Although the on-line demand for prescription drugs is growing rapidly, e-Pharmacy leaders are still struggling with underdeveloped infrastructures. One reason is that although many insurers have relatively open retail pharmacy networks, most limit patients to a single mail-service provider to concentrate bulk-buying discounts. Additionally, delivery delays, often increased by time required to verify first-time and renewal scripts, encourage many patients to fill prescriptions with their off-line pharmacies instead of buying them on-line. Finally, a fragmented regulatory system continues to cost on-line pharmacies resources for complying with divergent state regulations.
Forrester believes that on-line pharmacies will rise to the challenge of selling prescription drugs on-line, ringing up $15 billion in sales in 2004, according to Elizabeth W. Boehm, analyst at Forrester. "To meet growing demand and capture market share, e-Pharmacies will build a very solid and strong foundation to deliver products and leverage compliance services which boost revenues."
In an effort to build such a strong foundation, e-Pharmacies will strengthen relationships which support on-line prescription sales. During the next 12 months, on-line pharmacies will forge stronger ties with insurance partners by integrating with insurer systems to provide the same real time co-pay information which off-line stores provide. e-Pharmacies with brick-and-mortar parents will go beyond order-entry systems and unify customers' experiences across channels. On-line pharmacies will equally help drive electronic prescription adoption by creating a standard interface, as well as lobbying for standards across state regulations.
With a secure on-line retail foundation in place, on-line pharmacies will focus on compliance programmes which expand the industry. Nearly half of all patients fail to take their medication as prescribed by their doctors, and unfilled scripts cost pharmacies about $25 billion annually in lost sales. Forrester Research projects that e-Pharmacy-based interactive compliance programmes will add $1.3 billion in incremental drug sales by 2004. In addition to boosting sales, driving compliance will improve patient care and enhance communication with physicians.
To capitalise on the opportunity which compliance programmes offer, on-line pharmacies must take advantage of the Internet's interactivity to strengthen ties with customers. e-Pharmacies will connect with patients by encouraging them to take their medication and sending e-mail reminders to refill their prescriptions. On-line pharmacies must equally offer patients interactive treatment tools and site-sponsored support groups which complement drug therapies.
The Internet will introduce a level of co-ordination between pharmacies that does not exist off-line. e-Pharmacies will specialise to maximise penetration by defining their audiences according to their insurance plan, locality, or condition and hone their services in order to address the specific needs of a community. In an effort to maximise reach, insurer sites will rely on brick-and-mortar interface sites to serve customers who prefer in-store pickup, while brick-and-mortar competitors with a complementary geographic reach will form on-line alliances which create national brick-and-mortar networks.
For the Report The e-Pharmacy Opportunity, Forrester surveyed 3000 on-line consumers to explore their attitudes toward purchasing prescriptions and other health products on-line. Making up 5 percent of on-line users, on-line prescription purchasers outnumber those who have bought flowers on-line (4 percent). With 100 percent growth expected over the next six months, these users are catching up to those who have bought more popular items like videos (9 percent) and music (14 percent) on-line.
Forrester Research forms the leading independent Internet research firm, analysing technology change and its impact on business, consumers, and society. Forrester's "Whole View" of the Internet economy enables clients to weave together Internet commerce initiatives with e-Business technology to satisfy customers' changing needs. Clients receive continuous research and analysis through Forrester e-Research Reports, an array of advisory services, bit products, and topical events. Established in 1983, Forrester is headquartered in Massachusetts. Forrester's European Research Centre is located in Amsterdam, The Netherlands, and its United Kingdom Research Centre is located in London.