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How pharmacies benefit from flu shots

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Pharmaceutical companies may be raking in profits as this year's flu season gets underway, but drug stores are increasingly benefiting from the flu season as well, according to health care analysts.

Drug stores including Walgreens, CVS and Rite Aid started offering the flu shot in August, according to the companies.

"You know...a little over 10 percent of those vaccinations are occurring in these pharmacies and I think that will continue to grow, because it's very convenient to get your flu shot there and it's relatively cheap as well," said Morningstar Health Care Equity Strategist Damien Conover.

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About 18 percent of adults got their flu shots from pharmacies and 35 percent got their shots at a doctor's office early in last year's flu season, according to the Centers for Disease Control and Prevention.

More flu shots being administered at pharmacies has broader implications for drug stores, according to Conover. Besides making money by marking up the price of a shot, which could potentially cost more depending on whether a patient is insured, flu shots can increase foot traffic and ultimately sales at drug stores, Conover noted.

And overall demand for flu vaccines, wherever they're administered, is on the rise, Conover told "Big Data Download."

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"What we're seeing this year I think is kind of a continuation of a trend that really started a couple years ago with the H1N1 [swine flu] scare that really got a lot of people more interested in getting flu vaccinations," Conover said. "So over the last couple years, there's been more interest in getting vaccinations and because of that, the manufacturers are producing more and more vaccines that could be available to meet this increased demand."

Big pharmaceutical firms manufacture nearly 90 percent of all flu shots administered, with Sanofi producing 54 percent, GlaxoSmithKline producing 17 percent and Novartis producing 17 percent, according to Conover.

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