TRENDS
SECOND BEST
New survey reveals top trends in secondary market purchasing
M
ost independent pharmacies are under contract with a primary wholesaler, most of which carry enough product to
fully stock a pharmacy of any size. Even so, there are more than a
price on the items they're looking for, which are often medications with narrow margins. ″If we have a certain medication that we're constantly losing money on from our wholesaler, then we look for
hundred secondary suppliers in business who serve independents
that one,″ Glover said.
every day.
Although Meyer will search for a good deal, he often returns to
Elements magazine surveyed its readers to discover why they
the supplier with consistently low prices. ″It's just going back to the
venture into the secondary market and what exactly they're looking
ones that we know are going to be a lower price,″ he said.
for. Nearly every respondent said they have a primary wholesaler,
and all but four of them buy outside of their primary contract.
Drugs, navigates a handful of suppliers depending on whether
he's looking for brands, short-dated items, or savings on large
Of those pharmacies, 93 percent buy generics from
Charles Canvasser, owner of the Pharmacy at Westland Maple
secondaries and 59 percent buy brands. However, the vast majority
purchases. In almost all cases, he's only going out to the secondary
of their total purchases still go through their primary. On average,
market for items with big price tags. ″I don't have enough hours
secondary purchases make up about 20 percent of their total
in the day to sit and pick and choose an item that's $1.17,″ he said.
generic inventory and 13 percent of their total brand inventory.
About 70 percent of respondents said they use secondaries
″I'm looking for some significant dollars.″ When he does land a good deal, it saves him a lot. He's found a difference of $100 among
because an item is too costly at their primary wholesaler. Nearly 60
suppliers for a medication that's typically more than $300.
percent listed low reimbursement as a main reason for purchasing
outside of their primary contract.
because they don't want to ruin their rebates from their primary,
″Some of these insurance reimbursements are terrible,″ said
Both Canvasser and Glover restrict the amount they purchase
which are based on volume. ″If I'm going to deviate from them, it
Brian Meyer, owner of Sunflower Rx. ″I always have to look for the
needs to be something that's going to give me at least a 20 percent
best price to just to break even.″
difference,″ Canvasser said.
When asked which secondaries they use, the pharmacies
identified 43 different suppliers in total. The top three "best"
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choices were BuyLine, Anda, and IPC, with price, customer service, and product availability cited as the main reasons.
Here's a breakdown of five key takeaways on how independent
pharmacies navigate the secondary supplier market.
LOOK FOR OUT-OF-STOCK ITEMS
Seventy percent of pharmacies seek out a secondary because their primary doesn't have the item they need. This can occur for a variety of reasons, whether it's a shortage or pre-allocation
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SEARCH FOR BEST PRICES
Far and away, pharmacies go to the secondary market to find better pricing. When they aren't getting the best cost from their primary wholesaler, they seek out secondaries for a better deal.
″When they have specials or a really good price, they're
anywhere from 20 to 50 percent off what we normally would pay,″ said Bryon Glover, pharmacy director at Hoover Drug, Eufaula
prioritizing chain pharmacies.
″Every once in a while, a particular medication will be on back
order and you just can't get it,″ Glover said. ″I don't think there's really any rhyme or reason that we've seen.″
In these cases, pharmacies often first go to the secondary
suppliers that ″always have item in stock″ or ″have a comprehensive inventory″ or ″often have the missing item,″ according to the responses.
Pharmacy, and Checotah Pharmacy.
The amount they save sometimes depends on how much time
they're willing to spend searching. ″If we do a lot of shopping, we
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CARE ABOUT CUSTOMER SERVICE AND SUPPORT
can sometimes save even hundreds of dollars over what it would cost at our primary wholesaler,″ Meyer said.
Although price and availability drive the majority of secondary
purchases, many pharmacies choose their secondary based on
Among the reasons pharmacies choose a particular secondary
supplier, just over 80 percent opt for the one offering the best
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their customer service and support.
