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Healthcare is an institutional service system that requires marketers to optimise and protect the organisational functions of their stakeholders. Online pharmacies make medical products and information available to consumers as part of e-healthcare (Smith 2006). Consumers now have direct online access to scientific evidence, educational materials, online doctors, counselling that help them in gaining information about diseases, preventions and treatment.
A study by Betz (1987) emphasises that the pharmaceutical industry is more driven to gain competitive advantage through innovative technology. Bullocks (1996) reports that the percentage of total online revenue generated from ‘for-fee’ pharmaceutical sites will grow from near zero in 1995 to almost 30% by the end of year 2000, generating revenue of over $3.5 billion. Hence in an increasingly competitive pharmaceutical market the necessity to improve speed and access the global operations has been supplemented by E-commerce.
E-commerce mainly allows better interaction and effective communication among industries as well as with the users by reducing time and effort. Lin and Huarng (2000) suggest that the pharmaceutical industry has been able to achieve significant tasks by making use of E-commerce as a means of circulating information in order to better connect the industry and the users. So that it can reduce geographical distances and ease the access to medical information thus providing better services to the pharmaceutical community
E-commerce enables pharmaceutical companies to create an electronic highway to interact with all the stakeholders in the industry. Hence the pharmaceutical industry uses its core capability by means of Ecommerce to add value for marketing, sales, clinical development and drug innovation. Coombs and Richards (1991) observe that such combination of E-commerce and corporate strategy affirms sustained development in the pharmaceutical industry.
The pharmaceutical companies mainly implements electronic transaction in marketing, operations, selling and clinical fields in order leverage their existing capabilities and learn to minimise the risk of information overloads and content redundancy threat. With the support of people and technology along with a proper organization and use of information and expertise, the industry is able to pro-vide an efficient service to its users.
There exist an unprecedented number of consumers employing this non traditional channel for procuring both over the counter (OTC) and prescription pharmaceuticals around the world. However online drug shopping is associated with both benefits and drawbacks.
Key attributes of internet Pharmacies
The acquisition of pharmaceutical products via the internet is rising to unprecedented levels around the world most particularly in the U.S. The Food and Drug Administration acknowledges that there are benefits associated with online procurement of Pharmaceutical Products.
Improved convenience is one of foremost attributes of online shopping of pharmaceutical products. Customers can afford enhanced convenience and privacy as prescriptions can be mailed, faxed or phoned anytime. Many online pharmacies keep record and tracks of patients’ prescriptions and send reminders in case refills are required. Patients can also access a pharmacist 24-hour a day via e-mail or phone; get immediate price quotations and links to numerous medical resources (Hickey, 2000). Patients are also increasingly opting to purchase their prescribed medications and gain medical information online because they are frustrated that the average time their physicians spend with them has dwindled to a mere 15 minutes. Scalon (2001) suggested that Web sites such as Medscape and WebMD offer these frustrated patients more choices in physicians, insurers, treatments, and medications and according to Jastrow ( 1999) some online pharmacies, such as Walgreen’s, allow its customers to submit and refill prescriptions for either mail delivery to their homes or pickup at any Walgreen’s retail store.
The online pharmaceutical industry is regulated by the FDA in the United States of America and it stated that:
Legitimate pharmacy sites on the Internet provide consumers with a convenient, private way to obtain needed medications, sometimes at more affordable prices. The elderly and persons in remote areas can avoid the inconvenience of travelling to a store to purchase medications (FDA, n.d.; Spain,Siegel, Ramsey, 2001).
Like all online stores, these outlets offer the convenience of shopping from home (Fox, 2004).Another important factor that attracts consumers to online pharmacies is the privacy and confidentiality in the acquisition (and ensuing consumption) of pharmaceutical products.Pharmaceutical products that may inculcate consumer anxiety, such as personal quality-of-life pharmaceuticals (e.g., Viagra or birth-control pills), may be purchased via online sites from the privacy of one’s home, reducing the anxiety or embarrassment of using traditional pharmaceutical channels (Erdem & Chandra, 2003). Furthermore, the anonymity factor may encourage consumers to ask questions about a treatment or drug that may have been too embarrassing in a traditional face-to-face pharmacy setting (Fung,Woo,& Asch, 2004).
FDA asserts that the increasing use of computer technology to transmit prescriptions from doctors to pharmacies is likely to reduce prescription errors (FDA, n.d.; cf. Kart, Moser, & Melliar-Smith, 2008; Bizovi et al., 2002). Medical errors, as a result of lost, misread, or illegible notes and medical records are blamed for the annual 50,000 to 100,000 deaths of people in the U.S. Scanlon (2001) suggested that online pharmacies will reduce the occurrence of illegible prescriptions since they will be electronically entered. Online pharmaceutical sales appear to be a viable solution to improve the inefficiencies. It will also allow an automatic dispensing of pharmaceutical prescriptions, capture patient drug histories and informing the physician of any potential dangerous drug interaction.
Riggs (1999) argues that the cost of filling a prescription in a brick & mortar pharmacy can run as much as $6 per order while online the costs run about half , due to the lower overhead engendered by reduced labour costs and these savings are passed on to the shopper. Potential savings are especially valuable to senior citizens who are on multiple medications simultaneously and who often have minimal, if any, prescription insurance coverage. Furthermore, as the U.S population ages, their need for pharmaceuticals increases as does the price of these medications. A study by a healthcare group in USA showed that the average cost per prescription for seniors will rise by 72 percent by 2010. Schultz (2001) justifies this increase by attributing it to increase research and technology cost. Moreover online pharmacies can be considered as cost containment strategy adopted by consumers that may be a replacement for or complement to the generic drug substitution under the stewardship of medical practitioners (Erdem & Chandra,2003). This strategy has been especially helpful for consumers who suffer from chronic conditions that require periodic refills of the same drugs (U.S. Online Pharmacies, 2004; Erdem & Chandra, 2003).
Thus through strategic partnership between retail pharmacies, managed care and pharmaceutical companies enable pharmacies to maximize needed efficiencies and effectiveness and thus fuelling the expansion of online pharmaceutical sales.
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