Drug Store News: Familymeds bets on casino pharmacy

FARMINGTON, Conn. -- Familymeds, a wholly owned subsidiary of DrugMax, has opened a worksite-based pharmacy to serve the Mohegan Sun Casino's 10,000 associates and their families exclusively--a concept that will be an integral part of the retailer's long-term growth strategy.

The doors to the roughly 2,000-square-foot Eagleview Pharmacy opened Dec. 13, offering casino employees convenient access to a full-service pharmacy that sells prescription drugs and tailored front-end merchandise, such as compression hosiery (as associates spend many hours on their feet), eye and skin care products (to help alleviate discomforts associated with the smokey environment), cosmetics and convenience grocery items.

For some pharmacy retailers like Familymeds, such a concept certainly can open the door to greater business opportunities, but at the same time, it presents the pharmacy industry with yet another challenge: As more employers, looking to contain rising health care costs, establish such onsite facilities, it, in turn, would drive some business away from traditional retail pharmacy.

While staple grocery items like milk or frozen meals are new to Familymeds--whose livelihood rests in the specialty pharmaceutical, nutritional and medical supply arena--the concept, in general, is in line with its current business model. Most of its 80-plus pharmacies, which average 1,800 square feet in size, are located at or near medical buildings, hospitals or clinics to serve its patients conveniently.

To tailor its mix of prescription drugs, Familymeds collaborated with the casino's health insurer, Anthem Blue Cross/Blue Shield, to learn what prescription medications employees used.

"One thing we have learned in our current business model is how to serve defined populations," said Rees Pinney, senior vice president of worksite pharmacy for Familymeds. "We felt that experience serving defined populations translated easily into serving other defined populations, whatever that may be. In this case, it is employees of a specific employer."

Going forward, the company's goal is to operate as many closed-panel pharmacies--pharmacies that serve a single, defined population--as possible for employers who typically employ at least 2,000 associates at a single site. Potential ideal candidates include educational institutions, gaming facilities and manufacturing plants.

The industry likely could see more worksite pharmacies surface as employers seek new ways to contain rising pharmaceutical costs.

According to research by Mercer Human Resource Consulting that cited CHD Meridian Healthcare, a developer and manager of worksite corporate health programs, employers who offer worksite pharmacies can save up to 20 percent on their prescription coverage costs.

One such employer that has made a similar move is Toyota, which has started establishing company-run pharmacies in an effort to cut health care costs. According to published reports, Toyota hopes to cut retail pharmacy use to 25 percent, with roughly 40 percent of prescriptions filled through company-run pharmacies and the remainder filled through mail order services. CHD Meridian Healthcare provides Toyota's pharmacy service.