Five Surprising Facts About COVID-19 Prescription Trends for Retail and Mail Pharmacies

Somehow, we are nearly two-thirds of the way through 2020. It’s time to explore what’s been happening within the U.S. prescription market and its dispensing channels.

Below, I highlight five data-based observations about the prescription trends we’ve seen so far this year. Our findings span the unexpected resilience of retail pharmacies and a troubling drop in new prescription activity.

I also offer a fresh perspective on recent mail controversies and the abundance of nonsensical statistics in recent news stories. Links to sources appear at the bottom of this article.

While reviewing the data below, please recall our Drug Channels philosophy, courtesy of the late senator Daniel Patrick Moynihan: "Everyone is entitled to his own opinion, but not his own facts."

I ❤️ DATA

1. Prescription growth at retail and mail pharmacies has been comparable, suggesting that mail will likely gain little market share for 2020.

The chart below shows year-over-year growth in weekly prescriptions for mail and retail pharmacies. These figures are adjusted for prescription length (number of days supplied) by converting them to 30-day equivalent prescriptions. They must be adjusted because some prescriptions are dispensed in 90-day quantities.

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As you can see, total growth in prescriptions has been comparable for both mail and retail pharmacies. For the first 33 weeks of 2020, 30-day equivalent prescriptions dispensed form mail pharmacies grew by 2.6%, while equivalent prescriptions dispensed by retail pharmacies grew by 2.4%.

Mail pharmacy has experienced a long-term decline in the number of prescriptions dispensed. (See Section 2.3.6. of our 2020 pharmacy/PBM report .) The pandemic now seems likely to provide only a minimal boost. For 2019, equivalent mail prescriptions were 9.0% of total 30-day equivalent prescriptions. Based on the year-to-date data, we project that mail will gain less than one percentage point of market share for 2020.

2. The number of 90-day prescriptions has been increasing in community retail dispensing formats, but decreasing at mail pharmacies.

Retail pharmacy has kept pace with mail in part by dispensing longer prescriptions.

Before the pandemic, the share of 90-day prescriptions dispensed by a community retail pharmacy had been increasing, from less than 7% of retail prescriptions in 2010 to almost 20% in 2019. Factors behind this shift include: reimbursement and copayments that reduced the gap between mail and retail pharmacies; state legislation that prevented plan sponsors from favoring mail pharmacies; and narrow network models that increase 90-day-at-retail prescriptions. (See chapter 7 of our 2020 pharmacy/PBM report .)

The prevalence of 90-day prescriptions accelerated in 2020. The share of 90-day prescriptions dispensed at retail pharmacies grew, from 19.8% in the first week of January to 23.9% in the first week of June. This figure dropped to 22.9% by early August.

The shift occurred because we all rushed out to refill our prescriptions in March. PBMs waived quantity limits at retail pharmacies. The Centers for Medicare & Medicaid Services (CMS) also required Part D to suspend all quantity and days’ supply limits that were under 90 days, for all covered Part D drugs. The drop in new prescriptions (discussed below) also shifted the retail mix.

One other unexpected finding: IQVIA reports that the share of 90-day prescriptions filled at mail pharmacies has dropped during 2020, from 78.3% in the first week of January to 74.4% in the first week of August.

3. The number of prescriptions refills is close to pre-pandemic levels.

Typically, about 80% of all dispensing activity happens for refills of existing prescriptions. In early 2020, there were about 58.6 million of these continuing prescriptions filled every week. (This number is unadjusted for prescription length.)

This figure soared to almost 70 million during the March stockpiling period shown above. It has since fallen to slightly below the pre-pandemic baseline. The number of weekly refills has averaged slightly less than 58 million during July.

4. The number of new prescription starts has not recovered.

Before the pandemic, there were about 20 million new prescriptions every week in the U.S. This figure dropped to only 11 million new prescriptions during April. It has since rebounded to about 15 million new prescriptions per week, or about 25% below the pre-pandemic baseline.

It’s not hard to understand why. Fewer people have been visiting doctors, hospitals, and other healthcare providers. Telehealth has replaced office visits, but these virtual visits resulted in fewer new therapy initiations.

Consider IQVIA’s data for the number of new-to-brand prescriptions (NBRx) per patient visit by specialty:

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The NBRx gap between office visits and telehealth varies by specialty. Multiple factors are likely contributing to this difference, including: a visit mix skewing to existing patients; physicians’ reluctance to prescribe without a physical exam; and fewer diagnostic tests.

The number of new prescriptions should continue to recover as offices and hospitals resume in-person patient visits. But visits to physician offices remain 10% below pre-pandemic level. The reduced activity suggests that overall prescriptions may decline in 2020.

5. Mail pharmacy remains a small part of the total prescription market.

In March, the National Association of Letter Carriers (NALC) claimed that the U.S. Postal Service “handles 1.2 billion prescription drug shipments a year.” Over the past few weeks, this statistic has been quoted many times by political leaders and the media.

However, the 1.2 billion figure is wildly inflated and impossible to align with independent data. Consider the contrast with these two reputable sources:

• IQVIA reports that there were 206 million total unadjusted mail prescriptions in 2019. The IQVIA data exclude mail prescriptions from TRICARE, the healthcare program serving uniformed service members, retirees, and their families. But TRICARE dispenses only about 7 million unadjusted prescriptions. (Note that the figures in DCI’s published reports include estimated mail prescriptions and revenues from the TRICARE program.)

• The Kaiser Family Foundation reported that 173 million mail prescriptions were dispensed in 2018 to people covered by large employer plans and Medicare Part D.

What’s more, DCI estimates that about 40% to 45% of mail prescriptions are for specialty drugs. These products are typically sent via FedEx or UPS, not by traditional first-class mail.

As I told The New York Times last week, the number of patients relying on mail for their prescriptions is far from trivial. But the vast majority of patients get their prescriptions through retail pharmacies or by mail from carriers other than the USPS. And let’s not forget than 9 out of 10 Americans live within one mile of a community retail pharmacy location.

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I hope you've enjoyed this quick update on the U.S. prescription market. As always, an ounce of data is worth a pound of opinions.

SOURCES

This post is based on the following materials:

• Monitoring the Impact of COVID-19 on the Pharmaceutical Market, IQVIA, August 17, 2020

• The 2020 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers, Drug Channels Institute, March 2020

• Weekly prescription data for retail and mail pharmacies, which IQVIA graciously provided to Drug Channels

Note that IQVIA data are frequently revised and restated, so the figures in this article should be considered preliminary and are subject to change.