When facing major decisions, human nature encourages us to rely on experiences, assumptions and gut instincts to guide our actions. In some cases, this method is perfectly acceptable, but running a pharmacy business requires much more. Making decisions without evaluating solid data is one of the biggest mistakes an independent pharmacy owner can make.
There’s no reason to gamble on your business when the necessary information is at your fingertips. The data you need is already in your pharmacy’s computer system! Taking time to sort through facts is an imperative step to determine what profitable opportunities you’re missing out on. To get started, evaluate these seven areas:
Highest Profit Drugs
Which prescription drugs are bringing in the most money? This one is fairly straightforward. By answering this question, you will know where to focus your energy when it comes to inventory, education, doctor detailing and upselling.
Medications With Best Profit Margins
Certain drugs may actually be extremely profitable when you consider the percentage of mark up. For instance, if Drug X costs $1 from the supplier and you can sell it for $2, you are only making $1 as profit, but it’s a 50% markup. When considering a large amount of the product being sold over time, this may bring you a higher profit than Drug Z that costs you $50 that you can only sell it for $53.
Highest Profit Doctors
When looking at your script history, do you see one physician’s name more than the others? Now that you’ve identified your highest profit drugs, can you tell which doctors are prescribing those drugs the most? Make a concerted effort to network with those physicians. Build those relationships and ask for patient referrals.
Highest Profit Insurers
Is there a particular insurance company that covers or recommends your most profitable drugs? Since not all insurance pays the same dividends, understanding which companies are the most beneficial to you is important. Develop a marketing campaign that will allow you to give special discounts to customers carrying the insurance company that is most profitable for your pharmacy.
Top 20 Drugs Filled
Pull a report on the most popular drugs and make sure to keep them in stock. Make a list of the top 20 most popular prescriptions, along with their higher profit counterparts. Educate your staff on upselling opportunities and keep the top 20 list conveniently located and visible behind the bench.
Margins Over $40
While they may not actually be your most profitable drugs, it’s still important to keep track of any prescription that brings in a lot of money. Keep an eye on drugs with a margin over $40 and promote them when you can. They may move into your highest profit category and you’ll want to be aware when they do.
Daily Loss Report
If you are losing money on a particular product, drug or insurance company, you may want to consider removing it. On the other hand, if that product or service is paired with something popular and profitable, you may benefit from keeping it. Either way, you’ll want to monitor the situation closely.
Running reports in these seven areas will help you make educated decisions based on facts, not guesses. You may find out that your customers are no longer interested in a product you keep in stock or that you’re losing money in an area you imagined to be profitable. Regardless of what these reports tell you, your business is definitely better off if you know how to analyze the metrics and adjust as needed.
Don’t take a gamble on your pharmacy! What are you doing to make sure you capitalize on every opportunity for profitability? If you can’t answer that question clearly and definitively, let us help. Get started immediately by downloading our free eBook 3 Innovative Ways to Compete in the Pharmacy Market
Automating Inventory Management in Your Pharmacy