10 areas to grow your bottom line in 2020
Expand your services to add new revenue streams
- Independent pharmacy revenues were flat last year and owner salaries continue to drop
- But many pharmacies are growing revenues by innovating and adding services
- Discover 10 ways to grow your pharmacy’s revenues
- Then, decide and prioritize which ideas to pursue in 2020
The need to offer more than prescriptions
If it feels like you’re treading water, you aren’t alone.
An analysis of the 2019 NCPA Digest by Adam J. Fein, CEO of Drug Channels Institute, shows that for independent pharmacy:
- Gross margins were flat at 21.8%
- There was little to no change in profit per prescription
- Owner salaries dropped for the fifth consecutive year
Fein estimates the average owner of a single pharmacy earned $129,000 in 2018. That’s little more than an employee pharmacist and down from $200,000 in 2015.1
These challenges highlight the importance of adding revenue streams in addition to prescriptions. However, despite today’s challenges, many independent pharmacies still aren’t offering important clinical services.
Percentage of independent pharmacies offering more than prescriptions in 20182
- 79% medication synchronization services
- 77% medication therapy management (MTM)
- 76% flu immunizations
- 69% non-flu immunizations
- 57% blood pressure monitoring
- 53% durable medical goods
Fewer than 15% of pharmacies offer point-of-care testing.
This data shows that for many pharmacies there are opportunities to add new clinical services.
Identify an area for growth in 2020
Every market is different, but here are 10 potential opportunities for adding new revenue streams to your pharmacy in the year ahead:
- Add sizzle to your sync. For the 79% of pharmacies already doing med sync, compliance packaging and delivery can be natural extensions. Some pharmacies are charging and many patients are paying for these conveniences.
Even if your pharmacy offers those services for free, they can improve adherence rates, which ultimately generates more cash. And while you are talking to patients each month about their prescriptions, use that opportunity to offer additional services, such as MTM or a flu shot.
(See Learn how you can make money from med sync)
- Move MTM beyond Medicare. Payers in addition to Medicare may pay for MTM services, including some state Medicaid programs and self-insured companies.3
- Take a shot at more immunizations. Make vaccines a year-round revenue stream, expanding from flu shots to pneumonia, shingles, travel vaccines and more.
(See How to grow your pharmacy’s vaccine business)
- Test your patients. No matter how many flu shots you deliver, people will still get sick. While a CLIA waiver will allow you to administer point-of-care tests, a point-of-care testing collaborative practice agreement will typically give pharmacists the ability to prescribe drug therapies for patients with positive test results that detect infections or viruses or make therapy adjustments based upon collected results as compared to clinical guidelines. Working under a CPA allows your pharmacy to become a health destination offering both prescription and OTC medications.
(See Go beyond flu shots to serve all flu-related needs)
Other point-of-care tests are available for strep, cholesterol and A1C, which provide benefits to patients and offer additional revenue.
(See Opportunities in point-of-care testing)
- Coach and teach self-care. Payers and patients may cover the cost of certain self-care services, such as diabetes education, smoking cessation and weight loss programs.
(See How Buena Vista Drug fills a community need for diabetes education)
- Supplement their health. Half of Americans take a vitamin or supplement. For those who do, let them know about the products your pharmacy offers. For those who don’t yet take vitamins or supplements but could benefit from doing so, provide education and promote these profitable products. In particular, speak with patients on prescriptions who may suffer side effects from nutrient depletion.
(See Supplement prescription sales with profitable OTC recommendations)
- Compound your services. Perhaps you’re already offering flavorings to help children and pets take their meds. Consider going a step further by speaking with local providers about their compounding needs. Soon you may be compounding medications for patients for hormone replacement therapy or to remove ingredients such as lactose, gluten or dyes.4
- Be special. More than 60% of independent pharmacies don’t yet dispense any specialty medications, a large category that now accounts for one third of the pharmacy industry’s revenues5. Due to fast growth, in coming years specialty drugs will account for an even higher percentage of spending on drugs. Investigate opportunities for your pharmacy to enter this market and serve patients needing specialty medications.
- Fill a niche. Give customers a reason to walk in your store, like unique front-end products they can’t find anywhere else.
(See Carve out your niche for a more profitable pharmacy and 5 keys to a profitable DME business)
- Go outside your store. Think beyond the pharmacy’s four walls by considering services to long-term care facilities and transition services to hospitals.
(See Quality patient care from hospital bed to home and Decrease hospital readmissions, increase pharmacy revenue)
With options such as telepharmacy, growing your business into new locations may be easier than you think6.
(See Telepharmacy can expand your service area, increase efficiency)