Drug Distribution: Nothing More Than a Commodity Business?


It appears that both Walgreens and the pharmacy profession suffered from Walgreens' decision to exit the Express Scripts network last year.

It looks like I was wrong. When Walgreens made the decision to terminate participation in the Express Script network, I said it would be good for both Walgreens and the profession. Based on a number of reports recently it looks like Walgreens lost money and a number of other pharmacies gained what Walgreens lost.

I thought the Walgreens decision would help to convey the idea to the marketplace that drug dispensing is not a commodity activity. Although it isn’t known what Walgreens gained when they came back into the Express Script network, maybe they benefited financially with the new contract they received. Now that Walgreens has settled with Express Scripts and are back in their network they will be working to try to win back lost customers.

Depending on what tactics Walgreens tries, such as financial incentives, loyalty programs, or coupons for switching prescription, I am afraid that any of these tactics will simply suggest that drug distribution is nothing more than a commodity business. Perhaps I am just not thinking like a businessperson and holding onto an unrealistic professional idealism, but it looks like both Walgreens and the profession lost by last year’s decision by Walgreens to exit from the Express Script network. What do you think?

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