Thread regarding Walgreens layoffs

Why are business leaders allowing Pharmacies to fail?

The structural issue is the declining reimbursement rates. PBMs (pharmacy benefit managers) are forcing pharmacies to accept lower rates to fill prescriptions. I don't think insurance companies or pharmaceutical companies are helping matters any (they aren't going to let pharmacy have a higher cut. Many times, pharmacies fill a prescription for a negative price (at a loss).

So, what do business leaders want to happen?

If pharmacies close, and there are less pharmacies in an area, does that even fix the issue any?

Do they want 100% mail order?

Does anyone have a vision of the what plan is here.

And yes, corporate has not helped with their bad decisions.

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| 592 views | | 1 reply (February 22, 2024) | Reply
Post ID: @OP+1rbtua12

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Retail pharmacy dispensing (putting pills in bottles) is seen as a commodity activity, which pricing and reimbursement is reflecting. How are commodity services handled in any other business - through low-cost channels, efficiency, automation, and logistics. So, what could that look like for Walgreens?

  • Fewer physical stores and more smaller format stores in the remaining smaller footprint. On the remaining front-end - focus on OTC, H&W, and Beauty (in some markets).
  • Greater automation in the dispensing operations, with fewer pharmacy and retail staff. This was part of the theory behind micro-fulfillment. But current leadership doesn't know how to execute.
  • Efficient supply chain logistics to bring prescriptions to people's homes (driving 5 miles to a store and/or waiting in a drive through line is not convenient for consumers - it's actually very inconvenient)

In the end, Walgreens infrastructure is too capital intensive to service a commodity activity like putting pills in bottles. Too many physical stores, too much pharmacy labor.
You don't need to pay a pharmacist to do this stuff when much of it should be automated. Pharmacists should be focused on more value-add clinical pharmacy activities, like MTM, adherence, reconciliation. Which means employing fewer pharmacists and only really having a smaller number of clinical / ambulatory pharmacists - not retail pharmacists. And in the end, the infrastructure is just too inconvenient for consumers by making them have to come to the stores or wait in the drive thru line.

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Post ID: @1qro+1rbtua12

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