Viewpoints

What Comes Next After Generic Drug Price Promotions?

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By Dan Alaimo
Editor, Nonfood Strategies

Wal-Mart stirred up a maelstrom of controversy when it launched its $4 generic drug prescription program in September.

This initiative, which is now national, caused many supermarkets and other mass merchants like Target, to respond with offers that matched and, in some cases, exceeded, Wal-Mart. The major drug chains have so far elected to stay on the sidelines.

Answering whether such pricing is good, bad or indifferent is beyond the scope of this column. What can be said is that these were highly effective promotions, and pharmacies — particularly supermarket pharmacies — are typically under-promoted.

Supermarkets are growing their pharmacy programs. Giant Eagle has said pharmacy is one of its top priorities for the future, and sources have told SN that pharmacy, including the over-the-counter health categories, is Wal-Mart's biggest category in terms of sales.

Where many fall short is telling customers about their prescription and health offerings. The generics promotions are very effective at getting customers in the door.

The big question is, what comes next? More loss-leader or giveaway drugs? Lower costs on brand-name prescription items?

Whatever the impact on the bottom line, that would be missing a big opportunity.

More customers at the pharmacy counter give supermarket pharmacies the chance to demonstrate how they excel at service, education, and when needed, compassion. Also, since the industry is in the midst of the second sign-up period for the Medicare Part D prescription benefit, pharmacy staffers can encourage people to sign up, and offer help if necessary.

When it's in the customers' interest, pharmacists can also engage them in conversation about appropriate and related OTC items. This serves the interests of the patients while helping offset whatever losses might be incurred by the promotion program with additional sales.

Then there is education to be imparted about food products found in the rest of the store, and how it may relate to the patient's illness or condition. Supermarket pharmacy staffs are in the unique position to take advantage of an entire store filled with healthful and unhealthful items in building relationships with customers.

This of course is easier said than done. The pharmacist shortage is a well-known fact of life and low-price promotions usually mean more prescriptions, which results in more work to be done in the same amount of time. An answer can be found in technologies that free up time for the pharmacy staff.

Supermarkets also have a new opportunity to promote pharmacy items that don't have to be drastically discounted. With non-prescription pseudoephedrine cough and cold products now sold from behind the counter, as well as Plan B emergency contraception, supermarkets should let consumers know these are available, consultant Bruce Kneeland pointed out.

There's more potential for promoting pseudoephedrine than Plan B — by definition an "emergency" product is not going to be a big seller — but as customers try the replacement items and find them relatively ineffective, they will look for places that sell medications that have worked for them before.

Pharmacy promotions don't have to break the bank and they can do a world of good for customers and retailers.

Contributors

David Orgel

David Orgel is executive director, content & user engagement, of Supermarket News (SN) and its website, SupermarketNews.com. Orgel delivers his opinions on industry trends through a bi-weekly...

Carol Angrisani

Carol Angrisani is an associate editor at Supermarket News. Along with covering the packaged goods beat, she also manages SN’s annual private-label and ethnic marketing supplements. Carol...
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