3 Ways to ‘Cash-Flow’ Adherence Automation

Here at PDS, we take pride in highlighting some of our incredible solutions partners. We know these companies have the potential to revolutionize pharmacies just like yours through their products and services. We’re excited to introduce RxSafe, read on for their sponsored blog post about adherence packaging services.

Lately, we’ve been talking with pharmacy owners from across the country who are not just surviving but thriving and expanding their businesses in today’s environment. They’re growing their patient base, boosting revenues and increasing profits, using one key strategy: adherence packaging services.

Here are three of their stories.

Starting from scratch

PDS member and Texas pharmacy owner Ben McNabb went from zero adherence patients in 2016 to more than 400 patients by the end of 2017. During that time, his pharmacy’s CMS “Star rating” went from three to five stars.

Ben was able to expand his pharmacy’s geographic reach from a 10-mile circle to a 50-mile circle, and increase his overall pharmacy revenue by 24 percent in the first 12 months.

How did he do it? He focused on new patient acquisition, and forged relationships with local home health agencies and physicians.

He advertised on Google and Facebook. He even ran local TV ads after Cowboys football games. It worked. For his achievements, McNabb was awarded the NPCA “Adherence Practitioner of the Year” award in 2018 by leveraging strip packaging automation.

For McNabb, it was simple math. His adherence packaging patients average 11 scripts per month. With an average margin of nearly $14 per script, he was able to bring in more than $150 per patient per month in profits, or about $1,300 per patient per year.

But what if margins at your pharmacy are smaller, or your patients don’t average 11 scripts per month? The math still works.

For example, let’s assume your average margin is only $10 per script. To keep the math simple, let’s say your adherence patients only average 10 scripts per month. That’s still $100 in profit, per patient, per month.

That means, with 10 new adherence patients, your drugstore would earn $1,000 per month in new profits. If you could add just 10 new patients per month, in three months, your new cash flow would more than cover the monthly lease on strip packaging automation. (30 patients x $10 average margin x 10 scripts per month = $3,000 per month). Put simply, with just 30 new adherence patients, you’re already cash-flow positive.

In the scenario above, by adding 100 adherence patients, you could achieve $10,000 per month in new profits, or $120,000 per year. With 200 patients, you’d reach $240,000 in new profits every year. With 400 patients, your new profits could climb to $480,000 annually.

“Adherence packaging has helped our business to be more profitable because we are maximizing reimbursements from Medicare plans, maximizing the number of prescriptions filled per patient per month, and capturing many new patients that have complex drug regimens,” says McNabb, pharmacist and owner of Love Oak Pharmacy in Eastland, Texas.

If you’re like McNabb was in 2016, and haven’t started an adherence program yet, don’t sweat it. Simply estimate the number of new patients you are likely to enroll in your pharmacy’s adherence program, multiply by your estimated number of scripts per patient, and average profit per script, and you can calculate how quickly you’ll get a return on investment with adherence packaging automation. For example, using NCPA averages for prescription margins, if you could add 15 new adherence patients per month, you could be cash flow positive by your third month.

Moving from blister cards to strip packaging

When PDS member Kyle Lomax, pharmacist & owner at Southern Pharmacy, wanted to grow his adherence program, he realized that manually filling blister cards was a huge limitation.

“We were using a manual card-based system that was labor intensive,” Lomax explains. “We had reached capacity and needed automation to help us package adherence-based patients.”

Lomax purchased an adherence packaging system. Since then, he has improved productivity and also increased his pharmacy’s Star ratings.

“Using the automation versus card filling has cut down on our production time at least 50 percent,” Lomax says. “The visual inspection software included with the strip packaging system gives us the ability to verify packages very easily. The non-specific cartridges make it easy for us to change NDCs on the fly, and the small size in our retail environment has been a great fit for us.”

Based on NCPA averages, processing eight patients per day on a typical multi-dose blister card could cost your pharmacy $3,100+ per month. Using strip packaging automation, you could save $2,192 per month. Migrating from blister cards to a strip packaging system could triple your year-one adherence business, at no additional cost for labor and consumables, and you could achieve positive cash-flow in as little as two months.

Migrating from cassette-based to universal cartridges

Trey Crawford, a PDS member pharmacist who owns Diket’s Professional Drugs, started his adherence program in 2017, using a cassette-based strip packaging system.

“We were looking at our synchronization program and noticing that people were not getting their medications on time. When we looked at our Star ratings, we were seeing we were not where we wanted to be, and we saw adherence packaging as a way to get our adherence numbers where they should be.” Crawford says.

“Another reason that we decided to get a strip packager is because of PillPack. PillPack was bought by Amazon and we all know that Amazon is a real big player in the United States, and if you really want to compete with that giant, you have to be able to offer that for your patients so that you don't lose them,” Crawford explains.

Since purchasing the universal cartridge-based strip packaging system, Diket’s Drugs has been able to increase its trade area to a 50-mile circle, and has grown its adherence program to around 380 patients. With the new system, Crawford says he can run more than 50 completed jobs for adherence patients in one day, with 99.9 percent accuracy.

“The speed of the universal-based cartridge system is unbelievable,” says Crawford.

“There are no more trays that you have to load. No more cassettes. No more sending things off to get to another cassette because the NDC is incorrect. You have cartridges that you just pour the meds in and it makes life so much easier than what it used to be.”

If, like Crawford, you started with a cassette-based strip packager, please note: using universal cartridges means that you no longer have to store inventory in the adherence packager. Here’s how cash-flow could work for a pharmacy with 200 adherence patients, migrating from cassette-based automation. First, you could save as much as $80,000 to 100,000 by liquidating unnecessary inventory. Coupled with the improved speed of pharmacist verification, higher capacity and lower cost of consumables, and taking advantage of Section 179 savings, you could achieve positive cash-flow your first month.

At the 2019 PDS Super-Conference, RxSafe announced the launch of RapidPakRx™ and the PakMyMeds Network. RapidPakRx is the first-ever system for adherence strip packaging designed specifically for retail pharmacies to fill a 30-day supply of multi-dose medications at the lowest possible cost. PakMyMeds Network is a new, no-hassle solution to connect independent pharmacy owners with local patients who want an easier way to take their medications.

Using sophisticated online and mobile ad networks, social media, and GeoMarketing, PakMyMeds Network will advertise -- in up to a 50-mile circle around participating pharmacies -- to patients who could benefit from improved medication adherence and/or are searching for adherence packaging services. Patients who opt-in will then be connected with a partner pharmacy in the PakMyMeds Network. PakMyMeds network is available—at no charge for the first 90 days--to any pharmacy that purchases a RapidPakRx.

To learn more about the RapidPakRx and PakMyMeds, visit rxsafe.com/pds.

Ali Maoirana