Pharmacies are being paid less and less for prescription drugs, and adequate reimbursement for clinical services is still not a reality. At the same time, pharmacies are being evaluated on performance, and this requires investments in the practice. Keeping the bottom line balanced means that today’s pharmacy owner needs to maximize efficiency in their pharmacy department and find new revenue streams to help fill the widening gap between overhead and drug product reimbursement until reimbursement for services can add significantly to the bottom line.
Chain drug stores rely on extensive front ends to buoy pharmacy department sales. Independent pharmacies often cannot leverage an extensive front end in the same manner. This does not mean, however, that the independent pharmacy cannot use their front end to support their overhead during this paradigm changes in pharmacy.
Don’t try to beat the Big W
Over the years, I have emphasized that the chain pharmacies around me are not my competition. They do things in ways we would never consider. Conversely, they do not generally have the flexibility and latitude to attempt things an independent pharmacy could try. So, when selecting products for the the front end (over the counter) section of the pharmacy, it is always a good idea to strive to find products that the chain pharmacies not or cannot stock. Quality merchandise is also something that will set an independent apart from a retail chain pharmacy. The trick, however, is to jump-start the sales of these products.
While an independent pharmacy might shy away from mass market merchandise, there is no reason that the independent cannot look at some of the common retail strategies used by the chain drug stores. Of specific interest today is the use of tie-ins at the point of sale. Tie-ins are those items hanging next to the thing you were looking for. In a grocery store, grated Parmesan cheese might be hanging on the shelf right next to the spaghetti sauce. If you are looking for one, you are more likely to impulse purchase the other.
The Prescription Tie-In
An independent pharmacy can take this strategy and really make it shine by integrating the pharmacists clinical knowledge during the final verification phase of each prescription checked in the pharmacy. Many drugs either are dependent upon, or deplete specific vitamins / minerals or other nutrients from the body. These nutrients can become tie-in marketing opportunities for the pharmacy. While this is not a new strategy, this strategy can be optimized and made successful with a little advance planning. The result can be a significant boost to revenue to help offset the decreases seen with prescription drugs.
Examples of possible tie-ins might include:
- Recommending a Coenzyme Q10 supplement for patients taking HMG Co-A inhibitor (e.g. atorvastatin, lovastatin, pravastatin etc).
- Recommending a pro-biotic to patients taking a broad spectrum antibiotic
- Recommending a vitamin and mineral supplement to patients taking diuretics
Strategies
- Be selective: choose a product line that is unlikely to be stocked by , or unavailable at chain stores. This might be a premium brand with a high quality standard.
- Start Simple: There are dozens of classes of medications that have potential tie-ins for supplement sales. Rather than overwhelm the pharmacy staff and the patients, start with a few select classes and grow the program from there
- Think Clinically: While there are dozens of class of medications with potential tie-ins for supplement sales, some of these are better documented than others.
- Research before you sell: Be sure you understand the mechanisms and pathways. Having this knowledge helps earn the patient trust and understand that you are providing more than just product, but knowledge.
- Train your staff: Be sure that all of your staff understand what the program is and how it is going to be executed. Be sure that the pharmacists are familiar with the research done above.
- Document: If a patient is flagged for consultation about their medication and, after considering the pharmacist’s rational for the recommendation to purchase a supplement, the patient declines, document the outcome.
- Plan follow-up: Do not flag the same patient for consultation and recommendation of a supplement every time they come into the store. Remember that this is a professional consultation. Instead, document the outcome in a manner that all pharmacy staff will know when the consultation was made, the patient’s response, and when to follow-up (e.g. approach patient in 6 months to re-visit the topic)
Our pharmacy is beginning the implementation of this type of program. We have chosen Ortho Molecular Products as our “premium” brand of supplement. One advantage for choosing Ortho Molecular is their “Pharmace Replete” program designed to help tie-in sales. This includes materials that my be helpful to a pharmacy wanting to implement this type of program.