5 Profit Boosting Tips for Your Independent Pharmacy that Don’t Rely on the PBMs
It comes as no surprise that the PBMs are constantly coming up with new ways to dig deeper into your pharmacy’s profits. As soon as independent pharmacy owners think they have a grasp on ways to combat the claw backs, the PBMs create a new set of unattainable targets designed to take back even more money. If you’re always losing on the backend, what can you do to keep your pharmacy afloat? Let’s focus on some of the best ways you can build profits back into your independent pharmacy without relying on PBM reimbursement.
1. Create a Frontend Boutique that Drives Over the Counter Sales
A strategically designed frontend can dramatically increase the overall profits in your independent pharmacy. Doing your market research and understanding your local customers will help make sure you stock popular products that people are likely to need. Understanding your pharmacy’s location and the customer demographic can help you build out a frontend tailored specifically to your location. For example, stores in lower income neighborhoods are likely to sell much more generic, lower priced OTC products over more expensive brand name options. If your pharmacy is in an area with young families, then carrying products for infants and children is likely going to be much more profitable compared to carrying products for senior patients. Many independent pharmacies have found success in building out a beautiful boutique style frontend in high income areas. While customers are waiting for a prescription they’re likely to browse and pick up a few luxury items like candles, fragrances, and wearable items like jewelry or accessories
Often times, customers will stumble upon the pharmacy section by chance while shopping in the store and owners end up gaining a new patient in the pharmacy. Take a look at your pharmacy’s floor plan and understand product placement. Placing items properly is a great way to encourage a sale. Also, training your pharmacy staff on how to “up sell” a prescription is important. When a customer comes in with prescriptions for antibiotics there is a good chance they’ll also need analgesics or cough/cold medicines as well. Perhaps recommending a thermometer or humidifier will make the difference in a prescription sale at a loss vs. a sale with a higher profit item.
To maximize frontend sales, it’s important that owners take advantage of the reporting and inventory management features in their pharmacy’s point of sale software. Datascan’s Point of Sale has a tremendous amount of report templates as well as custom reports that owners can create that allows them to analyze front end sales and monitor slow moving products. Datascan’s Point of Sale software also makes it easy for owners and pharmacy managers to schedule sales and promotions, create custom coupons, build customer loyalty programs, and even send promotional notifications to customers.
2. Offer Local Delivery and Curbside Pickup
If your independent pharmacy is not offering delivery and curbside pickup options for your patients, then you are putting your store at a huge disadvantage. Some of the biggest benefits of an independent pharmacy are the conveniences it offers patients as well as the quality of the overall experience. Especially with the emergence of companies like Amazon Pill Pack offering rapid delivery options for patients, your community pharmacy needs to stay competitive by offering similar convenience options to patients. Amidst the recent COVID-19 pandemic, many pharmacies across the US began offering free delivery as well as curbside pickup, both of which helped to reduce the number of patients coming in and out of the pharmacy.
In order for local independent pharmacies to offer these options to patients, they need to collaborate with their pharmacy software vendors to set up delivery systems for collecting signatures and payments outside of their pharmacies. Datascan was excited to offer electronic delivery system to all of its pharmacies for free, a software system that allowed stores to create delivery manifests and collect signatures and payments electronically. Datascan even created options for contactless pickup!
3. Charge for Clinical Services and Immunizations
In many states across the U.S., pharmacists are considered to be medical providers. This means pharmacists are acknowledged as key medical personnel in managing patient health and care. Pharmacists are often seen as a first line of defense for many patients and as a trusted healthcare professional, pharmacists are able to provide many clinical services to their patients. Many states allow pharmacists to administer exams for acute conditions like rapid strep tests and even allow them to screen for chronic conditions. Pharmacists are able to provide blood pressure screenings, cholesterol screenings, and even type 2 diabetes screenings.
One thing that surprises many independent pharmacy owners is that you are entitled to administration fees for vaccination services. Many pharmacies offer immunizations like flu shots, shingles vaccines, and even pneumonia, but if you’re not billing for the administration fees with the drug, you could be selling yourself short. Datascan’s pharmacy management software can not only track and bill for these types of services, but it integrates with third party platforms for seamless reporting to states that require it.
4. Keep Durable Medical Equipment in Stock
Locating Durable Medical Equipment products locally can pose a huge challenge for patients, and for most people, ordering is not an option as they need these items quickly. Building durable medical equipment and supplies into your pharmacy’s front end can be a great way to build profits into your business. Getting in touch with local rehab centers, doctors offices, and even local hospitals to inform them of the types of supplies you sell is a great way to have patients referred to your independent pharmacy. This can also result in gaining a new customer in the pharmacy department! Deciding to contract with Medicare part B is up to the pharmacy, and Datascan’s pharmacy software allows you to bill Medicare B for DME claims. Pharmacies can also choose to offer cash-only DME or even build out DME rentals within our point of sale software.
5. Offer Compounded Medications
It’s often difficult for patients to find a pharmacy that fills compounded medications. Most chain pharmacies do not offer compounded medications and very often they will refer a patient to a local independent pharmacy. While many insurance plans do not cover compounds, patients are willing to pay out of pocket for these medications. Setting your pharmacy up to compound is a great way to generate a new revenue stream and help build profits back into your business. Without having to rely on PBM reimbursements, pharmacy owners can set their own costs and cash copays for compounds. Filling a compound medication for a patient also provides pharmacies the opportunity to win them over for all of their other prescriptions as well.
Datascan’s pharmacy management software includes a robust compounding module included in their system. Over the years, Datascan has continued to build out their compounding module within the pharmacy system to support features such as scale integration, the ability to quickly build, modify or copy compound Rx’s, robust reporting and search capabilities, and of course, third party insurance billing for compounded prescriptions.
There is no denying that PBM claw backs hurt your profitability but there are still many ways for independent pharmacies to build profits and improve their bottom line. Seeking out new revenue sources that do not rely on PBM reimbursement ensures that your profits stay yours and the PBMs keep their hands out of your pockets. Not only do these options help improve profitability for your independent pharmacy, but they also help expand customer reach and build brand awareness and customer loyalty.