Start Planning Now for a Profitable 2008

I’m Dreaming of a Profitable Independent Pharmacy
Just like the ones we used to know
Where the Cash Paying Customers are Plenty
And low reimbursements don’t result in bankruptcy
And we see Independents everywhere we go

Ah yes, the good ole days. Despite the fact that there is plenty to complain about, we predict that in 20, 30, or even 40 years from now we will talk about pharmacy in the “good ole days” as we remember the ’00 years. You laugh but give us a chance to explain.

So often we all get wrapped up with “what is wrong” in pharmacy, that we don’t make changes, don’t make decisions, and continue to run our pharmacy the same old way. Thus, we can’t create good times because we are so focused on the bad stuff.

A great quote from Albert Einstein says:

“In the Middle of Every Difficulty . . . Lies Opportunity!”

We interpret that to say:

“While you continue to complain about your problems and do nothing, wise pharmacy owners see these challenges as opportunities. They have already made the necessary changes and have built a profitable pharmacy business.”

Since this is the time of year to reflect and determine what you will do differently next year, let’s utilize this time to figure out how we will make the ‘00 years the “good ole days” in pharmacy. The best way to do that is one pharmacy at a time. Let’s start with you.

By the end of 2007, we challenge you to take an entire day to reflect on your pharmacy business. Go somewhere where you can really get away from it all. Away from your pharmacy, your family, your customers, your employees, and turn off that blasted cell phone. This should be a day with no interruptions. All you need is a legal pad, a pen, and some snacks (including water) to make sure you are nourished enough to think.

Here are some questions for you to ponder and answer:

Keep Doing ~ Start Doing ~ Stop Doing

What is working in your pharmacy business? What is profitable?

What should you start doing? What are other pharmacy owners doing that you could add to your business?

What no longer makes sense and thus you should stop doing it? What (if anything) is causing you to lose money?

What insurance companies are logical to keep? Who should you drop? Should you add any? What about Medicaid and Medicare?

What else about your prescription department should you examine? What should you cut back or cut out all together? What can you add or expand in your prescription pharmacy business (Compounding, Pain Meds, Vet Medicine, and Specialty Pharmacy)?

Does it make sense to sell off all or part of your traditional pharmacy business and use that money to expand into profitable areas?

What OTC and front end business makes sense? What needs to go? Is it time to add Health & Wellness products?

What marketing worked in ‘07? What failed? Isn’t it time for a website? Is it time to change your website? What is your marketing plan for ’08?

What customers should you keep? What customers should you fire? Yes, we said fire. We give you permission to refer those high maintenance customers that give you very little business to your competition. Let the chains spin their wheels on them.

Define your target customer and figure out how to get them coming in your door.

How about your membership to NCPA? What can your association do for you? Is it time to get more involved? What about pharmacy buying groups? Should you join one? Is the one you belong to a good fit for your pharmacy practice? If not, locate one that is a better fit for your needs and join them.

By the end of the day you should have defined 3-5 big changes for 2008. These are the kind of changes that when you implement them will give you huge results and a bright pharmacy future. The kind of changes where others say, “Wow! Look at ___________ Pharmacy. I wonder what they are doing. I want to be just like them.”

One more thing before we go. Be sure to tell your spouse, your business partner, or somone what your top 3-5 target goals are for ’08. It is vital that you have someone who can hold you accountable.

If you like what you read here, please share this blog with your colleagues.

We would love to hear your comments on what you like about us and what we can change for you in 2008. Click here to give us your feedback. Anyone sending in a comment will be given a one year membership to the Keep Your Pharmacy Open Message Board.

What is Reality in the Prescription Pricing Wars?

We have all heard the jokes about myths in America:

• "This is going to hurt me more than it is going to hurt you"
• "We're from the government and we are here to help you"

Well, let's add a new MYTH

• Chain Pharmacies Always have the Lowest Prices

In this time when everyone in America is complaining about the price of medicine, it is amazing how many patients still believe that they are saving money by being loyal to a chain pharmacy.

The reality is the independent pharmacies often come in the lowest.

Channel 36, an NBC news station out of Austin Texas, put pharmacies to the test to set the record straight. Here is their story:

Prescription Prices Depend on the Pharmacy

Prescription drug safety is regulated by the Food and Drug Administration, but there are no rules on how much customers pay for prescriptions.

As it turns out, the prices customers pay depends on the pharmacies they choose.
KXAN Austin News' Matt Flener conducted price checks by calling local pharmacies and checking prices on the Internet.

Flener checked the costs of three name-brand and two generic drugs in three Austin ZIP codes, finding different prices for the same prescriptions.

At the Apothecary Shop Pharmacy in Northwest Austin, the prices come with personality.
"You're a number at some pharmacies, and here you're a person," said Apothecary Shop customer John Monaghan.

"I am allowed flexibility, because I own the place, whereas they just have to put what's on the computer," said Apothecary Shop pharmacist Tom Schnorr.

Schnorr was referring to chain pharmacies, which ended up being some of the most expensive.
At a Walgreens in Northwest Austin, the generic Zocor costs $64.99. At the Apothecary Shop less than a quarter mile away, the same drug is $18.

Walgreens explains the difference in the level of service.

"Low prices don't do you any good if the pharmacy isn't open when you need it," a company spokesman said in a statement.

"I thank God I have insurance," Monaghan said. "I really feel sorry for people that don't have insurance."

MedSavers Pharmacy claimed some of the lowest prices in the test.

"My full idea with this store was to service the uninsured population of Central Texas," said MedSavers Pharmacy owner Chris Johnson.

Johnson does not accept insurance.

"I would say it's very revolutionary," said Johnson. "I don't have to charge my patients an established price that the insurance company has established. I get to charge them based on what the drug costs me to get."

MedSavers, for instance, boasted a $31.35 price tag for a 30-day supply of generic Flonase. Walgreens, however, had the highest price: $61.99.

"When it comes to pricing, Chris' prices beat others," said MedSavers customer Gary Bruce. "I'm not going to mention other chain prices by 60 percent."

"Usually, no matter what the drug, there's going to be tens, dozens of dollars difference, you know, between pharmacy to pharmacy, so a simple call around will save somebody a lot of money," Johnson said.

Back at the Apothecary Shop, pharmacist Schnorr still boasts about lower prices.

"There are some times where somebody is charged too much," Schnorr said. "I like having Costco, I like having Walgreens down the street, 24 hours. I go home at 6:30 every day, put my key in the lock, and my clients will be taken care of at night."

"I always come here," Monaghan said. "I know when they're open. I know when they're closed, and I know when their lunch hour is."

That comes from knowing the personality and the price.

Take a look at the full results from the prescription drug price checks

So America, before you call in your next refill at your local chain, we challenge you to price your prescriptions with various pharmacies in your area. We promise, the phone calls you make will be well worth your time.

Share your thoughts on this "hot topic" and post directly to this blog.

T Minus 48 Days and Counting

That’s the amount of time Community Pharmacy has left before the Medicaid ruling could take affect. Tick Tock . . . . Tick Tock!

The good news is NCPA and NACDS have joined forces in a lawsuit to stop this train wreck before it happens. For those who have not heard about this suit, please click here for more on this hot topic. We sincerely hope NCPA & NACDS are successful in this lawsuit.

NCPA & NACDS charge that the new payment system, scheduled to take effect in 2008, is illegal because it does not reflect the actual cost of generic drugs. As a result, they said in a joint statement, "small and independent pharmacies will be forced to close their doors or drop out of Medicaid."

However, Medicaid officials (CMS) dispute the industry's calculations, saying the government actually overpaid for generic drugs under the previous system.

So, let’s get this straight. CMS is saying because they (our government) screwed up in the past, that it is the pharmacist who must be held accountable. Thus, our government is dictating that pharmacists must lose money (reimbursement will be 36% below the pharmacists acquisition cost of the drug) to make up for our government mistakes. You don't need an MBA to know that losing money is not good for any business.

We understand that CMS is trying to save the government and taxpayer’s money. However, shifting the blame to pharmacy is only adding to the problem.

Let's follow CMS logic and apply it to the price of gas. The price of gas is way too high. So, does that mean as of January 1, 2008 that all Gas Stations will be required to sell Gasoline at a price 36% below their cost? If so, why? Putting gas stations out of business isn't going to solve our oil crisis.

Look, we can all agree that the cost of prescription drugs are too high. However, there has got to be a better way to handle this problem without putting pharmacists out of business.

Do you know how to solve this problem? Please post your thoughts directly on this blog.

A Web Presence is a Must for Independent & Small Chain Pharmacies

Independent Pharmacies are among the top of the list that should have a credible ‘web presence’ so that they remain a mainstay of our American tradition during a time of ‘mass market’ overload.

In our technology oriented society, there is a list of criteria that should be followed to create an appropriate ‘web presence’ for your Pharmacy. The success of your business depends on reflecting the correct image.

Working with a Pharmacy-specific web development company that understands your needs is the first step. The ‘value’ in their knowledge can save you time and money; and gives you choices that may be important for your Pharmacy.

“Web Site” vs “Web Presence”
A web listing, is entirely different than a web presence.
Free and paid listings usually include the retailer name, location, phone number and sometimes a brief description. A ‘static’ web listing – may have 5-7 pages of never-changing information = no reason for the customer to return. This equates to a waste of dollars spent.

A ‘web presence’ is a professional web site that engages the consumer, provides current information and helps your business reach its goals. Savvy multi-channel retailers use listings, links to their web site and search engine strategies to grow traffic to their site and their Pharmacy. When judging a web site, keep the following questions in mind:

• Does the web site attract, engage and retain the preferred customers?
• Does the site provide the level of customer service consumers expect?
• Does the site offer added value that encourages the consumers to refer the site to others?
• Does the site encourage the consumers to return to the site often?

A Yellow Pages Listing is NOT A Website
An internet Yellow Pages style ‘listing’ is not a website; nor is the listing with the local Chamber of Commerce, a “co-op” site that doesn’t recognize your individual pharmacy or any of the other ‘free’ referral listings! These may actually do more harm to your image than good as they are often of lesser quality and may reflect badly on your business.

Having Control Over Your Site:
You should have 24/7 access to your site – so that you can dictate changes around your busy schedule. Patients are looking for and are interested in pertinent news articles, integrative medicine, your opinion and your recommendations. The local Pharmacist is a trusted resource for consumer health information– so make good use of your site to provide this information to your patients!

You must have easy to use Marketing tools: Like putting gas in a car, your site must have consistent marketing: E-mail promotions, communiqués, on-line coupons, informative e-newsletters, new product announcements. Reasons for customers and patients to return to your site!

To ‘e-commerce’ or not:

When considering to sell product on-line (e-commerce) you must understand:

• Having an e-commerce site is like having another retail business – you must have the inventory, space and staff to support the site needs. If you aren’t ready, start out with a content driven site and upgrade to e-commerce later.
• Don’t sell general OTC – no one is interested in buying cotton balls or bandages on your site, when they can get them in hundreds of locations. Besides, you cannot compete with the discounts that the mass merchandizing chains can offer. Use your internet ‘real estate’ wisely to reflect products that will attract your patients and increase your margins.
• Don’t sign up with a company that limits the products you want to list or requires that you sell only a particular brand type.
• Work with a company that has a Product data upload department. Their staffed with experts that will coordinate with suppliers of product you want to offer on your site
• Where possible – list ‘rich text’ information and product pictures. A good web company will work with your suppliers and distributors who can supply this type of information.

Site Counters Are A Thing of The Past:
A ‘web presence’ of today includes an easily accessed list of exactly what pages your patients and customers are going to, how many unique visitors you have had, how many people have read your personal news articles, what quantity of those customers are looking at product you have listed and what are the top ten viewed products! This is important marketing information that should be available at your fingertips.

Informative and Ever Changing:
A true ‘web presence’ Pharmacy site should give you the platform to tell your unique story and yet have some areas that automatically change ~ to keep pace with the ever changing market. You should be thinking about today’s patients that look to you for their wellness needs and tomorrow’s customers that will be drawn to your Pharmacy because of the communication, marketing and unique quality of the products that you offer.

Easy Navigation:
A patient should be able to easily navigate every page without having to hit a ‘back’ key. No irritating pop-ups and no outside links to other sites with precarious information. You should have clear separations between your store message and your ‘About Us’: these are two individual topics.

Professional Network:
This is a topic that is pharmacy-specific. If you have a network of medical professionals that you work with, share the information on your site. Patients look to you for these recommendations and your web presence is the perfect arena to share this information.

Blend Tradition With Modern:
Your Pharmacy takes great pride in the tradition of your field. Reflect ‘customer service’ as the flagship trademark of your community Pharmacy ~ with a site that stays-in-the-positive in all areas for your patients.

A good web site will help your pharmacy by attracting new customers, educating and promoting effectively to existing customers and serve as a valuable resource for your patients that will enhance their affinity towards you and your Pharmacy.

For specific questions regarding your web presence, please contact Karen Sulprizio with PharmacistsOnLine at KSulprizio@PharmacistsOnLine.com or (866)312-8324