Week's news analysis

Mobilization of American drugstores
in the vaccination campaign

From our correspondent Washington: Luke Watson - 02 March 2021

Joe Biden has retained Donald Trump's idea: he relies in part on drugstore and supermarket chains to administer millions of covid-19 vaccinations to Americans. The United States is counting on the commitment of a good part of the 60,000 pharmacies in the country to inoculate millions of doses of vaccines in order to make the population sufficiently immunized so that a normal life can resume by the fall. Their efforts must complement those of hospitals, integrated private care centers and retirement homes. Not to mention the stadiums and gymnasiums that open here and there to vaccinate 24 hours a day, at the request of the governors.

Drugstore and supermarket pharmacies employ 155,000 pharmacists and process more than 3 billion prescriptions per year. They have already played an important complementary role in influenza vaccinations for years. About a third of these acts are thus performed in a supermarket or drugstore. Americans are used to posters on supermarket doors in the fall urging them to get vaccinated, cheaply, at the same time as they fill their cart with salad, chicken and ketchup.

It is true that American supermarkets, such as Kroger, Walmart, Publix or Safeway, generally have departments and counters dedicated to pharmacy, completely secure. They sell all common medications, including prescription ones. These pharmacies integrated into ordinary commerce employ thousands of qualified pharmacists and assistants in white coats who have specific training.

Their services are comparable to those of pharmacies integrated with drugstores like CVS and Walgreens. Surveys show that customers rate the services provided by pharmacists in supermarkets as superior compared to those of large drugstore chains.

In recent years, however, competition has intensified. Many supermarkets have abandoned pharmacies, in particular as a result of improved drugstore services. But also for security reasons: the risk of theft of stocks of drugs prized on the black market, such as opiates, can complicate the organization of a 24-hour supermarket.

The pandemic for a year has complicated everything. The growing reliance on courier delivery of monthly doses of drugs has risen sharply, amid fears of coronavirus contamination for millions of customers. For this type of service, drugstore chains, with their computerized systems for automatic customer recall and online orders, are better equipped. It is also in this niche that Amazon decided to launch a few weeks ago.

It remains that vaccination campaigns are a unique opportunity for drugstores, as for supermarkets, to rediscover their traditional stores to confined Americans. The customer who has an account at a supermarket pharmacy spends on average three times as much in the entire store as a regular customer.

CVS promises one million vaccinations per day

For Walgreens or CVS, capturing this clientele has become essential, because the number of visitors to their supermarkets has fallen significantly over the past year due to confinement. Drugstores have invested millions in downtown stores over the past few years to serve office customers. Since teleworking has emptied the buildings of business districts, the economic model of these large urban areas is no longer viable. The "clinics" developed by these chains within their traditional stores, which are supposed to offer new emergency medical services, cannot take off as long as the usual crowds of customers stay at home. In this context, vaccination once again becomes a "starter".

As of February 8, more than 42 million Americans have already been vaccinated at least once. More than 59 million doses of vaccine have been distributed. President Biden's goal of 100 million vaccinations in 100 days is on track to be reached. The preparatory work of his predecessor will have served him well.

Last fall, for example, the Trump administration signed partnership agreements with 40,000 pharmacies belonging to 19 drugstore and supermarket chains. CVS alone, which has nearly 10,000 stores, hired 10,000 pharmacists, pharmacy technicians and nurses last year. The channel claims to have trained 12,000 technicians in vaccination. She says she is ready to vaccinate a million people a day. Its rival Walgreens has the capacity to vaccinate 25 million people per day.

They have adapted their smartphone applications for making appointments. Private vaccination booths are provided in the spaces of the clinics of these chains. Some have "recycled" their clothing changing rooms or the spaces devoted to developing photos.

In rural areas and small towns where independent pharmacies are still well established, mobilization is also the watchword. Their commercial and financial interest is obvious. The federal retiree health insurance program, Medicare, pays pharmacists $ 16.94 for the first dose and $ 28.39 for the booster. If pharmacies manage to keep their influenza vaccination market share with Covid, that would translate to a gross margin for CVS of nearly $ 500 million and $ 445 million for Walgreens, according to house estimates. brokerage firm Jefferies Group.

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