[Industry Alert] CVS-Aetna Merger is Not a Done Deal 

In a hearing on Monday, US District Court Judge Richard Leon stated that he is considering hitting pause on the $70 billion merger between CVS and Aetna. The deal is currently unopposed, but the public comment period remains open until December 15, 2018.

According to the Department of Justice’s Antitrust Division, final judgments must wait until the public comment period closes.

Judge Leon stated in a hearing on Monday, “I was reviewing your motion, which of course is not opposed, and I kind of got this uneasy feeling that I was being kept in the dark.”

Multiple organizations such as the American Medical Association and the Association of American Physicians and Surgeons, have objected to the merger citing concerns over “substantial reduction” of competition in the PBM services market and increase prices for consumers.

Fast Facts: PBMs & Independent Pharmacy

  • Pharmacy Benefit Managers (PBMs) control nearly 80% of all prescriptions filled in the US.
  • The state of Ohio was charged $225 million over and above the average price for Medicaid prescriptions. Similar investigations are underway in Arkansas and Pennslyvania.
  • Kentucky fined CVS $1.5 million for violations related reimbursement processing, including cases where Caremark gave the state’s Department of Insurance inaccurate information.
  • CVS’ mandatory mail order pharmacy program results in millions of dollars wasted due to damaged, unwanted, or otherwise wasted medications.

What Can You Do?

We are urging all independent pharmacy owners, employees, and patients to take a few minutes to comment and share their input on the invaluable service that independents provide to the communities they serve.

What Do I Say?
Pharmacists United for Truth and Transparency (PUTT), a non-profit organization, has shared a version of the letter they are submitting. Download this letter as a framework to personalize and write your own message.

Mail To:

Peter Mucchetti, Chief 
Healthcare and Consumer Products Section, Antitrust Divison
Department of Justice
450 Fifth Street NW, Suite 4100 
Washington, DC 20530 

The Department of Justice will collect and publish comments in early 2019. We encourage everyone to exercise their first amendment rights, share their thoughts, and oppose the merger.

PDSPDS believes independent pharmacies are the best place for patients to get the care they need, and therefore we believe independents deserve to thrive. This is why PDS is dedicated to equipping pharmacy owners with the skills and strategies they need to be successful and profitable.

Here’s the one thing successful pharmacies have in common. It’s not what you think.

Dr. Lisa FaastDr. Lisa Faast is the VP of Marketing and Pharmacy Expert. She brings tremendous knowledge and insight from starting, owning and operating her own pharmacy in California. Dr. Faast now leads the marketing department and is our resident Profit Guru for our members.

Below, is her urgent message to all pharmacy owners.

After years of observing and talking to hundreds of pharmacy owners, I’ve noticed that the most successful of them have this ONE thing in common…

In fact, ALL the pharmacy owners with six-figure or seven-figure businesses use this simple tactic to drive patients through the door, provide smarter and continuous care to their patients, and most importantly, forging solid growth strategies with patient outcomes in mind.

How do they do it? How do they persuade their patients to partner with them without coming off as pushy or annoying?

I’ll tell you in a moment — but first, I’d like to share a story with you.

A while back, Mark, a close friend of mine, was working for a company that produced natural gas and oil.

He worked in a typical office.

You know, with cubicles, a water cooler, and a boss that’s always telling lame jokes.

One day, his phone vibrates.

It was a text from his wife.

“My water broke.”

Immediately, he starts sweating.

After a while, he looked like he got caught in the rain waiting for the bus outside.

“Where is everyone?!” he screams and he starts running around the office to look for his co-workers.

As he turns the corner, he bumps into Angela, who sat next to him.

Now, Angela wasn’t a bad person, but she wasn’t pleasant to be around either.

She would tease Mark about the weight he’s gained and told him to “put the fork down” whenever he ate lunch.

But, there was no one else in the office.

And it was an emergency.

So, Mark asks Angela, “Hey Angela, I have to leave. Can you finish my work for the day?” He closes his eyes, praying that she’ll say yes.

To his surprise, she agrees.

The following Wednesday, Mark is at home taking care of his newborn when he receives a call from his boss.

He tells Mark that Angela called in sick and if he could cover for her.

He agrees without hesitation.

So, what does this story have to do with you?

Here’s the simple takeaway: If you do something for someone, they’ll be more willing to do something for you.

Sounds pretty straightforward, right?

As a pharmacy owner, you can do this by providing value to your patient.

Give your patients what they want.

This could be giving away free samples (trust me, don’t underestimate this strategy) or training your staff to be thoroughly knowledgeable on your products, services, and possible drug interactions so that every person they speak with has their best interests in mind.

In short, make your patient’s life better.

This shows that you care about them and aren’t out to take their money. And this is vital to build trust and loyalty.

In fact, this concept is so powerful that my friend Mark was willing to lend Angela a hand despite her history of “bullying” him in the office.

This is the Rule of Reciprocity and it’s one of the principles of persuasion by Robert Cialdini.

Along with guest speakers such as Peyton Manning and Amanda Gore, Dr. Cialdini will be speaking at our annual PDS Super-Conference in February 2019.

At PDS 2019, Dr. Cialdini will show you how to “sell” without selling to exponentially increase your profits.

Bottom line: you NEED to learn all of the subtle persuasion techniques if you want to take your pharmacy business to the next level.

Otherwise, you’re leaving money on the table.

And you’ll continue to do so UNLESS you learn what other successful pharmacy owners are already doing.

At PDS 2019, you’ll have a chance to do just that.

Listen, patients are best served by independents. Therefore, independent pharmacies deserve to thrive. I truly believe that, and it is the core of PDS. This technique will help you thrive, and we’ll show you how to use it ethically and effectively.

And, by the end of the conference, you’ll have a step-by-step blueprint to follow to grow your business right away.

Will I see you there?

Learn how to use the principles of persuasion to increase your profits in 2019. Click below for tickets!

My Offer to You

Speaking of PDS 2019, if you book your ticket before December 1st, we’ll take $50 off your guest ticket price.

PLUS, we’ll give you an RxAnalytics trial and VIP Level at the Welcome Reception, for jumping on this offer.

These bonuses are only available for a limited time.

If you don’t take action now, someone else might take your spot. Click here or below for tickets now!

How to Create a Leadership Culture in Your Independent Pharmacy

How well you lead determines how well you succeed is not just a motto, but a truth that will dole out hard lessons if not thoughtfully applied in your business. Strong leadership culture is your pharmacy’s most sustainable business advantage. Read on to learn more about how to navigate the Five Levels of Leadership and create the culture you need.

At PDS 2018, John Maxwell, the New York Times best-selling author of The 5 Levels of Leadership: Proven Steps to Maximize Your Potential, discussed how to create such a culture in your independent pharmacy. It does not matter whether you are a seasoned entrepreneur or an inexperienced owner venturing into the industry. When you step in a leadership role, you become the most critical member of your organization. If your approach to leadership is anything less than earnest and informed your team and business results will be lackluster.

Level 1: Position

Leaders that operate on the first level use their position as a manager, owner, or executive to control their subordinates; without it, they would not have the support or the respect of the people that work for them. Pharmacy employees follow because they have to, not because they trust their judgment or believe in the mission. Moving beyond this level requires the demonstration of key characteristics that add value to the team and the business; achieved only by leveraging the talents and experience of the team.

  • Focus on building relationships with your pharmacy team.
  • Increase effectiveness by sharing knowledge and encouraging collaboration.

One way to know where you stand is by asking yourself, “If I didn’t have the position, would my team still be following me?” If the answer is yes, you’re on your way to creating a leadership culture.

Level 2: Permission

At this level, a leader becomes passionate about building positive relationships with employees. They listen to employee concerns, give constructive feedback, and are willing to do whatever it takes to help their team members succeed. As a result, subordinates follow them because they want to, not because their job depends on it. The formula to excel at the permission level consists of three simple steps: Listen, Learn, Lead.

Take the time to focus on…

  • Building a culture based on trust and candor.
  • Understanding employee performance goals and concerns.

Once a leader has earned the respect of team members, their focus should shift to the organization and its overall profitability.

Level 3: Production

Simply put, in level 3 things get done. In a leadership culture, team members follow because of the things that they have done for their organization, as opposed to personal relationships. Employees will learn how to create, set, and achieve goals that align with the company vision, so leading by example is critical to success in this stage.

  • Work to establish and strengthen credibility.
  • Translate ideas into action and align with the mission of your business.

Employees will hit their targets with encouragement and support, but they won’t benefit from your experience in the long run if they can’t produce results on their own. Investing and training team members will produce sustainable results.

Level 4: People Development

At this stage, people are following because of what the leader has done for them, personally and professionally. A level 4 leader must focus on developing new leaders and influencing success beyond what they can accomplish as an individual. Employees follow because they will learn how to lead, which is one of the most valuable incentives that a leader can offer their subordinates.

  • Find, place, and train employees that want to develop leadership skills.
  • Identify the strengths and weaknesses of their team members.
  • Understand when and where those team members will produce results.

Level 4 leaders have already earned respect, trust, and loyalty of their pharmacy team. If you want to become a Level 5 leader, you should focus on the impact that your business will have on your city, your region, and the world.

Level 5: Pinnacle

Their reputation is what defines a Level 5 leader. They have earned the respect of their community, and they attract team members, customers, and fans who believe in the same values that they do. Their employees follow them because of the values that they represent and the impact that they have on others.

If you want to attain the highest level in leadership, you should take a look at the relationships that you have with your employees, customers, and neighbors. Think about the role that you play in each of their lives. Would they willingly follow you? Could you confidently lead them?

Independent Pharmacy Owners Deserve to Thrive

The PDS Super-Conference is unlike any other pharmacy conference in the industry. Over the course of our 3-day event, you will discover groundbreaking innovations, exclusive exhibitors, and keynote speakers that will empower and inspire the best in you and your team. Click below to learn more and reserve your place among the industry’s elite.

Ethical Influence in Pharmacy: Persuading Prescribers and Patients to Say “Yes”

PDS 2019

What makes people say yes? The science behind persuasion is comprehensive, and researchers have been studying the factors that influence people to say “yes” to the requests of others for over 60 years.

The real question is: what guides human behavior? During the decision-making process, it’s natural to think that people consider all the information available to them to determine their response. In reality, people are guided by certain factors that influence their decisions because we lead such busy, sensory-saturated lives.

Read on to discover what guides people to say “yes!”

An Introduction to Our First Keynote Speaker for PDS 2019!

Dr. Robert Cialdini, a New York Times best-selling author, psychologist, and professor, founded the principles of persuasion. We’re so excited to reveal that he will be at the 2019 PDS Super-Conference as one of our Keynote Speakers! At the show, he is set to wow the crowd with his topic on ethical influence, which will be a hot topic at PDS 2019 because we will focus on prescriber buy-in as well as ethical persuasion for your pharmacy patients. We will lay the foundation down at the conference, address questions and teach you how to effectively get the buy-in you want without sacrificing your integrity.

What we’ll share with you below are the findings of his research… you may be surprised at how you can use his principles effectively and ethically.

The 6 Principles of Persuasion

In Dr. Cialdini’s research, he identified 6 factors that influence people and drive them to say “yes.” He believes that if you understand and employ these principles in an ethical manner, you can also increase your chances of influencing others to the desired outcome.

  • Reciprocity
  • Scarcity
  • Authority
  • Consistency
  • Liking
  • Consensus

Dr. Cialdini identified these universal principles by observing real-life situations of persuasion over a number of years. Let’s be clear, these principles must be ethically used to be effective and align with moral practices. Let’s unpack how these principles guide our behaviors.


This principle plays on the need for people to give back what they have received first. Whether it’s a behavior, gift, or service, people feel obliged to give back.

Simply put, if someone does you a favor, you have the social obligation to return the favor you owe. An example for pharmacies would be if one of your team members gives a customer personalized and unexpected service, such as a free sample, the customer will feel obligated to either purchase the product, other products or return to your store.


You may have already inferred what this principle is about. People want what they cannot have. If you announce that a product will be going off the shelves, your customers will be more willing to purchase this product even though nothing has changed about it, neither the quality or the price.

The research is clear — when using the scarcity principle in your pharmacy, you must not only speak of the unique benefits of your product, but also, what they have to lose if they miss out.


Why is it that we tend to hold more stock in people in uniform or degrees on the wall? Attributes such as these indicate a level of authority in their field and for most of the population that passes the mental litmus test of credibility.

The science behind the authority principle shows signaling what makes you credible makes your audience, patients, prescribers, or otherwise, more apt to be influenced by this display of expertise.


This is an interesting principle, and likely not often considered in a business setting. The idea is that your customers tend to be consistent with the things they have previously said or done.

What this means is that if you make small asks at the beginning of your relationship or transaction, they will be more willing to see it through. An example of this is a recent study where a health center was able to reduce their missed appointments 18% by asking the patients to fill out appointment details on their own appointment card instead of the staff. This also works if you want to make a bigger ask of the customer down the road, they will be more agreeable to complete the bigger action if they have consistently completed smaller ones.


The driving force behind this principle is simple — people will say yes to those they like.

What makes people like you? Humans will tend to like others with whom they can relate, people who are amiable, and with whom they have a connection. This is why it is so vital that you’re putting the right people on your team in customer-facing positions. Your team on the front lines must be personable, knowledgeable, and provide exemplary customer care.


The consensus principle follows the idea that people will flock to and trust the consensus of others. This is why social proof sites like Yelp, or the rating on your Facebook business page will successfully convert people to follow you. We trust the opinions of our peers.

For your pharmacy, it’s important to deliver quality patient care and excellent customer service, then provide an outlet for people to praise and rank you so you can build that credibility. This, of course, holds you and your team to high standards that you must uphold.

Save Your Seat to the Most Important Pharmacy Conference of Your Career

These 6 principles of persuasion are scientifically proven to increase your ability to influence others. As we said above, at the PDS 2019 show this coming February, we will focus on prescriber buy-in and ethically influencing your pharmacy patients. Join us there to see what Dr. Cialdini and the other pharmacy and business experts have to say on how to accomplish this as pharmacy owners.

PDS 2019 is the show you can’t afford to miss. Prices will increase on October 1, 2018, so don’t wait to book your tickets!

Who’s Afraid of an Amazon-PillPack Merger?

These days, everyone’s talking about adherence. Amazon’s pending acquisition of PillPack didn’t start this conversation, but the retail giant has certainly increased its volume… and it’s urgency. 

At RxSafe, we talk to a lot of independent pharmacy owners, and their reaction has been mixed. Here are a few observations we’ve heard, in no particular order.

What the Cynic Says 
Amazon overpaid. Jeff Bezos made this purchase mostly to anger his chief rival, Walmart. Once Bezos finds out how difficult the pharmacy business is, he’ll quickly lose interest and PillPack will be sold off a few years down the road at a big loss. But who cares, when your trillion-dollar company can simply write it off? Yawn.

What the Worrywart Says
This is just another nail in the coffin for independent pharmacy. We can’t compete with Amazon’s scale, ad budget and cost-cutting abilities. They’ll drive us out of business because nobody values personal relationships anymore. Consumers just want their stuff as quickly and cheaply as possible. Woe is me!

What the Opportunist Says
Hey Amazon, thanks for the free advertising! When my customers see all the hype about PillPack they’re going to come through my doors and ask me if I can give them a nice little box with a 30-day supply of neatly sorted meds, just like they saw on TV. I’ll launch my own strip packaging business, which will go through the roof. My market share will grow, my star rating will increase, and reimbursements will improve. The best is yet to come!

So, Who is Right About the Amazon-Pillpack Merger?
Only time will tell.

To add fuel to the fire, here’s some news: according to a survey released this week, 85 percent of Amazon Prime members said they are open to purchasing drugs directly from Amazon.com. That’s a big number, and perhaps not surprising, but it does give one pause. Another thing we’ve heard from multiple pharmacies is that PillPack is targeting new business by going through patients’ insurance companies to transfer individuals to their adherence platform.

As we’ve stated before: be aware. If you get a call to transfer a prescription, always call the patient to confirm that the request came from them.

Below is some specific advice for our friends.

To readers who are on the cynical side: let’s not write off Amazon just yet. After all, the company has a history of starting small, testing the market and fine-tuning its service, before launching a full-fledged commercial operation. If they’re serious about pharmacy, they’ll take great pains to learn the business, they’ll make adjustments to leverage their size and reach, and they could potentially have a huge impact.

For those who might be worrywarts: don’t panic. Remember, even though Amazon reportedly paid $1 billion for PillPack, the company’s revenues this year are just shy of $100 million. In terms of market share, that’s only about 25 hundredths of 1 percent of the $400 billion pharmacy market. Stated another way, if you considered the market size to be a mile long, PillPack has gone about 1 foot. Conclusion: Amazon/PillPack isn’t going to put you out of business tomorrow.

Finally, for the opportunists out there: We admire your pluck. And, we think you’ve got the right idea and the right attitude. However, don’t fall in love with the first “shiny object” that you see. There are major differences between adherence solutions and automation options, not to mention your own unique needs and customer base. Shop around! This is most certainly not a “one-size fits all” endeavor.

None of us has all the answers. But if you’re considering an adherence solution, here are some questions we strongly recommend you ask:

1. Would my patients be better served by blister cards or strip packaging? What are the pros and cons of each approach?

2. What are the economics of purchasing or leasing an automation solution?
     a. Cost of acquisition (do you need to buy cassettes or additional inventory?)
     b. Vision inspection (built-in, automated, manual?)
     c. Consumables costs (paper, ink, variable pouch length?)
     d. Maintenance costs (whole system or each part?)
     e. Fill labor (tech production and pharmacist verification)
     f. Speed of production (completed jobs per hour, on-demand?)
     g. Rework necessary (how much, how often?)

3. Can I easily integrate OTC into my adherence program?

4. How am I positioned to market an adherence program? Can my vendor help?
     a. Increasing awareness and demand in my market
     b. Branding, package design
     c. Google/Facebook ads
     d. Website, video, audio, email marketing
     e. Posters, bag stuffers, door hangers etc.

As you can see, there’s a lot to research, plan and prepare. Amazon is set to finalize its purchase of PillPack by the end of this year. Are you ready?

For more information about RxSafe, you can head to their website at www.rxsafe.com and you can see them in person along with all of their great technology solutions at the biggest independent only pharmacy conference every year – the PDS Super-Conference. When you attend the PDS Super-Conference not only do you get 3 days of proven, actionable programs from the stage, you get to interact up close with world-class exhibitors. The exhibitors at the PDS pharmacy conference have been vetted and are guaranteed to help your pharmacy operations. We even have some that only come to the PDS Super-Conference! For more information on the most impactful pharmacy conference head to www.pdsconference.com.

[Video] Pain Management to Boost Pharmacy Sales

Acute and chronic pain is a problem that affects approximately 100 million Americans; that is more people than diabetes, heart disease, or cancer combined. The devastating effects of opioid misuse have become all too familiar, leaving many, patients and healthcare providers alike, in search of pain management alternatives. The intersection of technology and healthcare allows independent pharmacies to take a leading role in the latest evolution of the industry and further cement their role as a healthcare ambassador to their community. 

Pharmacy Development Services introduced owners to the idea of alternative pain management therapy and PDS solutions partner, First Alternatives at the PDS Super-Conference.

Unlike pain medication or surgery, Microcurrent therapy pain management technology is: 

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    Not Addictive
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Role of the Pharmacist 

Pharmacists have the ability to establish solid relationships with pain patients in their communities. Positioning your store as a healthcare destination allows you to be more than a place to get prescriptions filled once a month. Leverage your knowledge and hone your pharmacy's unique strengths to create the competitive advantage every business is seeking.

Identifying the need for pain management solutions is just the beginning.  You can start to improve profitability through effective implementation, scaling the programs, and marketing your services. Exceptional patient outcomes and pharmacy profitability are not mutually exclusive. If you don't keep your doors open for business, what would the impact be in your community? 

Microcurrent Therapy 

Studies show microcurrent therapy is a viable treatment for patients with a variety of symptoms and conditions such as sciatica, back pain, carpal tunnel, and other chronic illnesses. Scientists have seen significant decreases in their participants’ threshold for pain, which is consistent with the results that ​microcurrent therapy customers have seen in their daily lives. 

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Click the video to watch our presentation from First Alternatives CEO, Mike Legel at a recent PDS Super-Conference. 

The Science Behind Microcurrent Therapy

In the 1980's, Tim Smith, at the time one of the leading engineers at Texas Instruments, was working as a consultant for SCENAR (Self-Controlled Energetic Neuro-Adaptive Regulation) when he realized that the groundbreaking technology could transform the lives of patients. Smith invested his own money to design, develop, and manufacture a commercial microcurrent device for pain management. 

​Now as the founder and CEO of Avazzia, the company built around his device, Smith has seen the extraordinary impact that his product has had on patients, doctors, and independent pharmacy owners. By partnering with First Alternatives, Avazzia has been able to sell its devices to consumers and business owners around the world. 

Avazzias devices use high-voltage, extremely low-level pulsed electrical waveforms, known as microcurrents, to treat nerve pain, muscle pain, inflammation, scarring, and other health problems. Human tissue has an electrical frequency, and that frequency is disrupted when we are injured, stressed, or sick. Microcurrent therapy restores the normal frequencies within our cells, drastically reducing pain, inflammation, and other functional impediments. 

Alternative Pain Management: Improve Pharmacy Profits and Patient Outcomes

Avazzia and First Alternatives are committed to changing the pain management industry
using microcurrent technology. Legel has created a business model that empowers independent pharmacy owners, providing information, products, and networking opportunities that will transform their businesses. 

Microcurrent devices are perfect for consumers and medical practitioners alike. Pharmacy owners can see profit margins of up to 36% on the retail price of their sales. There is tremendous earning potential when you bring microcurrent technology into your pharmacy or clinic. Welcome to the next generation of pain management therapy! 

Do You Want To Learn More? 

Mike Legel has developed a straightforward business model for pharmacy owners that want to sell microcurrent devices. You dont have to wait for PDS 2019. Click below to learn more about our PDS Super-Conference and join our mailing list.

About PDS 

For twenty years, Pharmacy Development Services has been the leading provider of business, leadership, and financial advice for independent pharmacy owners. Our proven strategies have helped members earn millions of dollars in extra profits, and we are ready to share them with you. 

When you attend PDS 2019, you'll find industry leaders, groundbreaking innovations, and data-driven solutions that will transform your independent pharmacy. Get access to cutting-edge pharmacy technology and keynote presentations from speakers like Dan Heath, Paul DePodesta, and John Maxwell.  Our innovative programs, products, and business strategies will give you everything to turn your passion into a profitable business venture.  

You can sign up for the 2019 PDS Super-Conference here! In the meantime, you can watch this video from a recent PDS Super-Conference. Mike Legel, CEO of First Alternatives discusses Advanced Microcurrent Technology and the benefits for independent pharmacy. 

About the PDS Super-Conference

The PDS Super-Conference is unlike any other conference in the industry. Over the course of our 3-day event, you will discover groundbreaking innovations, exclusive exhibits, and keynote speakers that have built multi-million dollar businesses in medical technology, pharmaceuticals, and pharmacy management. Our conference has transformed thousands of independent pharmacies, and we know that it will radically change your life.

Here’s the Rundown on DIR Fees

Pharmacists and owners know about DIR fees and the dangers it means for retail pharmacies. But for most of the world, the term “DIR fees” sounds like another industry buzzword. One of our PDS members, Traci Shell from Corner Drug Store in North Carolina sent us a summary that was so spot-on and well written, we had to share it.

BONUS: Look below for an easy download of this summary and a breakdown of DIR fees per PBM.

Hidden DIR Fees

You can share this with…

  1. The team at your next team meeting (that’s what Traci did!), so they can stay current with the issues your pharmacy faces and understand that the goals you set are around combating these fees. Read below to learn how pharmacies like you are making them irrelevant.
  2. Elected officials so they can begin to comprehend the plight of the independent. The more they understand the gravity, the greater the chances to spur legislation that drives real change in the industry.

What are DIR Fees?

DIR stands for Direct and Indirect Remuneration. In a nutshell, these are fees paid back to the PBM (pharmacy benefit manager) after the point of sale transaction or time of adjudication. Fees are typically collected at the time of third-party payment. However, some are taken far past that date. The fees discussed below and detailed on the second page only apply to Medicare Drug Plans.

What Does this Mean for Independent Pharmacies?

What makes DIR fees so “dangerous” is the fact that they are not easily identifiable at the time a claim is processed. This pain point is exaggerated by the fact that these fees vary by not only the PBM, but by the drug, the pharmacy, and by performance.

It’s not expected for EVERYONE to know EVERYTHING about these fees. However, it is crucial that their existence is acknowledged. Each day we encounter low or below-cost reimbursement by PBMs. We are forced to determine how little we are making on that claim or how much we are losing.

The Problem with PBMs 

Many times, a prescription is sent through under the assumption that we’re “only losing $2,” or, “at least we’re making $1.” The problem with this thought process is a failure to calculate in the DIR fee the PBM will expect to be paid. Often after assessing the estimated DIR fee, that small “profit,” is now a loss.

Up until this point, most were completely unaware of these fees. While DIR fees have been around since 2006, it wasn’t until 2013 when they began to show up in PBM’s pharmacy contracts. Since that time, DIR fees have gradually grown, evolved, and become the monster we can no longer hide in the closet.

How Independent Pharmacies Can Combat DIR Fees

While this summary may seem dark, there is hope! Pharmacies just like you around the country are discovering ways to undermine the cost of these fees on their business. It's not luck that makes a pharmacy successful. It's not even one single strategy, applied well. It is a combination of unique variables that sparks the development and profitability of your pharmacy while providing a system to sustain the growth.

After 20 years, and through a relentless mission to help pharmacies maximize their potential, PDS has identified these 4 "it" factors for pharmacy success.


Your business is nothing without a high-performance team to align with your vision as a leader. Too often, owners are mired in the chase for more profits that they forget the bedrock of their business: their people. A successful owner sets forth a plan to hire and train the right people and focuses on culture to engage their team. You will be unstoppable with an empowered staff that is powering on all cylinders. Keep in mind, people work harder when they know they are valued, appreciated, and set up for success.

Four Foundations of Successful Pharmacy Ownership


Pharmacy owners too often think that the variable to achieve pharmacy profitability is volume. They would be mistaken. Long gone are the days when pharmacies have to settle for every prescription that walks through the door. It is vital for owners to shift their mindset on what will move the needle in their business. For example, ask yourself which prescriptions are making the most money? The least? It’s critical to identify where you are making money - and doing more of that - and where you are losing money - and doing less of that. Your success should not be measured by script volume, but rather, profit per script. Would you rather fill 100 $4 prescriptions or four prescriptions with a $100 profit each? Which requires more effort?

This is only one of the many ways to impact your profitability. PDS has identified many ways to increase your profits. ​Find out more here.


Resting on your past successes is a prescription for failure. Doing something because you've always done it will cost you valuable time, money and resources. Ask yourself: is every corner of your business operating at peak performance? Auditing how your pharmacy works, from your workflows to your inventory will show you the changes you need to make to maximize efficiencies in your pharmacy. Do your employees adhere to structured systems and processes that set them up for success and smooths operations? Do you have a handle on your inventory so you're not allowing any stockpiling? Are you managing your will-call bins? Do you have expired or dead products? These are all questions to ask yourself as you look around your pharmacy.

Every corner of your business can benefit from a good audit. The key is to audit consistently and implement process change swiftly before you lose any more valuable resources.


Pearson's Law: Everything measured improves, and everything measured and reported on improves exponentially.

This factor in pharmacy success is all about numbers. Understanding your numbers will help you identify and set your goals and listen to what the data is saying to make informed decisions. It's how you measure whether or not your pharmacy is on the right track towards achieving your goals. Are you financially literate? Do you know how to read, understand and interpret your financial statements along with other pharmacy data to help you make better management decisions, course-correct and seize opportunities? If this is an area in your pharmacy you are falling behind on, it's vital for you to secure the right tools and resources to help you become literate in your business so you can measure profitability and growth in your pharmacy. (Hint: PDS can help!)

Download the DIR Fee Summary and Estimate Cost per PBM

Fill out the form below to download the summary and don't forget to share it with your team and your elected officials!

Thank You for 20 Years!

Success doesn’t just happen; it is something that you must work towards daily. PDS has been serving independent pharmacy industry for 20 years this May. In this time, we have consistently recognized four business principles adopted by the most successful pharmacy owners. These principles have also helped to define PDS' success over two decades of business. Whether you're celebrating 20 years in business or opening your first pharmacy here are the four essential pieces of the puzzle you should keep in mind on your journey.

Commitment to Adapt 

Running a successful pharmacy business means making (and keeping) commitments to not only yourself but the employees, patients, and customers that rely on you. Saying "I want to improveis easy. Keeping thcommitment to learn and adapt is tough. Don't just download the eBooks or attend training; invest time every day to put new knowledge into practice.  

Pharmacy Development Services has been working with independent pharmacy owners for 20 years. One of our most impactful revelations is when we identified our brand promise.

1. Earn your investment back as quickly as possible.
2. Multiply that return as often as possible. 
3. Make your life easier. 
4. Make your business better and more valuable.

This isn’t just a motto; it became our driver in everything we do. Every day we come to work with the purpose of delivering with each member interaction.

Stay Innovative

competitive edge in the market isn't a given, and we've already talked about the commitment to adaptability.  Relying on the program you implemented two years ago to keep you relevant won't work. Pharmacy entrepreneurs need to understand and anticipate the needs of their community. The ability to innovate and solve problems creatively is what will determine the collective success of our industry.  

The core of our commitment is innovation. In 2016, we introduced the RxAnalytics
dashboard. The first of its kind, this service helped members to track and optimize their prescription profit margins from month to month. This February at PDS2018, we unveiled the next generation of RxAnalytics. Our program now boasts real-time data function and identifies opportunities with granular specificity. At PDS, innovation is about empowering owners to improve their business without sacrificing exceptional patient care.  

Be Humble (Don’t be the smartest person in the room) 

It is easy to think that you have all the answers after a few wins, but it is also dangerously short-sightedTop-performers in any industry realize that there is always more to learn. The big question should always be "What can we collectively do to keep moving forward?"  

How to Avoid 'The Smartest Person' Mentality  

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    Ask Questions 
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    Listen as Though You Don't Know the Answer (Even If You Do)  
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    Allow Team Members to Contribute  
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    Hire People with Experiences and Skills Different from Your Own  

Once you are a part of the PDS community, you’re among friends. We are a network of entrepreneurs with a laser focus on finding what works for our industry. From RxAnalytics to the PDSadvantage, our goal is to connect and empower pharmacy owners.  Sharing knowledge, providing support and encouraging conversations are mainstays of PDS culture.  

Leading a Strong Team

Effective leadership is one of the most elusive aspects of running a business because people are complicated. There is a formula to building and keeping a strong team aligned to your pharmacy's mission. Business is the ultimate team sport. You'll find a plethora of advice on leadership, but we believe it can all be distilled into the three points below.   

Key Elements of Leading Your Best Team 

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    Provide Meaning to the Work – Productivity and engagement come with alignment. Your role is to give meaning and purpose to work. 
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    Cut the BS – Once you've outlined your mission and given context to the job, clear the way! Let them get to work without red-tape and blockers.
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    Create a Positive Culture – Employees are afforded respect, they know where they stand to improve, and wins are celebrated in a positive culture.  

In the next 20 years, the only thing that matters, regardless of industry, is how people felt when they were with you. Whether it is securing the long-term viability of your pharmacy or building a stronger industry, your legacy is defined by the position your people are in when you aren't around. Are you leading a team of mission-aligned doers or will it all crumble if you're not there to guide them?  The mission at PDS is to create something meaningful for OUR industry to reminds us that independent doesn't mean alone. 

Pharmacy Owners: Adapt or Go Home

Independent Pharmacy Strategy White Paper

Click HERE to access the Pharmacy Industry White Paper Immediately

This is the critical mindset that we write about in our 2018 Pharmacy Industry White Paper. This free download will show you what you should be doing NOW to make sure your pharmacy not only survives but thrives. 

Read this state of the industry as soon as you’re able so you can learn how to:

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    Offer better patient care
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    Have more professional fulfillment
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    Obtain higher profits
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    Increase the valuation of your business

Business Owners Have Cracked the New Tax Code… And It’s Working

In early April, the Wall Street Journal published an article that featured PDS member and multi-store owner, Cliff Holt of Hurricane Family Pharmacy. Cliff’s is one of the many companies taking advantage of the new tax deduction for pass-through businesses. These companies make up the majority of U.S. businesses and include entities like sole proprietorships, partnerships, and S-corporations. Pass-throughs are aptly named because profits essentially “pass through” to owners and are taxed at the individual level, instead of paying corporate taxes plus individual taxes on top of that after money is distributed to owners.

We’ll get into how pharmacy owners are using this new deduction below. Let’s unpack this a bit more.

What is the New Tax Code?

This new deduction effectively lowers the maximum individual income tax rate for millions of business owners from 37% to 29.6%. One of the caveats that come with this break is that it is not available for higher income professional services. There is a taxable income threshold of $157,000 in individual income or $315,000 for those filing jointly.

How are Businesses Using It?

Many businesses who have reached the income threshold have been getting crafty with how they make their business qualify for this deduction, outside of increasing their charitable and retirement-plan contributions thereby reducing their taxable income. A new method has emerged that will allow these businesses to expand the reach of the new tax code.

This new method is often referred to as the “Crack and Pack,” and involves separating their business into different entities to be able to claim the deduction on one part of their business that does not reach the threshold, thereby effectively benefiting from the break. If businesses can restructure themselves that disrupts their operations in a relatively minor way, this 20% tax break would be a powerful benefit.

What Does This Mean For Pharmacy Owners?

Showing the ingenuity and willingness to jump on opportunities that is common among high-performing PDS members, Cliff Holt has joined those businesses who have taken on restructuring to leverage this deduction. Cliff owns four pharmacies that get more than 90% of their revenue from selling medicines, nutritional supplements, gifts and other retail products. However, his pharmacies provide exempt health services (flu shots and vaccinations) and also employs two registered nurses, so his business would miss out on the 20% deduction. Unwilling to take the all-or-nothing approach, Cliff was able to restructure his business into two companies so he can continue providing health services and enjoy the benefits of the new tax code.

Cliff’s tax advisor, Tom Wheelwright of WealthAbility LLC in Tempe, AZ and featured repeat PDS Super-Conference speaker, is optimistic that the IRS will allow pass-through businesses to claim the deduction even while a small amount of their revenue comes from health or other excluded services. Tom, himself, has recently split his own CPA business from his education business to take advantage of the new 20% deduction.

It must be noted that this method isn’t for all pass-through businesses. Some find that the cost of restructuring alone outweighs or marginalizes the tax benefit. Also, this deduction expires in 2025 but could be exposed to legislation that will aim to reduce or eliminate this gain.

You can find the original Wall Street Journal article here.

Adapt or Go Home

As a pharmacy owner, Cliff has adapted to the changing pharmacy landscape and leveraged his opportunities to take back of his business what others would give away.

This is the critical mindset that we write about in our 2018 Pharmacy Industry White Paper. This free download will show you what you should be doing NOW to make sure your pharmacy not only survives but thrives. Read this state of the industry as soon as you’re able so you can learn how to:

  • Offer better patient care
  • Have more professional fulfillment
  • Obtain higher profits
  • And, increase the valuation of your business.

Click here to access the Pharmacy Industry White Paper Immediately.

The Pharmacy Brand Promise Your Patients Need to Read

kevin miller certacare

Pharmacies are in a unique position to be seen as the champion of patient wellness and community healing. They are the destination for judgment-free care. Unfortunately, people carry an assumption that every business they step into will try to sell them on their products just to turn a buck. Your brand promise is about sharing your commitment to health and wellness goes beyond profit.

Show them you care! The people who walk through your door are patients, not just a number. If you make them feel that way, you’re likely to lose them. But if you make them feel like you’re their healthcare champion, they will reward you with loyalty and a deeper relationship.

Pharmacies are both healthcare providers and retail businesses, so it’s a slippery slope gaining trust and providing the best-customized healthcare while moving the needle in their business. This is why it’s so important to be transparent and treat both sides of the coin — patient health and customer happiness — as a priority.

Many companies have brand promises directed towards their customers that exemplify their mission to place their happiness first. Here are a few famous brands with promises that have resonated with us:

Zappos: “Deliver WOW Through Service”

What Zappos does remarkably well is delighting their customers with services and features that are (still!) ahead of the curve with online retailers. Customers are encouraged to buy as much as they want, and return whatever they don’t like for up to a year with free shipping both ways. They can also call their customer service reps’ for just about anything under the sun. The call center team does not rely on scripts, they don’t have quotas or call-time limits. Their only mandate is to serve their customers to the best of their abilities. In fact, the culture at Zappos is so strong that new hiring recruits are offered $2,000 to quit after the training period, but only 10% take the money and leave.

Disney: “Creating Happiness Through Magical Experiences”

Disney dedicates their resources to making its parks “the happiest place on earth.” This mantra extends to everything they do, from providing unique check-in services, cast characters dedicated to delight guests, pristine and detailed sets, and leveraging the latest technologies to improve their guests’ experiences. It’s all part of the magic that happens here.

AirBnb: “Belong Anywhere”

Airbnb’s logo symbolizes “people, place, and love.” This inclusive message in their logo and brand promise transfers to their customers’ experience so they can expect to feel welcome and at home anywhere in the world.

But what about pharmacies?! We thought you’d never ask. PDS has created The Pharmacy Promise. This promise, that can be used in every retail pharmacy, serves as a vow from provider to patient that they will act in their patients’ best interest – and no one else’s – the moment they walk through the door. It is equally as important for your team to know this promise as well. Not only will they know it when they interact with patients, but they will take pride in their workplace and the mission of your pharmacy.

You can download the Pharmacy Promise below to print out and hang up in your store or commit it to your team’s memory so they can relay this to your patients during their interaction.

See the Pharmacy Promise below:

Pharmacy Promise To Our Patients

We don’t work for the insurance companies or the pharmaceutical companies,

We Work For You!

We promise to work with your doctor to find you the best product available that your insurance will pay for, in order for you to get the best outcome possible.

Download the Pharmacy Promise Instantly

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