Walgreens To Focus on 90-Day Rxs

I’m not sure I see this as new news since Walgreens has traditionally had more 90-day claims between retail and mail than anyone other than Medco (per data from a few years ago), but I think it’s a good supportive message for the general trend.  Walgreens has had 90-day networks for most of the past decade.  I remember them offering mail order pricing to us at Express Scripts years ago. 

“We think this is going to be one of the fastest-growing parts of the Walgreen’s pharmacy business for several years to come.”  comment by Colin Watts, Walgreen’s Chief Innovation Officer in article yesterday

The more interesting things to me in the article were:

1. It says that filling 90-day Rxs is more profitable.  You certainly save on supplies, but I don’t think that savings would outweigh the additional margin on foot traffic.  They didn’t talk about central fill which would certainly be one way of saving by filling 90-day offiste and delivering them to the store.  That leaves me with the assumption that they view the cost of the script using only the variable cost of the pharmacist’s time.  (A perspective I see from both sides – direct cost versus the pharmacist as a fixed asset until you reach a certain volume of drugs per store per day.)
2. It says that filling 90-day Rxs improves adherence which has certainly been the biggest push by the PBMs regarding mail order for the past 12-18 months.  No longer is the biggest advantage on saving money…it’s all about adherence.

The one interesting question I would have is what do they see as the theoretical maximum on 90-day utilization.  If they were close to 40% penetration a few years ago, do they believe they can get that to 45%, 50% … more?  Knowing that would create an interesting industry discussion about benchmarking and upside in this space for both 90-day retail and mail order. 

There’s a section about Walgreens90 in their 2010 Drug Trend Report (pg. 12) which talks about a 10% improvement in adherence and the savings they saw with 90-day prescriptions for diabetics.  This new press release certainly increases that improvement in adherence and also seems to apply broader. 

I think it’s the one time you can see all the industry focused on 90-day prescriptions.  The interesting thing will be how Medco and Express Scripts try to partner (or if they try to partner) with retail to offer a choice option like Maintenance Choice by CVS Caremark. 

The new Walgreen’s tagline is “Go 90″…”Get three refills in one, and for three months you’re done.”  Going back to their original press release, here’s a quote from Kermit Crawford (President of Pharmacy Services):

“The role of the pharmacist in the health care system has steadily evolved for some time, and it’s clear if people have questions or concerns about their medications, they want to be able to rely on the pharmacist they know, trust and are confident talking to about their health. We also know that an approximately 15 percent increase in adherence to medications occurs for consumers receiving a 90-day prescription versus those receiving a 30-day supply. So our Go 90 program can improve health outcomes and reduce overall costs to the health care system through better adherence while providing patients the choice they want.”