Health insurers pay enough for flu shots that pharmacies can afford to offer coupons and gift cards to win themselves customer loyalty. Flu vaccines have become a business worth $4 billion to $5 billion a year.
WEST PALM BEACH, Fla. — The flu shot, that most mundane of medical procedures, suddenly is the subject of an intense marketing blitz by retailers.
With several billion dollars in insurance reimbursements potentially in play nationwide, shoppers can’t pass a Publix, CVS or Walgreen’s without being enticed to hand over an insurance card and roll up a sleeve.
Publix dangles the most generous blandishment: Florida’s dominant grocer gives $10 gift cards to patients who get influenza vaccines at its store pharmacies.
Close behind is CVS. The national drugstore chain offers $5 coupons that can be applied toward $25 purchases at its stores. Get a flu shot at a CVS pharmacy in a Target store, and your reward is a $5 Target gift card.
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For patients, being inoculated at a pharmacy is cheap and convenient. The stores don’t collect a copay, and there’s no need to schedule an appointment or languish in a physician’s waiting room.
“From a public-health perspective, it’s a great thing,” said Dr. Larry Bush, an infectious diseases specialist in Wellington, Florida.
Neither CVS nor Publix would discuss the business strategy behind the flu-shot push. But public-health experts say insurance companies pay enough for influenza vaccines that the stores can offer gift cards and coupons without losing money.
“You come in there and you may buy something, or you may get another vaccine,” Bush said.
Insurers reimburse pharmacists for both the cost of the vaccine and for giving the shot, a sum that approaches $50, said Manny Oliverez, chief executive of Capture Billing & Consulting, a medical billing firm in Virginia. Bush said his typical reimbursement is $19 for the vaccine and $24 for the injection, a total of $43.
For the 2017-18 flu season, the Centers for Medicare and Medicaid Services shows payment allowances ranging from $9.40 to $50.22 for each of a dozen flu vaccines.
Payments from insurers leave enough profit for retailers to offer incentives aimed at boosting traffic — and perhaps winning more lucrative prescription business.
“They say, ‘Let’s give them $10 so they come to us and not the guys down the street,’ ” said Oliverez.
Oliverez himself gets his annual vaccine at the grocery store because it’s quick and easy.
National retailers aren’t the only ones marketing flu shots. Nearly three-quarters of independent drugstores have begun selling the vaccines, said John Norton, spokesman for the National Community Pharmacists Association.
Pharmacies face mounting pressure to keep drug costs down, and vaccines present a new income opportunity.
“Flu shots are an easy thing to offer, and if you get enough people signing up, it is a way to bring in new revenue streams,” Norton said.
For mass retailers, flu vaccines present a medical product with broad appeal. Some 100 million Americans get flu shots, which the U.S. Centers for Disease Control and Prevention recommends for everyone than 6 months — making flu vaccines a business worth $4 billion to $5 billion a year.
And with Obamacare requiring Americans to buy health coverage, a growing number of consumers have insurance benefits that pharmacies can tap into.
In-store flu shots are a recent phenomenon. Over the past decade, state regulators have allowed pharmacies to administer the vaccines, once the purview of doctors and nurses.
“There is a doctor shortage, and this is a place where pharmacists can fill the void,” Norton said.
Many flu vaccines still are administered at doctors’ offices or by school nurses, and the dollars haven’t grown big enough to represent more than a rounding error for major retailers. Neither CVS nor Walgreens disclose vaccine revenue in their regulatory filings, but both chains aim to take on a more central role in health care.
“The role of our retail pharmacist is shifting from primarily dispensing prescriptions to also providing services, including flu vaccinations as well as face-to-face patient counseling with respect to adherence to drug therapies, closing gaps in care and recommending more cost effective drug therapies,” CVS said in its most recent annual report.