Dramatic competitive actions by both of the two largest U.S. pharmacy retailers in the same month could be a good sign for the market for in vitro diagnostics, according to market research firm Kalorama Information. This month, the Department of Justice (DOJ) approved the $69 billion proposed merger between health insurer Aetna and CVS Health. But CVS's largest competitor Walgreens Boots Alliance also made news this month, with announced plans to open 600 testing centers in its stores, working with testing giant Lab Corp. Kalorama Information has covered direct to consumer testing and retail clinics in previous reports.
"Both these developments have implications for IVD marketers," said Bruce Carlson, Publisher of Kalorama Information. "The Aetna-CVS merger reinforces the strategy of using retail clinics and the status of CVS as a provider, and testing is a component of that. With Walgreens, they are now creating new venues for the sale of clinical tests in their stores."
Kalorama has covered retail clinics for over a decade from when the trend involved just a few hundred stores. Recently, Kalorama surveyed 2,000 U.S. adults through a web-based survey to gauge customer satisfaction with retail clinics. Kalorama said satisfaction remained high in these clinics. According to Kalorama's 2017 survey, CVS was the most common store where a retail clinic was located. 93% of retail clinic users are satisfied, 46% of them very satisfied, according to the survey.
"The message is clear that retail healthcare is not going away," Carlson said. "Retailers and to some degree consumers have already expressed their confidence. Marketers of IVD products and clinical test services have to consider the new venues and make them part of business plans. Consumers like it and for the pharmacies, there's a benefit of indirect revenue from sales made by clinic customers."
CVS's move into healthcare insurance, combined with strong consumer dissatisfaction with current healthcare options, comes amid similar moves into the healthcare space by other players, some until recently perceived as outsiders such as Amazon, Berkshire Hathaway and JPMorgan. Such new players are likely to bring a fresh approach to healthcare, translating practices that have proven successful in other industries.
"A key takeaway from our decade of reporting on retail healthcare is that we believe retail clinics create new healthcare visits," Carlson said. "These new outlets aren't merely moving revenue around from say the ER to the clinic, or the doctor's office to the clinic. New visits are a positive sign for sales of tests. If that's happening with retail clinics already, it's easy to see the new Walgreens-LabCorp stations creating new healthcare usage as well."
According to Walgreens, The company and LabCorp announced their mutual commitment to a significant expansion of their LabCorp at Walgreens collaboration. The two companies have agreed to open at least 600 LabCorp patient service centers at Walgreens stores across the U.S. over the next four years, inclusive of the 17 locations that have opened since they first announced their consumer-focused initiative in June 2017. LabCorp at Walgreens locations are currently open in Florida, Colorado, North Carolina and Deerfield, Illinois, serving as an important part of LabCorp's network of nearly 2,000 patient service centers across the U.S. Consumers and healthcare providers continue to have a positive response to the existing locations, which offer specimen collection services for LabCorp testing in a secure, comfortable environment. The sites are located near the pharmacy area.
Kalorama thinks that both moves could affect sales of cholesterol and glucose, also HIV, TB, influenza and any routine testing panels. Other tests like UA, CBC, strep swab, mono tests should be affected positively, according to the firm.
Kalorama has a number of market research studies in relevant areas.
Kalorama Information's report, Retail Clinics: Customer Survey 2018, was designed to mirror U.S. regional, income, age and education demographics. The report can be found at https://www.kaloramainformation.com/updates/Retail-Clinics. Kalorama completely covers the market for IVD in its report, The Worldwide Market for In Vitro Diagnostics, 11th Edition.
About Kalorama Information
Kalorama Information, a division of MarketResearch.com, supplies the latest in independent medical market research in diagnostics, biotech, pharmaceuticals, medical devices and healthcare; as well as a full range of custom research services. Reports can be purchased through Kalorama's website and are also available on www.marketresearch.com and www.profound.com.
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