When it comes to increasing market share, drug store chains are flexing their muscles. Walgreens Boots Alliance and CVS Health Corp. both saw double-digit bonus point gains over the previous year.
Pressure from competitors is taking a toll on bottom lines as the companies strive to provide more services, such as fast home delivery of customer prescriptions. In addition, the U.S. Food and Drug Administration has sped up the approval of generic drugs, putting downward pressure on more profitable established and well-known medications. The big chains have deep enough pockets to stay in the game, but independents and struggling rivals like Fred’s discount stores are closing stores.
CVS is the nation’s largest filler of prescriptions with its 9,000 locations, and hopes to maintain that momentum by growing the number of its HealthHub locations, currently in 1,100 stores. HealthHubs combine an in-store MinuteClinic with a “care concierge” who serves as a personal liaison for the store’s health services. Features at the HealthHub test stores in Houston include a nutritionist, respiratory therapist and an on-premises laboratory for blood tests.
“We can make care more local, make it simpler and help people achieve their best outcome at lower cost,” says CVS chief executive Larry Merlo. “We’re collecting data, and in the coming months, we’re going to have a picture of the path forward.”
Walgreens is testing a variety of health services, including eye care and optical services, hearing services and lab testing for both blood work and drug tests gathered into something called the “health corner,” where patients can make appointments and have access to the pharmacy. There is a common waiting area, but patients visit practitioners working in private rooms.
With physical expansion providing limited opportunities for growth, Walgreens is aggressively pursuing partnerships with the likes of Kroger and Birchbox and investing in its own house brands. CEO Stefano Pessina says the company will reimagine its whole approach to retailing as well as reconfigure its stores to provide consumers with one-stop shopping.