Table of Contents
NEW YORK — In this issue Chain Drug Review continues to present some of the major findings from the Pharmacy Satisfaction Pulse Survey conducted by Boehringer Ingelheim Pharmaceuticals Inc., this time examining the most important improvement opportunity revealed by the study: prescription drug pricing.
The latest survey findings are based on 20-minute online interviews conducted during October and November 2011. The nationally representative sample included 34,424 adult pharmacy customers who had filled six or more prescriptions (including refills) during the previous 12 months. Data from 2011 and 2010 is used for comparison purposes.
Rx Pricing & Customer Satisfaction |
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Given the continued economic pressure on many, if not most, Americans, it is no surprise that prescription pricing rates highly in importance with pharmacy customers.
On a scale of one to five, the mean importance of prescription pricing was rated at 3.8 in 2010, edged down to 3.7 last year and has held steady at that level in 2012.
The impact of the recession’s crunch on prescription drug purchasers is very likely reflected in the satisfaction metrics captured by the survey.
From 2010 to 2011, for instance, the percentage of those who described themselves as “very satisfied” with their drug prices fell from 50% to 42%, while the percentage of those who described themselves as “very dissatisfied” rose to 5% from 2%. Results from the most recent iteration of the survey show that the number of “very satisfied” has edged back up to 44%, while the “very dissatisfied” figure has gone down to 4% — still double the 2010 rate.
However, the economy probably should not take all the blame. A February 2011 report by the General Accounting Office (GAO) found that between the first quarter of 2006 and the first quarter of 2010 the usual and customary retail price index for 100 commonly used prescription drugs rose 29.1%, or 6.6% on an annual basis. By contrast, the medical consumer price index (medical CPI) rose 3.8% per year during that span.
The GAO analysis reveals that branded drug prices were the driver of that increase, as the price index for generics actually declined 2.6% on an annual basis. The biggest drop in the generic price index, 6.9%, occurred between the first quarter of 2006 and that of 2007, suggesting a sizable impact from Walmart’s introduction of its $4 generic prescription drug pricing program in September 2006, a game-changing initiative that prompted competitive responses from many retail pharmacy operators in the following months and years.
Now, most major chain pharmacy operators offer some version of a discount generic drug program. CVS Caremark Corp., for example, offers a 90-day supply of more than 400 generics for $11.99 for an annual enrollment fee of $15, according to Consumer Reports, while Walgreen Co. offers more than 700 generics for as low as $5 for a 30-day supply or $10 for a 90-day supply, on payment of an annual enrollment fee of $20 per person or $35 per family.
Among the most interesting statistics in the survey findings are the figures for mail order/online pharmacies, which are often touted by the pharmacy benefits managers (PBMs) who own them as a less expensive prescription option for consumers.
Fewer respondents (37%) who rely primarily on these pharmacies were “very satisfied” with their pricing than the customers of any other channel, while more (7%) declared themselves “very dissatisfied” with the pricing available. Discounting in particular is a sore spot for mail order/online, with 22% of customers expressing dissatisfaction (10% “very dissatisfied and 12% “somewhat dissatisfied”) in both 2011 and 2012, while 20% expressed dissatisfaction with the availability of coupons or co-pay cards for specific medications.
Unfortunately, chain drug retailers can find little to cheer about in those numbers, because theirs are only slightly better. Only 38% of their customers describe themselves as “very satisfied” with overall prescription pricing, while 5% are “very dissatisfied” — more than any other channel except mail order/online.
Repeating a common pattern that emerges from the survey findings, chain drug fares worse than independent drug stores and also trails mass merchants, food retailers and clinics in terms of overall satisfaction with pricing.
However, the percentage of those chain drug customers satisfied with overall prescription pricing did increase to 71% from 68% in 2011. In addition, more customers were happy with drug chains’ discounting efforts, especially discount/rewards cards, in 2012. Those satisfied with the discounts available on their prescriptions rose to 55% from 52% in 2011, while customers who were satisfied with discount/rewards card perks (73%) and coupons/co-pay cards for specific medications (72%) increased by five and three percentage points, respectively, since 2011.
Independent drug stores and mass merchants’ pharmacies set the bar in overall prescription pricing, with satisfaction ratings of 81%. However, drug chains get much higher marks from customers for their discount/reward card programs. The percentage of satisfied respondents jumped five percentage points to 73% this year, well ahead of the 43% satisfied among independent pharmacy customers or the 50% among mass retail’s customers.
Prescription pricing still represents an area for improvement for chain drug, but the good news is that customers’ perceptions have improved since 2011. Moreover, the percentages of customers satisfied with their discounting initiatives are solid and competitive with their retail rivals.
