Opinion: Mail-order pharmacy market to grow significantly

The Internet has enabled consumers to gain an advantage when choosing goods and services.  One of those areas of high interest is the ability to obtain prescriptions by mail, ordering either by the phone or through the Internet.

Prescription sales through mail-order have endured several starts and setbacks over the past few decades because the timing of the distribution has not matched well with the desirable target audience.

Here’s how the market has evolved, and what to expect in the next five to ten years.

Mail-order market misalignment

The practice and utilization of Internet/online pharmacies began in the late 1990s. Drugstore.com was one of the first safe and fully operational mail-order pharmacy with Verified Internet Pharmacy Practice Site (VIPPS) certification and began to shape the industry.

In some marketing situations, it is an advantage to be first-to-market, but consider the seven “P’s” of marketing in regards to the Internet/mail-order pharmacy business (specifically, Drugstore.com and the first wave of Internet pharmacies).

• Product. This is a prescription drug service utilizing an Internet-based platform to fill prescriptions and will be delivered through the mail.

• Price. Internet/mail-order pharmacies offer competitive pricing with brick-and-mortar pharmacies.

• Place. No brick and mortar available for patient walk-in.

• Promotion. Advertising done through traditional media (TV, newspaper, radio), insurance company co-promotion, and direct mailing.

• People. Patients looking to fill prescriptions without going to the local pharmacy.

• Process. Prescription drugs called into the pharmacy or faxed, paid by credit card or check, then shipped through the mail.

• Physical evidence. Brand new concept for the pharmacy market, evidence in works.

It’s also important to consider the market surrounding Drugstore.com’s launch: According to the Pew Internet & American Life Project Survey, only 46% of Americans (ages 18 and older) had adopted Internet use in early 2000. Of that population, 57% were ages 30 to 49, 41% were ages 50 to 64, and only 12% were ages 65 and older.

Furthermore, in 2001 only 21% of the American population made an online purchase, subsequently receiving a product through the mail.

Within the population of U.S. patients who used prescription drugs in 1998, patients ages 35 to 49 filled an average of six prescriptions a year, while patients ages 50 to 64 filled an average of 13 prescriptions and patients ages 65 and older filled and average of 21 prescriptions per year, according to the Georgetown University Health Policy Institute report released in 2002.

Despite the fact that Drugstore.com established a good reputation, it’s clear that the evolution of the market was not ready or willing to adopt the use of an online/mail-order pharmacy.

Patients ages 35 to 50 (who would have been more likely to use the Internet at that time, and therefore would have been more likely to use an online pharmacy) would have also likely had fewer physical, financial or technological limitations that would have inhibited them from going to a local pharmacy (therefore reducing the likelihood they would use an online pharmacy).

On the other hand, patients ages 51 and older who would likely have had more physical and financial limitations that would deter them from going to the pharmacy (and therefore increase uptick in online/retail pharmacy use), were also less willing to adopt the use of the Internet to purchase any product.

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