In this pharmacy blog post, we’ll go over some of the key characteristics of a successful pharmacy business and how to develop them. We’ll also cover the top mistakes that other pharmacies make and how you can avoid those pitfalls. Finally, we’ll go through some common questions for pharmacy owners about wholesaling to pharmacies, managing supply costs, controlling labor expenses, branding your practice as an independent PBM and more.
Overview of the Key Characteristics of a Successful Pharmacy Business
There are five key characteristics of a successful pharmacy business. We’ll go through each one and explain how you can develop them.
- Easy to Find: It’s not always about how much in business you have – you may be successful even if your business is tiny and limited in scope. However, it is about making it easy for customers to find you and for other pharmacies to deal with you, including other independent PBM wholesalers who may be interested in buying or partnering with your pharmacy.
- Efficient: Even if you’re in a small town and can shop locally for many of your supplies, you should still make it easy on customers and on other pharmacies to use your services.
- Generous: You need to balance the cost of doing business with generating as much profit as possible while also treating your employees well and making sure that they feel comfortable at work.
- Secure: Your business must be secure enough that you can sleep at night knowing that your practice is safe from any big risks.
- Strong: You should be confident enough in your position to tell customers and other pharmacies to go elsewhere if they don’t meet your fair terms.
Top Mistakes Pharmacies Make
Many pharmacies make the same mistakes when it comes to running their pharmacy business. Here’s a look at three top mistakes that pharmacy owners often make.
- Not having enough business: Many independent PBM wholesalers don’t have enough customers and end up closing or being bought out by bigger companies. This is more likely if you do business only with one or two big retail chains or during the holiday season when you have higher demand for products, but overstock isn’t possible in supplement sales (unlike stocking clothing).
- Not developing the right business strategy: You should have a business plan that covers all aspects of your pharmacy business. This includes such things as strategic planning, financial planning, marketing, operations and more.
- Late payments: In addition to not having enough business, you’ll also be losing out on potential sales if you’re delaying payment of invoices to suppliers and customers. It is dangerous to not pay suppliers on time as they may stop selling to you if they don’t receive payments from you in a timely manner.
Successful PBM Wholesalers
The pharmacy business is one where there are many independents and fewer large independent PBM wholesalers. But it doesn’t matter whether you operate as an independent PBM wholesaler or a pharmacy – you probably have a strong position and have many customers, but other pharmacies may be interested in buying or partnering with you.
There are three big independent PBM wholesalers that are growing:
OptumRx, BlueWave Rx and PharmacyOne. OptumRx was acquired by Intermountain Healthcare in 2014, while BlueWave Rx was acquired by CVS Caremark earlier this year. OptumRx is the largest of the three with over $1 billion in sales and has over 200 pharmacies. BlueWave Rx has about 1,000 pharmacies while PharmacyOne had just under 1,000 at the time of its acquisition by CVS in 2015. Each of these three companies has a different focus but all are in growth mode.
- OptumRx: PharmacyOne’s OptumRx was founded in 2004 and grew rapidly before being acquired by Intermountain Healthcare for about $2 billion last year. OptumRx owns over 2,500 pharmacies across the country and is the largest independent PBM wholesaler. OptumRx has a strong focus on providing an integrated pharmacy services platform that allows for purchasing of prescription drugs and supplies in bulk, either on your own or as part of a larger managed care provider network.
- BlueWave Rx: BlueWave Rx was founded in 2009 by Intermountain Healthcare with 1,000 pharmacies. It was acquired by CVS Caremark for about $1 billion earlier this year, which gave it nearly 4,000 pharmacies. BlueWave Rx was founded along with PharmacyOne and it has a strong focus on providing an integrated prescription drug and supply management platform.
- PharmacyOne: PharmacyOne was founded in 2007 and went public in 2011, growing to nearly 1,000 pharmacies after a series of acquisitions. It was acquired by CVS Caremark for about $1 billion in 2015. PharmacyOne has a strong focus on providing an independent PBM wholesaler business model – it is the only one of the three that is focused on independents versus being part of a larger company like OptumRx or BlueWave Rx. This makes it easier for pharmacies to transition from one pharmacy business owner to another.