The Aetna-CVS merger may be the impetus for an industry-wide revamp of retail healthcare, as the combined company positions walk-in clinics to play an integral role in cost management of the Aetna population. Stay tuned over the next few weeks as we explore the broader implications of retail clinics through various lenses.

Retail Clinics through the Pharma lens.

Among retail clinics’ impacts on key healthcare players, the effect on pharma is perhaps the most blurred. The majority of diagnoses in the retail health setting, after all, are for upper respiratory conditions easily treated with over-the-counter drugs. So why should pharma care? While retail clinic utilization is unlikely to heighten branded drug sales for one-time ailments, the shift toward easily accessible, low-cost care avenues could affect prescription drug sales (branded and generic) in the long-term. Here’s why:

Retail clinic utilization could drive drug adherence.

More integrated delivery networks are owning and operating retail clinics, including those inside Walgreens drug stores. By exerting control over the retail clinics’ staff, clinical protocols, and provider communication, health systems that operate their own clinics can also help ensure patient quality. Adventist Health System (Florida Hospital), Aurora Health Care, Providence St. Joseph Health, Swedish Health System, SSM Health, Vanderbilt Health, and Advocate Health Care—all IDNs that operate retail clinics—are heavily involved in value-based payment programs*, often risk-based, that incentivize improved patient outcomes through care coordination. Drug adherence plays an integral role in managing population health and driving down readmissions costs. With their high level of patient engagement and ease of access, IDN-branded retail clinics are uniquely positioned to work with pharma on outcomes-based contracting that incentivizes drug adherence.

Retail clinics’ involvement in the diagnosis and treatment of chronic disease could increase sales of high-priced drugs for which there are no generic equivalents. 

Retail clinics offer treatment and screenings for a variety of chronic diseases including high cholesterol, asthma, diabetes, high blood pressure, hepatitis C, and tuberculosis, among others. While surveys suggest a low percentage of retail clinic visits fall under the chronic care bucket, the Aetna-CVS merger is poised to change this. The drug store’s plans to prioritize treatment for five chronic conditions—diabetes, hypertension, cardiovascular disease, asthma, and behavioral health—likely will include pilot programs and expanded services at MinuteClinics, especially for Aetna members. Not only could these initiatives increase the number of new chronic disease patients receiving prescriptions, but patients who were already using branded drug regimens for their chronic illnesses may be less likely to abandon treatment if they can manage their disease hassle-free at the neighborhood CVS.

Retail clinics create an additional prescribing stream for conditions that have high uptake of copay assistance programs. 

According to the DRG Coupon Analysis Threat Assessor, about a quarter of patients with high blood cholesterol apply drug coupons, which increase patient assistance expenses for pharma if the patients’ health plans have enforced copay accumulator programs. These programs prevent the value of drug coupons from accumulating toward the patients’ deductible, thereby increasing the likelihood that pharma will max out their coupon copay assistance to the patient. Without accumulator programs, a patient that uses copay assistance can meet his or her drug deductible before the year’s end—prior to meeting the drug coupon manufacturer’s maximum allowable amount—and have the payer pick up the full cost of the drug. Close to one-fifth of patients with diabetes, another condition targeted by retail healthcare, utilize drug coupons. Because studies show that many retail clinic patient visits represent new utilization, rather than follow-up care, retail clinics may play a role in prescribing additional high-cost drugs that impact coupon utilization and may increase associated costs for pharma.

*Insights from Healthbase, a product that illuminates alignments between systems – down to the individual provider level – and ascertain the market control of IDNs across US regions and patient populations.

Continue reading: Go to Part II or Part III


Michelle La Vone Richardson is a Market Analyst at DRG whose work appears in Health Plan Analysis and Market Overviews. Follow her @mlavoneDRG on Twitter for #retailclinic and #convenientcare updates.

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