Study: Net Pharmacies Missing Mark

According to a survey released Friday by market research firm InsightExpress, online pharmacies are a “prescription for failure.”

The survey found that 93 percent of online consumers surveyed had never made a purchase from an online drugstore and that 76 percent had never visited an online drugstore site.

“The online drugstore business model makes sense in theory but not in practice,” said Charles Hamlin, president of Greenwich, Connecticut-based InsightExpress. “There’s an extraordinary difference between buying a CD online and discussing side-effects and proper dosages.”

Virtual Barriers

Respondents to the InsightExpress survey cited a variety of factors — most of them unique to pharmaceutical purchases — for not purchasing prescription medicines online.

Sixty percent of respondents to the survey said they do not purchase pharmaceuticals online because they are more comfortable with their local pharmacists. Other reasons cited include concerns about online privacy issues, 23 percent; and the fact that online drug purchases are more expensive, 4 percent.

Although only 8 percent of the respondents to the InsightExpress survey said that they do not order online because their insurance is not accepted, an earlier report by Forrester Research found that one major barrier to online pharmacies is insurance company policies that allow patients to use most offline pharmacies but limit them to a single mail service provider for bulk buying discounts.

Another survey of the purchasing habits of seniors aged 55 and older by Greenfield Online found that although 33 percent of the seniors that have visited an online drugstore or pharmacy have made a purchase, only 21 percent of the seniors who made purchases said they were likely to be repeat customers because of complications with insurance.

The Future of Dot-Pharmacies

The InsightExpress survey paints a grim future for online pharmacies. Fifty-seven percent of respondents said they probably will not purchase prescription drugs online in the future and 31 percent are undecided. Only 12 percent of respondents said they will likely purchase prescriptions online in the future.

Nevertheless, some signs of hope for the online pharmacy industry remain. The Forrester Research report predicts that online prescription drug sales will reach $15 billion (US$) in 2004.

Forrester also found that online pharmacies could improve their sales by developing interactive compliance programs that will send customers e-mail reminders when it is time to fill prescriptions and encourage patients to take their medications. These programs could add $1.3 billion in incremental health sales by 2004.

According to Forrester, the future will see e-pharmacies partnering with their brick-and-mortar counterparts to offer the option of ordering a prescription online and then picking it up at a local pharmacy. Traditional pharmacies without an online presence of their own will form Net alliances with real-world competitors in complementary geographic regions to create national brick-and-mortar networks.