As a marketing channel, the pharmacy turned challenges into opportunities for Rx brands
Pharmacies stepped up to help consumers through the public health crisis. And consumers responded by stepping into pharmacies. That dynamic has been an important part of getting many communities through an unprecedented challenge. And it has also helped pharma marketers reach patients in healthcare settings and generate positive ROI in several therapeutic categories at a time when few other businesses could operate in near-normal conditions.
Pharmacy in 2020: reliable, essential, more valuable than ever
The stay-at-home orders from COVID-19 response nationwide interrupted many typical doctor-patient relationships as access to clinics and hospitals was curtailed or discouraged for non-emergency, nonessential concerns and public transportation was interrupted. So pharmacies became an even more natural and logical healthcare destination.
And pharmacies leaned into that responsibility. As CVS CEO Larry Merlo said in the company’s second quarter earnings report, “The environment surrounding COVID-19 is accelerating our transformation, giving us new opportunities to demonstrate the power of our integrated offerings and the ability to deliver care to consumers in the community, in the home and in the palm of their hand which has never been more important.”
Pharmacies opened thousands of on-site COVID-19 testing centers and became de facto leaders in transmission reduction for retail stores. In concert with the Department of Health and Human Services, pharmacies expanded vaccine services by broadening the range of vaccinations approved for administration by a trained pharmacist. In hard-hit communities, pharmacies stepped up their telemedicine and delivery options, even launching drone services to minimize contact and spread. Some locations even opened customers’ eyes for the first time to the full scope of services when they applied their compounding skills to make hand sanitizer during shortages.
Stay-at-home’s impact on the pharmacy channel
Look past the headline items when evaluating the story of patient outreach in the pharmacy channel. Visits to pharmacies were undeniably down at the peak of stay-at-home orders. That resulted in a short term impediment to campaign lift and ROI.
Doing well in a tough time
Yet even during the periods of curtailed movement, pharma marketers were reaching patients in a relevant setting and an appropriate mindset. InStep Health’s media programs in 2Q 2020 operated mostly on-plan and on-schedule, even as stay-home orders were in their fullest force in most markets. Consumers still saw appropriate messaging in categories including eczema, type 2 diabetes, dry eye, and HIV. And despite the challenging operating environment, those messages were seen and acted on.
Over this period, our Media Display program continued to deliver positive results, with an average lift in total prescriptions of over 5%1 and ROIs greater than 4:12 across several therapeutic categories. Those results reinforce the pharmacy’s strength and viability as a marketing channel, even at a time when people are focused on the barest essentials.
A resilient rebound
Many of the effects of stay-at-home on pharmacy performance were short lived. Even when overall visits to pharmacies and general outlets were flat or trending down, visits relevant to pharma marketers were outperforming industry averages. As measured by IRI reporting3, while total non-edible (CPG) trips decreased to an index of 84 at their lowest point over the course of the stay-at-home period, trips for non-edible items, including health products, trended 11% higher during the same timeframe.
Basket sizes have climbed as well. So although hard-hit areas did show a drop in visits and for pharma marketing program performance, we also saw compelling data showing that consumers have pent-up demands and look for opportunities to return and shop.
New prescription volumes declined significantly, and the so-far lower propensity for telehealth visits to generate new prescriptions has slowed recovery in new scripts. But volumes have been steadily climbing since late spring 2020. At the same time, patient confidence as measured by HealthVerity quickly neared pre-pandemic levels in summer after bottoming out in late April.
Industry data analysis published on drugchannels.net found that in-store visits for refills, which account for the vast majority of visits, have nearly rebounded to pre-pandemic levels after spiking early in the stay-at-home order period and remaining depressed in spring. And concerns that the pandemic would send more customers to mail-order remain unfounded, as dispensing growth through both mail and retail channels is virtually identical year-to-date through mid-August.
What hasn’t changed
The key strengths of the pharmacy channel remain intact. So do the fundamental principles of a strong in-pharmacy marketing program.
Measurement needs to be governed by consistent standards, including the use of test and control groups for matched panel analysis. Campaign performance should also take into account when the program ran: pre-COVID-19, during stay-at-home, or post-restriction periods. Understanding differences in performance between geographies will also be more relevant than ever.
Partnerships already guided by sound measurement and long-term analysis will find it easier to incorporate COVID-19 adjustments into both evaluating campaign performance and future campaign planning. COVID-19 and related responses will undoubtedly continue to affect consumer behavior, pharmacy visits, and doctor access for a period of time. Sticking with careful, detailed analysis will reduce risk for future campaigns by providing a solid base for planning and decision making.
Most of all, what hasn’t changed is that the pharmacy is solidly positioned at the front line of community healthcare. Even as pharmacies adapt to changing needs by expanding delivery services and promoting telehealth options, the local pharmacy remains a pillar of in-person healthcare delivery. As healthcare services return to normal capacity and delivery channels continue to evolve, the pharmacy will be more relevant than ever.
Instead of speaking for the pharmacy, we’ll leave the last word to Walgreens Boots Alliance co-COO Alex Gourlay. “We’ll be relied upon in this new world to get medications and products to customers faster because of the proximity of our brick-and-mortar locations. Flexibility in supply chains and among wholesalers and delivery partners will become critical,“ he wrote in Chain Drug Review. “What won’t change? The heart of the retail pharmacy.”
InStep Health is a continuum of connections. We place Rx, OTC, and CPG brands at the center of care, wherever consumers go. Designed for the individual experience (iX), our platform reaches patients when they interact with healthcare providers or pharmacists, reaches healthcare providers and pharmacists so they’re up to date on the best possible solutions for their patients, and uses best-in-class data insights and technology to focus when and where your messages will have the most impact.
SVP Networks and Analytics
1. Matched-panel research conducted by Retail Intelligence Inc. for InStep Health Media Display programs executed April – June 2020
2. Patient Value ROI calculated using script lift and client-supplied or RED BOOK™ pricing data
3. IRI Consumer Network™ Panel All Outlets (CSIA) Data for weeks ending 04/12/20 – 06/28/20 instephealthmedia.com