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J.D. Power and Associates Reports: Flat-Rate Pricing for Generic Prescriptions May Lead to Higher Satisfaction Among Pharmacy Customers

Thursday, September 25, 2008 General News J E 4
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WESTLAKE VILLAGE, Calif., Sept. 25 Pharmacy customers whoparticipate in flat-rate generic prescription pricing programs haveconsiderably higher levels of satisfaction, compared with customers who don'tparticipate in these programs, according to the J.D. Power and Associates 2008National Pharmacy Study(SM) released today.

(Logo: http://www.newscom.com/cgi-bin/prnh/20050527/LAF028LOGO-a)

The study, now in its second year, measures customer satisfaction withpharmacies in two segments: brick-and-mortar and mail order. Covering retailchain stores, supermarkets and mass merchandisers, the study examines sevenkey factors that contribute to customer satisfaction for brick-and-mortarpharmacies: non-pharmacist staff; store convenience; medication availabilityand information; layout and design; cost competitiveness; remote orderingconvenience; and pharmacist. Five factors are measured for the mail ordersegment: ordering convenience; delivery convenience; medication availabilityand information; cost competitiveness; and customer service representative.

Satisfaction among brick-and-mortar pharmacy customers who participate inflat-rate prescription pricing programs averages 826 on a 1,000-point scale,compared with 817 among customers who don't participate in these programs.Nearly one-fourth of pharmacy customers participate in a "$4 generic" orsimilar flat-rate prescription pricing program, with the greatestparticipation rate among customers 44 years and older.

"Flat-rate generic prescription pricing programs are becoming increasinglypopular among pharmacies," said Jim Dougherty, executive director of thehealthcare practice at J.D. Power and Associates. "While low price alone isnot a guarantee of satisfaction, customers find these programs especiallyappealing because of the low prices, and pharmacies may be able to attract newand repeat customers with the simplicity of the programs."

The study finds that customers 65 years and older account for 26 percentof mail order prescriptions, compared with 18 percent of prescriptions filledat brick-and-mortar pharmacies. Among customers in this age group who usemail order pharmacies, satisfaction averages 861, compared with 835 amongcustomers 55 to 64 years old and 799 among customers 18 to 54 years old.

"Health insurance and Medicare Part D have driven more seniors to utilizemail order pharmacies to obtain medications for managing chronic conditions,and these mail order pharmacies can improve customer experiences by making theordering process quick and easy," said Dougherty. "The mail order industryalready has a large share of older customers, and that share should continueto grow as the baby boomer generation ages. As this industry changes andexpands, companies will need to respond appropriately to ensure customersremain satisfied."

The 2008 National Pharmacy Study is based on responses from15,163 consumers who filled a new prescription or refilled a prescriptionduring the three months prior to the survey period. The Web-based study wasfielded June through August 2008.

Included in the study but not ranked due to small sample size are: AuroraPharmacy, Discount Drug Mart, Fred's, Kerr Drug, Kinney Drugs, MedicapPharmacy, Sav-More, Snyders Drug, Thrifty White and USA Drug.

Included in the study but not ranked due to small sample size are Bashas'and QFC.

Included in the study but not ranked due to small sample size isDominick's.

Included in the study but not ranked due to small sample size are A&P andAcme.

Included in the study but not ranked due to small sample size are Aetna RxHome Delivery and Drugstore.com.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is aglobal marketing information services company operating in key businesssectors including market resea
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