Independent Pharmacy News

The Pharmacy category is for all Pharmacy related posts.

How Much Is It Worth?

By |October 29th, 2013|

Determining a pharmacy’s value from a lender’s perspective

With the average pharmacy owner about 60 years old, it is expected in the coming decade more than 60 percent of independent pharmacies, or same 1,000 annually, will trade or change ownership. While some of these pharmacies will be bought by chains as prescription file buys, an increasing number of young entrepreneurial pharmacists are seeking to acquire established pharmacies.

It’s easy to understand why a pharmacist would choose to acquire an existing pharmacy instead of starting from scratch. A successful startup pharmacy will generally take two years to reach break even, with the owner often having to take a reduced salary or no salary at all as business develops. As the average established independent pharmacy generates approximately $4 million in gross revenues, generally, there is ample cash
flow after all expenses, to service debt and compensate the owner comfortably. The key of course, is finding a fair valuation for the buyer and the seller to make the transaction feasible for each.

A pharmacy’s value is made up of tangible and intangible assets. Tangible [...]

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    Funding a Pharmacy Acquisition is Probably within your Grasp

Funding a Pharmacy Acquisition is Probably within your Grasp

By |March 28th, 2013|

You have chosen to become a pharmacy owner, and decided to acquire an existing practice. However, still unanswered, is the $1 million question: How do I get the million to buy a pharmacy? Surprisingly, funding a pharmacy acquisition is achievable and within the grasp of many pharmacists.

First, consider the ownership opportunity. The 2012 NCPA Digest, sponsored by Cardinal Health, explains that there are approximately 23,000 independently owned pharmacies nationwide. With the average pharmacy owner about 60 years old, it’s expected that more than 1,000 pharmacies will be acquired annually over the next decade. Further, as the Digest states, the average gross revenues of an independent
pharmacy are $3.83 million. Most importantly, the Digest shows that most pharmacies have sufficient cash flow or net operating income (NOI) to provide the owner a pharmacist salary and have monies left over to service debt and provide a return to the business. The opportunity is ripe; a prospective owner just needs to be shown how to get the money.

Changing Times

Historically, pharmacy acquisition financing was primarily provided through seller financing, drug wholesalers, and less [...]

Compounding Pharmacy – Willie & Kate

By |February 21st, 2013|

Compounding Pharmacy Customer Spotlight

Willie and Kate share their personal experience about working with Live Oak Bank, who has a team that understands the industry.

Remedies Pharmacies

By |November 7th, 2012|

If you are looking to illustrate the phrase “sparsely populated,” Montana fits the bill. At more than 147,000 square miles, it is the fourth-largest state by area in the United States, but 44th in population with 998,000. The state has 6.8 residents per square mile, compared with 1,189 for New Jersey, the most densely populated state.

In places such as Montana, telepharmacies serve an important health care function, says Justin VanCampen, who with wife Keri own four pharmacies in the state (all under the Remedies business name).

“For a lot of people it’s a 120-mile Remedies Pharmacies Justin & Keri VanCampen round trip to the nearest pharmacy,” says Justin, a 1999 University of Montana pharmacy graduate. “The nearest specialist might be 100 miles away one way. Having a pharmacy presence in the community allows them to get their antibiotics or other medications right away.”

The telepharmacies are staffed by technicians. When patients enter they are directed to a private consulting area with a two-way video monitor and phone link. Justin says he can ask patients about any health issues or if they have any questions about their medications.

Keri [...]

Searching for New Business Ideas

By |September 17th, 2012|

Inspiration for new business ideas for the pharmacy can come from just about anywhere depending on how observant and creative the pharmacist/owner may be. New ideas may be found outside the pharmacy by watching other local businesses, being involved with local business organizations, or local trends and events in health and wellness that the pharmacy may tag onto too. More often, networking with peers through local, state, and national pharmacy organizations, staying current with the pharmacy literature, and partnering with schools and colleges of pharmacy are frequent sources of new ideas that can keep a pharmacy offering core and new services to the community it serves.

Independent pharmacies are key parts of the communities they operate within. Many pharmacist/owners are involved in their local chamber of commerce or other business and civic groups, such as the Lion’s Club, the Rotary Club or other organizations. This involvement allows the pharmacist/owner to build relationships with other business owners and networking at local [...]

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    Pharmacy Roadshow: Highlights from Successful Independent Pharmacies

Pharmacy Roadshow: Highlights from Successful Independent Pharmacies

By |September 17th, 2012|

In visits to more than 60 pharmacies across the United States in the past three years, veteran industry consultant Bruce Kneeland has documented thriving independent pharmacies of all sizes (600 ft2 to 34,000 ft2), and in all markets (urban, suburban, and rural). It is a testament to the independent pharmacist’s entrepreneurial spirit and focus on personalized customer service. That focus means understanding a patient and/or customer’s unique needs and finding a way to support them. As one pharmacist notes, “it’s learning to never say no”. A common thread among all the pharmacies was building a relationship with customers, calling people by name and treating them with respect. In essence, they treat patients and customers like family.

What other attributes did this divergent group of independent pharmacies and pharmacists share beyond superior service? Developing a business strategy to support customer needs, creating new services both in the front-end and in the prescription department, providing staff education and training to carry out [...]

Key Performance Indicators for Your Business

By |September 17th, 2012|

Operating a successful independent community pharmacy business requires crafting a business strategy with short and long-term goals and managing a set of key metrics to achieve them. Basic metrics may be categorized by profitability, productivity, financial position, and cash flow. Other key metrics will vary depending on what the business is trying to achieve. For example, perhaps the pharmacist/owner has instituted a new pharmacy workflow management system integrated with a point-of-sale system at checkout. A goal related to this decision may be to provide faster check out for customers as well as capture purchase patterns for a new loyalty program. Metrics that the pharmacist/owner might wish to measure could include the average time is takes to process a transaction at the check out area.

Profitability Indicators

Profitability measures center around gross profits, net profits and expense control. They measure the efficiency in generating profits from sales. Key metrics in profitability include:

Sales compared to the year before or another prior time frame

Hiring a Specialty CPA

By |September 17th, 2012|

Using an accountant to manage the pharmacy’s bill paying and payroll can help the pharmacist/owner free up time to devote to other aspects of the business. An accountant needs to be a trusted advisor, and there have been cases where pharmacist/owners have asked friends or acquaintances to fulfill this role without due diligence, and dire consequences resulted that legal action could not solve (Tennessee v. Blaskis). Hiring the right accountant for the pharmacy business is important. Even with the right individual on board the pharmacy team, the pharmacist/owner needs to maintain vigilant oversight and review of the businesses financial documents on a regular basis. What steps might a pharmacist/owner take when looking at hiring an accountant?

First consider the person’s qualifications. Accountants may or may not be certified. All certified public accountants, or CPAs, are accountants but not all accountants are CPAs. In many states, anyone can call himself/herself an “accountant.” In order to become a CPA almost all states [...]

Creating Multiple Revenue Streams

By |September 17th, 2012|

Today’s health care and business environment is challenging. The economy continues to move slowly with a variety of thought on how long it will take before the housing market and job growth will recover. Health care is one growing component of the economy, but pressures to contain costs are a continual focus on the part of all types of payers. Cost containment efforts create margin pressure on the product dispensing side of the pharmacy business. Additionally, uncertainty exists over the implementation of new reimbursement models based upon “average manufacturer price” or AMP. On a positive note, opportunities for service-based revenue are available and growing. Maintaining a healthy pharmacy business requires continually scanning for new business opportunities that can generate multiple revenue streams beyond traditional dispensing services.

Pharmacy-related Revenue Streams

Providing new patient-care services or expanding dispensing services can lead to new revenues on the pharmacy side of the business. Disease state management and medication therapy management (MTM) services are two primary [...]

Creating a Year-Round Immunization Business

By |September 17th, 2012|

Pharmacists can now play an even greater role in improving public health, not only by educating and advocating about the importance of immunizations but also providing them. Over two decades the ability of pharmacist to provide immunizations has grown tremendously, in 1994 Washington was the first state to give community pharmacists the authority to vaccinate the public and in 2009 Maine was the final state to approve influenza vaccine administration by pharmacists. Now all 50 states allow pharmacists to vaccinate the public, although training and certification requirements, types of vaccines allowed, patient ages, collaborative practice agreement requirements and other intricacies vary by state. Refer to your state practice act and board of pharmacy for specific details.

While pharmacists nationwide may be providing influenza vaccinations, a greater opportunity exists to improve public health and pharmacy profits by expanding vaccination services year-round. Where allowed by law, increasing the number of and types of vaccinations provided may help to increase store traffic, pharmacy [...]