Content about Special Reports

Walgreens is fundamentally changing the way it does business with both its upstream pharmaceutical suppliers and its downstream customers in the managed care world. The goal: to help its partners on both ends knock down decision-making silos and create more strategic and profitable relationships that lead to lower costs, higher profits and most importantly, healthier patients.


A vast army of some 70,000 Walgreens pharmacists, technicians, nurses and nurse practitioners, and other clinicians is poised to plug some of the gaps in the nation’s overstretched healthcare system with expanded services, greater access for patients and new solutions for providers and payers in desperate need of quality, cost-effective solutions.


The predictability of the chain store shopping experience has long been both a strength and weakness. The quality and experience may be predictably good, but can a shopper have a warm relationship with a store that treats everyone the same? 


Walgreens gets that. So it is transforming its relationship with its customers by getting to know their needs more closely. 


For years, Wall Street — and customers, too — rewarded Walgreens for being the hedgehog of retail. A homage to the old Aesop fable, unlike the fox, the hedgehog is steady and methodical. And, that’s just how Walgreens operated its business. It didn’t make big acquisitions; it grew organically and built its own stores. It didn’t hire a lot of experts from other fields; it tended to cross-pollinate and promote from within. 


Walgreens has really helped to transform why consumers shop a drug store with its position in healthier-for-you foods and fresh produce. That’s not just thinking outside of the box for traditional retail pharmacy operators; that’s throwing out the box altogether and replacing it with an in-store food pyramid. 


One of the most visible representations of Rite Aid’s efforts to make a comeback is its Wellness store format. The company first unveiled the format in several test markets in the Northeast last year, gradually expanding it to other states. Today, more than 420 stores have been converted, and the chain hopes to eventually make the format the norm. The company plans to have 780 stores converted by the end of the year.


Senior Walmart executives regularly invoke the name of Sam Walton when it serves to reinforce a point regarding the company’s business model or the cultural principles on which Walton is said to have founded the company. Dr. John Agwunobi, president of health and wellness for Walmart U.S., took the practice a step further recently when he participated in a panel presentation with other top executives at a conference put on by the Center for Retailing Excellence at the University of Arkansas’ Sam M. Walton College of Business.


Walmart’s first small-format Express stores have only been open about six months, but strong initial consumer acceptance, coupled with increasingly flexible real estate, points to the near certainty of an eventual rollout.


The stores range between 10,000 and 15,000 sq. ft., offer about 13,000 products and were developed so Walmart could tap potential growth opportunities in rural and urban markets. Walmart expects to end its current fiscal year in late January 2012 with 11 Walmart Express stores following the opening of the first units in northwest Arkansas.


About half of people who provide care and support to loved ones said they are more likely to be nonadherent to their own personal medication regimen than to neglect providing medications to those they are caring for, according to a study by researchers at Harvard University, Brigham and Women’s Hospital, and CVS Caremark. Given this, there’s a significant opportunity for pharmacists and doctors to identify and work with caregivers to improve medication adherence and chronic disease management.


Industry members would likely agree that those patients who are adherent to their prescription medications use less health care and have lower overall costs; however, how much adherence lowers total costs, why some patients do not take their medications as prescribed and whether what’s saved in health care offsets higher drug costs are among the questions that have not been as clearly understood.


Private-label penetration at CVS/pharmacy locations is expected to grow to more than 20% in the next two to three years, and to help drive that growth, the retailer has developed its new Just the Basics line of store-brand products.


Officially launched in February 2011, the brand represents a functional, value-
priced, smart-simplicity positioning. It is comprised of nearly 100 items, and there are plans to expand the line going forward.


CVS Caremark’s annual meeting of shareholders in May was of special importance as it marked the official retirement of former chairman and CEO Tom Ryan, who left the growing company in the hands of a strong, capable new leader — Larry Merlo.


“I’m passing [the company over] to a great leader, one whom I respect and who knows this business. Larry will take this company to great heights,” Ryan told shareholders in May.