The Online Drug Wars

Anyone whose business or profession depends significantly on the Internet (and who doesn’t these days?) can’t help but feel that life is moving too fast.

Compared to other online drug companies, Walgreens‘ executives might feel more like they’re sliding backward or sinking into quicksand. Because they’re operating in fantasy land – not good for one of the nation’s premiere drug store chains with over 2,700 stores.

Prescription drugs get significant online e-commerce action these days. Companies like Drugstore.com, Planetrx.com, and Soma.com have shaken the bricks-and-mortar outfits to their very foundations. So much so that Rite-Aid, a chain of 2,400 stores, acquired more than 25 percent of Drugstore.com. And CVS, a chain of 4,000-plus stores, acquired all of Soma.com.

These actions, or reactions, are quite understandable. The prescription drug industry is a $100 billion business that’s growing rapidly. It dwarfs the markets for over-the-counter medications ($16 billion annually), beauty and personal care products ($36 billion), and vitamins and supplements ($11 billion).

What makes the prescription drug business even more desirable, though, is the fact that it’s an “annuity business.” Many of the medications prescribed today – such as blood pressure, cholesterol, and depression drugs – are ongoing, “refillable” prescriptions. The company that gets the first prescription has a good chance of providing subsequent refills, sometimes for years, because it’s more convenient for the consumer to re-order from the old place than start over at a new place.

As in so many emerging online industries, the name of the online prescription game is information. When your visit to the doctor’s office ends with the doctor handing you a prescription (four out of five doctor visits do), you will likely want to know more about the drug(s) you will ingest: What is it commonly prescribed for? What are its side effects? Not insignificantly, what will it cost?

And ideally, you’d like to be kept up to date about new research and treatments that affect your condition.

This kind of information isn’t easy to obtain from your bricks-and-mortar drugstore. You have to go to a store, wait in line, and speak to a pharmacist, who may or may not have all the information you need. And forget the ongoing updates. Yet this kind of information is perfect for Internet dissemination.

Go to Drugstore.com, Soma.com, or Planetrx.com, and you’ll find out all you ever wanted to know about most prescription drugs. You’ll learn the chemical underpinnings of Prozac, as well as possible side effects. You’ll also find that a 30-capsule, 10-milligram dose will cost $68.64 at Soma.com, $66.30 at Drugstore.com, and $64.37 at Planetrx.com. No surprises when you enter your order here (unlike conventional drugstores, where you can be hit with sticker-shock if you don’t inquire in advance).

You’ll also find some enticing promotions at the online stores. Drugstore.com offers $5 off your first prescription and up to $30 off on subsequent prescriptions. PlanetRx.com offers a coupon worth $25 off on a future purchase of nonprescription products with your first prescription order.

In the arena of providing ongoing information, the online stores seem to be just getting started. Both Drugstore.com and Soma.com provide visitors the opportunity to get specific drug and health questions answered online. But none of the online franchises is making a big push to promote ongoing communications like research updates or newsletters.

All of which brings us back to Walgreens, where the contrast to its online counterparts is embarrassingly stark. It’s not even possible at www.walgreens.com to enter a new prescription. The closest thing to a transaction option is the opportunity to refill an existing prescription, check on its status later, and pick it up at the Walgreens store of your choice.

You can obtain information about specific drugs – minus the all important price information. If you’re looking for signs of progress, you’ll find a promise that new prescriptions will be handled come this fall.

Oh yes, you’ll also have access at some time in the future to a health library from Mayo Clinic “on 100 major health topics.”

With its huge built-in customer base, you’d think Walgreens would be using its web site to aggressively collect the email addresses of all visitors so it can alert them when it finally upgrades its site. But there’s no sign of an email harvesting effort whatsoever.

Is Walgreens worried about its unimpressive online presence?

Absolutely not, according to a July news release announcing the Mayo Clinic content. President David Bernauer remarked: “Just as we prefer building our own stores versus acquisitions, we’re building our pharmacy Internet site organically, rather than simply acquiring or partnering with an existing one. This allows us to provide pharmacy patients with a more comprehensive online experience.”

Let’s see. It’s organic. And more comprehensive.

On which planet? In whose lifetime?

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