Posted: May 25th, 2022

Pharmaceutical Drug Costs 8 pages

Management

Pharmaceutical Drug Costs

In today’s competitive pharmaceutical drug market there are more and more factors that are influencing brick and mortar pharmacies in their endeavor to stay viable. One area in which pharmacies are competing hard is that of generic drugs. “Generic medicines account for 69% of all prescriptions dispensed in the United States, yet only 16% of all dollars spent on prescriptions. Generic pharmaceutical products are used to fill nearly 2.6 billion prescriptions every year” (Facts at a Glance, 2012). It is these drugs that pharmacies are using to lure people in the door in hopes that they buy other products besides their drugs.

Several of the nation’s largest retailers and pharmacies now offer discounted pricing on a large range of generic equivalents and brand name prescription drugs. Drug discount cards, retail drug discount programs, and other programs may offer substantial savings from retail prices (Retail Discount Drug Programs, 012). One of the last pharmacies to jump on this trend is that of CVS. Enrollment into the CVS/pharmacy Health Savings Pass is easy and costs only $15 annually, per person. Whether one has limited prescription insurance or no coverage at all, they can sign up today for the CVS/pharmacy Health Savings Pass and start saving right away. This is not an insurance plan, but a prescription savings pass that allows a person to save on the medications that they and their family need. Plus, they will receive 10% off MinuteClinic services that are located inside certain CVS/pharmacy stores. A Health Savings Pass allows customers to:

“Pay only $11.99 for a 90-day supply of over 400 generic prescriptions.

10% off at MinuteClinic on any regular priced health service or screening

Save 10% off on your annual flu shot

Save $10 on 50 count TRUEtest strips (limit 2 per month)

Save at any of our more than 7,000 CVS/pharmacy locations nationwide” (CVS/pharmacy Health Savings Pass, 2012).

The current issue that CVS is having is that they are not making any money on this program because they have to discount their generic drugs so deeply. Their hope is that just getting people in the store will create store loyalty and people will buy other products while they are also getting their prescriptions filled. The issue that needs to be addressed is twofold. First they need to work on getting as many people as possible signed up for their discount prescription program. And then they need to figure out how to get those people to come into their store so that they can buy things other than prescriptions. CVS needs a good marketing plan in order to make these things happen.

In order for a company to stay competitive they must know where they are currently, where they want to be in the future and have a plan on how to get there. Research and analysis are critical because they lead a company to identify their product’s target audience, as well as its strengths, weaknesses, threats and, most importantly, opportunities. Knowing the threats and opportunities that a product faces helps one more realistically set sales goals and objectives. Knowing ones opportunities, target audience, and sales goals will give them the information they need to set their marketing goals to take advantage of the opportunities and meet the sales goals. Knowing ones marketing objectives will give a company the information they need to set their positioning, pricing, distribution, and other marketing strategies. Having these strategies in place will give a company the road map to set up the tactical elements of their marketing plan, such as advertising, promotions, branding, and packaging. All of these things have to be tailored to a company’s market in order for them to be successful (Buttell, 2009).

The first thing that CVS needs to do is perform a situation analysis. A situational analysis, which examines the internal environment, the external environment, the current marketing mix and the continuing relevancy of current market targets (Gerson, 1998). A useful tool used in performing a situation analysis is what is known as the C’s of Marketing. The C’s of Marketing help companies center on key fundamentals that apply directly to marketing. Understanding these principles is vital in developing a successful marketing plan. The 5 C’s of Marketing can be summarized as:

Company – the product time line and experience in the market.

Collaborators – distributors, suppliers, and alliances. These are any companies that one works with on a day-to-day basis to help the company function.

Customers – this is the company’s market. It is important to understand the quantity a customer will purchase and even trends in consumer tastes so that a company can make sure that they have the products on hand that the customer wants.

Competitors — it is important to know both ones actual competitors as well as their potential competitors as well as those that directly or indirectly compete with them. It is vial to understand their products, positioning, market shares, strengths and weaknesses.

Climate – these are governmental policies and regulations that affect the market. It is also the economic environment around a company. This includes the business cycle, inflation rate, interest rates, and other macroeconomic issues. Society’s trends and fashions are found in the climate. The technological environment is creating new ways of satisfying needs like using technology to enhance the demand for existing products (Milne, 2011).

The next step that CVS needs to take is to do a PEST analysis. The PEST analysis is a useful tool for understanding market growth or decline, and as such the position, potential and direction for a business. A PEST analysis is a business measurement tool. PEST is an acronym for Political, Economic, Social and Technological factors, which are used to assess the market for a business or organizational unit. The PEST analysis headings are a framework for reviewing a situation, and can be used to review a strategy or position, direction of a company, a marketing proposition, or idea (Pest Market Analysis Tool, 2010).

The next step is for CVS to do a competitive analysis so that they can figure out where they stand in comparison to their competitors. The objective of the competitive analysis is to better position an organization to leverage their competitive edge. It is important for a company to know how their company differs from others, in what way does it stand out and is there a sustainable value that they can maintain and develop over time (Berry, 2012).

The competitive analysis process gives a company the opportunity to describe their major competitors in terms of the factors that most persuade revenues. This often includes a competitor’s:

size amount of market share comparative product quality expansion accessible capital and resources representation marketing strategy target markets and any characteristics considered important.

“Industry associations, industry publications, media coverage, information from the financial community, and their own marketing materials and websites may be good resources to identify these factors and rate the performance of each competitor. Access to competitive information will vary. Competitors that are publicly traded may have a significant amount of information available. Competitive information may be limited in situations where a competitor is privately held. If possible, one may want to take on the task of playing the role of a potential customer and gain information from that perspective” (Berry, 2012).

The last thing that CVS needs to do is evaluate their product offering. Company’s that are successful don’t market products, they market offerings. An offering includes the benefits or satisfaction that is provided to the target markets, both tangible and intangible. In order to successfully market a product, a company must first understand its benefits from the buyer’s point-of-view. This approach allows a company to see past the tangible product itself and consider what the consumer is actually buying and their reasoning behind buying it. Offerings should comprise a tangible product or service, plus any related services that go along with it. It should also include any intangible benefits that are present. Centering on the offering, rather than on the actual product or service itself, can be important for analyzing consumers’ options, in order to better recognize unmet needs and wants of the target markets, and to improve development of new products or services. “In a bigger sense, an organization’s offerings are a part of who they are as a business. The marketing plan should address what types of customers a company wants, what the consumers need, and how their offerings will meet those needs. It should also describe how the offering is communicated and what value it holds for the customer” (Berry, 2012).

Most companies sell more than one product. A multi-product advance frequently adds worth, leverages economies of scale and expertise, and augments the potential for revenue generation. Most retail stores offer several hundred products in order to meet the span of needs of their customers. The mutual offerings of a company are known as their offering mix. This offering mix can be categorized according to the breadth, extent, intensity, and steadiness of the products. These four dimensions are the tools for developing the company’s marketing strategy and deciding which product line to cultivate, preserve, yield, or get rid of. Strong products should be grown or maintained. Weak or unprofitable lines should be sold or discontinued as soon as possible. “Four basic factors are critical in the decision to manage individual product lines.

Consumer demand

Cost to produce

Gross margin

Total sales volume” (Berry, 2012).

Going through the process of developing a marketing plan will help CVS to figure out how they are going to draw people into their stores and sell them things beyond discounted generic drugs. A provides the market with a source of discounted drugs among other products. This market need is important today as many Americans are faced with the dilemma of using their limited income on food or meds. A pharmacy should seek to fulfill the following benefits that are important to their customers.

Selection: The pharmacy needs to offer a wide range of medication, both originals as well as generic alternatives.

Accessibility: Products should be distributed through their conveniently-located store front

Customer service: The pharmacy should recognize the value of having outstanding customer service. By exceeding all of the customer’s expectations, they are ensuring repeat customers and many referrals.

Pricing: The pharmacy’s prices have to be noticeably better than other local pharmacies (Pharmacy Marketing Plan, 2012).

CVS also needs to conduct some marketing research in order to ensure their success in the market. One method that they can use would be to conduct several focus groups in order to gain insight into the targeted customer’s mind and the processes of their decision making. These focus groups help to provide the pharmacy with a wealth of information. In addition they could hand out surveys to current customers. Having a carefully designed survey is paramount to ensuring that the data collected is accurate and applicable. The surveys can help provide insight into the barriers that people face when buying products from a pharmacy as compared to other retail shops. The last source of marketing research that CVS can do is an in-depth analysis of the pharmacy industry, focusing on consumer decision models within the industry. Cumulatively, all of this market research will help the store to lay out a plan on how to move forward in the market (Pharmacy Marketing Plan, 2012).

The keys to CVS’s success include: repeat customers, low overhead and operating costs and superior prices and service. In the drug store business the prescription department is the profit core and center of the business. The prescription department ranks as one of the most profitable sections in the pharmacy and has a significant influence on other department sales. The pharmacist should, therefore, concentrate on making this department the central

Focus of the drug store. Other merchandise may be carried based upon clients’ needs and what the drug store’s competition is offering (Drug Stores Business and Industry Profile, 2004).

A broad line of merchandise may be carried to appeal to a wide range of shoppers. “Some of the items generally carried by a drug store include: cosmetics/fragrances, cigarettes and cigars, small art and crafts items, hair care/skin care products, magazines/books, film/film developing, vitamins, greeting cards, batteries, disposable diapers, blank videotapes, oral hygiene products, contact lens solutions, diet aids, pet food, and candy. Some drug stores have added a cooler with beverages and snack foods” (Drug Stores Business and Industry Profile, 2004).

In order to be successful, the management of a drug store must know its competition, have a vision as to the markets that it can cultivate, promote a helpful atmosphere for both clients and employees, and strive for profitable accounts and customers. Management of a drug store should be able to gauge the approximate saturation point in a given market area. Markets should be developed where growth potential exists and where the firm has a price or some other advantage. Effective labor, supplies, and operating cost controls should be followed by the owners and employees. By combining reliable professional service and Responsive product offerings to meet customer health care needs, independent drug stores can expect to maintain a position of profitability. Those drug stores that can be flexible to meet changing customer attitudes will continue to fill a vital need within their community (Drug Stores Business and Industry Profile, 2004).

Potential customers must be attracted to the store and then enticed to buy the offered merchandise. Promotion in the drug store business is very important. The store front should be neat and appealing, while the inside should be clean, white, and “hospital-like” in appearance. Signs may indicate specials for the week. Generally, the prescription department should be elevated and in the rear of side of the store so customers pass other merchandise to get to the counter. The firm’s operating objective should be to develop a good reputation in the industry for quality pharmaceuticals and goods at a fair price (Drug Stores Business and Industry Profile, 2004).

CVS knows that they are never going to make any money on selling generic drugs. In order to offer their discount drug program they are having to sell generic drugs at such a deep discount that they are anything but profitable. In order to combat this they have to figure out a way to get more people in the door in hopes that hey not only buy other prescription medications there but also buy other products as well. It is on these other products that the store will be able to make money and be profitable. Having a good marketing plan in place will help CVS to do just that.

Works Cited

Berry, T. 2012. “Add competitive analysis to your marketing plan.” Web. 2 April 2012.

Available from: http://articles.mplans.com/include-competitive-analysis-in-your-plan/

Berry, T. 2012. “Product marketing.” Web. 2 April 2012. Available at:

http://articles.mplans.com/product-marketing/

Buttell, Amy E. “4 Steps to an Effective Marketing Plan.” Journal of Financial Planning

(2009): 6-8. Business Source Premier. Web. 2 Apr. 2012.

“CVS/pharmacy Health Savings Pass.” 2012. Web. 1 April 2012. Available from:

http://www.cvs.com/CVSApp/promoContent/promoLandingTemplate.jsp?promoLan

dingId=1046#0

“Drug Stores Business and Industry Profile.” 2004. Web. 2 April 2012. Available at:

http://www.sbaer.uca.edu/profiles/industry_profiles/14.pdf

“Facts at a Glance.” 2012. Web. 1 April 2012. Available from:

http://www.gphaonline.org/about-gpha/about-generics/facts

Gerson, Vicki. “Arming Yourself With a Marketing Plan.” Bank Marketing 30.9 (1998): 38-

40. OmniFile Full Text Select (H.W. Wilson). Web. 2 Apr. 2012.

Milne, G. 2011. “Writing the Situational Analysis for Your Marketing Plan.” Web. 2 April

2012. Available at: http://www.marketing-plan-success.com/articles/situation-analysis.php

“Pest Market Analysis Tool.” 2010. Web. 2 April 2012. Available at:

http://www.businessballs.com/pestanalysisfreetemplate.htm

Pharmacy Marketing Plan.” 2012. Web. 2 April 2012. Available at:

http://www.mplans.com/pharmacy_marketing_plan/executive_summary_fc.php “Retail Discount Drug Programs.” 2012. Web. 1 April 2012. Available from:

http://www.michigandrugprices.com/Discount

---

Get Professional Assignment Help Cheaply

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

• Plagiarism free papers
• Timely delivery
• Any deadline
• Skilled, Experienced Native English Writers
• Subject-relevant academic writer
• Adherence to paper instructions
• Ability to tackle bulk assignments
• Reasonable prices
• 24/7 Customer Support
• Get superb grades consistently

 

Online Academic Help With Different Subjects

Literature

Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.

Finance

Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!

Psychology

While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.

Engineering

Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.

Nursing

In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.

Sociology

Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.

Business

We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!

Statistics

We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.

Law

Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

• When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
• We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

• The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
• We will have a different writer write the paper from scratch.
• Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment  Help Service Works

1.      Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2.      Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3.      Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4.      Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

---