The evolution of the retail pharmacy franchise business over last 50 years and the future

As Medicine Shoppe International, Inc. (MSI) franchise system celebrates 50 years of serving independent pharmacy, it’s an exciting time to take a look back at how the pharmacy industry has evolved over the last five decades – and look forward to the changes and opportunities that community pharmacists will see in the decades to come.

Back in 1970, MSI established its franchise system expressly to provide operational expertise and support the growth of independent pharmacies. It is no surprise that the retail pharmacy industry itself looked much different, then, than it does today. Consider these contrasts.

• Competitive landscape: most Americans got their prescriptions filled at a local, independently owned, neighborhood pharmacy. While a handful of regional chains did exist, it wouldn’t be until the 1980s that regional and national chains started to exponentially expand.
• Technology: Computers in small businesses were limited and the Internet did not exist – there were few technology tools available to help small business owners improve efficiency or operations.
• Chronic disease and the rising cost of care: The cost of healthcare was not yet at the top of the nation’s economic concerns. The importance of medication adherence and the dangers of adverse, medication-related events were not as broadly understood as they are today. And, incidence of chronic diseases that pharmacist care can impact – like diabetes and hypertension – were not nearly as widespread.
• Marketing mix: Most local store promotional dollars were focused on the local newspaper, radio station or community events. Targeted online advertising, apps and social media didn’t exist.
• Gender: The vast majority (upwards of 90%) of practicing pharmacists – and pharmacy students – were men, while men comprise just under 40% of today’s practicing pharmacists.
• Expertise: Fifty years ago, independent retail pharmacy owners could rely on the pharmacological education they received in college for the majority of the knowledge they needed to be successful; now the business of running a successful pharmacy is much more complex.

Then and now, independent pharmacy owners choose this path because they have a deep commitment to providing their communities with accessible, high quality, personalized patient care. Independent pharmacy owners who have stayed true to that commitment – while seeking out support and guidance to evolve their businesses and adapt to changing industry trends – are the ones that have continued to thrive through decades of considerable change. The patient-centered pharmacy owners who continue to embrace these industry trends will likewise be poised to lead the industry into the next decade and beyond:

• Deliver patient services that improve health outcomes and drive down the costs of care: More patients are grappling with chronic diseases – like hypertension and diabetes – and the broader healthcare system is experiencing higher patient loads than ever before.
• Advocate for patient choice – and for pharmacists to be compensated for delivering valuable clinical services: Although competition with chain and mail order pharmacy has never been greater, when united, independent pharmacists have a very powerful voice in local, state and federal lawmaking.
• Embrace technology that reduces the complexity of running your business:  By taking the guesswork and stress out of inventory management, helping pharmacy owners more easily track down every dollar of reimbursement they’re owed, and making it easier for patients to refill their prescriptions, MSI provides franchisees with the technology they need to drive improvements to their businesses’ bottom lines, improve overall efficiency and free up time and resources so they can focus on patient care.
  
• Marketing mix: Technology can never replace the value of face-to-face interactions; it is a pathway for pharmacists to connect and build relationships with their patients online. Tools like Pharmacy Marketing Advantage help franchisees build connections with patients beyond the counter – and sets their pharmacies up for success in the connected landscape of healthcare.
• Recruit female pharmacists: In 1970, when MSI was founded, less than 10% of licensed pharmacists were female, and approximately 70% of all pharmacists worked at independent pharmacies¹. Today – nearly 62% of practicing pharmacists are female, but less than 25% of independent pharmacies are owned by women. The future of independent pharmacy will be dependent on actively recruiting women to consider the career path of pharmacy ownership.

The healthcare landscape is rapidly evolving and as an integral part of that landscape, the role of pharmacy must continue to transform. Since the founding of MSI in 1970, we believed that independent pharmacies are uniquely positioned to serve the healthcare needs of their local patients. We have supported franchisees in improving efficiency, adapting their marketing to reach more patients, and delivering a broader array of healthcare services so they can protect their bottom line, while providing better service to patients and staying ahead of the competition. As we celebrate our 50^th anniversary milestone, we look forward to championing the independent pharmacy of the future, and we believe in the power of our pharmacy franchisees to improve healthcare outcomes and access, as destinations for personalized patient care in their communities.

¹ https://www.nber.org/digest/feb13/w18410.html