Pharmacy Edge Magazin
Issue
eighteen
Rob
Meriweather
Corporate Vice President Sales, H. D. Smith
e
February - March 2018
Dr. Arlen Meyers
MD, MBA
The Primary care Pharmacist
How DIR Fees Impact Independent Pharmacies How Independent Pharmacies Can Attract More Patients
Pharmacy Edge 2018
Contents - February 2018
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A message from our President Brandon Welch
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Biosimilar Drugs: 10 Things You Need to Know About Them
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A message from our Vice President Nicholas Micciche
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How DIR Fees Impact Independent Pharmacies
An interview with Rob Meriweather, Corporate Vice President Sales, H. D. Smith
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How to Determine if Multi Store Ownership is Right for You
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How Independent Pharmacies Can Attract More Patients
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The Primary Care Pharmacist
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Dr. Arlen Meyers, MD, MBA President and CEO at Society of Physician Entrepreneurs
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Pharmacy Edge 2018
Brandon Welch
A message from our President Welcome to the brand-new year of
This year, I envision another year of success as we launch a new concierge service that we offer to our independent pharmacy members through our strategic partnership with HD Smith. We help independent pharmacies negotiate drug prices through HD Smith. This way, we continue to add value services to our members to stay competitive in the marketplace. We continue to serve as an advocate and support system to all APPA members, staff, and team. Speaking of teamwork, our organization is growing by the addition of some new members to the APPA family. We’re not only an alliance, but a family set on common goals. Nick Micciche joins APPA as the newly elected Vice President with 13 years of previous pharmacy experience. Dr. Arlen Meyers joins APPA’s Advisory Board with a plethora of experience as a physician, entrepreneur, and professor of various specialties. Dr. Meyers is helping us fulfill our mission in bringing physicians and pharmacists together to support the independent pharmacy community. I’m also happy to announce our 2018 Pharmacon Convention that will be taking place in Orlando, FL from June 8th-9th. There will be over 1,000+ pharmaceutical
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industry professionals, 80+ exhibitor booth spaces, various exhibitors, an audience of independent pharmacy owners, pharmacists, hospital pharmacy directors, and pharmacy buyers. There will also be a plethora of networking opportunities, educational seminars, and more! On Thursday, June 7th, please make sure to come out and join the first ever APPA golf tournament! It gives me great pleasure to see the participants for this year’s event lining up for the inaugural event. Registration will continue through June 1, 2018. The number of participants registered for the tournament is limited to 80 golf enthusiasts. Each team will consist of 4 members that will start out on an assigned hole at the same time, hence a “shotgun” event. This year’s program is specifically designed with the intention of generating the greatest degree of accomplishment to the individual player regardless of degree of proficiency by increasing the level/degree of difficulty on some holes. Sponsors are providing door prizes to be awarded for longest drive, closest to the hole, highest and lowest score among other contest events at the awards ceremony. A luncheon will be following the tournament guaranteeing a fun-filled evening event. Don’t forget to register at joinappa.com!
Pharmacy Edge 2018
Nicholas Micciche
A message from our vice President As the new Vice President of APPA, I wanted to briefly introduce myself and express my gratitude for this opportunity. I have been in the field of pharmacy for 13 years. I knew at a young age that I wanted to become a pharmacist and was lucky enough to spend time learning with some of the best in community pharmacy, including pharmacists Gil Rodrigues, Jayme Rook, Danny Jackson, Vanessa Wade, Carlos Regalado, Ray Lees, Devan Patel, and Lee Stewart. When I first started as a pharmacy technician, my pharmacy manager, Gil Rodrigues, taught me many lessons. He taught me not only to ask questions but to search out the answers. He did not get annoyed with my constant questioning, but instead challenged me to look up the answers and quizzed me on them at least weekly. One year for my birthday, Gil even gave me his medical dictionary. To this day, I’m not sure if Gil was being funny with his gift but I still have and use that dictionary to this day! I knew early on that I loved community pharmacy and I have appreciated the many challenges faced by pharmacy owners big and small. I would have to say that my greatest love to date is compounding and personalized medicine. From marketing expenses to the endless audits and then to the ever-increasing costs of compounding regula-
tions, I have traveled the same route as many pharmacy owners have. I know how rough the road can get but I also know how rewarding the outcomes can be. Thank you to those who have spent time precepting students. This is invaluable to our profession. Thank you to those who have also taken time to mentor students and technicians like me with their incessant questions! Thank you to everyone who has pushed through tough times with low reimbursement rates and have continued to put your patients first. And I am especially thankful to those who support one another because unity within the profession is paramount. It is because of you all that I have a future in pharmacy. As I look forward to wrapping up my education at USF College of Pharmacy, I am committed to lifelong learning, entrepreneurship, and the preservation of independent pharmacy. The prospect of working alongside independent pharmacy owners with the American Pharmacy Purchasing Alliance to propel the profession forward is exciting to say the least. I truly believe in the power of people, strength in alliance. We have to band together to unite the profession because progress is best made through an alliance of dedicated healthcare professionals.
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Thoughts on Independent Pharmacies and Their Wholesaler Relationship An Interview with
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A strong wholesale partner will help you understand where your profit opportunities are and how to access them; all while running the best possible operation you can.
1. Why should independent pharmacies choose to be part of a buying group? Buying groups offer suites of services to attract pharmacy owners. Those services range depending on the buying group, and can include: state legislative advocacy, PSAO services, secondary generics sourcing, pharmacy consulting, and store marketing. 2. What should independent pharmacies look for in a wholesaler? Independent pharmacy owners must find a wholesaler with shared interests and one who looks out for independents – whether through legislative lobbying or supporting organizations like NCPA. Additionally, be sure your wholesaler provides a transparent deal, and solutions that increase the efficiency of your pharmacy operations. In today’s landscape, pharmacy profitably is not exclusively dependent upon “buying better.” A strong wholesale partner will help you understand where your profit opportunities are and how to access them; all while running the best possible operation you can. At H. D. Smith, we are investing in solutions designed around what we call the “Winner Wheel.” The Winner Wheel helps differentiate independent community pharmacists, and buying groups, and sustain their relevance and future profitability. Our Winner Wheel solutions help community pharmacies in: • Operational efficiencies like inventory, turns, accounts receivable and net profit • Sustained relevance in areas like specialty and automation • Quality outcomes that will drive income to the pharmacy in this evolving payment model
3. What questions should independent pharmacies be asking when looking for a wholesaler? On a broad scale, start by asking “what does your company see for the future of retail pharmacy?” “What are you investing in to advance that cause?” “How might those investments help me?” On a more local level, ask “How will you service my business if I accept your offer?” “What is the culture of your organization?” “What is your mission and values?” 4. What are some of the important characteristics of a strong pharmacy/wholesaler relationship? • Trust and transparency • Flexibility • Ethical integrity • Responsiveness 5. How does the pharmacy/wholesaler relationship affect the success of an independent pharmacy? It directly impacts profitability, your ability to service patients and, based on the points above, your future success. 6. What does H. D. Smith offer independent pharmacies that other wholesalers don’t? The business of wholesaling is very commoditized. Therefore, it’s less about what we do and more about how we do it. H. D. Smith offers a full range of primary products from brand, specialty, generics, OTC and DME. We have automation and profit-enhancing partnerships. Beyond all of this, we offer transparency, customized solutions and a shared interest in the health, viability and future success of independent pharmacy. 7. How often should independent pharmacies reevaluate their primary wholesaler relationship? The market is changing so much that 9
Pharmacy Edge 2018
you must ensure you are evaluating the market, not just your current wholesaler. It’s beneficial for a pharmacy to evaluate their wholesaler relationships every 2-3 years or as often as your contract will allow. 8. What are your thoughts on secondary purchasing? Given the margin pressures the industry is facing, secondary suppliers certainly serve a purpose and have created a market for themselves. In most cases, however, there is more profitability for a pharmacy in their primary agreement if it’s structured and managed correctly. That’s why we have invested in tools that help our pharmacies maximize profitability from their primary agreement with H. D. Smith. Secondary purchasing can be a useful model, it’s just not ours. 9. What can pharmacies do to get a better cost of goods? Simply put, the best pricing is a function of volume (per site), generic source compliance and faster pay terms. Volume, by itself, is not a driver for improved costs. Volume per site is an important consideration because it determines the wholesaler’s cost to serve. Higher costs are incurred by the wholesaler in lower-volume pharmacies. Higher-volume pharmacies obviously reduce the costs and allow for more of the margin to be shared with the pharmacy. A higher volume with a favorable mix of source generics will drive the best possible pricing for independent retailers. Compliance ratios in typical retail pharmacy settings can reach north of 30 percent. 10. How can wholesalers help independent pharmacies manage inventory and prevent shortages? Pharmacists must be able to access and see real-time inventory available 10
We believe that these pharmacy owners must face the future with a partner who supports them. to them. This will help ensure their patients have a positive, reliable experience. Wholesalers must inform pharmacies of market shortages, trends and brand-to-generic conversions. Additionally, pharmacies need to manage their inventory, one of their largest assets, through sophisticated software that can analyze such things as seasonality and dispensing patterns. Perpetual inventory tools can be very useful, but, in some cases, are just automated poor reorder points. 11. What resources, support or other tools does H. D. Smith provide to help independent pharmacies be more profitable? We are developing programs and partnerships around our consultative-style account management approach, called the Winner Wheel. Below are some examples of programs we offer to our pharmacy customers. a. Marketing i. Patient-facing ii. Digital marketing iii. In-store Signage
iv. Mobile apps v. Websites b. Compliance reports/quarterly business reviews i. Missed opportunity dashboards that show how they perform compared to rebate tiers so they don’t miss potential rebates and savings c. Pharmacy solutions i. Med sync programs ii. TCGRx (inventory management, workflow, automation and compliance packaging solution iii. iMedicare d. If desired, we help pharmacies break into the specialty market with our solution of tools, clinical expertise, software and training e. Revenue diversification opportunities like pet medications 12. What else does H. D. Smith offer that’s different? H. D. Smith carries more than 30,000 SKUs ready for next-day delivery. We deliver 6 days per week and, in some markets, even twice per day to the same pharmacy. 13. Do you have anything else you’d like to share? Yes, it’s important to talk about the future of healthcare. The future of care will likely be determined by paper pushers, cost-savings measures and regulations. The future of our health will be determined by providers who can understand and effectively address the needs of patients. Independent community pharmacists are these providers. We believe that these pharmacy owners must face the future with a partner who supports them. H. D. Smith will continue to support independent community pharmacies for years to come.
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Pharmacy Edge 2018
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The Primary Care Pharmacist Dr. Arlen Meyers, MD, MBA
President and CEO at Society of Physician Entrepreneurs
»» Better use of data to support prescribing fulfillment »» Increasing importance as part of the are team »» A high touch center »» Providing disease prevention services and basic primary care, like vaccinations and other disease prevention products and services »» Interoperability with next generation EMR systems »» Clinical pharmacy support
My father ran a corner drug store in an ethnic neighborhood. My first job was packing gelatin capsules and putting the pills in those brown bottles. He didn’t pay much attention to child labor laws, but I am indebted since I learned a lot about pharmapreneurship.
What did you want to be when you were 8 years old? In those days, the independent corner drug store was much, much more than just a place to get your medicine. It was part community health center, a place to use the pay phone, a place to get a malted, and, of course, a place to catch up on the latest neighborhood gossip in 5 or six different languages. I can still remember the smell of the place. Of course, things have changed since then and independent pharmacists are redefining their role in the brave new world of sick care. Forces like vertical integration, data driven sick care, the rising prices of drugs, the consequences of polypharmacy in the aging population and changing care delivery models are creating challenges and opportunities. The primary care pharmacist will play an increasingly important role. Here’s how:
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»» Helping to assure prescription adherence and compliance »» New business models to improve service and reduce the costs of drugs in face of competition from Amazon »» Serving as a health community resource center »» An information and education center concerning wearables, apps, and other remote sensing devices. »» Providing telepharmacy services »» Having a side gig as a medical science liaison The primary care pharmacist in the corner drug store is being reinvented by pharmapreneurs. Expanding their scope of practice might fill some care gaps, but, of course, will be resisted by vested interests. Of course, we’ll miss the cherry phosphates, but wouldn’t it be nice if we brought back those cell phone booths, so we don’t have to put up with all the chatter in six different languages while you are trying to figure out how to use your Apple watch to monitor your atrial fibrillation.
Pharmacy Edge 2018
Dr. Arlen Meyers, MD, MBA President and CEO, Society of Physician Entrepreneurs (SoPE) CMO, Bridge Health; CMO ,Cliexa; Board Chair GlobalMindED
(m) 303-548-0654 https://www.linkedin.com/in/ameyers/
I consult for and speak to companies, governments, colleges and universities around the world who need my expertise and contacts in the areas of bio-entrepreneurship, bioscience, healthcare, healthcare IT, medical tourism -- nationally and internationally, new product development, product design, and new ventures financing. I am a former Harvard-Macy fellow and In 2010, I completed a Fulbright at Kings Business, the commercialization office of technology transfer at Kings College in London. Publications this year include “Building the Case for Biotechnology,” “Optical Detection of Cancer,” and “The Life Science Innovation Roadmap.” I am also an associate editor of the Journal of Commercial Biotechnology and Technology Transfer and Entrepreneurship and Editor-in-Chief of Medscape Reference: Otolaryngology-Head and Neck Surgery.
I’m a professor emeritus of otolaryngology, dentistry, and engineering at the University of Colorado School of Medicine and the Colorado School of Public Health and President and CEO of the Society of Physician Entrepreneurs at www.sopenet.org. I have created several medical device and digital health companies. While most of them failed, my primary research centers around biomedical and health innovation, entrepreneurship, and life science technology commercialization.
In addition, I am a faculty member at the University of Colorado Denver Graduate School and Director of the Biomedical Entrepreneurship Program at the Jabs Center for Entrepreneurship at the University of Colorado Denver Business School. I am also an iCorps participant and trainer. Currently, I serve as the Chief Medical Officer at www.bridgehealth.com and www.cliexa.com.
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Helping You Care For Your
Community H. D. Smith is a pharmaceutical wholesaler, dedicated to supporting the success and prosperity of community pharmacies with its complete line of products and a wide array of business solutions.
866.232.1222
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hdsmith.com
Pharmacy Edge 2018
Biosimilar Drugs:
10 Things You Need to Know About Them Are you planning to invest in pharmaceutical products? You’ll find a great opportunity with biosimilar, one of the two types of biological products on the market.
The Biologics Price Competition and Innovation Act (BPCI Act) provided an abbreviated licensure pathway for biological products to be demonstrated as biosimilar or highly similar to an FDA-licensed biological product, provided that data supports the claim. This makes biosimilar a generic version of biologic drugs. With many branded biologics on the market, there are plenty of biosimilar in the works, promising significant growth in the industry. Before you invest, however, you must know more about the products you will be investing in. in this case, biosimilar drugs.
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can only dispense biosimilars when specifically prescribed by a doctor. This shows that sales of biosimilar is dependent on whether or not a huge number of doctors would recommend it. If you’re into making a significant revenue, you must study the market first. There are time restrictions on production Biologics have a special exclusivity period that specifies that a biosimilar drug should only be introduced to the market 12 years after the brand-name biological product was approved. The exclusivity period also runs concurrently with company patents that runs for 20 years.
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Varying approval requirements Biosimilars must go through different testing in order to demonstrate similarity with the reference product. And each individual drug will have specific factors that need to be satisfied, such as metrics used and the size of a clinical trial, approval requirements will greatly vary from one biosimilar drug to another.
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It is different from generics Biosimilar drugs may be a version of branded biologics, but they are not generics and should not be referred to as such. Don’t confuse one from the other as they have marked differences in structure, complexity, size and other factors.
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It is not interchangeable as generic drugs When doctors prescribe brand-name drugs, pharmacists can substitute them with a generic version automatically. This is not the case with biosimilars. A pharmacist
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Lower profit Due to the cost involved of replicating brand name biologics, biosimilar drugs can’t be sold at low prices or at a bigger discount than the brand-name drug. The difference in price may not be that attractive to consumers as generics.
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Plenty of existing competition from Europe Europe has been approving biosimilars for years, while it was only recently that the FDA approved
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its first one. With real-life patient experience with the drug already established in Europe, market competition is tough. Shared risk between companies Most companies pair up with other pharmaceutical companies to gain access to expertise and share costs. Teva Pharmaceutical, for example, paired up with Swiss-based Lonza. Along with this partnership is risks that will be shared between companies until the market’s dynamics are worked out.
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Brand-name biotech companies are also developing biosimilars Just when you think market competition is already tough with European biosimilar drugs on the market, big names in the biotech industry, such as Amgen, are also developing biosimilars, making it even tougher for potential investors.
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It’s a fairly new market It was only in 2006 when the FDA approved Novartis’ version of a human growth hormone, Omnitrope. This kept production of biosimilar drugs off limits, until FDA was forced to open doors by the BPCI Act.
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Tough investment choice Biosimilar drugs are still a new industry, where market dynamics have yet to be established. This makes it hard to pick a company to invest in. Fortunately, biologics companies also carry brand-name biologics, and you can base your decision on the success of branded drugs.
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Independent pharmacies don’t have it easy where DIR fees are concerning and dealing back and forth with pharmacy benefit managers. In fact, smaller pharmacies have closed their doors due to their experience with DIR fees. As what vice president of Policy and Regulatory Affairs for the National Community Pharmacists Association (NCPA) Susan Pilch said in an interview, transparent calculation of fees is a major problem for pharmacists even if these are being extracted on every claim. “We have no detailed accounting on a claim-by-claim basis on how it’s being calculated. These fees are being withheld from us in a lump sum months down the road. It makes it very difficult for us in terms of business perspective.” These can easily lead to a downhill plunge in profit and revenue. Because DIR fees are retroactive, former NCPA president and independent pharmacist in West New York Steve Giroux considers it one way a pharmacy becomes unprofitable quickly.
How DIR Fees Impact Independent Pharmacies Brandon Welch, APPA President 18
Pharmacy Edge 2018
“When it’s not done in real time, we often don’t know for months or almost a year that we are unprofitable on a particular transaction.” Battling DIR Fees Many situations have proven, time and again, how PBMs are taking advantage of a seriously flawed system. Aetna and CVS Caremark are inappropriately collecting DIR fees according to the NCPA and the pharmacists themselves. PBMs say one thing but DIR fees tell another story. NCPA CEO B. Douglas Hoey, RPh said, “When the pharmacy processes a script, the PBM says how much they are going to pay for it.” But when the DIR fee comes back 3 months later, a retroactive payment clawback happens. Many independent pharmacies also avoid processing through Humana insurance because of the $5 dollar levy on pharmacies for every Medicare Part D script filled. One owner of an independent pharmacy said that the five dollars are “in some cases is half of our profits and in some cases it is all of our profits. Plus, there are no savings to the patients.”
What can independent pharmacies do to battle against DIR fees? »» Take action that will stem the profit loss from the DIR fees, recommends the NCPA and the NACDS (National Association of Chain Drug Stores). »» Engage in a reliable business plan that takes into consideration reimbursement for all reimbursement models, including those taken post-adjudication. »» Revenue stream should be assured at the business-planning stage and not later when the operation is already underway. »» Urge passage of a bipartisan legislation that will prohibit retroactive DIR fees and boost transparency of drug spending in Medicare Part D. »» Urge CMS to intervene on the DIR fees that are misleading patient beneficiaries when they select their part D plan and pushing them more quickly into the coverage gap hole. What Congress Is Doing to Eliminate DIR Fees In early September 2017, Senate Bill 3308 and the companion legislation, H.R. 5951 was introduced. A month after this, more than 50 members of Congress sent a letter to the CMS and the HHS (Department of Health and Human Services) calling on them to eliminate DIR fees.
In the letter, the legislators wrote, “We understand that common practices by pharmacy benefit managers (PBMs) and plan sponsors do not use DIR to reduce beneficiaries’ medicine costs at the pharmacy counter and actually leads to negative reimbursement for the pharmacy”. It also urges CMS to revisit their strategies in calculating specialty pharmacies’ performance. The NASP (National Association of Specialty Pharmacy) has been educating lawmakers about the negative impact on DIR fees. Is DIR Fee elimination the perfect solution? According to the PCMA (Pharmaceutical Care Management Association), pushing through with the proposed legislation will increase costs. The same is true for “the independent drugstore lobby agenda on DIR”. It may also lead to reduced Medicare enrollees’ access to affordable medicines and will undermine PBMs and plan sponsors to detect wasteful spending. In a statement, PCMA called the proposed bill as a tool that will “undermine the ability of Medicare Part D plans and PBMs to detect wasteful spending by limiting the use of audits and other tools to pursue suspected fraud in the pharmacy setting.”
When it’s not done in real time, we often don’t know for months or almost a year that we are unprofitable on a particular transaction
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How to Determine if Multi-Store Ownership is Right for You The traditional pharmacy ownership model is evolving. While many envision an independent pharmacist as a person in a white coat behind the counter who also owns and operates the store, the reality is changing. Many new pharmacy owners want a hybrid model where they can step beyond the confines of the counter and manage businesses in multiple locations. According to the 2017 NCPA Digest, 29 percent of independent community pharmacy owners have ownership in two or more pharmacies.
That’s up from 27 percent in 2016 and 24 percent in 2012.
challenges that a single-store owner may not encounter.
Additionally, the average number of pharmacies in which each independent owner has ownership is 1.96, 1.79, and 1.76 when comparing the 2017, 2016, and 2012 NCPA Digest respectfully.
Here we take a deeper look into the strategic considerations of location expansion to see if entering the multi-store business model is the right path for you and your business.
Purchasing another location has many advantages, including leveraging a wider customer base, appreciating a better cost of goods sold as a result of combined purchases and overall growth in profit as an owner. With that said, growth can come with
IDENTIFY COMMON FACTORS Let’s consider some common themes in growth strategy: experience, cash on hand and location. Many first-time pharmacy owners go into business with the idea of only 21
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owning one store, but we are seeing that many owners consider a second location once the dust settles from the first acquisition. That being said, time vested in your first store can impact your ability to successfully expand to a second location, so it may be prudent to wait on expansion until your first store is fully transitioned and stable.
be vetted to understand potential challenges due to your ability to be on-site or manage day-to-day. Lastly, if crossing into another state, you should familiarize yourself with each state’s board guidelines.
Lessons learned in sole ownership are valuable for developing an acute business acumen. For example, learning how to navigate employee management and payroll, purchasing from wholesalers and ensuring proper operational expense control. In addition, you will most likely use a lot of your liquid cash available to invest into that first pharmacy where you work full-time.
MAP A PLAN FOR SUCCESS Developing a road map for the future is crucial to the success of any multi-store ownership venture. You must have key areas of concern addressed, starting with how you plan to manage the store as an absentee owner, or how you adjust from being at one location full-time to having two stores to manage.
When you compare a first-time owner with someone more rooted in their ownership tenure, you will find threads of experience that lead to better positioning for growth. Additionally, more experienced owners may be able to secure more cash to inject into the next pharmacy purchase. Not every scenario will follow this thought process, but the general question you need to ask is “how do you grow without over-extending?” Growing through acquisition can be a great step if your current business is in a solid financial and management position. Additionally, the physical location may also play into the successful transition of growing through acquisition. Does it make sense to purchase a store within a couple hours from your current location or do you have the management in place to operate multiple locations several states away? The impact of distance should 22
If these common factors look strong, you may be ready to create a formalized plan for growth.
Growing through expansion should be a positive event within your business. Take the appropriate steps and time to increase your chances of success.
Creating a time management calendar can help. Chart two schedules comparing how much time you spend at your current pharmacy versus how you would divide time between two stores. Include what your roles and responsibilities will be at each location. If you have been a single store owner for several years and work full-time in that store, you will know how that store operates because you oversee every aspect of management. Determine how you plan to keep that level of management when you are splitting time between stores, or shift to a new management model. Give thought to how you will hire and retain key employees at the stores. Your employees can be a tremendous asset to your ability to manage additional locations. When creating your management plan, also consider how you will motivate and incentivize your employees so retention and succession are built into the long-term vision of your business plan.
Pharmacy Edge 2018
A solid management plan allows an absentee owner to develop a foundation for success and potentially gives you more flexibility to purchase additional pharmacies. This type of ownership will most likely employ the right personnel with proper procedures to ensure customer service and financial controls are being achieved at a high level when operating multiple locations, which is why starting out with a well-developed plan is crucial.
macy for sale and how purchasing it may impact your current business.
AVOID PITFALLS Don’t just buy a store to add volume. Be strategic in your approach to finding the right store when expanding through acquisition. Often times an existing owner may be approached by someone who knows of a pharmacy for sale. In this case, the owner may not necessarily be seeking a pharmacy to purchase, but considering potential expansion. In cases like these, bigger isn’t always better, so it is imperative to understand the phar-
Absentee ownership may not be for everyone. If you are a handson, detail-oriented person, you may struggle more than an owner who is more macro in their approach since you rely on your managers and employees. Also, you need to have the proper policies and procedures in place since you are not present all of the time.
When analyzing a store to purchase, ask questions about store performance. Buying a store with negative trends may require more of your time, energy, and money which needs to be factored into your evaluation. If the new store does need this extra attention, determine if you have the capacity to devote additional time to achieve desired outcomes.
Perform proper due diligence on the store being purchased and truly un-
derstand the business model and financials. Are there any concentration risks or potential loss of business of the store being acquired? The new store should stand alone financially from the cash flow of your existing stores. Be mindful of using existing cash flow from your current business to leverage the acquisition cash flow needs. These pitfalls can sometimes be minor stumbling blocks, but if you don’t have enough of a vetting process to determine how many downsides there may be, you might find the disadvantages are too great to make a successful growth model. SEIZE ADVANTAGES When the stars do align and you find the right store; it can be a great thing. Adding another location should help you achieve scale to leverage your entire business. This may help you reduce costs at each individual location while having a central office for bookkeeping, third-party reconciliation, and other functions such as
Mike Bollinger Senior Loan Officer - Pharmacy Lending Live Oak Bank Email: mike.bollinger@liveoakbank.com Cell: 504.453.9726
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human resources. Additionally, you may be able to aggregate your drug purchases to ensure you are maximizing any pricing discounts offered by your suppliers. Expanding your business through acquisition and multi-store ownership should help your financial position with regards to cash flow and expenses. You start to create a global view of your business which allows you to see all of your stores together as one from an operational and financial perspective. This may allow you to acquire a pharmacy that is less-attractive to some buyers, but may be a good fit for you based on your global cash flow to make the purchase. Having multiple locations will allow you to expand your footprint and
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bring your business model to more patients in, and outside, of your community. The ability to reach more patients with the level of care and customer service will enhance name recognition to grow sales and all of your locations. When all the advantages are there, it’s the perfect time to dial up the volume. TAKE THE LEAP? Only you will know if growing to a second, third, or fifth location is the right decision for you and your business. One key in making that determination is returning to the fundamentals in your business plan. Have certain factors pre-determined before starting to review any phar-
macy for purchase. This list may include items like annual revenue size or specific script counts. It may also be niche markets such as compounding or long-term care. In any case, you should have a clear vision of the type of store that best compliments your current business model. This allows you to make sound, strategic decisions when presented with an opportunity to purchase. Moreover, it is okay to pass on a store that does not meet your pre-determined criteria. You will thank yourself in the long run. Growing through expansion should be a positive event within your business. Take the appropriate steps and time to increase your chances of success.
Texting for your existing business phone number I need a refill of my medication. Can I pick it up in an hour?
Adding texting to your landline, VoIP, or toll-free phone number helps you reach patients and eliminate hours of phone tag. Your customers want to text you... let them! Keep the number your customers already know - incoming texts appear on your computer, tablet, or smart phone. Mobile and multi-user accessible, Zipwhip texting is a seamless resource that can be used to boost your customer communication, taking your business to the next level.
A simple solution for pharmacies Adherence
Customer Service
Engage hard to reach populations.
Reach patients the way they want to communicate.
Profitability Attract new customers with an added communication channel.
Live two-way texting to coordinate refills faster
Schedule personalized med reminder texts in advance
Add ‘Click to Text’ to your website and increase inquiries
Set up auto replies to respond after hours
BCC group text by chronic disease state
Use keywords to promote specials and online reviews
Messages
Family Pharmacy
The response to texting has been so much better...Our patients even thank us for it. Contact
Srinivas/Independent Pharmacy Owner La Plata Pharmacy, Maryland
Today 10:17 AM
Hello, we are working on your monthly refills. Is there anything you don’t need this month? No changes! Can I pick them up tomorrow We’ll have them ready by 1 PM.
Jay Jung (206) 816-3531 jjung@zipwhip.com Zipwhip.com
Pharmacy Edge 2018
How Independent Pharmacies Can Attract More Patients
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Pharmacy Edge 2018
Independent pharmacies have been on the rise in the past few years, yet not all of them find it easy to attract patients. There are many reasons for this, and one of the most common is that many independent pharmacies don’t have the huge marketing budgets that big pharmacy chains do. As a result, they don’t have the firepower to reach out to a wide audience and increase brand awareness. Another reason is that many people hesitate to buy their prescriptions from independent pharmacies, opting instead to buy from big-name businesses that are popular and well-established. Still, these do not mean that independent pharmacies should give up. After all, there are several strategies they can use to attract more patients and increase their sales. These include: Provide exemplary customer service One of the biggest advantages that independent pharmacies have over chain businesses is that they have the time and training to provide better customer service. So, they need to capitalize on this fact and improve the way they interact with their patients. Creating a simple and stress-free pharmacy experience, clarifying prescription issues with doctors ASAP, delivering medications to patients’ homes within the shortest possible time — these are just some of the ways to enhance customer service and make patients feel that they’re properly cared for. Focus on educating patients Aside from being short on customer service, many pharmacy chains don’t really focus on educating patients since their main priority is to increase their sales. Independent pharmacies can take this fact to their advantage by making patient education a focus of their business model, if they are not already doing so. Specifically, they can educate patients about how and when they should take their medica-
tions and inform them about the free or low-cost medical services they can find in their community. Give away free products and services Many pharmacy chains attract customers by giving promotional products. This might seem something that’s beneath independent pharmacies, but they have to acknowledge the fact that it is an effective strategy. After all, a lot of people appreciate freebies, so why shouldn’t they use this fact to their advantage? They can give away free kids’ vitamins, prenatal vitamins, allergy medications, acne solutions, and other products that patients will surely appreciate. They can also provide simple but helpful services like blood pressure screenings as well as cooking classes that are specially designed for diabetics. Encourage referrals and recommendations What many independent pharmacies don’t realize is that their patients can also be their spokespersons. This can happen organically when patients are impressed with the level of care that independent pharmacies provide and become encouraged to recommend the establishments to their loved ones. However, those who own or manage independent pharmacies can speed up the process by creating a referral program, through which they’ll give free products or discounts to existing customers who can bring a new customer to the pharmacy. By taking this step, independent pharmacies can motivate their patients to actively refer them to other people and help them grow their customer base. Increasing brand awareness and attracting customers can be a big problem for many independent pharmacies. But, by taking the right steps, they can overcome this challenge and gain more patients.
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The latest and the most significant industry-related news and trending stories. This magazine is produced by APPA - American Pharmacy Purchasing Alliance If you wish to submit an article-to Pharmacy Edge, or would like to request a media kit for sponsorship The latest and thesend most industry-related news opportunities, ansignificant email to info@joinappa.com. and trending stories. This magazine is produced by APPA - American Pharmacy Purchasing Alliance If you wish to submit an article-to Pharmacy Edge, or would like to request a media kit for sponsorship opportunities, send an email to info@joinappa.com.
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