Is e-commerce the prescription for the future of pharmacies?

Scott Schaftlein

EY US Delivery Excellence Lead

Digital transformation leader. Innovator. Proud husband and father of two. Passionate community leader in Louisville and beyond.

Reem Hanna

Senior Manager, Health Sciences and Wellness Consulting, Ernst & Young LLP

Health care growth strategy advisor. Focused on technology integration and operations improvement. Pharmacist. Passionate about health care quality, safety and accessibility.

7 minute read 20 Jul 2021
Related topics Smart health experience

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  • Is e-commerce the prescription for the future of pharmacies? (pdf)

Boosted by the pandemic and evolving consumer needs, pharmacy e-commerce continues its rapid growth and becomes increasingly digital.

In brief

  • Virtual patient care and pharmacy e-commerce surged during the pandemic and are now an integral part of health care delivery.
  • Consumer expectations, regulatory changes and pressures to lower prescription prices are driving the growth of pharmacy e-commerce.
  • Pharmacy leaders must consider e-commerce challenges and best practices to capitalize on the opportunities a digital service model presents.

While e-commerce is nothing new, the COVID-19 pandemic spurred a massive shift in consumer behavior, when traditionally in-person health care services became virtual, and online prescription purchasing moved from being a simple convenience to a crucial lifeline. Pharmaceutical e-commerce shows no signs of waning in the coming  post-pandemic world, as many consumers are now accustomed to the convenience — and often lower costs — of remote prescriptions.

Government and consumer demands for lower prescription costs, as well as industry and regulatory efforts to loosen telepharmacy restrictions, are among the factors driving the growth of pharmacy e-commerce.

Recognizing the opportunities, e-commerce giants and telehealth start-ups put down stakes in the online pharmacy market, spurring competition for established pharmacies and other health care providers.

To compete successfully in this growing market, pharmacy leaders must understand the challenges and opportunities inherent in shifting to an e-commerce model and the recommended best practices to launch a successful pharmacy e-commerce platform.

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EY - Female farmacist uses digital tablet
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Chapter 1

Now: pharmacy e-commerce challenges

Customer demands, competition and regulatory barriers are all challenges pharmacy leaders face.

Customers want it all

Evolving consumer needs and preferences due to COVID-19 made pharmacy e-commerce integral to health care delivery. More than a year after the pandemic took hold, consumers now expect all retail businesses — including pharmacies — to provide online conveniences with fast (and generally free) shipping.

Consumers are not just expecting lower costs; they’re demanding a higher level of service, convenience, innovation and personalization. They want the ability to choose when and where to receive service — which is increasingly online. When it comes to customer experience, consumers compare pharmacies with every other company regardless of industry. This challenges pharmacists to not only provide a positive customer experience in person, but through digital channels as well.

Customer experience


Percentage of survey respondents who expect the same level of service from health providers that they receive from other businesses.1

Competition and pandemic slowdown

Even before the pandemic, pharmacies were facing challenges, including shrinking reimbursements and below-cost prescription rates. When the pandemic hit, pharmacies saw reduced foot traffic due to stay-at-home orders, the delay of elective procedures and COVID-19-related job losses that caused millions to lose health insurance.

Then there are the competitive threats: a US e-commerce giant entering the pharmacy business, a large warehouse club retailer offering same-day pharmacy delivery and large chain pharmacies consolidating, increasing their footprint and market power.

Faced with all these challenges, many community pharmacy owners looked for exit strategies, leading to more consolidation.

Regulatory barriers

Geographic restrictions on providing telehealth services as well as federal proposals for lowering prices are threatening the margins of many pharmacies. Although COVID-19 spurred the loosening of some digital pharmacy regulations — and telehealth itself is permitted in some form in all 50 states — 32 states are considered “restrictive” when it comes to pharmacy e-commerce services, with 26 states not allowing the practice at all, according to analysis by TelePharm.

In addition, public outcry for lower prescription costs and disparities in pricing between the US and other industrialized countries have spurred regulatory interest in price controls. However, regulations that may lower the prices for consumers don’t necessarily translate to lower costs for pharmacies.

EY - Female farmacist uses digital tablet
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Chapter 2

Next: opportunities for pharmacy e-commerce

Consumer demand, advanced technologies and the expanding of pharmacist roles present opportunities.

Consumer demand

E-services are not just being embraced by the young. Contrary to what many believe, baby boomers are fueling the e-pharmacy market as Americans age 50 and older are now adopting consumer technology at rates close to those ages 18-49, according to a 2020 AARP report. Pharmacies have an imperative to invest in e-commerce.

Health care preferences


Percentage of AARP survey respondents who want their medical needs managed by a combination of health care professionals and technology.2

Additionally, during the pandemic there has been a 340% increase in telemedicine usage among Medicare recipients, per a survey. One-third of respondents reported ordering their prescriptions from an online pharmacy. And nearly one-third said they monitor their health using a wearable device.

Advanced technology opens doors to more services

By investing in better technologies coupled with their retail footprints, pharmacies can benefit from a variety of services and tools that add value for both pharmacists and consumers, including telehealth, vaccination delivery and remote monitoring.

While the adoption of digital pharmacy services was gradually increasing prior to 2020, both adoption and usage soared with the outbreak of the virus. Loosened restrictions due to the pandemic allowed pharmacists in many states to process prescriptions and medication orders remotely, enabling community pharmacies to stay open and maintain customer contact when in-person traffic plummeted. Pharmacy e-commerce is now expected to be a mainstay in health care delivery as consumers — and pharmacists — experience its benefits.

First-time use of virtual health care


Percentage of survey respondents who have had their first virtual care visit during the pandemic.

Immunization services generate revenue from both the service and the resulting foot traffic. Retail pharmacies are playing a significant role in administering COVID-19 vaccines, leveraging technology that allows an end-to-end digital experience.

Remote patient monitoring (RPM) technology collects health data from individuals and transmits it to health care providers for assessing patient health outside of a clinical setting. Through RPM, community pharmacists can play a key role in patient care as they’re already trained in biologic data interpretation, medication management and patient counseling for various chronic conditions. In addition to monitoring the data, pharmacies are well positioned to distribute these devices, providing an additional revenue stream.

Pharmacist roles are expanding

The traditional role of the pharmacist is reliant on technology for the basics of providing prescriptions to patients, yet many pharmacies don’t use all the patient-focused technology available to them.

The focus on patient care is particularly important since pharmacists do more than fill prescriptions, such as patient education, medication therapy management, medication monitoring, disease management and vaccine administration. In fact, various lobbying efforts have pushed for pharmacists to achieve provider-level status nationwide since their legal abilities vary from state to state. 

EY - Young woman using smart phone by pharmacy
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Chapter 3

Beyond: e-pharmacy leading practices

Five steps to get started in e-pharmacy.

1. Use digital tools to enhance the customer experience

A highly personalized experience is at the forefront of the “pharmacy of the future.” Gaining a better understanding of a customer and their health and wellness journey is the first step to creating this positive customer experience. Digital tools such as customer activity tracking are integral to this process and can help determine customer preferences, pain points and values, and develop data-driven goals to enhance the customer experience.

2. Consider a direct-to-patient model

A complementary direct-to-patient channel can reduce the cost of delivery and the number of transactions required to serve a customer. E-commerce enables connectivity across multiple players in health, and the lines blur for consumers. The ability to embrace this connectivity will improve consumer satisfaction and reduce cost to serve.

3. Develop strategy for stronger pharmacist-caregiver relationships

With inexperienced family caregivers performing medical tasks, pharmacists need to educate and improve caregivers’ willingness to use pharmacy services for medication management and other health-related assistance.

4. Modernize digital marketing

Using social media tracking and insights to monitor online activity could unleash data to better predict trends, provide each customer with a more personalized experience and help pharmacies prepare for the future. Pharmacies can use existing and additional demographic and digital data to anticipate customer needs and engage most effectively. Having a targeted web experience, personalizing notifications and implementing and refining existing loyalty programs are ways to influence the shopping experience and may reveal further techniques for increasing a pharmacy’s return on investment.

5. Investigate future capabilities to keep up with rapid industry movement

Investigate additional capabilities to prioritize or develop by identifying the gaps between expectation and implementation to date and determine why these gaps exist. For example, with the elimination of third-party tracking cookies, privacy regulations will evolve, and success in the e-commerce landscape will be dependent on careful planning to create a new system within these constraints. 

Devon Weiss, Jacqueline Tilden, Alexandra Mulconnery, Ankit Goel and Prabuddha Mathur contributed to this article.


The pharmacy landscape is changing due to consolidation within the industry, competition outside the industry, and heightened customer expectations. In the coming post-pandemic world, an e-commerce platform is no longer a nice-to-have convenience; it’s an essential tool for doing business in today’s increasingly online economy. As the role of pharmacist continues to expand into more patient-focused care, the need for better technologies to assist in that care — including telehealth capabilities — is vital to the health of a pharmacy and its patients.

About this article

Scott Schaftlein

EY US Delivery Excellence Lead

Digital transformation leader. Innovator. Proud husband and father of two. Passionate community leader in Louisville and beyond.

Reem Hanna

Senior Manager, Health Sciences and Wellness Consulting, Ernst & Young LLP

Health care growth strategy advisor. Focused on technology integration and operations improvement. Pharmacist. Passionate about health care quality, safety and accessibility.

Related topics Smart health experience