Managing any business is not easy, but owning an independent pharmacy can even be more demanding.
Pharmacies must find their way in a new industry landscape as healthcare goes digital and trends like personalized care, wellness, and transparent pricing become prominent. As you focus on growing your own pharmacy business, it’s important to identify key challenges and new opportunities.
Here are 5 challenges facing independent pharmacies that your pharmacy is likely to deal with and what you can do about them.
Adapting to a digital world
Staying up-to-date is critical for pharmacies trying to compete in a digital world. Now that the healthcare industry as a whole is facing digital transformation, many community and independent pharmacies struggle to implement new technologies and offerings, especially with the small budget they have.
According to URAC’s 2018 industry insight report, software solutions can reduce dispensing errors, boost medication adherence, and increase day-to-day quality assurance and efficiency.
Your pharmacy can make the most of innovative solutions by investing in technology that best suits your needs and business goals. Small changes, such as a pharmacy mobile app, online refill options, or an updated IVR system can help you reach more patients digitally and provide the same level of service as big-box stores.
Fewer leads from healthcare providers during COVID-19
The US unemployment rate rose above 14% in April, and while it has decreased by nearly half this month, millions of workers have lost access to employer-provided medical insurance. As more healthcare costs fall on patients, mounting financial pressure has caused many to opt out of routine and emergency visits. This trickle-down effect results in fewer insurance providers and doctor referrals to local pharmacies.
Pharmacies have the opportunity to fill a growing need for accessible healthcare services. By offering basic triage and healthcare clinics, immunizations, and health insurance resources, you can promote medication adherence while providing crucial, affordable care. If you have a specialty or compounding pharmacy, consider offering synchronization and medication management services to help patients reduce costs and stay adherent.
Increased DIR fees and decreasing reimbursement
According to Drug Channels, 18% of total Medicare Part D rebates in 2019 were made up of pharmacy DIR fees. A recent NCPA survey about pharmacy financial health found that DIR fees are the number one business challenge for 52% of pharmacies in 2020. Increased fees can contribute to a reimbursement decline, and below-cost prescription rates have led many independents to close their doors permanently.
Focusing on medication adherence can help your pharmacy combat rising DIR fees and reimbursement rates. Consider adding digital website refills, automated refill reminders, or secure 2-way messaging to give patients the ability to manage their own prescriptions. Alternative fulfillment options like home delivery or mail order can simplify patient care and allow you to cater to your community more effectively.
Building and maintaining a patient base
Data from the 2019 NCPA Digest shows that the number of independent pharmacies has decreased, from 23,106 in 2011 to 21,767 in 2018. According to Health Mart President Nimesh Jhaveri, RPh, patients look for an “easy, frictionless experience” in a pharmacy and “services to make their life easier.”
Digital transformation, or the practice of adopting digital tools and platforms for business success, has become a necessity for healthcare professionals. Your pharmacy can make the most out of digital demands by finding methods for increasing business growth, such as:
- Attracting online audiences with a digital marketing strategy that includes a website, online reviews, and social media presence
- Introducing digital tools like a pharmacy mobile app or cloud-based IVR to maximize efficiency and offer patients a convenient, seamless experience
- Offer in-demand services that support adherence, such as medication therapy management (MTM), medication synchronization, and telehealth
Declining cash flow and margins
Some challenges facing independent pharmacies such as increased fees, global crises, and the struggle to stay competitive in a digital world can all wreak havoc on a pharmacy’s cash flow. Data shows that profit margins from prescription and non-prescription sales were down to 21.8% in 2018 from 24% in 2010. For retail pharmacies in particular, the risk of leaving potential revenue on the table is high. Just 3% of shoppers filling a prescription will make other purchases, according to Drug Chain Review.
Successful independent pharmacies will build services and products around patients’ needs and their desire for a seamless experience. Consider taking a second look at your offerings to see how you can position your pharmacy for extra business. This could mean arranging your store based on most-used health products or adjusting services or fulfillment methods to meet current demands.
Struggling to overcome some of your challenges in independent pharmacies? Digital Pharmacist supports the growth of over 5,000 pharmacies in 7,500 locations around the country. Get in touch to learn how we can help you transform your business today.