Pharmacies are increasingly using collected health data to target advertising to customers or identify needs and purchase patterns.
The world population is currently estimated to be approximately 7.3 billion people. At the same time, the number of active monthly users on the top 8 social media websites is more than 4.2 billion people.
Although this number does include users who have active accounts on multiple social media websites, Facebook alone has more than 1.55 billion active users. Therefore, it is not hard to imagine the vast number of users on social media and the vast amount of influence these sites have. Although not ubiquitous, many of its users share unnecessary and detailed personal information to strangers all over the web.
Simultaneously, passive data collection is occurring all the time online in nearly all developed countries. With the fast proliferation of the internet, the advent of miniature computers tucked away in everyone’s pockets, and new buzzwords like the “internet of things,” people are more connected than ever.
If you combine active with passive sharing of data, marketing and consumer companies have access to bucket loads of personal data. Collecting and deciphering data are considered to be a crucial part of the future success of many companies and industries.
With that in mind, it is not difficult to believe that corporations prioritize the collection and use of data through legal means. Due to the implausible nature of going off the grid, most consumers have come to terms with privacy-invading tactics such as consumer-directed marketing or phone GPS locations.
Therefore, can you blame pharmacy and the pharmaceutical industry for wanting a piece of the pie? Nevertheless, some consumers and privacy advocate persons have decried such practice.
What makes your health information so much more important, especially when it is scrubbed of all patient identifying information? Why is the average consumer accepting of that train set for your nephew, which you stuck in your Amazon basket a month ago, following you around the internet providing you with a gentle reminder to BUY ME?
Although some get squeamish over the thought of a pharmacy using your health data in the same manner. Whether data collectors are interested in which laundry detergent you use or how your blood glucose levels read over the last month, everyone needs your data to help drive profits.
It should come to no surprise that the name of the game for any for-profit corporation is the bottom line—and that includes pharmacy.
Pharmacies are doing what?
Certain large-scale retail pharmacies utilize several methods to collect and track personal health data. Depending on the level of customer involvement, these methods can provide retail pharmacies with information on medication treatment outcomes, lifestyle choices, health outcomes such as blood glucose levels, prescription drug combinations, etc.
This information can be extremely valuable to the collecting company or valuable to other companies within the health care industry. For many years, retailers have been using rewards programs to track consumer purchase preferences and, more recently, gain clues on customer behavior simply through online activity.
Drug stores are getting on board by offering unique discounts or reward points for logging health activity or participating in the programs. However, because it now involves health information, there are groups such as the Center for Democracy and Technology worried that drug store rewards programs are discriminatory and target low-income individuals who may need a discount at the expense of relinquishing personal data that they would otherwise keep private.
News flash: there is a very important and very costly piece of legislation called the Health Insurance Portability and Accountability Act (HIPAA). Under HIPAA, companies must de-identify all personal health information using 1 of 2 methods.
The first method allows an expert to de-identify data in a statistical manner. The second method, which is used by most companies, is called the Safe Harbor Method. This method, established by the Department of Health and Human Services, identifies 18 specific identifiers and removes them from the data.
Both methods result in data sets that cannot identify the patient to which it pertains. Collected health data are used to help determine disease state patterns or successful treatment outcomes.
It is also used by pharmacies to target advertising to customers or clue in on customer needs or purchase patterns. The same practice that other retailers have been doing for years.
As the internet expands into every facet of our lives, I know that much of my personal information is stored somewhere on the cloud. Therefore, I can take comfort in the fact that my health information is actively being protected, even if it is driving business profits.
Is there that much profit to be had?
Up until now, I have been referencing the retail pharmacy and the money that they can earn through the collection and use of health data from customers. However, I have also alluded to other companies within the health care industry who may also be interested in health care data.
Enter companies such as IQVIA and Wolters Kluwer, which are making pharmacies rich by buying your health data and then getting rich themselves off that same data.
How you ask? Data collection companies such as these buy a ton of bulk health data from retail pharmacies, electronic health records, insurance claims, and others, and then, in turn, sell it mainly to pharmaceutical companies.
Remember though, these health care data are de-identified—so is it really your information?
The health care industry is highly regulated and drug manufacturers cannot lobby for information from the consumers of their products. Pharmaceutical companies will pay a lot of money for these collected data.
These data can help drug manufacturers to market to certain customer groups or help guide strategic business decision making. However, the data collection does not just continue to line the pockets of big pharma at the expense of customer privacy.
Pharmaceutical companies will collect post-market drug information as required for government safety programs (ie, REMS programs) or to better extrapolate patient populations taking particular drugs. This can lead to further research and development for patient groups that may be underserved. Furthermore, insurance coverage and patient co-pay statistics can help a company decide to offer patient assistance for under-utilized drug products.
The role of specialty pharmacies
Retail pharmacies have for many years provided a gold mine of resources for drug companies. Nevertheless, the blockbuster retail drugs of yore are dwindling and specialty products are taking center stage. Specialty pharmacy providers (SPPs) are recognizing this opportunity and are well positioned to take advantage.
Specialty pharmacies provide more expensive drugs to patients that require a higher level of service and care. At the core of their business, SPPs characteristically collect large amounts of clinical data in comparison to their retail counterparts.
Therefore, to further meet the demand of the pharmaceutical companies, specialty pharmacies are investing much time and resources into delivering data sets that are clean and detailed to drug manufacturers. This practice not only serves drug companies, but also helps SPPs to better serve patients and clients.
Patient clinical data collection provides practicing pharmacists with a clearer picture of the patients they serve. As well, for integrated pharmacy and pharmacy benefit managers (PBMs) such as CVS Health, these data can be used to interact with potential PBM clients.
As the future pipeline for medications consists of many complicated specialty medications, data collection will remain a top priority for SPPs and drug manufacturers alike.
So, what do I get out of it?
In the earlier paragraphs, I talked about the rewards programs that retailers offer customers, often to disguise data collection practices. In these instances, it may seem that the only person truly benefiting from your data are the companies, while you live on the table scraps.
However, imagine a world in which your data was not used by these companies. Although health data does help to drive the profits of businesses, it also assists in answering questions that make everyone’s lives better.
Although I may no longer need that washed out jean jacket in my Amazon basket, maybe I actually do and forgot. And I may not need a camera filter on my phone to know I am visiting Disneyworld, it sure adds to the character of that selfie.
The collection of data streamlines the consumer process and also assists in aggregating important data facts to improve future outcomes. The convenience that most of us are used to is created by companies finding unique ways to tailor individual information.
I do not know about you, but I am ok with J. Crew shooting a 20% off coupon to my phone when I visit my local outlet mall.
About the Author
Alex Toman attended Duquesne University, earning his Doctor of Pharmacy degree in 2011. Alex worked as a retail Pharmacist until 2015, at which time he transitioned into a clinical Pharmacist role within the specialty pharmacy industry. He is currently enrolled in the Masters of Science in Pharmacy Business Administration (MSPBA) program at the University of Pittsburgh, a 12-month, executive-style graduate education program designed for working professionals striving to be tomorrow’s leaders in the business of medicines.