Month: March 2024

Patient Access IS Pharmacy Viability

Last week while I was in Washington DC, I had the privilege to meet with several US Senators, US Representatives, and the lawmakers’ staff charged with healthcare issues. I was with a group of independent pharmacy owners, and we were asking for support for three pieces of bipartisan legislation that had implications related to patient access to healthcare. Our job while meeting was to convey real stories and the ramifications of the legislation to these lawmakers. 

One of the things we were asked to do when speaking with our legislators and their staff was to speak in terms of how the legislation impacts our patients. The patients are constituents of the lawmakers. We were cautioned to limit speaking in terms of the benefits or ramifications of how these bills would impact the businesses (both chain and independent pharmacies).

While I understand the need to approach the lawmakers from the perspective of access of patients to healthcare, I view enabling the success of the local pharmacy as the other side of the same coin. Legislation that helps maintain the viability of a pharmacy by making the playing field more fair results in the pharmacy staying open. Pharmacies that are open can care for and serve the patient. A pharmacy that closed its doors due to poor or non-existent reimbursement for services cannot serve the patient. 

If a pharmacy has to close and there is another pharmacy nearby, care will generally gravitate to that pharmacy. There is a real risk when this happens that the addition of these new patients with prescription plans that poorly reimburse the pharmacy will further erode the financial viability of the remaining pharmacy. Once all pharmacies are closed in an area, then access to care becomes a crisis.

The number of small towns in Iowa now without a pharmacy that have approached us to open stores in them is, frankly, staggering. But given the current state of pharmacy reimbursement, it is unlikely we could ever manage such a feat without risking the overall viability of our existing stores. Something has to be done on a federal level to protect access to pharmacies.

So, while we voiced our concerns to legislators in terms of the impacts of the legislation on the patients we serve, the real concern is and will continue to be pharmacies being paid fairly for the care they provide. This is Legislative Season. Many groups are contacting or even heading to Washington DC to engage with their legislators. Make the effort. Make Every Encounter with your lawmakers Count this spring!

Sticky

Do you have a store or shop you regularly patronize? Have you ever stopped to consider why? There are numerous reasons, of course, but it boils down to one concept. Given a choice between two alternatives, the store you prefer offers sometime that the other doesn’t. That something might be an employee, or customer service. It might be convenience of location or hours. We call patients with an allegiance to a business sticky customers.

If you are operating a pharmacy, your goal is to attract and maintain long-term, loyal, sticky patients. But what differentiates one pharmacy from the next? It likely isn’t the medications: most every pharmacy has access to the same product. Patients perceive that all community (retail) pharmacies to the same thing. Jerry Seinfeld’s observation on pharmacy sums up what many believe pharmacists do

“I’m workin with pills up here. I’m taking pills from this big bottle and then I’m gonna put them in a little bottle!”

Jerry Seinfeld

Many customers really don’t understand what pharmacists and pharmacies actually do. As a result, a lot of patients are sticky to chain or box store pharmacies simply because they don’t know that not all pharmacies follow that model.

Of course there is always churn in pharmacy. The most common reason a patient switches pharmacies is customer service. Even just one bad customer service experience can result in a patient transferring to a new pharmacy. While customer service can help with achieving a sticky customer base, and poor service can certainly result in the loss of customers, customer service alone doesn’t really differentiate a pharmacy.

If you start to compare chain and independent pharmacies, you start to recognize that there are a lot similarities beyond just prescriptions. Things like a drive-thru window, over-the-counter medications, greeting cards, and sundries are all common features in pharmacies. Things like delivery and durable medical equipment might be less common, but again, there are multiple options typically available to the pharmacy customer. This begs the question: what can one do to truly differentiate a pharmacy?

Differentiation

When trying to define something that truly differentiates a pharmacy, it essentially boils down to the same question. “Where else can I go to get this?” In a small market, if the answer is more than zero, it isn’t a differentiator. In a larger market, it can be more than zero, but it still has to be fairly small.

It isn’t enough to offer something uncommon, it also has to be in demand and the quality has to be high. This applies to services as well as product. Ultimately, a well differentiated pharmacy is the only place you can go in the area to get something that is in demand. Of course, this isn’t an easy thing to achieve. It requires thinking outside of the box. Once you determine your niche, it requires marketing and effort to grow it.

Perhaps the easiest path to differentiation is to know what your competition does and compare it to what your pharmacy offers. These things are not differentiating your store. The trick is to identify what you might add as a service or product that they don’t do. Ideally, it would also be something that your competition cannot offer because if you do hit a home-run, the competition will want in on the action.

We obvioulsy cannot offer individualized suggestions to every independent pharmacy here in this article. Today, we will discuss one example that many independent pharmacies could implement.

Professional Supplements.

One way to differentiate an independent pharmacy from the chain pharmacy competition is supplements. Every pharmacy can order national brands of vitamins and supplements. You can go to almost ANY pharmacy and pick up a bottle of Nature Made Stress B-Complex. If the pharmacy doesn’t stock it and there is demand, they can add it. But what if you could order a supplement line that was unavailable to the chain pharmacies?

Professional Supplements refer products that are not sold by the traditional wholesale channels in pharmacy. Companies Ortho Molecular only sell their products to independent pharmacies. These are high quality products that one cannot purchase from your local big-box pharmacy.

Just putting in a quality product that is unavailable elsewhere isn’t generally enough. While there may be existing demand for the products in your area, the public needs to know that you have the product and learn why they need it. In other words, adding a professional supplement line is just step one. Marketing and education follow, to raise awareness and create demand.

In order to create the demand for professional supplements, it is necessary to reach out to practitioners and prescribers that understand the importance of quality supplements and are receptive to general aspects of functional medicine. It also will require the pharmacists and staff to become familiar with nutrition, nutrient depletion and supplementation, and to become comfortable with the basics of functional medicine. This requires ongoing, significant professional commitment and work in marketing and education. Is it worth it to go down a path like this? It absolutely can be a big win for the pharmacy. Margins on supplements are very good, and the patient interactions can be very rewarding.

In a given market, it is possible that two pharmacies might both sell one or more professional supplement brands. While this may or may not be an issue depending on the market saturation, it does diminish the differentiation factor. If you achieve respectable sales of a profesisional product, you might then consider private labeling some of the products. This means that the professional product X becomes YOUR own product, under its own brand, with a different name. Now, even your local competitor cannot offer your product (unless you sell it to them).

Obviously, there are lots of different ways a pharmacy can create truly sticky customers. Differentiation is necessarily an individual process, and there may be a variety of ways to achieve this goal. The important lesson: you have to make the effort. If you don’t make Every Encounter Count in your pharmacy practice, you will miss opportunities!