There's 3 different online pharmacy business models, and I'll consider
the term synonomous with mail order pharmacy. The nature of pharmacy
is the best customers are older and not online friendly (a
generalization). Phone, fax and mail are equally important. All 3
models have completely different answers.
One is simply as an adjunct to existing pharmacies or existing
insurance plans. Examples would be Walgreens.com, drugstore.com (with
Rite-Aid I believe) etc. Also the trend is for prescription drug
insurance plans to be affilated with an in-house pharmacy or preferred
mail-order pharmacy. Their value proposition is a lower co-pay for the
patient. With the vast increase in the number of insured Americans I
presume the growth is quite rapid at the moment for Rx plan sponsorred
mail order pharmacies, but the results will be aggregated within
entities with larger non-mail order portions. This industry is
completely legal.
The second would be the online pharmacies that offer prescription
drugs without a prescription from a doctor the patient has personally
seen. This is accomplished by means of the patient submitting a
medical profile, which is then reviewed by a licensed physician who
writes a prescription for the patient. The primary market for these
pharmacies tends to be in "lifestyle" meds (erectile dysfunction,
weight loss) and controlled medications, (mostly narcotics). The
value proposition to patients is either convenience or access to meds
that they otherwise couldn't get a prescription for. While for the
most part legal, it is generaly considerred unethical in that
pharmacists and physicians are not providing proper care. Improper
ethics is appropriate grounds for regulators of pharmacies,
pharmacists, and physicians to withdraw licenses. These pharmacies
generally dispense FDA appoved medications from within the US. By
it's nature this industry strives to stay unreported and you won't be
able to find reliable industry size or growth statistics.
The third, is International pharmacies offering prescription drugs
from Canada and elsewhere. These pharmacies will typically have the
disclaimer "The FDA, due to the current state of their regulations,
has taken the position that virtually all shipments of prescription
drugs imported from a Canadian pharmacy by a U.S. consumer will
violate the law." on their website. This is a requirement of the
Squaretrade pharmacy seal which in turn is the requirement to do PPC
ads on Google and Yahoo. This statement revolves around the fact that
medications dispensed by these pharmacies have not been approved by
the FDA but rather Health Canada or whatever other country the
medicines are distributed from. The pharmacies in turn will have have
a disclaimer on their patient agreement similiar to "My prescription
is filled according to the laws of the jurisdiction in which the
dispensing pharmacy is located." US customs has until recently
allowed prescription drugs to enter the US unimpeded but recently has
started refusing 1-3% of packages. These packages will typically be
returned to where they were shipped from and the pharmacy will
typically reship the package free of charge. The press has reported
that this industry from Canada was flat at $1B in '05 from '04 after
growing 40% in '03. US customs has reported that about 50% of
international drugs destined for consumers originate from Canada.
This data should be considered quite unreliable. The Canadian
pharmacies have an incentive to hide their volumes as the drug
companies will typically have terms of sale disallowing the sale of
their product outside of Canada so any pharmacy of consequenece in
Canada will do their drug purchases via an intermediary, thereby
clouding the reporting. Also Canadian pharmacies have established or
formed partnerships with pharmacies in Europe and elsewhere to avoid
porduct sourcing problems. Canadian or international pharmacies will
typically require a prescription the patient, not offer controlled
medications, and typically not offer lifestyle medications. The
Medicare D insurance programs have hit the business of Canadian
pharmacies hard with reports of down 30% to 50% in 2006 not being
uncommon.
I hope that helps. I wouldn't get involved :) |
