SAN FRANCISCO — The emergence of Health Mart as a major force in community pharmacy is one of the industry’s most compelling stories in recent years.
Starting from a base of some 250 members in 2004, the network of franchised drug stores is nearing the 3,000 mark, and plans call for more expansion.
“We’ve enjoyed 50% compound annual growth rates over the last six or seven years,” says Brian Tyler, president of McKesson Corp.’s U.S. Pharmaceutical business unit, which franchises the chain. “We have some critical mass in scale now and will look to grow store count further.”
The secret to Health Mart’s success is its ability to seamlessly meld the best elements of chain and independent pharmacy practice.
“Our challenge is to continue to coalesce as a group, and to execute and deliver together more like a chain would,” notes Tyler. “We will always respect the autonomy of independent pharmacy, because we understand that these folks are independent pharmacists by choice. They know their local community and what their customers expect better than we do.
“But there are still things that need to be commonly done across the franchise to take advantage of such developments as limited networks, and to document the value of the care that is delivered across a chain like Health Mart.”
Franchisees can benefit from the extensive array of capabilities offered by McKesson. In addition to being the nation’s largest drug wholesaler, the company has robust assets in health care technology, specialty pharmacy, and clinical and business services.
Technology exemplifies the type of things McKesson can do for Health Mart members.
“We’re super excited about technology and what it’s going to mean to the future of independent pharmacy,” Tyler notes. “We recently launched some pretty cool new technologies, including some that seem very basic, like a Health Mart consumer-facing website that allows Health Mart pharmacy owners to promote their pharmacy’s distinctive personality and services. It’s an online portal that is fully integrated into their pharmacy management systems and mobile technology enabled. In essence, Health Mart pharmacists can give their patients the opportunity to refill their prescriptions from their mobile devices. We also have smartphone applications for our independents that allow them to basically look like a chain. The customer can find a store, request a script or a refill, and find out when it’s going to be ready.
“One of the things we’re trying to do is enable the kinds of technology solutions that an independent pharmacy couldn’t access on its own, things that would be prohibitively expensive to develop. We think technology is no longer something that’s nice to have; it’s a must-have.”
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"When new patients walk in, the first thing they see is the front of the store, and if it doesn’t reflect a professional, health care-related atmosphere, a lot of people aren’t going to give you a chance behind the counter."— Chuck Wilson,
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With that kind of support, Health Mart pharmacies have a competitive edge. “Part of what we’ll look to do is continue to communicate that story and make sure that Health Mart — as it expands from 3,000 to 4,000 or 5,000 stores — grows in a way that maximizes the power of the franchise and all of its members,” says Tyler.
At McKesson’s recent ideaShare conference in Las Vegas a mock-up of Health Mart’s newest prototype store was on display. The format features a sleek, contemporary design centered on the prescription counter, logical merchandise adjacencies, clear signage and inventive use of technology.
“The front end is the most visible part of the store,” says Chuck Wilson, Heath Mart’s vice president of operations. “When new patients walk in, the first thing they see is the front of the store, and if it doesn’t reflect a professional, health care-related atmosphere, a lot of people aren’t going to give you a chance behind the counter. And as prescription drug margins continue to tighten up, you have to have another way to generate revenue.”
The assets that Health Mart has developed to support its franchisees are growing along with its drug store network.
During the past year the company has revamped the Health Mart Marketing Tool Kit, launched a consumer-facing online platform and deployed a comprehensive line of private label over-the-counter health care products, now numbering about 330 items.
The objective of all those initiatives and others like them is to give the independent pharmacy owners that are part of the chain capabilities that they couldn’t hope to replicate on their own and to benefit from the power of a strong national brand.
“One of the challenges that we have is to get our owners focused and committed to a consistent marketing program,” Wilson says. “If you make it too hard for people that’s not going to happen. So we made the marketing took kit easier to use and easier to find on our McKesson Connect portal. That has really helped our members sharpen their competitive edge.”
Health Mart’s current strategy is to help members get the word out locally. Marketing efforts are focused in the three-mile radius surrounding each store from which its customers are drawn.
“We’re continuing to look for innovative ways to help franchisees have a bigger impact,” notes Wilson. “One great example is the Physician Outreach Network. It gives our owners a way to look at the physicians in their market and know where the scripts are coming from and, perhaps more importantly, where they’re not coming from. With that information they can go out and have a meaningful conversation with those prescribers.”
The network is just one way that Health Mart is a difference-maker for its members. “Our goal is to provide them with a core set of tools and enable them to capitalize on the scale and brand recognition that we’ve built up over the past eight years,” says Wilson.
