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October - 1999 - issue > Cover Feature
e-Drugs
Friday, October 1, 1999



Imperfect as our bodies are, we seek knowledge to maintain our health — yet we consider ignorance bliss. In the health care industry, only the uninformed have the leisure to be blissfully ignorant. Unfortunately, the fragmented foundation on which our health care industry has been built keeps our heads just above water and disenchantingly invites us to heed the flashing error signals. For some time now, effective and cost-efficient implementation of health care has been conspicuously missing in action.

Boot Camp

The problem had been outlined, but a solution had yet to be found. One promising antidote rang loud and clear: information technology and the Internet served as a wake-up call to the industry. Astute and definitive, the men in charge of drugstore.com, a tour de force in Internet-based drugstores, would heed the call.

They would respond forcefully with an online drugstore that offers thousands of brand-name personal health care products and a full-service mail pharmacy. Their organization would be armed with a platoon of highly-trained professionals and IT specialists. And the provision of a highly safe, reliable, scalable, user-friendly, feature-rich Web store would fall on the shoulders of one gentleman.

Macho, Macho Man

From his Indian school days in the small village of Mannarkovil, Kal Raman, chief information officer of drugstore.com, has worked his way to the US and up the corporate ladder. Raman attributes some of his growth to his mentor at Wal-Mart, Doyle Graham. “All the co-workers and supervisors have been very helpful to me, and without their support I wouldn’t be where I am,” says Raman. Raman was handpicked by Peter Neupert, president and CEO of drugstore.com, at an interview in Seattle, WA.

“I think Kal is a unique talent. I’ve hired a ton of engineers over my career and worked with a lot of the best of the best at Microsoft,” says Neupert. “I was impressed with his skills, style and approach and decided that he would be somebody that I would be very proud to work with.”

At drugstore.com Raman is in charge of making technology decisions and delivering neural IT systems to manage every aspect of the store, including merchandising, inventory management, accounting, managing distribution centers and handling customer care. “I spend lots of time in the infra-structure design, triaging projects and hiring the right people, which we as a company take very seriously,” says Raman.

Ask, Tell

As it stands today, information like personal health records is being inputted numerous times by the office, pharmacy, employer and HMO; with a system like this, the health care industry is just asking for mistakes and errors. It’s unfortunate, but the information-laden health care industry has yet to disseminate the information effectively. As a result, we pay more than we would like, and we are more ignorant than we would like.

“If you look at how the health care industry operates today between HMOs, PBMs, pharmacists and insurance companies, there is a complicated flow of data and information, changing fifteen hands before it reaches the insurance company,” says Raman. “We want to reduce the number of hands that touch the data.”

“People want to know more and more about what’s going on in their bodies,” says Raman. “There is a big need for information and a big need to know what’s going on. People want to be proactive, doing whatever it takes to make sure they don’t fall sick.”

Through the Internet, online health care services like drugstore.com seek to place medical information directly in the hands of the customer.

“What the Web does is empower [users] with information and opportunity,” says Neupert. “It empowers them to learn about the latest and greatest treatment, it empowers them to learn what the risk factors are and it empowers them to learn what the opportunities are.”

Today, health care is under a lot of pressure to deliver medical services in a way that both decreases cost and increases access. In the developing stages of drugstore.com, the challenge is to combine effectiveness and speed with quality and accuracy.

“Things are going to change so quickly,” says Raman. “The biggest challenge I think we have is anticipating what the customer needs.” It’s somewhat a process of trial and error, says Raman.

Project Rite Aid

With a great business model, the right approach and a talented team, drugstore.com needed only one more component — great partners. With strategic relationships with giants like America Online, Amazon.com, Excite and Yahoo!, drugstore.com already had a forceful presence. But for further reinforcement drugstore.com looked to Rite Aid for an alliance. They got a thumbs up from both Rite Aid, one of the nation’s leading drugstore chains, and General Nutrition Centers (GNC), the largest specialty retailer of vitamins and mineral supplements in the US. Forces combined, drugstore.com became the first online pharmacy offering the ease and manageability of online ordering with the choice of mail delivery or local in-store pickup at Rite Aid stores.

“We will be able to offer customers an enhanced shopping experience by combining both the online and offline worlds for their pharmacy needs, as well as providing easy access to the products that enhance and promote well-being,” says Neupert.

In the terms of the agreement, Rite Aid and GNC will make drugstore.com its exclusive Internet pharmacy by adding a drugstore.com link to their Web sites, sending customers who want to place an order directly to the company. In addition to the benefits of promoting each others’ services, another boon is that drugstore.com will have access to the pharmacy benefit management plans and customers of Rite Aid.

Many of drugstore.com’s major business problems were solved in the alliance with Rite Aid, according to Raman. But the management and implementation of information systems remained intact.

Plan of Attack

To keep their site highly reliable and safe for customers day-in and day-out, drugstore.com uses Windows NT with IIS, ASP and C++ as the languages. Raman says NT not only provides excellent reliability, but also provides excellent support from Microsoft because of Neupert’s inside connection: Neupert used to run MSNBC and was with Microsoft for over fifteen years.

Raman’s IT team approaches all systems with the customer in mind. “We design through the impacts it will have on the Web store, order processing, merchandising and distribution systems,” says Raman. “We also build and change every system in such a way that we can serve our customers 24/7.”

Programmers and IT specialists at drugstore.com use Oracle as their enterprise database and UNIX as their back-end systems, where they need the capacity to do high-volume number crunching with a high level of availability.

Most importantly, since drugstore.com stores very personal health information, Raman ensures that drugstore.com stores and retrieves any personal and financial information in an encrypted, secured fashion.

All That You Can Be

In business, and the health care industry in particular, Raman understands that IT is not a solution in and of itself. “Information technology is nothing but a means to give knowledge and a means to give a solution,” says Raman.

That said, the precision and exactness of IT in health care is of utmost importance. “If I sell a regular business product to the wrong customer, customers will not die. When I sell a wrong medication, customers will die. So, the quality and accuracy have to be right all the time,” says Raman.

Raman believes drugstore.com will soon be the leading health care retailer on the Web. Raman and his entourage are pushing to change customer behavior through information technology. “The Internet is just going to challenge the lack of choice thoroughly and completely. Heath care customers will have all the choices they need, and consumers will be the boss once again.”

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