JANUARY 01, 2007
Eileen Koutnik-Fotopoulos, StaffWriter

REGISTERED PHARMACIST ANDY Palans, owner ofWharf Health Mart in O'Fallon, Mo, has seen many benefits from becoming a Health Mart pharmacist. He made the change when his pharmacy moved in March 2006."Our store has gone up in business about 20% since we moved, and I attribute a majority of that to switching to Health Mart, mainly because customers want to see the new and exciting look."

McKesson's Health Mart pharmacy franchise model is different from other franchises. It levels the playing field for independent pharmacy by providing its members with the resources and national strength they need to compete in today's growing competitive marketplace. McKesson recognizes that independent pharmacies are at a disadvantage when it comes to managed care.

"Independents are very successful when they compete at the local level. They can't control the pressures on the national level. This is where they're feeling pinched," said Stefan Linn,McKesson senior vice president of marketing. The franchise "gives them recognition within the industry. Independents are always struggling to be known. It [Health Mart] gives them a uniformed way to connect with the industry. It also carries more weight with public policy," added Linn.

Unlike a typical franchise, the Health Mart model does not require a sign-up fee, no long-term commitment, and has a 90-day opt-out clause, which can be used at any time without penalty. Franchisees pay a low monthly fee, which is not tied to revenue. Health Mart helps independents in 4 key ways: managed care and contracting, branding, in-store execution, and community.


Health Mart franchises benefit from automatic enrollment in Access Health, McKesson's managed care contracting entity, which conducts third-party contracting with pharmacy benefit managers on behalf of pharmacy members. As part of the Health Mart managed care network, franchises are part of a >3000-pharmacy network, have representation in >9000 plans with >60 pharmacy benefit managers, and can take advantage of contract review and advice.

"One of the main benefits I will see in the future is having Health Mart on third-party cards, therefore, letting people know that we do indeed accept their insurance," said Palans.


The franchisees benefit from increased customer recognition and store traffic through the branding component. The franchisees have access to a national branding and advertising campaign, a consumer Web site, advertising templates and resources for local marketing, and contemporary store signage and décor.

Wharf Health Mart underwent a facelift when it became part of the franchise network. "When we moved, we bought the whole trade show store of the future.The main thing I see with our improvements is the ease at which customers have in finding what they need," commented Palans. "When we moved, McKesson came in and did a whole redo in our store merchandise based on our store demographics. They sent back what was not selling and put on our shelves everything they thought we would need based on our demographics. Now, in most instances, we have what customers look for."


The in-store execution programs drive manufacturer recognition. All Health Mart pharmacies are automatically enrolled in McKesson's FrontEdge Merchandiser program. The program helps franchisees reinforce relationships with manufacturers through dedicated resources for front-end store execution, guaranteeing consistent merchandising for product introductions and special promotions.Trained merchandisers visit the pharmacy monthly to update the pharmacy's products and promotions, so store shelves are easier to shop and staff can focus more time on patients.


The community aspect provides an opportunity for franchisees to come together and share best practices, to partner more effectively with industry associations and policy makers, and to gain from continued education opportunities around timely business and clinical topics. Furthermore, the Health Mart community allows leading independents to speak with a collective voice, which leads to stronger partnerships with policy makers and industry associations.

As for Health Mart's future growth, Linn said, "I think it's going to grow in pockets and then expand throughout the United States." Currently, the total number of Health Mart pharmacies hovers near 500, with about 300 franchisees in progress to becoming Health Marts. McKesson anticipates 3000 Health Mart stores by the end of 2007.

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