.png)
Congratulations! The race to the bottom has been won! And like elite athletes who are constantly shaving time off the one mile record, it seems there’s no end in sight to how low prescription reimbursement will fall. Lower drug reimbursements and negative margins caused by PBM contracts are a constant complaint amongst pharmacy owners.
Summoning our business chops, we’ll remember that there are several basic ways to influence profit margin. We can buy for less, sell for more, or do both. In the traditional pharmacy space, owners face fewer and fewer options to control these influences on profit margin, especially on the selling side.. With pharmacy benefit managers’ take-it-or-leave-it contracts, setting the price you sell at is virtually impossible. Sure, you can change your Usual and Customary (U&C) price so you feel better, but when you submit that claim, your U&C is basically irrelevant and no third party cares about your acquisition cost. We all know that getting a good deal on the buy side is also incredibly difficult. This is especially true if you’re a single store owner without a large amount of buying power and negotiating room. Wholesalers make money regardless of your margin and there are many ways that this process is fraught with difficulties and challenges, but that’s an article all of its own. While there are some ways to buy for less, there is a limit to how low you can buy while there seems to be no limit to how low you may be reimbursed.
Enter cost-plus pharmacy. The same challenges exist around the buy side and may be even harder due to less or nonexistent brand purchasing and associated rebates. The magic happens on the sell side. How many independent owners would get at least a little bit excited if they knew they could set a price and that would be the actual price they get paid? And how much more excited might they be if they knew they’d be paid at the point of sale or within a few days rather than having to wait weeks for their money? When insurance is not part of the reimbursement model, business challenges don’t disappear. HOWEVER, taking back control of your pricing is game changing. Now you’re actually in the race and you’re not in last place anymore. Run the race like you’ve been training, but on the track instead of in quicksand. Maybe you’ll actually find yourself winning for once….and not the race to the bottom, but the race to the top. Add in the ability to practice pharmacy your way without so many external forces and this starts to sound a lot more like pharmacy as we all hope it can be. Not sure where to start? We can help you train for your race.
Get in touch today.
