Market Effects from COVID-19

Prescription volume dispensed by retail and mail service pharmacies has increased dramatically in March as a result of COVID-19 concerns.  It is common knowledge that the first week of the month is the busiest in retail pharmacy departments.  Medicare checks are received by seniors and updates are made to the Medicaid eligibility files, leading more patients to obtain their needed prescription medications.  This is what pharmacies experienced the week of March 1 to 7.  However, instead of the normal drop-off the week of March 8 to 14, we are aware of pharmacy dispensing volume being 5 to 10% greater than the first week in March.

In a Reuters report published in U.S. News & World Report on March 13th, it was noted that doctors, insurers, and the CDC were urging patients, especially those with chronic conditions, to get enough medicine to last a long period.  Insurers were recommending patients that typically receive only a 30-day supply of their medications talk to their pharmacist, and if needed, their doctor, about getting a 90-day supply. Some insurers were allowing early refills of prescriptions to accommodate their patients’ needs.  All of this created the spike in prescription volume seen in the second week of March.

The increase in prescription volume will lead to an increased demand for prescription drugs and PBM services.  The increased demand will likely create strains on resources, both product materials for manufacturers and services via PBMs.  We believe that this will also lead to an increase in adherence measures, as calculations may be artificially inflated due to early refills and 90 days supply prescriptions.

Will there be a drop in prescription demand when this pandemic is over?   We suspect that patients will increase the days’ supply that they keep on hand, leading to a “new normal” for consumers.

All of this has put more pressure on suppliers to keep more product on hand, for manufacturers to ramp up production, and for raw material suppliers to keep up with demand.  This will require close monitoring in upcoming weeks and months.  The most important thing our industry can do right now is to try to keep up with patient needs and ensure that those in greatest need have access to the supplies they require and medications they take.

In the end, there will be much to learn from this crisis.  Governments, manufacturers, health-care systems, and retailers (not just pharmacies), will all need to look back on the lessons learned to devise and implement processes and procedures to put in place, should we ever encounter something like COVID-19 again.  Furthermore, entities in each of these sectors should work together to develop best practices that are in harmony and will ultimately promote and provide the best patient care and outcomes possible.

Finally, best wishes to all of those on the frontline in healthcare– they are our heroes in this fight against this virus.  It is for their sake that steps are taken to ensure that the supplies and medications needed are always available.


Posted March 20, 2020

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