Rite Aid President and CEO Heyward Donigan has a vision for the future of the pharmaceutical industry: People should be able to consult their local pharmacists via video or text from their smartphones.
Rite Aid wants to put your pharmacist in your pocket via your smartphone
Rite Aid CEO Heyward Donigan says the future of pharmacy should be full-service and “transportable.”
“During covid, everyone understood the power of pharmacies,” she said in an interview with The Washington Post. “That really accelerated the world view of what a pharmacist can do.”
Rite Aid, which runs more than 2,300 stores across the United States, reported revenue of $24.6 billion in its fiscal year ended in February, up 2.2% from a year earlier. But its net losses widened to $538.5 million from $100.1 million due to store closures and other charges.
In her first couple of years on the job, Donigan closed about 150 unprofitable stores, made plans to roll out small-footprint stores in underserved markets, made corporate workers remote and implemented more technology to automate some tasks. She’s also relocated the company’s headquarters to a modern, waterfront campus at the Navy Yard in Philadelphia from Camp Hill, Penn. It’s designed around meetings versus individual workspaces and opens in July.
“I look at remote opportunities not only as more efficient, but also as an opportunity to get to know people in different geographies with more diversity than we could ever have done before,” she said.
Donigan explains her vision for the future of pharmacy and its impact on workers. The following interview has been edited for clarity.
Q: How is Rite Aid navigating the future of work?
A: We are remote first for our corporate associates, and we have a cameras-on policy. So I embrace seeing your pet, meeting your husband, the lawn mowers, the leaf blowers, the Instacart delivery.
We also take a break in the middle of the day. Don’t book meetings between 12 and 1 p.m. if you can avoid it. Go for a walk, walk your dog. And turn cameras off if you can at 6:30 p.m. No meetings on Friday afternoons. We have off-sites regularly. We do have a rigorous covid protocol still in place for our in-person meetings. We require two antigen tests.
Q: How is Rite Aid reimagining the workplace?
A: We had actually embarked on this before the pandemic. When I first got to the company, I said, “You can live anywhere you want.” We established WebEx at the time and got everyone trained. I was hiring people from all over the country and allowing them to work from home and come in for meetings and collaboration. So when the pandemic hit, we were pretty well-prepared. As we saw the benefits of working remote, we realized that this was an opportunity to become a more modern workforce and not debate whether we’re going back into the office.
The other thing it really afforded us was an opportunity to think about real estate in a different way. While Camp Hill has been the company’s headquarters for many years, it was very difficult to get to.
Q: What are Rite Aid’s regional collaboration centers?
A: What we found out is that people were busily flying around meeting with clients off-site, working successfully remotely, or going to happy hours together, and the space was going unused. So we ended up not leasing any more of those spaces. We are, however, committed to building out our new technology center in Raleigh, North Carolina, where our technology teams will go to collaborate, design, and do lab work.
Q: What are Rite Aid’s technology teams working on?
A: Technology underpins our pharmacists’ ability to provide the right medication, quality, clinical interventions. A workflow tool prompts pharmacists to do [an outreach]. We also have a significant recall of all of our technology infrastructure, and new processes and platforms under development right now.
Then we have our point-of-sale systems in our stores, which are pretty antiquated. We’re really moving to being a cloud company. We’re developing a native app. We have third-party delivery. We have a digital marketplace.
Q: How does Rite Aid’s tech help pharmacists target customers with care they may need?
A: Because we get all the data [based on prior visits, purchases and health plans] — I know it may sound a little creepy — we know whether you’ve been taking your medications regularly. So when you come to the store, we can suggest a test you may need, actually physically give you one, or suggest that you go to your physician.
The new elements are the testing capabilities that we can provide a customer, an expanded vaccine supply and holistic therapies. Health plans provide us with information on their members and the specific clinical categories that they want us to do an intervention on.
Q: What tech improvements did Rite Aid make to respond to the covid crisis and how will those impact the business ahead?
A: We had to come up with a vaccine scheduler online from scratch almost within weeks because the federal government required it. It’s a tool that will now be used for all of our vaccines, not just covid. We also radically changed our platform to enable people to refill and pay for a prescription on the app or in the browser and have it delivered. That was really important because people were scared to go to stores. We launched Instacart and DoorDash. You can shop at the Rite Aid store on Amazon. Video conferencing was launched nationally.
Q: How have your digital partnerships affected the business?
A: We have grown these digital delivery and convenience channels 50 percent over last year, and we anticipate another 50 percent growth or more this year. Prescriptions are almost back to where they were before covid, and we are seeing an increase in people wanting their prescriptions delivered. What we will continue to work on is how do we continue to evolve our engagement with pharmacists in-store, telephonic, [or via] chat or video.
Q: How is Rite Aid managing the labor shortage?
A: We are over the worst of it. The hot spots tend to be consistently in the Pacific Northwest and in Western Pennsylvania. At this point, [the shortage is primarily for] pharmacists and technicians. We moved work remote, we took the calls out of the stores and sent them over to the call center. These are changes that will last.
Q: What does the pharmacy of the future look like?
A: The pharmacy of the future to me is always going to start with your phone. I don’t view, as a customer, a pharmacy as a store. Nobody knows more about prescription drugs than a pharmacist, and I would like [my doctor] to talk to my pharmacist on my phone about which prescriptions I should be on. The evolution of this business is how to make the pharmacist transportable.
Q: What are the biggest challenges in building that future?
A: The challenge is how to enable engagement in this omnichannel fashion. We are building this integrated full-service pharmacy. For us, it’s just connecting all of the assets.