Anemic demand for flu shots
Bob Moon: You’ll probably never guess what question occurred to us this morning around the table at our story meeting.
Walgreens ad: Why do we offer flu shots at Walgreens every day?
Well, yeah, actually. That was pretty much what we wondered — and not just there: Same for CVS and Rite Aid. Summer’s not even officially over ’til Friday, but it’s pretty hard to miss the signs outside nearly every pharmacy, pushing walk-in appointments and promotions on flu shots.
So why is this such big business, when flu season usually doesn’t get going ’til December? We asked Marketplace’s Jennifer Collins to find out.
Jennifer Collins: Pharmacies are looking to turn getting a flu shot into a competition. Listen to these ladies:
Lady 1 in Walgreens ad: I was the first to get a flu shot.
Lady 2: You didn’t make an appointment yet.
Lady 1: Don’t need one at Walgreens.
Drugstores and supermarket pharmacies provide around 20 percent of the flu shots in the U.S. every year. They’ve been steadily stealing market share from doctors.
Katherine Harris: Getting a flu shot from a physician can be a big hassle.
That’s Katherine Harris of the Rand Corporation. She says pharmacies earn around 30 percent profit on flu vaccines. They also bring people in the door — people who may pick up a bottle of shampoo or a tube of toothpaste on their way out.
Analyst John Heinbockel of Guggenheim Partners says vaccines also get…
John Heinbockel: People to think about a drug store as being more of a health care location.
Heinbockel says stores have been adding clinics and other medical services as part of a larger plan to broaden their business.
Heinbockel: The profitability of filling prescriptions will probably go down. They’ll need to replace that profit with something else. And services around the pharmacy is a good way to do that.
He says the vaccine can be a tough sell in a year like this one, when money is tight and there’s no big scary flu strain. And there’s always that fear of needles excuse. But it may not work so well anymore. Some shots are coming with new, much thinner needles.
I’m Jennifer Collins for Marketplace.
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