Costco Rx sales up in 2007, but pace slows
ISSAQUAH, Wash. —Costco produced another year of strong pharmacy sales for fiscal 2007 and is planning to open its second central-fill center sometime in 2008.
The 518-store chain didn’t produce the double-digit increase in sales it managed in recent years, but continued to move up the ranks of the country’s top drug store retailers. According to preliminary results for its fiscal year ended Sept. 2 (final results are due in mid-October) Costco’s pharmacy sales totaled $2.72 billion, an increase of 7.9 percent from 2006.
Prescription sales generated $1.347 billion in revenue—a 7.5 percent increase over last year—while OTC sales increased 8.1 percent to $1.370 billion. All in all, Costco vice president of pharmacy Vic Curtis said it was another good year for the chain. “It’s not quite the growth we had the past few years, but that reflects the industry as a whole,” said Curtis. “The industry is trending a little down this year, but it’s still a healthy increase.”
Curtis couldn’t go into details about sales until Costco reports its full-year results in October, but confirmed that it’s sticking with its $10 generics plan that provides customers with 100-count supplies instead of 30. Costco created the plan last December when it was unable to turn a profit on the $4 generic programs other pharmacy chains had adopted.
Curtis said Costco also is close to announcing plans to build a second, central-fill facility that’s due to open in 2008. “We can’t say where the site is right now but we should have it finalized in a couple of weeks,” Curtis said.
Costco opened its first central-fill center in Everett, Wash., in 2006 and the center now processes nearly all online prescriptions and close to half the orders for 39 stores in Washington and Oregon. Costco chief executive officer Jim Sinegal said earlier this year the central-fill center has reduced the cost of filling a prescription “from $6 per script to about $3” and said a second center would probably be built in one of Costco’s busy West Coast markets.
Costco also is teaming with Maxim Health Care for the ninth consecutive year to provide flu and pneumonia immunizations this fall. Flu shots will cost $20 with pneumonia shots running $33.