The Online Drugstore Industry
By
Kyriakos Leonidou
Linda Moya
Jeff Pany
Juan Pulgarin
Major Players in
Online Drugstores
PlanetRx
Drug Store
http://www.planetrx.com
http://www.drugstore.com
AARP
Family Meds
http://www.rpspharmacy.com
http://www.familymeds.com
Advance Rx
Pharmacy Home
http://www.advancerx.com
http://www.homepharmacy.com/
Drug Emporium
CVS
https://www.drugemporium.com/
http://www.cvs.com
http://www.soma.com
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Two Sample Front Pages
• Community focus
• Targeted market
• Relaxed presentation
• Low price focus
• Mass market
• Product oriented
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Online Drugstore Basics
• For the most part online stores carry all the products
that customers would find at a brick and mortar
drugstore or pharmacy
• Most drugstores demand registration before any
purchase can be made
– Home Pharmacy does not, however it does not sell
prescription drugs
• Consumer can shop at any time and any where as long
as they have access to a web interface
• All online stores have virtual shopping carts, delivery
options and support the use of credit cards
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Two Sample Signup Pages
• Address required at
registration
• Address required at
check-out
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Two Sample Drugstore Displays
• Extensive use of
product images
• Minimal layout
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Online Drugstore Customers
• Who are the targeted customers?
– Most online drugstores target the general public
• e.g. Drugstore and DrugEmporium
– Some focus on a specific consumer profile
• e.g. The AARP Pharmacy Service focuses on elderly/retired
people
– Other online drugstores target customers with very
specific needs for specialized products
• e.g. Cyber Medical Group targets consumers of Viagra
• What is a general profile of the active market?
– Affluent, upscale, married women who purchase
primarily healthcare products
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Customer Acquisition Strategies
• How do they attract customers?
– Affiliate programs (DrugStore $5 - $20, PlanetRx $5 $15, CVS 15% of the sales of selected products (not
pharmaceuticals))
– Group affiliation (Rite-Aid, GNC and DrugStore)
– Physical presence (CVS, DrugEmporium)
– Maintain visibility on top search engines (all)
– Word of mouth (all)
– Direct mail (some)
– Promotions (e.g. $1000 giveaways (DrugEmporium))
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Online Appeal
• Drugstore related products delivered without
having to leave home
• 24-hour shopping
• Discrete shopping (avoid the “embarrassment”
factor associated with certain products)
• Higher product availability
• Greater convenience
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Customer Retention Strategies
• Customization/Personalization (e.g. PlanetRx)
• Maintain customer profile
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Shopping history (e.g. PlanetRx, AdvanceRx)
Medical history (e.g. DrugEmporium)
Shipping information (e.g. Family Meds, AARP)
Credit card information (e.g. DrugStore)
Order status (e.g. PlanetRx)
Prescription refills (e.g. CVS)
• “1-click” shopping (e.g. DrugStore)
• Reminders for purchases made on a regular basis
(e.g. DrugStore)
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Customer Retention Strategies
• Online medical consulting (e.g. DrugEmporium)
• Product recommendations based on diseases (e.g.
Family Meds)
• Community chat room for health topics with
periodic special guests (e.g. PlanetRx)
• E-mail subscription to health issue articles (e.g.
PlanetRx, AdvanceRx)
• Customer choice – recommends product
alternatives (e.g. DrugEmporium)
• Convincing privacy policy for personal
information (e.g. Home Pharmacy)
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Online Drugstore Issues
July 30, 1999 WASHINGTON - In a stunning
testimony this morning before the Oversight
and Investigations Subcommittee,
investigative TV journalists explained how a
7-year-old child, a man dead for 24 years,
and a neutered cat ordered drugs over the
internet.
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Online Drugstore Issues
• Ensuring a medical prescription submitted is valid!
• Impact of FDA proposed regulation policies
– Proposal to require that each Internet pharmacy provide consumers
with information about the web site's operator and evidence of
compliance with federal and state laws
• Ensuring confidential consumer health records
• Correct, timely prescription drug order fulfillment
• Crowded sector – shakeout likely to occur
– 400 and growing as of July, 1999
• Customers want to use their insurance to pay
• Encroaching on turf of PBMs
– “middlemen” between drugstores and health insurers
– PBMs handle mail-order prescriptions, view web as logical extension
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of what has been exclusively their domain
Online DrugStore Trends
• Partner for power
– Amazon.com investment in DrugStore, permanent tab
– Rite-Aid online presence solely through Drugstore
– PlanetRx – exclusive online drugstore for managed-care provider
CCN
• Partner with healthcare information sites
– Healtheon and CVS – advertising, services for each other
– CVS sole drugstore promoted on the WebMD site
• Partner with PBMs
– “middlemen” between drugstores and health insurers
– "The online pharmacies went ahead full steam and ran straight into a
wall," says Forrester Research analyst Evie Black Dykema. "That
wall's name was insurance."
– CVS and Medco (#1 PBM)
– PlanetRx and Express Scripts (#3 PBM)
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