers looking to broaden affordable and accessible health care offerings when such services from more traditional providers can be out of financial reach for many people. Chains also continue to launch innovative presentations of front-end categories as well as bolstering their e-commerce appeal to entice omnichannel shoppers. Leading industry executives give their outlook for 2020, for their business and the sector as o while in the U.S. and Canada.



2020 will be a defining year for retail, specialty and community pharmacy. The industry has experienced significant growth in recent years. attributed to the introduction of many new specialty drugs. as well as an increasing number of consumers taking on a greater role in the management of their own health care needs. This trend has largely favored organized providers who have figured out how to offer high-quality drugs and an efficient way to manage patients to better outcomes. The rise of e-commerce, the changing wholesaler and player models, and heightened customer expectations are adding to the complexity of trying to figure out how to stay relevant in the markets that providers currently operate in today. It is also likely that there will be new developments worthy of additional consideration, as the issue of increasing health care costs takes political center stage in the run-up to the next presidential election.

As all of these changes continue to take shape, pharmacies will continue to wrestle with how best to navigate the dynamic terrain of pharmacy reimbursement while waiting to be compensated for the ancillary value-added services that they will be motivated to provide as they seek a pathway to better outcomes and higher quality ratings. Congruently, pharmacies will also have to contend with a changing wholesaler and specialty pharmaceutical distributor pricing model that has yet to sort itself out. At a time when providers will seek relief from the pain of defining reimbursement with new procurement efficiencies, those opportunities will be harder and harder to identify and capitalize upon. Adding fuel to this fire will be providers’ escalating need to have better access to new drugs, new therapies and new patients. Limited-distribution drugs, as well as a multitude of new multisource drugs and touting better therapeutic interchangeability and higher cost savings for patients, will have economic consequences which will need to be considered by wholesalers and providers alike. 

Retailers will invariably have to seek new ways to remain relevant in a largely integrated industry by attempting to create and deliver new and unique value. Proper expense management, better maintenance of cash flow, and redefining core competencies will be the keys to remaining stable and sustainable in a hyper-competitive retail environment. In keeping with these principles will be identifying new potential partnerships which allow for better connectivity with local providers and businesses with the hope of additional revenue and expanded clinical services. Deciding which networks you should participate in will get harder as the fundamental question of access versus profitability gets weighed; additionally, evaluating your e-commerce and online strategies will become a major priority for retailers as they balance the ease and convenience of online shopping with the need to give consumers a reason to visit their brick-and-mortar locations. All of these variables must be weighed appropriately in order to navigate through the changing landscape of health care in a meaningful way.

At CARE Pharmacies we see these challenges as an opportunity to reevaluate the value that we deliver to our members and our customers, ensuring that we remain competitive in a highly contentious and transitioning marketplace. Our unique operating model allows us to realize the operational efficiencies of a drug chain while delivering the best personal and deliberate clinical care that is inherent to community-based pharmacy. Our established relationships with local physicians, prescribers, manufacturers, wholesalers and other drug chain partners should sustain us in the near term and position us favorably in the future as the new procurement and fee for service models take hold.