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ELEMENTS
MERCHANDISING BASICS Increase sales in your front end through simple merchandising adjustments
SMOKE SECURITY SmokeCloak offers an innovative way to combat pharmacy theft
Website Essentials Why your pharmacy needs a website, tips to create a successful one and how it can boost your business
VOL. 5 ISS. 1 | MAR 2016 | PBAHEALTH.COM/ELEMENTS
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ELEMENTS
The business magazine for independent pharmacy
STAFF & CONTACTS Matthew Shamet – Publisher and Editorial Director Kirsten Hudson – Editor Kellie Paxton – Art Director Kathleen Barbosa – Contributing Writer Analisa Bregant – Contributing Writer Paige Fisher – Graphic Designer INTERESTED IN ADVERTISING? elements@pbahealth.com
Contents Departments 5 NEWS:
20 SPOTLIGHT:
Improve Patient Understanding in 2 Minutes Research confirms that asking patients open-ended questions can improve comprehension. 6 TRENDS:
Innovative Thinking Put on your thinking cap to improve your pharmacy business.
Stocking Up Reasons to add compression hose to your front end. 24 MONEY:
Strategic Purchasing Making smart choices about how and when you purchase inventory can improve your cash flow, cost of goods and terms. 29 OUTLOOK:
8 RETAIL:
Merchandising Basics Increase sales in your front end through simple merchandising adjustments.
Specialty Outlook Insights into the booming business of specialty pharmacy. 34 NOTES:
11 SOLUTIONS:
Smoke Security SmokeCloak offers an innovative way to combat pharmacy theft.
ON THE WEB //
Seasonal Changes Boost front-end sales by promoting allergy products this spring.
Feature: Website Essentials
14
Why your pharmacy needs a website, tips to create a successful one and how it can boost your business.
Find more strategies, tips and expert advice to improve your business at pbahealth.com/elements.
Star Ratings Explained: What Your Pharmacy Needs to Know
A refresher on how Star Ratings affect your pharmacy today, including tips on how to improve your ratings. Read more at pbahealth.com/star-ratings-explained-what-your-pharmacy-needs-to-know.
Elements magazine is published quarterly by PBA Health. Copyright© 2016 PBA Health. All rights reserved. Neither this publication nor any part of it may be reproduced without written permission by PBA Health.
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NEWS
Improve Patient Understanding in 2 Minutes Research confirms that asking patients open-ended questions can improve comprehension How many times have you explained a medication’s instructions, but left the consultation unsure if the patient understood key information? “There are many instances where we assume patients understood. They nodded their head, smiled and said, ‘yes,’ but it turned out they had no idea what we were talking about,” said Richard N. Herrier, Pharm.D., FAPhA, CAPT., U.S. Public Health Service (Ret.), professor at the College of Pharmacy at the University of Arizona in Tucson, Ariz. Herrier co-developed a method for counseling patients that aims to improve patient understanding through questioning with Robert Boyce, B.S.Pharm., FASHP, CAPT., U.S. Public Health Service (Ret.), director of pharmacy services in the Student Health Center Pharmacy at Oregon State University in Corvallis, Ore. Research confirming this method’s effectiveness was recently published in the Journal of the American Pharmacists Association. THE METHOD In a typical consultation, Boyce said a pharmacist explains the prescription’s label or reads directions from the provider. “This method is one way, and rarely assesses what knowledge the patient might know.” To fix this, Boyce and Herrier created three openended “prime” questions designed to verify that patients truly understand all the directions. These are, ‘What did the doctor tell you the medication was for?,’ ‘How did the doctor tell you to take the medication?’ and ‘What did the doctor tell you to expect?’
If a patient can’t answer all the questions, the pharmacist fills in the information gaps. This can sometimes make the consultation longer. This questioning method takes about two minutes, while traditional counseling takes 75 seconds, according to the study. But, the study found that the added time comes with an improvement in patient understanding. According to the study, 71 percent of patients counseled using this approach answered all three prime questions correctly after the consultation, compared with 33 percent of patients who were instructed using the traditional method. BENEFITS OF IMPLEMENTATION Ensuring patients understand their medications is key to improving adherence, which offers other benefits for your business. “Enhancing adherence means you’ll fill more prescriptions,” Herrier said. “If patients take their medication, you’ll see an increase in prescription volume and income.” Taking the time to counsel patients also shows that you care. “If they know you care and are knowledgeable, then they’re more likely to trust your expertise and interest in them,” Herrier said. “They’ll be more likely to ask for advice, potentially leading to more business in over-the-counter (OTC) medicines and medical devices.” Implementing this method can be challenging. To make the process smoother, Herrier recommends pharmacists decide what they want patients to know about the medication ahead of time, so they’ll know what to listen for in a patient’s answers. In his experience, Herrier said independent pharmacies have an easier time adopting the method. “The reason was they talk to patients anyway,” Herrier said. “That transition for them was much easier in most cases.” Boyce urges pharmacies to remain patient as they try this new method. “Over time they’ll find that they’ll never go back to the old method,” he said.
Follow Elements magazine on Facebook and Twitter for pharmacy business tips and advice, news announcements, industry information and exclusive offers.
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TRENDS
Innovative Thinking Put on your thinking cap to improve your pharmacy business
As the health care landscape changes, pharmacists have to adapt and grow. That starts with thinking differently. “People change. So must pharmacy,” said Dave Wendland, vice president and member of the owners group at Hamacher Resource Group, a leading partner in category management, business strategy and marketing services focused on consumer health care at retail. “Staying stagnant and not innovating is a death sentence,” he said. Are you ready to think like an innovator? TRAITS OF INNOVATORS Change happens all the time. Trends change. Patients change. Health care changes. Independent community pharmacies must innovate to accommodate change. “If independent pharmacy operators aren’t reinventing, reimagining and reshaping their businesses, they’re likely receding and retreating,” Wendland said. Wendland calls these types of businesses “establishment retailers.” Establishment retailers are the pharmacies choosing to live in the past, and they haven’t caught up to the present, he said.
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DIFFERENTIATING YOUR BUSINESS Innovators are those businesses that aren’t afraid of making mistakes. They’re the ones that are always striving to push their limits, Wendland said. Wendland believes successful innovators in pharmacy are those who bring new value to their patient base, and who refuse to surrender to the competition. Specialty pharmacies that focus on conditions such as HIV, cancer, multiple sclerosis and respiratory conditions are one example. “Specialty pharmacies have aspired to be different in the marketplace,” Wendland said. “They’ve transformed their approach to patient care, and they’ve reengineered their entire operation.” Pharmacies that focus on niche areas, such as women’s health, diabetes or other chronic conditions, also provide unique experiences for patients, he said. “They’re redirecting energies to something that’s going to resonate with the population they hope to serve.” STEPS TO INNOVATION The first step is always the most difficult. Pharmacies looking to become innovators must understand that the first step is not the final one.
TRENDS
About the expert Dave Wendland, vice president and member of the owners group at Hamacher Resource Group, will share more insights into thinking outside of the box during a continuing education session at the Next! 2016 PBA Health Conference & Business Seminar, June 24-26, 2016 in Kansas City, Mo. Learn more and register to attend at pbahealthconference.com.
“Innovation is iterative, and improvements are continual,” Wendland said. “The most important action to take when getting started is to remember the saying, ‘Think big, but start small.’” If you don’t consider yourself to be an innovative thinker, Wendland has a few nuggets of advice. He recommends reading and continually learning. Wendland suggests that pharmacists commit to reading one new, industry-relevant article each day, so at the end of one year they have countless ideas to consider applying to their businesses. “Everybody can be creative,” he said. “Innovation simply means being open to new ideas.” Wendland also advises pharmacies to look outside their four walls. Visit other pharmacies, and also visit retailers outside of your industry to gain insights. “You could even learn from Bass Pro Shops,” he said. “Maybe you see they have a class on fly fishing and think, ‘I could offer a class that helps people learn how to care for a loved one who is bedridden.’” Wendland said innovation should be a team effort, and suggests you give your team the freedom to brainstorm. “The good news about community pharmacy is they can try just about anything. There isn’t a corporate office where you have to run it up the flagpole,” he said. “If you want to do something new, do it.’”
considering your budget when deliberating ideas, but to always be open to new ideas and to overcome the initial resistance to change. “A great idea sometimes comes with a high price tag,” Wendland said. “That’s where we go back to, ‘Think big, start small.’ If the big idea costs too much, then instead of saying, ‘Nope, we’re not going to do anything,’ the response should be, ‘What can we do, within our budget?’ That’s where real creativity can pay off.”
IDEAS INTO ACTION Once you put an idea into action, how do you determine whether it was a success? Examining the hard numbers and how much your business profited monetarily from the new endeavor is useful in measuring success. However, Wendland recommends measuring the soft data as well. “Don’t overlook the value in customer satisfaction and employee happiness,” he said. “To determine success, you must quantify both variables.” Pharmacists should expect to run into a few obstacles to innovation. Wendland recommends
• Visit a retailer. Notice an idea that strikes you? Write that down. It could possibly work for your business.
Innovation Inspiration Use these simple strategies to help you think like an innovator • Take a different route to your pharmacy each morning on your commute. • Walk in your pharmacy as if you were a customer. Write down the first three things you see when you walk in.
• Give yourself permission to dream. Never give up on the “what if’s” in life.
ELEMENTS | pbahealth.com/elements
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RETAIL
Merchandising Basics Increase sales in your front end through simple merchandising adjustments Whether you want to boost your independent community pharmacy’s front-end sales, introduce a new line of products into your store, or enhance your patients’ shopping experience, now’s the time to improve your merchandising. “The best merchandiser wins. It’s that simple,” said Gabe Trahan, senior director of store operations and marketing at the National Community Pharmacists Association (NCPA). Get ahead of your competition and gain foot traffic by differentiating your store through superior merchandising. Consistently updating displays in your front end can help your pharmacy appear up-to-date and drive patients to shop at your pharmacy, in addition to filling their prescriptions.
Merchandising Mistakes
Avoid these common mistakes for better merchandising • • • • •
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Don’t put the price of an item on the front of its packaging Don’t use your most prominent end cap to sell clearance items Don’t keep clutter on your pick-up and dropoff counters Don’t display more than one or two items at each counter Don’t stock fewer than three of each item
ELEMENTS | pbahealth.com/elements
RETAIL
Products to Stock
How trendy is your pharmacy? Gabe Trahan, senior director of store operations and marketing at the National Community Pharmacists Association (NCPA), suggests popular front-end products for your pharmacy to promote.
Premium supplements
Promote supplements that support energy and heart health
Skin care
Offer sales on anti-aging or sun care products
Compression hosiery
Provide a special on compression hosiery (for more on this product, see page 20)
“A merchandiser who can attract the customer’s attention and add perceived value to an item will increase sales and revenue,” Trahan said. “And, remember frontend sales are cash.” Here are a few merchandising basics to get you started. PLANOGRAM POTENTIAL To begin the process of arranging new merchandise, Trahan recommends utilizing planograms. “Planograms should be viewed as a map pointing you toward proper sub-category placement, priority product placement, new item placement and suggestions on removing slower selling items,” he said. “Like all maps, planograms offer ways to get you to where you want to go. It’s up to a good merchandiser to explore other routes without wandering in the wrong direction.” VALUE NOT SIZE Merchandize your products by value—not size. “The item with the biggest ring at the register goes at eye level,” Trahan said. “An example is a typical end cap of vaporizers and facial tissue with tissue on the top and vaporizers at the bottom. Experienced merchandisers will reverse that placement with the vaporizers on top.” It’s also a good idea to add a prominent sign to your end cap to draw shoppers in.
ACQUIRE NEW IDEAS Take a look at your competition for ideas. Notice what products those pharmacies offer or how their store layout is set up. “Look at the competition; look at your patient base; and find what products and departments it makes sense to add or update,” Trahan said. CHANGE IT UP Regularly rearrange your merchandise. “End caps should be redone at least every two weeks,” Trahan said. “Get an extra two weeks out of the display by relocating the end cap.” Trahan also recommends changing every over-thecounter (OTC) planogram category once a year. “You know you’re doing a good job when customers complain that you’re always moving things around,” Trahan said. MERCHANDISING NOT DECORATING Trahan reminds independent pharmacies not to confuse merchandising and decorating. “Be the best at merchandising, and don’t decorate,” he said. “Instead, let the items be the star on the shelf.” BUNDLE BUYING Grouping certain items together can encourage companion purchases. “Place facial tissue in the cough and cold department along with vitamin C, hand sanitizer, thermometers and new toothbrushes, so customers can throw those germs away,” Trahan said. Think about certain items you offer that may not seem like they go together, but when they do, they increase a sale from just one item to two or three more purchases. HIRE WELL Trahan suggests investing in hiring a front-end manager. “Too many stores struggle because the person who orders and merchandises the front end is the employee who isn’t busy at the time,” he said. “Invest in a frontend manager. Work closely with this team member on section profitability and marketing.” With more than 30 years of pharmacy management experience, Gabe Trahan, senior director of operations and marketing at NCPA, offers merchandising advice to help increase business and foot traffic at your pharmacy. For tips, ideas and advice on how to increase your pharmacy’s front-end profits, follow Trahan on Twitter at @NCPAGabe or check out NCPA’s front-end program, Front-End Overhaul at ncpanet.org/feo.
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2017 Brown & Bigelow Calendars PHARMACY PROGRAM Closed: 10 7/8 x 10 Opened: 10 7/8 x 18 Spiraled
2017 Pharmacy Calendar
JANUARY 2017
View of San Francisco
Last Move
17 JANUARY 20 MONDAY
SUNDAY
8
7:50 A.M. 4:49 P.M. Morning
7:49 A.M. 4:52 P.M. Morning
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7:50 A.M. 4:50 P.M. Morning
7:49 A.M. 4:53 P.M. Morning
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7:49 A.M. 4:54 P.M. Morning
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7:48 A.M. 4:55 P.M. Morning
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7:47 A.M. 4:58 P.M. Evening
15
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7:47 A.M. 4:59 P.M. Evening
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Last Quarter
Benjamin Franklin,
1706
7:41 A.M. 5:08 P.M. Morning
7:38 A.M. 5:14 P.M. Morning
7:39 A.M. 5:13 P.M. Morning
7:40 A.M. 5:11 P.M. Morning
7:40 A.M. 5:10 P.M. Morning
29
7:34 A.M. 5:18 P.M. Evening
30
15
28
7:37 A.M. 5:15 P.M. Morning
27
New Moon
Daily Fishing Guide
Fair Best Poor Good vary according to Specific times will U.S. your location in the
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Colorful illustrations by America’s most beloved artist, Norman Rockwell, makes this a popular calendar.
Discover the natural wonders and beautiful scenery of America in this attractive appointment calendar.
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from the Marin
WEDNESDAY
3 10
11
16
17
18
22
Benjamin Franklin,
23
29
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 19 20 21 22 23 17 18 24 25 26 27 28
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Epiphany Día de los Reyes Magos
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1706
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
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4
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Martin Luther King, Jr., 1929 Birthday Observed Conmemoración del Natalicio de Martin Luther King, Jr.
Headlands, California DECEMBER
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Prescriptions - Sundries - Photo Finishing - Snack Bar
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set Standard Time: Sunrise/Sun
7:35 A.M. 5:17 P.M. Evening
125 Camelback Road • Phoenix, Arizona 39402
SUNDAY
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7:43 A.M. 5:06 P.M. Evening
20
7:44 A.M. 5:04 P.M. Evening
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7:45 A.M. 5:03 P.M. Evening
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7:42 A.M. 5:07 P.M. Morning
7:45 A.M. 5:02 P.M. Evening
7:48 A.M. 4:56 P.M. Evening
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Full Moon
7:46 A.M. 5:00 P.M. Evening
YOUR PHARMACY NAME HERE
555-1234 Epiphany
First Quarter
New Year’s Day
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7:50 A.M. 4:48 P.M. Morning
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7:51 A.M. 4:47 P.M. Morning
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7:51 A.M. 4:46 P.M. Evening
Valley Pharmacy
SATURDAY
FRIDAY
THURSDAY
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7:51 A.M. 4:45 P.M. Evening
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7:51 A.M. 4:44 P.M. Evening
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25
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New Moon
YOUR PHARMA CY NAME HE Your product or
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FREE! Pharmacy Back Cover Back covers included on the Rockwell Pharmacy and Scenic calendars above contain up-to-date information that boosts the value to the recipient. It provides helpful family health care tips on the back cover and a handy location for emergency phone numbers. (Back cover not available with 805 Vistas Hermosas or 855 Smart Living). Valley Pharmacy
Prescriptions - Sundries - Photo Finishing - Snack Bar 125 Camelback Road • Phoenix, Arizona 39402
555-1234
Closed: 10 7/8 x 10 Opened: 10 7/8 x 18 8 9 10 4 5 6 7 15 16 17 11 12 13 14 22 23 24 18 19 20 21 29 30 31 25 26 27 28
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JANUARY ENERO 2017 5 4 3 2 MAR/TUE
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Año Nuevo New Year’s Day
8 15
9
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Día de los Reyes Epiphany
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FEBRERO/F 1 2 3 4 9 10 11 5 6 7 8 16 17 18 12 13 14 15 23 24 25 19 20 21 22 26 27 28
VIE/FRI
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1
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National Glaucom a Awareness Month • Thyroid Awaren Valdez Harbor, Valdez, Alaska TUESDAY ess Month • Birth WEDNESDAY Defects Prevent ion Month THURSDAY FRIDAY SATURDAY
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125 Camelback Road • Phoenix, Arizona 39402
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16 Martin Luther King, Jr., Birthday Observed 1929 Conmemoración del de Martin Luther Natalicio King, Jr.
23
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805 Vistas Hermosas
2
855 Smart Living
3
4
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New Year’s Day Año Nuevo
Prescriptions - Sundries - Photo Finishing - Snack Bar
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Adorn your casa with this Calendario de Citas featuring the scenic beauty of Central America: Argentina, Chile, Colombia, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, México, Peru, Puerto Rico and Venezuela. Bilingual Spanish/English month headings, holidays and captions. Calendar is “stitched” and the back cover features three Years-At-A-Glance. HERE MACY NAME an YOUR PHAR r product or slog
SUNDAY
28
27
30
JANUARY 2017
Spiraled
EBRUARY
Venezuela Nueva Esparta, Margarita Island, Venezuela • , Nueva Esparta, Isla Margarita
R DICIEMBRE/DECEMBE 1 2 3
DECEMBER 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
30 FEBRUARY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
17 Benjamin Franklin,
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Epiphany Día de los Reyes
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Magos
Full Moon
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1706
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Last Quarter
Health Tips New Moon
BE SMART Boost your immune system with good nutrition. Consider a vitamin C Start the New supplement as Year Right – The lifestyle. Set well. better As your stepsmanageable fitness goals to you feel, the more you will to maintain positive exercise regularly, enjoy life, habits take effect, eat a diet rich in fiberso start today and work toward and low in fats, you’ll soon feel a healthier cholesterol, sugar the benefits in your overall health and salt. and energy level.
Soothing scenic photos paired Valley Ph armacy with helpful health and wellness tips for each month create a unique promotional tool for health conscious customers. Calendar is “stitched” and the back cover features three Years-At-A-Glance and a handy Health Record Summary Chart for tracking important medical information. Prescrip
tions - Sun dries 125 Cam elback Roa - Photo Finishing - Sna d • Phoenix ck Bar , Arizona 39402 555-1
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YOUR CUSTOM IMPRINTED CALENDAR: ORDER NOW! • Helps build strong name identity • Puts your name and number where buying decisions are made • Reminds your customers of your name and services many times a day, every day To order calendars, go to the Brown & Bigelow listing in the PBA Health directory at www.pbahealth.com
SOLUTIONS
Smoke Security SmokeCloak® DNA offers an innovative way to combat pharmacy theft This cutting-edge security product will leave thieves in a fog. SmokeCloak® DNA’s fog-generating machines are a unique type of security system. When activated, they emit large amounts of smoke to deter intruders and prevent them from stealing products or damaging property. Besides engulfing burglars in a haze in less than 60 seconds, SmokeCloak recently outfitted its fog machines with a new DNA technology from Applied DNA Sciences, a biotech company based in New York. The fog drives intruders from the store and the DNA technology marks the intruder with a unique forensic identifier. “A proprietary mix of DNA fluid goes into the fog,” said Larry McIntosh, director of sales and security at SmokeCloak. “When it’s activated and deployed into an area, it’ll coat the bad guy and anything he might grab with a unique DNA marker. It’s a cool, CSI-like feature.”
Law enforcement can then use the DNA marker to track the criminal or any stolen items back to the scene of the crime. PHARMACIES ARE TARGETS Burglars are increasingly targeting pharmacies, and especially independent community pharmacies, for prescription and over-the-counter (OTC) products. “A cellphone store is a target too, but it’s not the same as getting a safe full of oxycodone,” McIntosh said. “Pharmacies are typically smaller footprints, and they have a very rich product that burglars want that they can resell for extremely high profits,” McIntosh said. A current trend is stealing cough medicine and reselling it by the box, he said. Trends of abuse are growing nationwide. The 2013 U.S. Department of Health and Human Services (HHS)
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SOLUTIONS
At a Glance
Let us clear up the fog. Here’s what you need to know about the fog-generating machines offered by SmokeCloak.
Will the fog leave a residue or damage my store or products? No. SmokeCloak uses a proprietary glycol fluid that’s food-grade safe, doesn’t leave a residue and won’t harm your property. Does SmokeCloak work with my security system? It can be connected to operate automatically with your current security system, or it can work as an independent unit. SmokeCloak partners with your current security company to install the product and hook it up to your alarm system.
How does the DNA feature work? SmokeCloak partners with Applied DNA Sciences, a biotech firm based in New York, to add a unique DNA feature to every machine. When the fog is dispersed, it coats everything in the location, including the intruder, with an undetectable, unique DNA marker. The marker lasts three weeks or more on humans and longer on clothes and other items.
What are the different product options? The products best suited to pharmacies include the SmokeCloak Easy DNA, VALI 5, VALI 10 and VALI 20. SmokeCloak can help you determine what you need based on your store’s size.
How long does a SmokeCloak product last? Typically 10 to 15 years or more, if properly maintained.
National Survey on Drug Use and Health reported that prescription pain relievers are the second most abused illicit drug in the U.S., with 1.9 million Americans dependent on the substance. And, an October 2015 address from the Obama Administration revealed that prescription drug abuse in the U.S. is only increasing and federal, state and local private sectors are working to address the epidemic. INSTANT PROTECTION Criminal activity goes hand-in-hand with the prescription drug epidemic. Independent community pharmacies face more hurdles to protecting their businesses than national chain and big box pharmacies. “Independents are on their own. They don’t have big budgets and security teams,” McIntosh said. “Often, they’re one pharmacy, and their business is their livelihood.”
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How much does the system cost? Pricing ranges from $2,400 for the SmokeCloak Easy DNA to $4,500 for the VALI 20. The price is a onetime charge, with no monthly fees.
ELEMENTS | pbahealth.com/elements
SmokeCloak reduces the risk of theft by deterring criminals. When the motion sensor is activated, SmokeCloak dispenses fog into the air. The smoke fills the area, and disorients anyone attempting to steal from your pharmacy. Confused by smoke and the alarm system blaring, the criminal will most likely flee the scene, leaving behind any items he may have tried to take with him. McIntosh explains the SmokeCloak product as “being a protection for the gap in time of alarm activation to when the police show up.” McIntosh, a former police officer, knows firsthand that it takes law enforcement officials 10 to 15 minutes to reach a site of break-in. “Alarm calls tend to be given lower priority because they’re often times false alarms,” McIntosh said. “Burglars will have plenty of time to get in and out of the store because of the length of time it takes for police to get to the scene of the crime.”
SOLUTIONS
“They can get in and out within five minutes,” he said. “The store can be damaged, the goods taken and the alarm functioned perfectly.” You may already have an alarm system, bars on the windows, cameras, motion sensors and sirens, but SmokeCloak is one more deterrent to add to your arsenal. It adds another layer of protection for your pharmacy. And, it works with your current anti-theft systems. SmokeCloak can be set up to complement a previously existing alarm system, and activate when the alarm is set off. Or, it can be tied to a motion sensor. When a potential burglar reaches the motion sensor in a specific location inside the store, SmokeCloak will release its fog. Depending on the size of your pharmacy, SmokeCloak can remain in the air upwards of 20 to 45 minutes. The fog will dissipate more quickly when a door or window is opened, making it easier for you and law enforcement to survey any missing property or damage done to the store.
related to disarming the alarm system, McIntosh said. “Forgetting to disarm the system when you walk into your store is a common pilot error,” he said. “If SmokeCloak is tied into the motion sensor and you forget to turn off your alarm, it will sound off before you reach the back counter. There will be no risk of the fog dispensing.” SmokeCloak has the capability to run for 90 minutes on its battery backup. In case of a storm, which may deactivate certain alarm systems, SmokeCloak will continue to operate. Maintaining a SmokeCloak device is relatively inexpensive. Each canister of fluid includes enough liquid to dispense about 15 fog activations. Purchasing a new canister costs $200 and replacing the battery costs about $30. McIntosh recommends having your system checked yearly by your security company. If properly maintained, the system can last for a decade or longer. When considering your budget, SmokeCloak devices range from $2,400 for an entry-level device to upwards of $4,500. It’s a one-time fee and there’s no monthly charge. “Our price is low compared to the cost of other security systems,” McIntosh said. “The pricing is almost never an issue for our customers. If a pharmacy is broken into, the owners think about the damage they once experienced at their store. They remember how much it cost to repair things. To spend around $3,000 for a product that’s going to provide greater security, and last you 10 to 15 years, our customers don’t blink an eye at that.” Watch videos of the product in action and learn more at smokecloakdna.com.
“Independents are on their own. They don’t have big budgets and security teams. Often, they’re one pharmacy, and their business is their livelihood."
ALL THE DETAILS The SmokeCloak fog and DNA coating is safe for people and property. The fluid mixture released from the machine is a food-grade safe glycol. It’s non-toxic and doesn’t leave a residue. “Some people ask if it puts out a pepper spray that disables or harms the burglar,” McIntosh said. “That’d maybe be good in some situations, but in everyday usage you can’t do that because of liability. What about the employees or the officers who come in? So, it has to be completely safe in the environment that it goes off in.” Incidents involving false alarms with SmokeCloak are in the single digits, and most were cases of human error
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Website Essentials Why your pharmacy needs a website, tips to create a successful one and how it can boost your business By Kathleen Barbosa
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A website is your pharmacy’s digital storefront. Having one is not only a smart marketing move; it’s necessary for success. “Consumers are looking for information online before even walking through the doors of a brick-and-mortar,” said Nicholas Deuro, web developer and founder of nickpc (nickpc.com), a company that offers custom website design and development. “The biggest mistake businesses make with websites is that they look at them as a luxury as opposed to a necessity.” If potential patients can’t find your website, it raises a red flag. “If someone can’t Google you, then they might not trust that you’re a legitimate business, especially in pharmacy,” said Kellie Paxton, art director of print and web at PBA Health, a pharmacy services organization that also offers marketing services to independent community pharmacies, including website design and development. Websites also offer other business benefits. They act as low-cost advertising, provide readily available information to patients 24 hours a day and can improve workflow by answering simple questions about your pharmacy so you don’t have to. Most of all, having and maintaining a quality website can grow your business. “That initial good impression is what could translate a potential viewer into a potential customer,” Deuro said. Whether you’re starting from scratch or in need of an update, investing time and resources into your pharmacy’s website is a smart business decision. WEBSITE BASICS Every small business website needs certain features and information. Including basic information, such as your phone number, email address, physical address and store hours, is a must. Drew Tonsmeire, area director of the University of Georgia (UGA) Small Business Development Center (SBDC) at Kennesaw State University in Kennesaw, Ga., suggests making your address available as a map. “A lot of people could be new to your community, or just visiting, and they’re in need of a pharmacy that they’re not regularly using, so just an address isn’t enough,” Tonsmeire said. A digital map that syncs with users’ phones will provide them with instant directions to your pharmacy. “Remember, people can land on any page of a website, so that information for phone number, address and location has to be on every page,” Tonsmeire said. Other must-dos include answering basic questions
about your business such as, “Who are you? What does your business do? When do you do it? Where do you do it? And, why do you do it?” Paxton said. Also, make any extra benefits and features of your website clear to users. “Do you write a newsletter once a month? Do you provide coupons for opportunities to get lower-cost items from your store?” said P. Simon Mahler, chapter chair of the Mid-Columbia Tri-Cities SCORE in eastern Washington, a nonprofit association dedicated to educating entrepreneurs and helping small businesses through mentoring in partnership with the U.S. Small Business Administration (SBA). Your website should be simple, clear and user-friendly. “You want to make sure that as users are browsing through the site they’re not trying to scrounge up information,” Deuro said. It should be simple to use, and have consistent colors, textures and themes. Consistency ensures that users feel like they’re on the same website, even as they click from page to page, he said. Keep content simple, make sure everything on the page has a reason and don’t try to overload users with content. “When websites are poorly designed and
By the Numbers Percent of small businesses don’t have a website Percent of small business websites are not mobile compatible Percent of small business websites have no call to action Percent of consumers look online for local products and services Percent of smartphone owners have connected with a local business after a search Source: U.S. Small Business Administration
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Website Vocabulary When it comes to websites, there’s no shortage of technical terms and jargon. Here’s a look at some common terms you may encounter as you create and maintain your pharmacy’s website. SEO SEO stands for search engine optimization. It refers to how search engines, such as Google, Yahoo and Bing, index your website, and how you can improve your ranking by using strategic keywords. Template A template is a pre-designed webpage that you can customize with your own text, pictures and other content. Plugins Plugins are software modifications that you can add to a website or template. An example is a feature that enables visitors to chat with you directly. Traffic Traffic is another word for the users who visit your website. It’s measured in unique monthly visitors, which means the number of devices that visited your website.
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developed, they can create barriers,” Paxton said. Finally, Deuro said that every website needs a call to action, which is a specific request you want users to do, such as to call your pharmacy, visit your pharmacy or transfer their prescriptions. KEY FEATURES AND FUNCTIONS All of the experts agree that making your website mobile responsive is a top priority. “Now more than ever, people view sites on phones, iPads®, laptops and desktop computers,” Paxton said. You have to be prepared for any device. “No matter what kind of device visitors use to look at your website, you want to make sure you’re giving them the best possible result,” Deuro said. Mobile responsiveness can even affect your website’s search ranking. In April 2015, Google added mobile responsiveness as a factor in its algorithm that determines the order of search results, Deuro said. A website, even if it’s only a few years old, might be lower in search results if it isn’t mobile responsive. Even if the user isn’t searching on a mobile device. Tonsmeire warns that ranking just a few listings lower can hurt chances of patients finding you. “They’re not going to go deep in their search,” Tonsmeire said. Users will go one or two pages at most to find what they’re looking for. If your pharmacy’s website isn’t there, you may lose patients to the competition. The importance of mobile responsiveness is only expected to grow. “It won’t be too long before people start asking the question,
‘What’s a PC?’” Mahler said. Another essential feature for a successful website is analytics. “Google Analytics is a tracking code that tracks visitors to your site. It gives you an idea of how many visitors you have per day, what pages they go to and look at, how long they’re on a page, and what pages they came from,” Tonsmeire said. “It’s probably one of the best tracking tools out there and it’s absolutely free.” Deuro said this information can help you make strategic decisions to improve your website. “We could actually look at the site, see what works, what doesn’t work, and start tailoring it in a positive direction that will not only benefit the pharmacy, but the end user, too,” Deuro said. DO-IT-YOURSELF VS. PROFESSIONAL HELP If you need a new website, or if it’s time to redesign and update your current site, you face a complex decision— hire a professional or do it yourself? “The decision to do it yourself or do it with outside resources lies in the three T’s: time, talent and treasure,” Tonsmeire said. “What do you have time to do? What do you have the talent to do? What do you have the money to do? And, so you have to really assess your own situation.” Most small businesses Tonsmeire works with have more time than treasure, so they spend more time and effort making their own website with a template platform. “Ultimately the cheaper it is, the more time it’s going to take,” Tonsmeire said. “It can be an inexpensive template to begin with, but you’re going to have to take the time to build it, and then have a plan for keeping it updated.” If you want to build your own website, most of the experts recommend using a template-building platform, such as Wix.com, Squarespace or Wordpress.com. Vivian Hernandez, marketing communications manager at Wix.com, a web development platform with more than 78 million users, said templates make websites simpler for small businesses. “Small business owners already face so many challenges that creating and managing a professional online presence shouldn’t be one of them,” Hernandez said. Hernandez said Wix.com allows users to create
websites using a code-free, drag-and-drop editor for hundreds of templates, or from scratch. But Paxton cautions that it’s not always simple. “It’s very easy to get caught up in the idea that it’s easy to just purchase a template and build your own website,” Paxton said. “It is possible. It’s just not as simple as it sounds.” Turning your vision into a reality can be difficult, and some templates may be unable to support features you want, such as online refills. “If you happen to have an expert designer and developer on staff at your pharmacy, then go for it, but that’s not often the case, especially in independent pharmacies,” Paxton said. PERKS OF PROFESSIONALS Contracting website work out to a professional may cost more, but it can save you valuable time and effort. “A lot of people think they can do it themselves and that’s fine, but as with any type of technical field, or highly developed skill, by allowing someone else to do it, you’re going to save yourself a lot of valuable time, energy and frustration,” Deuro said. Templates might provide the necessary tools, but Deuro said you might not have the skills to create what you envision. “Much like if you’re going to repair my car, you can go out and buy a toolbox, but if you don’t know what to do with those tools you’re kind of left by yourself,” he said. Deuro said hiring an expert often creates a more professional-looking result, and simplifies the process. “So you can focus on running your business and doing what you do best,” he said. The biggest hurdle to hiring a professional is often the cost. “A lot of small businesses don’t have a budget specifically for a website,” Deuro said. Cost varies depending on if you’re starting from scratch or if you need a redesign. The functions, features, and technology you need, such as e-commerce, and if you’re willing to maintain the website yourself, also factor in. To save money and ensure that you’re getting the best support possible, Mahler recommends shopping around for professionals. “Look at the big markets,” Mahler said. “They’re all
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competing, so they’ve got to be affordable.” Mahler also suggests pharmacies check with their area SCORE office. Some locations offer small businesses free or discounted website design and development services. Local businesses are another option. “Find somebody in your town, so you can sit face-to-face,” Tonsmeire said. “Support local small businesses in your community and reach out to them.” In the long run, Tonsmeire said, you’ll benefit from a local business’s customer service. “I have never heard anybody brag about how cheap their site was,” he said. “It’s always about service. Having a webmaster halfway around the world in a different time zone, or in a different language, usually creates more problems than solutions.” Ultimately, Tonsmeire said it’s important to remember that, “the cheapest site is not always the best site.” HELP PATIENTS FIND YOU If patients can’t find your website, it might as well not exist. Start by making sure your site shows up in search engine results, also known as search engine optimization (SEO). “SEO is how online providers like Google, Yahoo and Bing can actually find your website,” Deuro said. Deuro said his clients often ask why their website doesn’t show up while searching for specific keywords. For example, a pharmacy in Madison, Wis., that specializes in diabetes might not show up in the results for the search, ‘drugstore with insulin.’ “It’s because we don’t actually see that on your website,” Deuro said. “If the content isn’t there on your website, there’s no way for a search engine to harvest that information.” Tonsmeire said websites should use the language patients use. For example, do your patients call your
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business a ‘drugstore’ or a ‘pharmacy’? “Think about what patients use and include those kinds of words on your site,” he said. Including the name of your neighborhood and other recognized geographical landmarks can boost your website’s ranking. For example, you can help patients find your website by including relational geographic descriptions, such as located ‘downtown,’ ‘just a couple of blocks off campus,’ or ‘near the hospital.’ Also, contact anyone who refers patients to you currently, such as physicians, and ask them to post a link to your website on their website and social media pages. “Look at those kind of natural referrals you would normally have and see if you can make those electronic as well,” Tonsmeire said. If you want to use advertising to grow your website’s traffic, Tonsmeire suggests pharmacies target specific areas or groups of people, such as people in your zip code or people interested in your sports nutrition products. “The thing about Internet advertising is you actually do better targeting a smaller audience,” he said. To build traffic, your website needs consistent promotions. Include your website on all emails you send, and on your social media profiles. “Have a Twitter, have a LinkedIn profile, have a Facebook page, and then start getting content on there to drive people to your website,” Mahler said. STANDING OUT The most effective websites have something in common: They stand out. “How do you make yourself unique? By making yourself look like the expert,” Mahler said. Whether you’re a diabetes expert or a sports nutrition guru, highlight your special skills on your website. You can also include customer testimonials,
endorsements from health care partners, or links to publications you’re featured in. Websites offer a great platform for establishing and highlighting your expertise because you control the outlet. “It’s a completely owned space, that lets you craft your narrative, present your brand exactly the way you want, and validate your business,” said Hernandez of Wix.com. Non-pharmacy websites are a great source of ideas for ways to distinguish your pharmacy from the competition. Adapt techniques, features or ideas that you like from non-pharmacy websites and add them to yours. “There’s no sense in reinventing the wheel,” Mahler said. “You’re reinventing your industry by being different because you’re studying a different industry.” UPDATES AND MAINTENANCE One of the biggest mistakes pharmacies make with their website is not updating it. “They think once you build it you’re done, and that’s not true,” Tonsmeire said. “You need to be thinking about a plan to add new content, new ideas and new information.” Leaving out-of-date pictures or inaccurate information on your website gives visitors a bad impression of your business. To keep content fresh, Tonsmeire suggests thinking about questions patients ask. “Those kind of questions you hear from your customers become great content to add to a website,” he said. Small businesses, such as pharmacies, should expect to spend about one to two hours per month updating their website. It’s not just your content that needs to be maintained. “If they’re not staying on top of their website’s management system, theme code, third-party plugins and modules or other software, that could leave your
site open to automated attacks and hacking,” Deuro said. After a couple of years, a website’s technology can become out-of-date, which can leave the website vulnerable. “It’s completely possible to manage it yourself, but a lot of people don’t realize the amount of time that needs to be invested to actually ensure that your website is operating at peak efficiency,” Deuro said. Every few years, Paxton said your website design will need an overhaul. “Trends are always changing and you don’t want to look dated,” she said. Maintenance and updates are a never-ending part of websites. “Don’t just give up and call it good. Always be looking for ways to improve,” Mahler said. GROWING YOUR BUSINESS Ultimately, a website is a tool to get new patients and bolster business. “You can reach a much broader-based market to attract more potential business, which ultimately increases your revenues,” Mahler said. Transform your website traffic into foot traffic by compelling users to act. “Your website has to be enticing,” Tonsmeire said. “When they click to your site, what’s going to entice them to come to your store?” Don’t give away all of the possible information online. “Bait the hook, set the line out there, and give them a reason to call you and ask you questions,” Mahler said. “If you write all the information on your homepage or on your about page, you get no wiggle room for people to want to call.” With the right content, a website can attract repeat visitors and loyal patients. “Create reasons why people need to visit your website, and then sit back, enjoy and watch your business grow,” Mahler said.
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SPOTLIGHT
Reasons to add compression hose to your front end When patients come into your pharmacy complaining of tired, achy legs, do you have a line of compression hose to show them? Stocking compression hose in your front end is a smart option. Compression hose are relatively inexpensive to purchase in bulk, and they’re a complementary addition to the products you already offer. “At some point, you’ve probably had a patient say, ‘I need support hose.’ If you don’t have the product, you’re missing out on a sale,” said Evan McGill, executive vice president of business development at Knit-Rite, Inc., the manufacturing company of Therafirm®, a brand that offers quality, gradient compression hose. PROFIT SUPPORT Compression hose are typically a cash item, but that can be good for business. They may be pricier than other items in your front end, but it doesn’t take long to get a return on your investment. McGill points to Therafirm’s Core-Spun line. “If the pharmacy carries 48 pairs, your investment in inventory is going to be under $1,000, depending on compression levels,” he said. “You’ll make about a 60 percent margin.” If you’re hesitant, McGill recommends reassessing what you stock in your front end. For example, if you have a wall of $1 items, compression stockings might be a better option. “They’re a nice product for profit margin,” he said. Not only is carrying a line of compression hose in your pharmacy beneficial from a moneymaking standpoint, providing a diverse profile of products will also differentiate your pharmacy and get patients in your door.
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THE BUSINESS OF COMPRESSION McGill suggests building referral sources by letting local physicians, including vascular surgeons, podiatrists and dermatologists, know you’re in the compression business. “You’d be surprised how many physicians don’t know where to send patients for compression,” he said. “A lot of them send patients to Walmart, Walgreens or CVS, where they don’t necessarily get a nice product selection. And, they don’t get great service,” McGill said. “If the pharmacy is performing measurements and personalized fittings, the doctors are going to respect that and help build a referral service.”
SPOTLIGHT
Compression Stockings vs. Anti-embolism Stockings Many people don’t realize that graduated compression stockings and anti-embolism stockings have fundamental differences. Evan McGill, executive vice president of business development at Knit-Rite, Inc., the manufacturing company of Therafirm® compression hose, explains the differences. Stocking design Compression stockings are truly graduated compression, which means they’re tighter at the ankles and go up in a proximal direction. Anti-embolism stockings offer different pressure points. Type of patient Compression stockings are designed for mobile patients, while antiembolism stockings are meant for patients who are bedridden. Results of compression Graduated compression hose are intended for mobile individuals who can walk and who suffer from only minor symptoms, such as ankle swelling, varicose or spider veins or edema. Anti-embolism stockings are intended to prevent blood coagulation, thrombosis and blood clotting in patients who are bedridden.
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McGill recommends remembering that, “it’s not just patients, it’s people” who need compression. It’s not only beneficial to sufferers of deep vein thrombosis (DVT), edema, and leg veins, but also to people who stand for long periods of time, pregnant women, long haul truck drivers, frequent flyers or people who experience leg pain at the end of a busy day. McGill also recommends taking a closer look at your prescriptions to find patients who might benefit from compression. “If someone’s getting an anticoagulation medication, like a blood thinner, there’s a good chance that person has DVT. Once that DVT heals, that patient can benefit from compression,” McGill said. “We estimate that 75 percent of people who walk into the pharmacy could benefit from compression immediately.” STYLISH AND MODERN Some patients may be hesitant to purchase compression hose due to common misconceptions that they’re uncomfortable and hot, unaffordable, and ugly and unfashionable. “Compression hose used to be thick, beige and unattractive,” McGill said. “Compression is now built to be more fashionable, so people want to wear it.” Therafirm’s goal is to provide a compression version of the types of socks people wear every day. “If you’re someone who likes to wear a sheer product to work, but you need compression, we have that option,” he said. Therafirm offers compression hose in a variety of collections, styles and compression levels. McGill recommends its Core-Spun collection for pharmacies just getting into compression. “Core-Spun is great because it comes in various compression levels, it’s unisex and its biggest feature is that it’s a very stretchy product. It’s easier to get on, and comfortable to wear,” he said. A Core-Spun display also requires as little space as 15 inches across on a counter top. Make your pharmacy the go-to compression hose location for patients in need of support and comfort for their leg pain. “People trust their pharmacists. They trust their recommendations,” McGill said. “We really need to think of compression as medicine for your legs.”
Remember learning about inventory management in pharmacy school? Maybe it’s because you were busy learning to be a pharmacist. Managing inventory is easy, if you have the right tools. That’s why there’s ProfitGuard. ProfitGuard automatically tracks your purchasing, so you don’t have to. You’ll see at-a-glance where
you can improve profitability and still meet your supplier contract, plus get recommendations for even bigger savings. Managing inventory doesn’t have to take up all your time. www.pbahealth.com/profitguard
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MONEY
Strategic Purchasing Making smart choices about how and when you purchase inventory can improve your cash flow, cost of goods and terms Is your pharmacy getting the best possible balance between cash flow and profitability when it comes to purchasing inventory? “The way pharmacies pay will either affect profitability or cash flow, or it will affect both,” said Don Raby, CPA, CGMA, Chief Financial Officer at PBA Health, a pharmacy services organization based in Kansas City, Mo. Raby laid out the advantages and disadvantages of different methods of purchasing inventory, including credit cards, a line of credit and electronic funds transfer (EFT). CREDIT CARDS Using a credit card to purchase inventory can offer you good terms and rewards.
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“The terms that pharmacies get with their credit card company, depending on when they buy in the credit card billing cycle, are probably better terms than they typically can get with their supplier,” Raby said. For example, if you purchase inventory using a credit card at the beginning of your billing cycle, you could have 30 days before you have to pay the card off, which optimizes your cash flow.
“The way pharmacies pay will either affect profitability or cash flow, or it will affect both.”
MONEY
But if you wait until the end of your billing cycle, using a credit card may not be the best option. You can likely get better terms from your supplier. “The credit card’s benefit depends on when in the billing cycle you buy your inventory,” Raby said. The opportunity to earn reward points is another advantage. “Because of the dollars that are involved with pharmaceuticals, pharmacies can rack up a lot of points pretty quick,” Raby said. LINE OF CREDIT Purchasing inventory with a line of credit from your supplier offers you the flexibility to maximize your cost of goods or improve your terms. “Typically, the faster you pay, the better your cost of goods,” Raby said. “If you’re willing to give up a little bit on your cost of goods, you can get 30-day terms or 45-day terms.” “It becomes a balancing act for the pharmacy,” he said. “They have to ask themselves, ‘Am I more concerned about cash flow? Or, am I more concerned about my cost of goods?’” Raby said he’s consulted with pharmacies about using a line of credit from a bank to purchase inventory to take advantage of lower interest rates. “Typically your cost of goods improvement will run 12 to 15 percent on an annualized basis if you can borrow from your bank at prime, and use the cash to accelerate your payment terms with your supplier,” he said. With a line of credit, pharmacies can maximize cash flow and get a better cost of goods by timing their purchases well.
For example, if you have semimonthly terms with your supplier from the first to the fifteenth, Raby said pharmacies should stock up at the beginning of the month. “If they buy on the first or the second of the month, they maximize cash flow time, and they get the same cost of goods.” Raby recommends taking advantage of this strategy. “You know you’re going to fill the script, so why not stock up on it early in the billing cycle?” he said. “You maximize your cash flow and get the same cost of goods. It just makes sense.” The downside to a line of credit is that purchases made later in the supplier’s billing cycle minimize your cash flow without offering you a better cost of goods. A line of credit also doesn’t offer the reward points a credit card does. ELECTRONIC FUNDS TRANSFER Another option for purchasing inventory is through electronic funds transfer, or EFT, where suppliers draft your account when payment is due. The biggest advantage of EFT is an improved cost of goods. As long as you have the money in your account, this method improves profitability with a better cost of goods and has a hassle-free sign-up process, Raby said. The downside to EFT is that it offers pharmacies fewer rewards compared to credit cards. Overall, selecting a payment method requires weighing each method’s benefits and drawbacks, and deciding which method will best meet your needs. “Pharmacies just need to balance what their concerns are, and manage it from there,” Raby said. “There’s always a tradeoff.”
About the expert Before coming to PBA Health as its Chief Financial Officer, Don Raby, CPA, CGMA, worked for more than six years at one of the country’s top accounting firms. While there, he worked primarily in the tax department, with a focus on corporate taxation for small business owners, as well as for Fortune 500 companies. Raby has been with PBA Health for more than 14 years, and has worked extensively with pharmacists and pharmacy owners to improve the financial side of their businesses.
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How to make your front-end a profit center. We want to help you build your front-end sales by showing you the hottest-selling impulse and seasonal items that other pharmacies are having great success with today. As your premier online wholesale distributor and a national PBA partner, we take pride in providing unparalleled customer service and an extensive assortment of product categories (including seasonal and popular countertop and front-end items) at wholesale and bulk prices. Our secret sauce is selling small cases so you don’t tie up your cash flow in excess inventory. Many of our pharmacy customers have had success in testing products by buying one to two cases of 10 to 20 different items to see if they sell. They reorder the products that are selling and enjoy the profit margins! Let us know if you would like a list of the products that are selling well for other pharmacies.
Why DollarDays? • Free shipping and a 2% discount on all orders of any size or volume • Over 300,000 high quality goods at wholesale and bulk prices • Access to the same type of buying power available to large enterprises • Customer service – our team will assist you through the entire shopping, checkout and post-purchase process • A large assortment of countertop and floor displays
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OUTLOOK
Specialty Outlook
By the Numbers $400 billion — Projected spending for
Insights into the booming business of specialty pharmacy Specialty pharmacy is an emerging opportunity for independent community pharmacies to advance their businesses, while also helping patients. “From a financial aspect, specialty pharmacy is a great avenue for independent pharmacy,” said Jake Galdo, Pharm.D., BCPS, CGP, clinical assistant professor at Samford University in Birmingham, Ala. “It’s also a great opportunity for independent pharmacies because we know our patients.” The demand for specialty pharmacy is growing, and so is the chance for independent pharmacies to become involved. “It’s an incredibly booming industry,” Galdo said.
specialty drugs by 2020
51 — Percent of specialty drug spending used for cancer, rheumatoid arthritis and multiple sclerosis treatment
9.1 —Percent of national health spending projected to be used for specialty drugs by 2020 3 to 4 —Number out of 100 people who use at least one specialty drug Source: The Growth of Specialty Pharmacy, published by the UnitedHealth Center for Health Reform & Modernization, April 2014
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OUTLOOK
Independents already provide patients with quality service and high-touch patient care, which expensive specialty pharmacy demands. Galdo said this level of patient care makes independents well-suited to dispense specialty medications. “We know patients’ family history, we know their social life, and what’s going on,” he said. “We’re able to help them in ways mail order may not be able to.” MUTUALLY BENEFICIAL Patients who rely on specialty medication stand to benefit from specialty services offered by their local pharmacy. These patients often require more time for counseling and additional education on how to administer or store a complex medication. Independent community pharmacies provide the personal approach to care that these patients need. “When we have specialty medical conditions, which tend to be devastating medical conditions like oncology and rheumatoid arthritis, patients need that extra little bit of touch,” he said. “They need that extra little bit of time from us to help them.” Independent community pharmacists also tend to have a closer relationship with their patients, which, Galdo said, can help them when dispensing specialty medications. “We know them by name, we interact with them and we know the entire course of their medical history,” Galdo said. This familiarity is the foundation to a
strong pharmacist-patient relationship, he said. These relationships can improve adherence, which is key to ensuring high-quality results. BUSINESS BENEFITS For independent pharmacies, specialty medications offer a high dollar margin, even if the profit margins are smaller. Galdo explained that pharmacies typically have a profit margin of about 20 to 25 percent for most drugs they dispense. While this percentage seems reasonable, Galdo said that less expensive generic drugs with 25 percent margin might only amount to $2 or $3 for the pharmacy. “That’s not enough to cover the cost of dispensing, which on average is about $11,” Galdo said. Specialty drugs have a large dollar margin, which can help a pharmacy’s bottom line, Galdo said. “With specialty pharmacy, your margin is only 5 percent, but if the cost of the medication is $10,000, your 5 percent margin is $500,” Galdo said. “That covers the cost of dispensing, and then a whole lot.” FUTURE OF SPECIALTY Specialty pharmacy is poised to grow, Galdo said. And, the biggest factor spurring specialty’s growth is money. “Money and the fact that we live longer,” he said. As the population ages, people are more likely to develop a more complex condition, such as cancer, that
What is Specialty Pharmacy? When defining specialty pharmacy, Jake Galdo, Pharm.D., BCPS, CGP, clinical assistant professor at Samford University in Birmingham, Ala., keeps it simple.
“The succinct answer is a high cost and something else,” he said.
Galdo said the Centers for Medicare & Medicaid Services (CMS) consider drugs that cost about $600 per month to be high-cost drugs, and private insurers usually set the bar around $1,200 per month.
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The “something else” means an extra service, storage requirement, special administration, such as injection, or any extra step or education that a medication needs to be properly dispensed. “A good example is insulin because it’s high cost, it requires refrigeration and you have to inject it,” Galdo said.
If you read this…dispense this. You could save this.
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Colchicine 0.6 mg once or twice daily. When the script reads “colchicine 0.6 mg once or twice daily”... consider the capsule — and its cost-saving possibilities. Prescriptions of “colchicine 0.6 mg once or twice daily” frequently do not specify a brand or dosage form. Scripts written this way provide you with an opportunity to dispense West-Ward’s low-cost colchicine 0.6 mg capsule — adding choice, accessibility, and the potential to save money for your adult patients who take colchicine for prophylaxis of gout flares.
Important Safety Information
• Colchicine 0.6 mg capsules are contraindicated in patients with renal or hepatic impairment who are currently prescribed drugs that inhibit both P-gp and CYP3A4. Combining these dual inhibitors with colchicine in patients with renal or hepatic impairment has resulted in life-threatening or fatal colchicine toxicity. Patients with both renal and hepatic impairment should not be given colchicine capsules. • Fatal overdoses have been reported with colchicine in adults and children. Keep colchicine capsules out of the reach of children. • Blood dyscrasias such as myelosuppression, leukopenia, granulocytopenia, thrombocytopenia, and aplastic anemia have been reported with colchicine used in therapeutic doses. • Monitor for toxicity and if present consider temporary interruption or discontinuation of colchicine. • Drug interaction with dual P-gp and CYP3A4 inhibitors: Co-administration of colchicine with dual P-gp and CYP3A4 inhibitors has resulted in life-threatening interactions and death. • Neuromuscular toxicity and rhabdomyolysis may occur with chronic treatment with colchicine in therapeutic doses, especially in combination with other drugs known to cause this effect. Patients with impaired renal function and elderly patients (including those with normal renal and hepatic function) are at increased risk. Consider temporary interruption or discontinuation of colchicine capsules. • The most commonly reported adverse reactions with colchicine are gastrointestinal symptoms, including diarrhea, nausea, vomiting, and abdominal pain.
Indication
Colchicine 0.6 mg capsules are indicated for prophylaxis of gout flares in adults. The safety and effectiveness of colchicine capsules for acute treatment of gout flares during prophylaxis has not been studied. Colchicine 0.6 mg capsules are not an analgesic medication and should not be used to treat pain from other causes. Please visit www.west-ward.com for Full Prescribing Information and Medication Guide for colchicine 0.6 mg capsules. Manufactured by: West-Ward Pharmaceuticals Corp., Eatontown, NJ 07724 ©2015 West-Ward Pharmaceuticals Corp. All rights reserved. WW00179
OUTLOOK
requires specialty drugs. More drugs will be developed to treat those conditions, and Galdo said developing these new drugs is driving the industry. “We have to invest a large amount of money to find a very special therapeutic option for a very specific medical condition,” he said. “That large upfront research cost is driving the backend profit of the business.” Despite these forces driving growth, Galdo cautioned that this niche is not without challenges for independent community pharmacies. Independents face limited distribution, where pharmacy benefits managers (PBMs) and payers designate a few select pharmacies in the nation to carry a certain drug. “So a community pharmacy in rural Alabama or rural Georgia might not be able to access that drug,” Galdo said. “We can only ensure access when we work together to try and overcome it.” A knowledge gap is another challenge some independents face. “Specialty medication deals with medical conditions that are just now being discovered,” Galdo said. “We’re just now finding ways to treat them.” If a pharmacist doesn’t know what the special condition is, Galdo said it’s difficult for him to know how to treat it. “Anyone could do specialty pharmacy, but not everyone should do it,” he said. “If you don’t know what HIV is, should you be dispensing drugs to a patient who has HIV?” To overcome this knowledge gap, Galdo recommends pursuing continuing education. “It’s about being engaged and being willing to jump in and learn something new,” he said.
SPECIALTY SUCCESS In order to be effective, Galdo said independents must focus on how they implement specialty pharmacy into their practice. “The best thing that an independent pharmacy can do to be successful in specialty pharmacy is to be deliberate and analytical within workflow,” Galdo said. Properly incorporating specialty pharmacy into your workflow can make you more efficient, and less likely to make a dispensing error, which, Galdo said, can be devastating in specialty pharmacy. While you never want to make a dispensing error, Galdo noted that a mix up in specialty pharmacy can be particularly damaging for the patient and the pharmacy. “If I misfill a Lisinopril®, it’s not as terrible from a patient outcomes perspective and it’s not really that bad from a financial outcomes perspective, but if I misfill Sovaldi®, I’m out $30,000, and I could really harm the patient,” he said. “If done well, if done properly, we can have a great impact on our patients’ lives,” he said. “We want to get into specialty because there’s a need for our patients to get the best care possible.” Galdo will go into more detail on how specialty pharmacy can benefit your patients and your pharmacy during a continuing education session at the Next! 2016 PBA Health Conference & Business Seminar, June 24-26, 2016 in Kansas City, Mo. “We’re going to cast that vision of ‘What is specialty pharmacy?’ and ‘How can I, a community pharmacist, be able to care for my patient,’” Galdo said. Learn more and register to attend at pbahealthconference.com.
About the expert Jake Galdo, Pharm.D., BCPS, CGP, clinical assistant professor at Samford University in Birmingham, Ala., is leading research projects addressing medication and system-use evaluation in community pharmacy, quality improvement analytics, patient-centered care, and developing different revenue streams for community practice.
ELEMENTS | pbahealth.com/elements
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NOTES
Seasonal Changes Boost front-end sales by promoting allergy products this spring Get your front end ready for allergy season by stocking and promoting the seasonal products your patients need. As more allergy prescription products go over-the-counter (OTC), more patients will self-medicate. “Many people can’t tell the difference between cold and allergy symptoms,” said Ted Bittner, director of sales and marketing at National Pharma Industries, a company that provides quality pharmaceutical and nutritional products, including a full line of 1-DOSE ™ single-dose vial products. “They simply medicate out of the front end of the pharmacy.” PEAK SEASONS Bittner recommends pharmacies run specials and promotions during peak allergy seasons. “The major outdoor allergy season generally starts in February and lasts through mid-May,” he said. “The minor allergy season is in the fall, beginning in August and lasting through mid-October.” He suggests hanging signage around your pharmacy with pollen count information. “Post it daily, so patients can see whether the local pollen count is mild, moderate or severe,” he said. You can find this information
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by entering your zip code on pollen.com, which provides a daily pollen count and allergy forecast. Making patients aware of the looming allergy season will put allergy products top-of-mind. KEEPING IT SIMPLE As you stock allergy products, consider different options. A unique new allergy-fighting antihistamine product, 1-DOSE diphenhdyramine features a prefilled single-dose vial design that’s a convenient option for parents of young children or anyone on-the-go. “The medicine’s individually-
labeled package makes the product convenient and safe,” Bittner said. “You can keep some in a purse or packed in the car, available for whenever you need it.” The product’s computermeasured, pre-filled dosage also makes it a safer option for correct dosing. “There’s no confusion over teaspoon, tablespoon, milliliter or ounce,” Bittner said. “The dose needed is pre-measured. You simply refer to the dosing instructions on the box for the number of single dose vials you take.” “There are no messy bottles or cups involved,” he said.
By the Numbers 50 million – Number of people in the U.S. who are estimated to be affected by nasal allergies
13.4 million – Number of visits each year to health care facilities due to seasonal allergies
30 – Percent of adults affected by allergies in the U.S.
8.3 million – Number of American children who suffer from respiratory allergies
5 – The ranking of allergic diseases, such as asthma, among the most prevalent chronic diseases for all age groups
Source: American College of Allergy, Asthma & Immunology
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