Friday, October 31, 2008

Reductions Possible at Walgreens

If you shop at Walgreens, expect some changes when you visit or call the pharmacy in the future.

You may be talking to someone at a call center in another country, or having to wait a day to get your prescription delivered after it has been filled from a centralized fulfillment center and shipped to your local store.

The Wall Street Journal reports that “Walgreen Co. plans to cut costs, overhaul stores and change the way it fills prescriptions as it shifts gears to respond to rising competition and slowing drug sales.

Walgreens will modify its current service model by:

  • filling presecriptions at a central facility, shipped to stores the next day

  • centralizing claim processing

  • routing many customer calls through call centers

The moves are intended to reduce costs and allow pharmacists to spend more time focusing on customer service. These processes are being tested in Florida, and will expan there soon.

The Chicago Tribune reports that the Deerfield-based Walgreens plans to cut $1 billion in costs through 2011, redesign its stores so they are easier to shop and centralize the way it fills many prescriptions, its executives told investors at a daylong conference in Chicago on Thursday.

The company is also taking a look at corporate overhead costs, a move that raises the possibility of job cuts at Walgreens' headquarters and would be out of character for the more-than-century-old company.

"Even the best of companies at times have to change their business model," said Gregory Wasson, president and chief operating officer.

The initiative, called "Rewiring for Growth," comes as Walgreens searches for a new chief executive to lead the company through a sea of challenges: rising costs, slower sales, growing demand for mail-order prescriptions, Wal-Mart's move into low-cost generic drugs and aggressively expanding rival CVS Caremark Corp.

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