If we were to ask independent pharmacy owners what makes their pharmacy run, many might say their inventory, their customer service or their rock-solid team who keep the ship afloat. While all of those are true, the undercurrent at the heart of these statements is money. Make no bones about it, your cash balance dictates your ability to pay your team (and by extension, their families) and whether or not you shudder at the thought of paying your wholesaler bill.
A large part of understanding the science behind profitability is knowing how your money moves through your business. Once you understand how it works and what financial statements you need to review then you will know what to do to improve your cash balance. Money in the bank means that you have a safety net to see you through those industry forces that impact your pharmacy today, such as lower reimbursements, DIR fees and GER contracts.
As a pharmacy owner, you should be confident in your ability to:
- Pay your wholesaler on time, every time.
- Sleep at night knowing that your cash balance is on solid ground.
- Keep the fear of making payroll a thing of the past.
- Know how your money moves through your business.
If any of these statements hit home, read on for a few tips to get you on the track to financial freedom.
Better Outcomes, Better Profits
If you’re to increase your cash balance, you must understand that profitability follows great patient care. This is not something we tout as a feel-good story. We mean that if you look at your dispensing data to find where there are more effective therapeutic options for your patients which also offer higher reimbursements, this is a win-win for you and your patients.
Real-Life Application: One PDS member pharmacy consulted with their patients and prescribers to help their patients get the most effective drug available with their insurance. Without any changes to the total Rx volume, this pharmacy was able to increase their gross profit by $25,000 – all from one drug!
As you continue to analyze your data, you’ll start to
- Discover more profitable opportunities
- Increase your average margin dollars per prescription
- Earn more profits without filling more prescriptions
- Mitigate low-yield prescriptions
- Build trust as a thoughtful, dedicated healthcare advocate
PDS offers our members access to our proprietary platform, RxAnalytics, a tool that can help you revolutionize how you see patient care and profitability. Fill out the form to learn how you can get a pharmacy performance analysis to know whether RxAnalytics is the right place for you to start.
Synchronize Your Way to Money in the Bank
The foundation for a profitable, high-performing pharmacy is a solid medication synchronization program. Many pharmacies don’t implement this program correctly; therefore, don’t see the benefits of improved workflow, reduced expenses, scheduled staffing, improved adherence, and opportunities for healthy patient interventions.
There’s no magic involved. You don’t have to be a “special kind of owner” to achieve results that impact your profitability so you can rest easy knowing your cash balance is on solid ground. Besides the patient, workflow, prescriber, performance, and marketing impact you gain from implementing a successful synchronization program, the direct financial impact is undeniable.
Your synchronization program should be able to:
- Deliver more prescriptions per patient
- Lower expenses per prescription
- Improve inventory management
- Allow for more effective staffing
You’ll see all of these benefits in your financial statements, and the numbers don’t lie. PDS offers a comprehensive training to equip owners with the tools and knowledge they need to properly implement this program and synchronize their way to better financials.
Get the clarity you need to be sure that medication synchronization, and the PDS exclusive member program SyncRx, is the right place for you to start. Fill out the form to learn how to get started with a pharmacy performance analysis.
Understanding Your Money
In order to move from the unknown to the known, you have to understand the health of your finances. Stop worrying over how much money you have in the bank and start by creating a plan of attack. PDS is offering a pharmacy performance analysis from an experienced independent pharmacy owner. In this analysis, we’ll show you:
- A snapshot of your pharmacy’s performance in four key areas
- The eight KPIs you should measure
- The tools you need to move the needle
Take the next step to secure your financial freedom and leave the stress of making ends meet in the past.
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Avoid Transactional Anxiety: How to Alleviate Stress Related to Purchasing for your Independent Pharmacy
Here at PDS, we take pride in highlighting some of our incredible exhibitors. We know these companies have the potential to revolutionize pharmacies just like yours through their products and services. We’re excited to introduce Associated Pharmacies, Inc. (API), the warehouse subsidiary of American Associated Pharmacies (AAP). Read on for their sponsored blog post about avoiding transactional anxiety related to purchasing.
You fill a prescription and your pharmacy dispensing system shows that you lost money on the transaction. Then a second and third prescription still yield little or no profit. Your current solution: find an alternative source to purchase items at a price below the reimbursements. But there are many more transactions throughout the day and the time spent sourcing alternative suppliers multiplies.
We call this transactional anxiety related to purchasing. You ask, “what is that?” and “how did I get it?”
It begins with a lack of understanding of how to purchase pharmaceutical inventory – Brand and Generic Rx. As a pharmacy owner, making the right purchasing choices helps ensure the profitability of your business. This can be difficult in today’s market.
Newton’s third law states that for every action, there is an equal and opposite reaction. For independent pharmacy owners, action equals Brand Rx and Generic Rx equals reaction. For years pharmacy owners have pressured suppliers for lower acquisition costs on Brand Rx to match reductions in reimbursements received from payors, sometimes pushing them as low as cost minus 5%, 6% or 7%! Should it be expected that suppliers sell Brand Rx below acquisition cost?
Percentages vs. Dollars
To keep up with declining pharmacy reimbursements wholesalers must dollar cost shift Generic Rx profits, in the form of higher prices or lower rebates, to Brand Rx discounts. To ensure these dollars are available, pharmacies are required to purchase a minimum dollar amount or ratio of Generic Rx in addition to Brand Rx needs. This chase for a lower Brand Rx cost of goods percentage, in turn, reduces dollar profits on Generic Rx prescriptions. For an average pharmacy, 90% of prescriptions filled are for Generic Rx and 10% are Brand Rx.
Because of this brand/generic dollar cost shifting, there is no individual prescription transaction clarity. Dollars that would be considered Generic Rx profits are used to improve Brand Rx profits. Brand and generic transactions do not stand in separate silos, which means individual prescription profitability can no longer be truly measured. The probability must be evaluated based on the total combined net cost of inventory, not a single transaction; and not assessed by a rebate amount or Brand Rx discount percentage.
Are you experiencing low or negative profitability on your Generic Rx prescriptions? Do you find yourself or your staff spending valuable time searching for suppliers for less expensive inventory? If so, your Brand Rx cost of goods percentage is likely eating up Generic profits.
You need to consider the impact “shopping around” has on generic purchase compliance requirements, and how that, in turn, affects Brand Rx pricing. Balance is required, and profitability is built on an understanding of the “big picture” of the cost of inventory.
The Bottom Line Is What Matters
No matter how profitable each individual prescription filled may appear, or each individual purchase made, low margins and poor cash flow can be deadly for your pharmacy business. Don’t allow yourself to stay transfixed on small gains on each transaction and miss out on opportunities to maximize the overall bottom line.
Not sure how to be confident in this approach? The good news is you don’t have to sort through it alone. Don’t be afraid to ask questions of your supplier or buying group representative. A representative can explain the intricacies in understanding terms, and how supplier offerings will affect your bottom line. If they are not willing or able to disclose details of a prepared analysis or the contents of a calculation methodology, you should see red flags.
You have options, and independent pharmacies’ preferred Generic Rx partner is now better than ever. API’s warehouse program is designed to improve cash flow, starting with a 20% instant generic rebate deducted from invoice. Keep more money in your pocket from the beginning and enjoy monthly accrued Generic Rx rebates on these same purchases!
Visit RxAAP.com today for more information, and a representative will help you map out the best purchasing plan unique to your pharmacy.
About the Author
Associated Pharmacies, Inc. (API), the warehouse subsidiary of American Associated Pharmacies (AAP), is designed to lower operating costs and increase profit margins. Make API your pharmacy’s NEXT improvement.
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.
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 Parata, read on for their sponsored blog post about how a true adherence program can benefit your pharmacy business.
Did you know medication nonadherence can cost the healthcare system as much as $300 billion dollars per year? This common problem affects all aspects of the healthcare community from the providers to the patients. The healthcare providers take a hit with penalties, pharmaceutical companies have increasing amounts of waste, and consumers incur unnecessary medical bills.
This is where independent pharmacies come in! Businesses and owners are in just the right spot to improve medication adherence. With Amazon’s recent acquisition of PillPack, the benefits to patients are obvious — they are healthier, and their medical costs are potentially decreased. But how can a true medication adherence program benefit independent pharmacy?
- Gain Customer Loyalty
An adherence program, like pouch packaging, helps to guarantee patients come to you for their refills. It becomes easy for the patient. A true adherence program builds trust — that means a patient does not have to worry if their medication is sorted or taken correctly. Eliminating common questions like, “Was I supposed to take that pill in both the morning and night?”, can be priceless for the patient. And by reducing the number of visits to the pharmacy per month from 5 to 1, you’ve helped them capture back more of their time. When a pharmacy can do that for a patient, the seeds of loyalty are planted.
- Experience less stress with better workflow
Since refills are scheduled, your pharmacy’s workflow becomes much more predictable. A predictable workflow translates into less stress. With his adherence program, pharmacist, PDS member, and pharmacy owner, Peter Wolfe, says the face of his pharmacy’s day-to-day has completely changed. “We stay about a week ahead, and we always know what’s up next. It eliminates stress, saves on inventory, and frees up time.”
- Cut down hospital admissions
Who can resist a greater good benefit like this? Fewer admissions due to nonadherence is better for the whole medical community as well as patients. When patients are adherent to their recommended medications, hospitals lower their risk of penalties in the form of reduced Medicare payments. As an added bonus for independent pharmacies, capturing patients with chronic conditions from referrals to hospitals is easier when you offer compliance packaging that works.
- Add OTC to your program
Packaging over the counter medications and supplements with prescriptions helps the patient take them as recommended, while also adding revenue for the pharmacy. Patients can mitigate vitamin depletion that some medications cause. Adding these items to pouches is an easy part of the packing workflow. Add simplified cross-selling that makes providing a complete solution to your patient easier.
- Earn the patient’s entire business
When patients are on a true adherence program, any prescriptions they may have gone to another pharmacy for are transferred to you. In addition to gaining those prescriptions, you also have a better picture of their medication regimen. This presents new opportunities to make appropriate interventions based on the whole picture.
Independent pharmacies can follow these five steps for a successful adherence program. We encourage you to work with the entire healthcare community to help pharmacies battle medication nonadherence on the front lines. Now is the time to think about how your pharmacy business and your patients can benefit from a fully functioning adherence program.
About the Author:
Parata Systems provides pharmacy technology solutions that empower pharmacists to help people lead healthier lives. Founded in 2001, Parata offers the most extensive pharmacy automation portfolio in the industry – designing, building, and supporting both vial-filling and pouch packaging solutions.
Flu season is upon us, and as they say, an ounce of prevention is worth a pound of cure. How will you be conveying that message to your patients this flu season?
Here are 22 marketing tactics to position your independent pharmacy as the go-to for their healthcare needs this flus season. The ideas below are all highly effective with little to no-cost investment. Whether you choose to implement one or all of the ideas, they’ll make your job a lot easier and your pharmacy marketing tools much more effective by keeping your brand top of mind.
1. Flu shot gift cards. This is a simple flu shot solution for younger patients with elderly parents, friends or neighbors. Have the gift cards available at your cash register and strategically place some signage throughout the store. Your all-star pharmacy team should also be trained to mention this offer while the patient is receiving their shot. Before you know it, your independent pharmacy can be the go-to healthcare destination in the community.
2. On-site flu shots to local businesses. The flu takes a real toll on workplace productivity. Reach out to local business leaders and organizations offering them the solution they didn’t know they needed. Send a letter or make a personal phone call offering to administer on-site vaccinations. Take the stress off their plate allowing them to focus on running their business while you build yours.
3. Send out a voice broadcast to your past flu shot customers. If they received a vaccination in the past, they’re likely to continue. Consider sending a voice broadcast to elderly and diabetic patients. Remember these best practices while you’re planning the campaign:
- Create a short script that runs no longer than 30 seconds.
- Avoid scheduling the call too early in the morning, too late at night or during typical dinner times.
- Think about what type of voice would be pleasing to the ear.
- Don’t forget to give the customer the ability to opt-out from receiving future calls.
4. Record helpful and educational videos. Engage and education existing and potential customers. Videos can be posted to your website, shared on social media, played in the store or linked in an email campaign. Here are a few video suggestions to get you started:
- Demonstrate how flu shots are pain-free and easy to administer by using a live patient (make sure you get their consent first!).
- Create a fun, candid video
- Tap into the knowledge of a staff pharmacist or the pharmacy owner and ask them to record an educational video. Sample topics: The Top 5 Ways to Stay Healthy This Flu Season (tie-in products they can buy in the store) or How to Wash Your Hands Effectively
- PRO TIP: Ask a child to join you in the video – their mom will surely show it to 20 people.
5. Record a new on-hold message. Sometimes putting patients on hold is unavoidable. Make the most of this (hopefully) brief hold and remind them about the importance of getting a flu vaccination. Keep the message short and to the point and when your done conducting the business that they called about, ask them if they’d like to schedule their flu shot appointment
6. Place a sign by the road that reads, Flu Shots Here. Simple, cost-effective, and most importantly, it works.
7. Pass out “I got my flu shot, did you?” stickers to each flu shot customer. This patient will be a one-day walking advertisement and testimonial for your pharmacy.
PRO TIP: Take pictures of customers wearing their stickers and post a collage of these on your social sites. Make sure to ask for their consent first! These customers will share the image on it. Influencer marketing at its best!
8. Have FAQ and Fact Sheets, both in English and Spanish (or any other language prevalent in your location), available in the pharmacy waiting area.
9. Hang flyers around your pharmacy and on community bulletin boards.
10. Send customized letters to families with children, diabetic patients, your elderly customers, pregnant women, etc.
11. Educate your staff on the benefits of getting a flu shot and train them so they can effectively “sell” to your patients.
12. Send a text message reminder to your customers that have opted-in to receive messages from your pharmacy.
- The flu claims an avg of 36,000 lives and hospitalizes more than 200,000 people every year. Schedule a flu shot by calling xxx-xxxx.
- Flu season is just around the corner, protect yourself by getting a flu shot at ____________.
- Stay healthy this winter, get a flu shot. Call ___________ to set up an appointment.
13. Offer a $10 coupon to the store with every flu shot. Restrict the coupons to OTC items only and only on a $20 sale or more.
14. Set up a synchronization alert to automatically remind this year’s flu shot patients when it’s time to come back next year. This strategy works well for any appointment or event in your pharmacy — diabetic shoe reminders, cholesterol testing days, etc. Do you have a medsync program in place? If not, you’re missing out! Here’s a great place to start.
15. Offer free Vitamin C to the community. Position your efforts as a way to keep the community healthy during the season. Not only will it put your pharmacy in a good light, it will also get people to spread the news about your efforts and get people to walk into your store.
16. Add a widget to your blog or website. Go to the CDC website and download one of the many data and statistics widgets they offer for health-related websites and blogs.
17. Inform your Facebook and Twitter communities by uploading your ads, videos, reminders, and exclusive promotions.
18. Set up an after-hours flu shot clinic for professionals that are stuck in the office during your pharmacy’s hours.
19. Write blog posts about the flu season and how to stay healthy. Suggestions: The Truth About Flu Shots, How to Stay Healthy During Flu Season, and What to Do if You Catch the Flu.
20. Staple bag stuffers to each bag leaving the pharmacy with flu flyers.
21. Update your monthly pharmacy newsletter with an ad, educational article, or information hotline number geared about the flu season.
22. Update your pharmacy voice mail message. Include a quick recap of benefits and how they can make an appointment.
Not sure where to start? Voice broadcast scripts, bag stuffers, flyers, FAQ sheets in English and Spanish, etc. can be found in the PDS Advantage Library by searching the keyword “flu.” These documents were designed as basic templates; feel free to edit the information to fit the needs of your pharmacy. Don’t have a PDS Advantage account? If you are a valid pharmacy professional, you can set one up for free here! Begin testing out a few of these ideas this week, and let us know what else you would recommend, or what has worked for your pharmacy in the comments below.
Independent pharmacy owners have multiple items on their to-do lists, with the most important being properly dispensing medications to ensure their patients recieve the right dose to get well. Running your operations and implementing new programs, all while keeping up with employee morale, can often get pushed to the side. These details may seem minor, but they often what take a back seat and in doing so, negatively impact your business.
Don’t Just Survive. Thrive.
Pharmacies have many opportunities to add additional revenue utilizing their existing prescription customers. You just have to take a deeper look into what you’re already doing. Below are our top 3 ideas to increase revenue without expending too much effort.
- Idea 1: Take a visible end cap on a heavy traffic pattern isle and fill it with seasonal items that are already on your shelves.
- Idea 2: Place a tester for a hand or pain relief cream on your wrapping counter. It’s all about the laws of percentage!
- Idea 3: Recognize which shelving in the store has the most visibility to your customers while they are waiting for their prescriptions to be filled. Find the sections that could be communicating “buy me” while a patient is standing or sittiing down waiting. Make sure to have the right mix of impulse, trendy, cute and useful items.
Cost-Saving Tips to Keep in Mind
- While snacks and candy seem like quick and easy sales, the reality is that their profit margin is too low and take up too much valuable real estate.
- Some specialty candies down low will do the trick especially as “distraction” candy for kids.
- Make sure to stock items that are fun versions of old standbys, such as:
- Neon or animal print nail clippers
- Cell phones paraphernalia (Only EVERY customer over 8 has got one!)
- Pain relief products, or sleep aids
- Unique pill holders (this one is a fast seller!)
There is no playbook or blueprint that guarantees what you should be offering in these highly visible and high-traffic locations – all it takes is trial and error. Your traditional wholesaler carries general drugstore merchandise that you can find in every chain drug, grocery and dollar store. Become the destination for products other than the predictable OTC drug necessities!
Finding the Best Resource for Specialty Items
We live in a society that is constantly consuming. Whether your customer needs a modest gift to give or wants the latest gadget or gizmo, keep something on shelves they’ll be willing to buy. With desire, modest effort and a reliable resource, you can start to fill your registers with much needed augmentation for the low reimbursements you’re receiving on prescriptions.
About the Author:
Langermania is the leader in providing specialty products for independent pharmacies to grow their revenue. Many of our products are not found in the chain stores, eliminating the worry of competition and keeping up with the latest products. We work diligently to source the latest trends to be able to offer over 7,000 stores unique items. Visit our website to see more of what we offer and how we can help grow your independent pharmacy.
If you ask a room full of independent pharmacy owners if they would prefer to increase the volume of $10 prescriptions or the dollar value of existing scripts, chances are they’d all choose the latter. However, many believe it’s easier to find more customers; and focus on tactics to attract new business instead of optimizing current prescription profit margins.
Yes, increasing the number of patients walking into your pharmacy can make your business, well, busier. Take a moment to ask yourself if you are looking to be busier or more profitable? One of the easiest ways to improve your bottom line is to focus on increasing the profit margins per prescription with your existing patients.
Increase Profit Margins by Investing 1 Hour a Day
PDS Members are spending at least one hour per day analyzing their dispensing and utilizing the PDS Profit Chart to identify new opportunities to grow their profit margins. For example, a doctor-approved switch from one low-profit drug to another in the same drug class, but with a higher margin, can increase your profits every month that patient is on the prescription. A $10 prescription can quickly generate a $100 profit (when filled monthly) almost instantaneously.
For example, Mike, owner of a Utah-based pharmacy and a PDS Member since 2013, credits the Profit Chart as key to having the best few months in the history of his business. Mike and his team tripled their profit margin per prescription in his most recent month of reporting. The difference amounts to a $40,000 boost to his bottom line!
Dispensing Data Analysis & The PDS Profit Chart
One of the most effective ways to increase $10 scripts to $100 profits is by utilizing the Profit Chart to identify key switch opportunities, implement successfully, and then replicating that success across as many prescriptions as possible. To do that, pharmacy business owners should leverage their dispensing data.
What Pharmacy Data Should Owners Review?
- Patient Prescriptions
- High Margin Prescriptions
- Lowest Margin Prescriptions
- High Reimbursement Insurance Plans
- Low Reimbursement Insurance Plans
Once you identify an excellent opportunity, begin looking for other candidates that have been prescribed the first medication to see if they would benefit from suggesting the switch as well.
PDS Member Vic, owner of North Carolina-based pharmacy, did just that by implementing the Pain Protocol. After seeing how well the pain medication switch for several patients fared, $90,000 in one month to be exact, Vic realized that he could increase profit margins and improve the comfort for a huge percentage of his pain patients. Running a profitable independent pharmacy and providing world-class healthcare outcomes are not mutually exclusive.
The Profit Chart Paradigm Shift: Pharmacy Businesses Are Allowed to Make Money!
The “profit-driven” mindset and practice of utilizing data to grow your business can be a bit of a paradigm shift for many independent pharmacy owners.
PDS Members John and Sue, owners of a Kansas-based pharmacy, recall that at first, they felt like they were “gaming the system.” They shared that it felt wrong to be seeking the greatest profit from their patients when they had chosen the pharmacy industry with patient-care and not profits in mind.
Amy, an Oklahoma-based PDS Member, felt very similar but shared that ultimately the PDS Founder, Dan Benamoz, put it best when he explained that leveraging RxAnalytics is one of the best ways to move the needle and keep her in business.
These are stores where communities and patients have built heartfelt relationships. Utilizing the Profit Chart and data analysis doesn’t hurt the patient. In fact, in many cases, the switch either doesn’t impact the patient or improves their standard of care through a higher-quality drug.
Turning Ideas into Action!
If you’re ready to stop focusing on things out of your control – like low-paying insurance providers – download our newest eBook – The Pharmacy Business Blueprint for Massive ROI – now! Or, to see how PDS can help you turn $10 prescriptions into a $100 profit, chat with one of our Account Executives; let us know how we can help you.
Improving profit margins is the name of the game for small
business. The key is doing so with little to no extra cost or effort. We are here to tell you that profit doesn’t have to be a four letter word. You can have it both ways: improve your patient’s health care and run a thriving, profitable pharmacy business.
Consider ‘cross-selling’ tactics for a moment. As a pharmacy, we can solve problems your patients may not even know they have. You are the experts, and it’s time to show it. Rather than looking at it as just selling an add-on product, look at it as an ‘up solution.’ With a well-trained staff, they can begin to make recommendations for products that will help your patients while they are still in the store actively buying from you. Cross-selling is a quick and easy way to increase profits while positioning your pharmacy as a knowledgeable and caring community healthcare destination.
Remember, you are not in the prescription-filling or DME business, you are in the problem-solving business. You provide solutions to people’s health issues. And guess what? There are hundreds of cross-selling and upsolution opportunities readily available within the four walls of your pharmacy.
I Didn’t go to Pharmacy School to be a Salesman
Correct, you didn’t spend six plus years learning how to make a “sale” or how to grow your independent pharmacy profit margins. However, you did learn about the different interactions and side effects of hundreds of medications and how to educate your patients on the solutions available to them. By re-framing your team’s thought process (and incorporating a little bit of training), you can increase to your bottom line by thousands of dollars a year. As the pharmacy owner, you are not alone!Train your staff and create critical drivers that encourage your team to take a vested interest in the business.
Growing a Profitable Supplement Business
Pharmacists are taught to be on alert for major side effects from the drugs prescribed. However, from our experience, there is rarely a focus on educating their patients about depleted nutrients caused by medications or supplements to enhance the performance of their prescription. You are the best person to share this knowledge with the patients in your community. As the medication expert, you can help them maximize their therapy and reach their ultimate health goals.Patient education, offering supplement solutions, and healthy prescription alternatives to patients can add thousands of dollars to your bottom line and build credibility your role as a great source for health information in the community.
High Margin Upsolution Opportunities
There are 100’s of cross-selling opportunities available at the fingertips of pharmacy professionals. Here’s a quick list of conditions and products that have proven to decrease the chances of nutrient depletion, improve the disease state, and grow your bottom line.
- High Cholesterol Patients – CoQ10 either OTC or as a prescription
- Chronic Pain Patients – Transdermal Rx, OTC B Vitamins and Vitamin D3
- Poor Bone Density Patients – High quality calcium supplement, such as calcium hydroxyapatite
- Depression, Allergy, Autoimmune and Muscle Relaxant Patients: Vitamin D3
Nutrient Depletion Recommendations
- Proton Pump Inhibitors – B Vitamins, Calcium, Magnesium, Iron, Probiotics, Vitamin D
- Blood Pressure Medications – Antioxidants, B Vitamins, Magnesium
- Diabetes Drugs – B12, Folic Acid, Chromium
- Diuretics – Magnesium, Zinc, Calcium, B6, Vitamin C
- Statins – CoQ10, Antioxidants,
- Oral Contraceptives – B Vitamins, Antioxidants, Multivitamin with minerals
Product Pairing Recommendations
- New toothbrush with antibiotics
- Hand sanitizer for cough and cold products
- Lip balm for acne medicine
- Children’s fever medicine for antibiotics
If you are a pharmacy owner, manager, key employee or anyone in the industry concerned with the state of pharmacy, you must join us to discover the solution that the top 20% of the industry have already discovered. Own your future. Clickhereor below to find out more about the 2018 PDS Super-Conference in Orlando Florida on February 22-24, 2018.
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 Ideal Protein; read on for their sponsored blog post about an exciting new revenue stream that is focused on wellness & better patient outcomes.
Are you ignoring a high-value, high-impact opportunity for your pharmacy? It may seem overwhelming to consider adding a new service to your existing business when reviewing your current day-to-day operations. But, have you really thought about the sustainability of your current business model? As drug reimbursements decline and become harder to realize through cost-containment techniques of PBMs, highly trained pharmacists and their teams should be focusing on the most cost-effective and impactful services for their business.
Pharmacies are often the most accessible health care hub for patients in their communities; not seen only as a medication center, but an advice center. Oftentimes, patients with chronic conditions rely on their pharmacist for advice on how to manage their ailments.
As a healthcare provider, you know that excess weight is a contributing factor towards many chronic conditions.
Are you providing your patients with the solutions and tools they need to heal and prevent these ailments?
Diet plays a critical role in many diseases, and in a marketplace saturated with “fads” and “quick fixes,” who does a patient turn to for advice? In order to achieve patient wellness, the first step for a healthcare provider is to advise their patient towards weight loss and good eating habits as key in easing chronic conditions. The second and vital step is to offer that patient a structured solution, overseen by a healthcare professional, that provides effective results and focuses on long-term sustainable weight management. Over 3,800 clinics have done just this with Ideal Protein.
What is Ideal Protein and How Can it Help Pharmacy Growth & Patient Wellness?
Ideal Protein aids in significant and sustainable weight loss, resulting in improvements toward patient outcomes who are using the system. We have provided healthcare professionals a complete turnkey suite of assets to offer to their patients. As value-based reimbursements become the standard, pharmacies are stepping up to provide effective solutions that improve the health of their patients and result in greater store profitability with a low operational footprint. It is about becoming the retail healthcare hub in their community.
With a unique business model, pharmacies who implement Ideal Protein can expect to:
- Deploy existing staff to deliver a unique, sustainable weight loss and weight management service that improves patient outcomes.
- Drive weekly in-store customer foot traffic and new customer acquisition.
- Benefit from a new high-margin, cash-based revenue stream.
- Develop long-lasting customer retention and trust.
All of the education, training, and weekly visit materials are provided to the staff to ensure that each patient receives consistent one-on-one support. As patients lose weight, they often need medication re-modulization for which pharmacists are available to make their recommendations to the physician.
Because the system is effective, patient referrals are one of the leading sources of new customer acquisition. In addition, patients receive daily support through the IdealSmartTM mobile app, continually focusing on long-term behavior change. As an Ideal Protein authorized clinic, we provide your pharmacy access to all of the material needed to implement and grow your business.
One of the biggest challenges for a pharmacy business is that no one likes to sell. It seems to be part of our psyche that if you are selling anything, it equates to a used car salesman selling a lemon dressed up as a Cadillac.
In other words, selling is perceived as trying to get people to do something that is not in their best interest. No wonder we resist it! And the problem is we are so busy avoiding selling that we are often not providing our customers with all the value we have to offer.
If you want to increase your sales, don’t train your pharmacy to sell; teach them to solve problems and offer solutions.
Problem Solvers and People Pleasers
In many cases, patients don’t even know how to think about what you have to offer, much less know how to choose it.
For example, a patient who has just been diagnosed with diabetes likely has a “deer in the headlights” look. They think they are coming in to pick up a prescription (or several). They don’t even know how to think about dealing with diabetes themselves, much less that you can be a resource and guide them through measuring and tracking insulin levels, adjusting meds and important supplements and resources. What to start with, what to do next, and how to make lifestyle changes that will determine their quality of life? When they are standing in front of the pharmacy counter holding their prescriptions in their hand, they don’t have a clue what is involved or how to make a decision.
Thisis where training your pharmacy team to identify problems and offer solution is essential. Once you have fully identified their needs, the next step is to educate them on what you can do for them. If your customers don’t understand the value you have to offer – they are going to make a decision based on perceived price – and you are going to be squeezed!
By identifying your customers’ needs based on what they are buying, you (and your team) can then recommend other products, programs or services that will support them. It is always the customer’s choice whether or not to buy what you are recommending. You actually take away that choice if you don’t let them know what you have to offer.
Your Pharmacy’s Profit Ignitor
Training this skillset can be hard work, but it is possible. To make your life easier, we developed the Pharmacy Profit Ignitor workshop where you can send your team to understand the vast opportunity of increasing front-end sales by offering solutions via nutrient depletion supplements.
This pharmacy training is where they will learn how to ignite front-end sales based on products already in your store or by bringing in new lines. They’ll leave with an action plan and return ready to increase your bottom line by $18,000 or more in the front end and much more on the back end of your store. And, learn strategies that can be used over and over to increase sales that compliment sync and data-mining initiatives.
To learn more about how to get beyond selling and build your superstar team, download our free eBook: Pharmacy Training – A Practical Guide to Creating a Superstar Team.
In this eBook, you’ll learn about…
- Employee engagement and the impact it can have on your business
- Identifying key characteristics to build a superstar team
- Disengaged employees, the key indicators, and the negative impact on your business performance, profit and the connection between the two
- Leveraging professional training programs
- Training courses, workshops, and webinars exclusively available to the pharmacy industry