Supermarket Pharmacies Show Continued Financial Stability; FMI Survey Finds Technology, Whole Health Are Contributing Factors

WASHINGTON, DC — July 10, 2006 — Supermarket pharmacies maintained their financial stability in 2005 and met major regulatory challenges: preparing for Medicare Part D and complying with new laws restricting the sales of cold medicines containing pseudoephedrine, which can be used illegally to produce methamphetamine.

An increased focus on technologies, such as electronic prescribing and robotic prescription filling and labeling systems, and whole health services for customers contributed to the stable performance, according to a new report from the Food Marketing Institute (FMI), Supermarket Pharmacy Trends 2006.

“It is most impressive to see more supermarket pharmacies reaching beyond the prescription counter to help consumers improve their health and well-being,” said Michael Sansolo, FMI senior vice president. “In addition, the findings from this year’s report are reassuring given the amount of regulatory change in pharmacy operations over the past 12 months.”

Key Findings

General Operations:

• Median prescriptions filled per day remained unchanged from 2004, at 120.


• Prescription revenues remained at 9 percent of total store sales.


• The median cost of a prescription increased slightly from $53 to $55.

Medicare: Responding pharmacies reported that eligible Medicare customers had little understanding of the new Part D prescription drug coverage.

• Only 2.3 percent of respondents thought consumers had a good understanding of the programs, while 97.6 percent felt consumers had a poor or fair understanding.


• To help alleviate the confusion brought about by the new regulations and change in plans, 95.5 percent of supermarket pharmacies offered educational materials for their customers, although 57 percent of pharmacies believe the government should educate consumers about Medicare.

Technology:

• 73.4 percent of supermarket pharmacies are set up to accept e-prescriptions from physicians now — or will be by the end of 2006.


• Two-thirds of all supermarket companies are using robotic prescription filling in at least one pharmacy. These systems automatically fill containers with the prescribed amount of medication.

Inventory Control: Supermarket pharmacies reported an average of 12 inventory turns per year. At one turn higher than last year’s findings, this may reflect the growing number of drugs being dispensed by the pharmacy versus over-the-counter. Legislation requiring products containing pseudoephedrine to be kept behind the pharmacy counter could also be a cause for more turns as over-the-counter cough and cold medicines are high-turnover items.

• Almost 85 percent of pharmacies use loss prevention equipment such as cameras and key controls to deter internal theft and monitor product movement behind the pharmacy counter.


• 65 percent of respondents use background checks to prevent internal theft.

In-Store Services: The addition of health-focused services in the supermarket allows the pharmacy to offer “whole health” solutions for all customers, not just those filling prescriptions.

• Health seminars and health-focused recipes top the list of in-store services, with 54.3 percent of pharmacies offering each.


• 52.2 percent give store tours, showing customers where to find healthful products.

Staffing: The use of automated pill counters, robotic dispensing systems and other technologies, coupled with creative employment benefits, are helping alleviate shortages of staff and pharmacists.

• Pharmacy employee turnover is lower than supermarket employee turnover.


• Creative benefits for pharmacists include performance bonuses, sign-on bonuses, additional vacation, continuing education, reimbursement, relocation, licensing fees and professional membership fees.

The 2006 Supermarket Pharmacy Trends report features profiles of the supermarket pharmacy consumer, essays from pharmacy executives, an analysis comparing chain and independent operator pharmacy operations, and a legislative brief on pharmacy priorities.

The annual report is based on a survey of pharmacy operations executives at 46 companies operating 4,742 U.S. supermarket pharmacies. Survey data are derived from 2005 operating results.

To purchase the report (PDF copies are $75 members, $125 associate members, $175 nonmembers; additional charge for printed copies), visit the FMI Store at www.fmi.org/store/ or call 202-220-0723.