OD'ing on Convenience
They're aggressively taking over the major street corners, wreaking havoc in neighborhoods across America. They push Xanax, Claritin, Prilosec, syringes, beer, cameras, lipstick, milk and printers for faceless shareholders. They create traffic, drive out small, local competitors and they've been known to destroy historic buildings and set up shop in concrete boxes.
And you've probably given your money to at least one of them.
That may be because it's more convenient to get your Viagra at their drive-through windows, or because they are the only pharmacy that recognizes your health insurance. Or maybe you just couldn't resist their advertised special on Big Mouth Billy Bass.
They are drugstore chains. Fueled by a growing society of pill poppers and consumers too hurried to wait in a grocery store line to buy paper towels, they are growing like weeds, abandoning strip malls, taking over prominent street corners and changing the landscape of America with uniform stucco boxes.
Just drive to any major intersection and don't be surprised to be surrounded by the stores with signs promising one-hour photo service and bargains on cosmetics. Often the bland structures even face across the street from one another as if poised for some kind of bizarre drug store death match.
So, far Walgreens reigns as the leader in drug store sales. The chain's size has doubled in the past decade. Now with just more than 3,000 stores nationwide, it plans to have 6,000 by 2010. "Today about 50 percent of the population lives within five miles of a Walgreens. Someday we'd like to see 80 percent within one mile," Dave Bernauer, Walgreens chief executive officer told shareholders this spring.
CVS, with 4,082 stores, is the nation's largest chain in number of stores. It plans to open 400 to 450 stores this year. Eckerd plans to open 150 stores, with most being relocations from strip malls to stand-alone buildings.
The drugstore industry says the chains are just growing and moving to meet consumer's demand. "Drugstores are just adapting to what the customer wants," said Dan Kidder, spokesman for the National Association of Chain Drug Stores.
The nonstop traffic in the parking lot outside an Eckerd store in St. Petersburg, Fla. corroborates his argument. A parking spot along the sidewalk is a score. Young mothers with toddlers in tow, grandfathers with walking canes and women thumbing through developed photos as they head back to their cars make up the drugstore scene that lasts from morning until night.
But in their haste to fill America's ravenous appetite for medicinal cures and convenience, drugstore chains, the suppliers of health, have assisted in the death of urban architectural aesthetics. Last year drugstore chains topped the National Trust for Historic Preservation's list of 11 top dangers to historic preservation.
"In communities from coast to coast, shoppers are coming back to Main Street -- and national drugstore chains are following them," National Trust President Richard Moe said in a statement when last year's list was unveiled. "As part of their massive expansion efforts, chains have targeted the most prominent intersection in town -- the spot some executives have called �the corner of Main and Main' -- as the prime location for new stores."
Communities across the nation have fought to stop major drugstore chains from destroying historic buildings or encroaching on their neighborhood. In New York State alone, 30 communities are fighting chain drugstore developments.
But it doesn't seem to be hurting drugstore profits. Walgreens had a 21.5 percent profit this fiscal year through May 30; it was due in large part to a 25 percent increase in prescription drug sales. CVS had third quarter net earnings of $377 million, a 15.5 percent increase compared to last year.
The trends fueling this growth, however, may say as much about American society as the greedy ambitions of the drugstore industry. The underlying motivations for the latest drugstore trends are rooted in convenience. Chain drugstores are deserting strip malls to get more space, escape competition from neighboring grocery pharmacies and accommodate customers with easy access and 24-hour drive-throughs.
And we Americans are taking more prescription drugs than ever before. In part it's due to an aging Baby Boomer population, but it's also due to the development and purchase of pills for whatever ails us, be it hair loss, sexual dysfunction or acne. According to IMS Health, spending on prescription drugs more than doubled from $37.7 billion in 1990 to $78.9 billion in 1997. Last year pharmaceutical sales increased 14 percent.
Death by Drugstore
Historic preservationists claim the drugstore boom is a result of lousy planning. To understand the magnitude and scope of the controversy, consider just a few of the places where drugstores have faced neighborhood opposition: Pawtucket, R.I. (Walgreens), Homestead, Penn. (CVS); Rockland, Mass. (Walgreens); Tarboro, N.C. (Eckerd); Albany, N.Y. (Eckerd); Londonderry, N.H. (CVS); York, Penn. (Eckerd); Richmond, Ind. (CVS); DeKalb, Ill. (CVS); Durham, N.C.; Southbend, Ind.; Galveston, Texas (Eckerd); Nashville, Tenn. (Walgreens); Denton, Texas (Walgreens); Melbourne, Fla. (Walgreens); Indianapolis, Ind. (Walgreens); Baltimore, Md. (CVS); Tifton, Ga. (CVS); Cleveland, Ohio (CVS); Wayne, Mich. (CVS); Greenville, Mass (CVS); Tampa (Walgreens); and St. Petersburg (CVS).
To the drugstore chains that are opening more than a store a day, complaints about aesthetics and destroying cultural heritage haven't reached the point of overdose; in other words the complaints haven't significantly affected profits. "It's really handled on a case by case basis," Walgreens spokesperson Carol Hively said. "We have so many stores being built we can't really say there's a pattern."
As such, community success has been mixed. Even when communities have protested, they have sometimes lost:
* Despite a massive effort by the Citizens Downtown Improvement Council in Dekalb, Ill., a grand former U.S. Post Office with domed ceiling and marble floors was demolished in 1995 and replaced with a 13,000-square-foot Walgreens with 62 parking spaces in front.
* In Richmond, Ind., the community rallied to save an 1878 meeting house, one of the state's oldest in an area rich with Quaker history. It was destroyed along with mature trees to make way for the prototypical CVS drugstore and parking lot.
* Before Eckerd made a public vow in May not to tear down any more historic buildings, it had bulldozers running overtime. In Tarboro, N.C., in 1998, Eckerd and community groups were in the midst of discussing the fate of the Tarboro Depot when Eckerd demolished it early one Sunday morning.
Not all community protests have been in vain. A neighborhood in Tampa, Fla. has prevailed -- at least for now. A grassroots neighborhood coalition in Tampa protested and helped prevent a historic water tower from having a Walgreens in its shadow.
"We feel that the existing seven stores within three miles of the tower property are more than enough to meet the needs of the neighborhood," said Michelle Geisler, a protesters of the drug store development. "At the very least, we will stand and fight for our neighborhoods and the right to self-determination and quality of life."
Since topping the National Trust for Historic Preservation list last year, drugstore chains have been more willing to negotiate with communities in regard to historic buildings, said Gary Cozel, spokesman for the group. "We are making good progress with drugstore chains in getting them to respect the homes and historic places that are on the list. That by no means implies the threat is over." Three of the four major drugstore chains -- Walgreens, Eckerd and Rite Aid -- have committed to the trust not to tear down any more historic buildings. CVS has not committed to such an agreement. These agreements are only binding in a public relations sense.
Walgreens' Hively said, "The number one deciding factor (in choosing a drugstore site) would be finding the very best intersection in the neighborhood. In most cases something will be torn down."
Saving historic structures still doesn't always address the aesthetics of the newly constructed drugstores that are about as inviting as a hospital. And to some critics the "cookie-cutter" design and sea of asphalt surrounding the stores are akin to a parking lot of old jalopies.
"It's a disconcerting trend that only adds to the clutter of our landscape, adds more concrete and overdeveloped sprawl," Geisler said.
The chains say they are trying to be good neighbors, and when forced by city zoning regulations and sometimes extreme public pressure, they have adapted their architectural designs.
But that's only natural, said John Ransom, who tracks the health industry for Raymond James. Drug chains are businesses that are going to do what's in their financial interest, he said. It's up to the local governments to require businesses to fit in architecturally. "I don't like the way it looks more than anybody else, but Walgreens is a consumer company," Ransom said. "People have to yell loud enough; otherwise they will keep building boxes."
Gone are the days of quaint drugstores with one pharmacist, who owns the place, calls you by your first name and talks to you while she fills your prescription. Independent pharmacies are hard to find. That's in large part because you have to be a big guy with the muscle of numerous stores to cut the better deals with health maintenance organizations. Cash payment for dru gs has largely gone the way of soda fountains. More than 80 percent of prescriptions are at least partially covered by health insurance.
Over the past 20 years, managed health care has cut deals for lower drug prices, and thus driven down pharmacy profits from 40 percent to 2 percent. To gain more leverage with HMOs, many drugstore chains grew by merging. Chains such as Revco, Thrifty, PayLess, Thrift Drug, K&B and Harco Drug were swallowed up in the process. The number of members in the National Association for Chain Drugstores dropped from 176 in 1981 to below 150.
Meanwhile, lifestyles have changed too.
Fifteen years ago, the only thing that lured Kate Green (not her real name) to the drugstore was fear of pregnancy and an occasional family case of the flu. Now she goes at least twice a month, sometimes twice a week. She takes Zocar for her high cholesterol and Zoloft for panic attacks, as well as a birth control pill. Her teenage daughter takes Accutane for acne. Her 10-year-old son takes Ritalin for attention deficit disorder. Her husband takes Prozac for depression and Prilosec for indigestion.
And her family prescription drug usage isn't that uncommon. Drug needs are even higher among the elderly, and with an aging baby boomer population, that number is growing.
Customers like the Greens and the baby boomers are fueling drugstore, as well as pharmaceutical, growth. Quite simply, drugstores are growing because Americans are buying more prescription drugs.
According to the National Association of Chain Drugstores, prescription sales rose from 2.5 billion in 1996 to 3 billion last year, and are expected to climb to 4 billion by 2004. While managed health care has driven drugstores' profit margins down, prescription sales are still drugstores' bread and butter. Pharmaceutical sales accounted for 52 percent of overall drugstore revenues last year.
Advanced drug research, aging baby boomers, more drug ads and an increase in what the industry euphemistically calls "lifestyle drugs" are fueling the boom in drug sales, said Kidder of the National Association of Chain Drug Stores. "There's a lot of new drugs out there. Some have replaced medical procedures. Instead of years of physical treatments, now some people can take a drug."
There's also a faster process to get drugs on the market, thanks to the pharmaceutical industry's intense lobbying of Congress. The Food and Drug Administration approval process has shortened from 36 months to 12 months, flooding the market with more drugs.
The industry has also been successful at lobbying Congress to loosen the reins on direct-to-consumer advertising. Since the advertising laws changed in 1997, it's not uncommon to see drugs marketed on television to adults and teens. Industry spending on such advertising increased 70 percent last year and 40 percent the year before that, Ransom said. Last year drug companies spent $1.4 billion advertising to consumers, according to Competitive Media Reporting.
The return on their investment has been immediate. About a third of all consumers surveyed said they asked their doctors about drugs they saw in ads.
But critics of orthodox medicine, such as Harvard-trained Dr. Andrew Weil, question how well the touted prescription drugs work and whether their harmful side effects may outweigh their benefits. Plus, many of the drugs being touted on TV are ones that treat non-life-threatening discomforts such as allergies, indigestion and acne. Claritin, a medicine for allergies, had $48 million in TV ads last year.
Some of the top-selling drugs are mood pills such as Prozac, virility pills such as Viagra and drugs such as Preracid and Zocor, given for gastrointestinal ailments and high cholesterol (ailments that possibly could be treated through diet and exercise). The production of Ritalin, a drug commonly given to children with attention deficit disorder, rose 700 percent in the past decade.
"Lifestyle drugs," as the industry calls them, are also on the rise; that concerns some healthcare givers who fear the increase comes at the expense of finding cures for life-threatening illnesses, especially those in Third World countries where the profit potential is low to nil.
"There's a lot of new drugs out there," Kidder said. "There's more lifestyle drugs to help your hair grow, lose weight, clear up acne."
It all comes back to what consumers want: convenience. California physician Lawrence Diller suggests in his book Running on Ritalin that the drug is being overprescribed and used as a substitute for good parenting and better schools.
While diet and exercise can help most people lower their cholesterol levels, it's much easier to pop a pill. And while you're getting the prescription filled, you can drop off your film and pick up a canned ham for dinner.
Drugs, Guns and Booze
Drugstores are no longer the pharmacy and soda fountain of American mythology. In Western states, many drugstores have expanded their offerings to include booze and even firearms. Although you still can't buy guns in Florida drugstores, you can buy everything from a Lean Cuisine to an alien headlamp.
They call themselves drugstores, but actually they've become oversize convenience stores/mini-discount stores with pharmacies tucked in the back. Sure, drugstores have always had their share of nonpharmaceutical items -- remember the soda fountains? -- but what's happening now is akin to the industry pumping up on steroids. The old, the infirm and the lazy are giving them a dose with every purchase.
Drugstores are growing by thousands of square feet and morphing even more into grocery stores, discount stores and medical centers. The average Walgreens store has 14,000 square feet, while the average independent drugstore has about 2,500 square feet.
Hively said the chains are expanding their cooler space to carry more frozen foods and dairy items. So now customers can pick up a slab of bacon and a frozen pizza while waiting for their prescription to be filled.
Some drugstore customers don't even buy their prescriptions there. Peggy Herlache of St. Petersburg, said she just goes to Eckerd to get her film developed. She orders her medicine through the mail.
CVS, which interestingly enough started out as a general mercantile, is experimenting in the medical direction at three stores, where the chain added medical resource rooms; nurses and doctors are often available to consult with customers on ills such as diabetes, congestive heart failure and asthma. Customers can also access a library of medical journals and books.
Sav-On pharmacy, a division of Albertsons, is putting video rental departments and delicatessens in some of its newer stores.
"The lure of the pharmacy store is convenience," said Ransom of Raymond James. "The average front sale (nonprescription) is only about $9. If they could move that up, they could increase profits. The photo lab is one of their highest margin businesses."
All that extra stuff they're peddling has prompted a need for more floor space; hence the migration from strip malls to larger stand-alone stores that's causing the flap over aesthetics and destruction of historic buildings. And coupled with the overall increase in drug sales it has translated into more stores.
Even still why build a drugstore across the street from a competitor when it's not likely customers will transfer prescriptions month to month? "An intersection that's good for one drugstore will likely be good for another," Hively said. "Before we choose a particular site, we do about 80 pages of research."
The stand-alone stores have also enabled drugstores to put in drive-through windows to save consumers the time of actually having to park their car and walk into the building. And they are easier to get in and out of than the typical strip mall. As Hively put it: "It's less convenient to pull into a big crowded parking lot at a strip mall."
The Cost of Convenience
What many consumers are finding out, however, is that convenience has a price beyond dollars. Visual blight, loss of historic structures, increased neighborhood traffic, loss of mom and pop stores and potentially poorer health are the side effects of the easy access and pharmaceutical services chain drugstores sell.
But as always, politics and technology are swiftly working to produce a cure. In May, health plans, unions, several large employers and consumer advocates asked the FDA to tighten controls on drug advertising, according to The New York Times. The coalition Rx Health Value is made up of groups with a clear financial interest -- Blue Cross and Blue Shield, General Motors, GTE, AFL-CIO and a host of other health plans and employers. The coalition plans to study new drugs and offer consumer information on which ones are most effective. Of course, that pill may have its own negative side effects.
The Internet promises a way to escape drugstores altogether. Most of the big drugstore chains have sites where customers can order prescription drugs and a bottle of shampoo and have it all delivered through the mail.
Ransom of Raymond James said he doubts customers will stop physically going to drugstores. "For a lot of reasons, most people are going to want to go the pharmacists," he said. "I think the Internet is just a supplemental tool. Mail order has been around for years, and mail order market share has lagged."
But for those who are as sick of drugstore development as they are for medication, mail order pharmacies and the Internet still offer an alternative. Geisler, who opposed the Walgreens beneath the Tampa historic water tower, said she used to be a Walgreens customer but now buys her prescriptions through a mail-order pharmacy offered by her employer, a computer services company.
"I refuse to fall prey to these corporations' tactics," Geisler said. "I personally will not join the mooing herd, clamoring together to run through the aisles, filling carts with useless things. Hey, we're all busy. But are we really that much busier today than just five years ago, or are we just lazier? I believe it's the latter."