Our latest thoughts and inspirations on buying a pharmacy, starting a pharmacy, and ongoing pharmacy operations

Part 1: What’s Your Pharmacy’s Biggest Challenges?

As a community pharmacy owner today you are facing many challenges not only because you are a small business in a competitive market but also due to factors that are out of your control like Medicare Part D reimbursement. I wanted to provide you some comfort in knowing you are not alone and that some of the challenges are being solved throughout the country. Below are the top 5 we are seeing in the market today:

1. Lowered and delayed Medicare Part D reimbursement - This is a reality for community pharmacy owners today and will be for the foreseeable future. There isn’t much you can do about it so try not to dwell on it. All you can do, as an owner, is counter the shrinking margins by relentlessly controlling expenses and by creating efficiencies within your operation.

There is a lot to consider (and worry about) when you go to sell your pharmacy but there are 3 that bother most owners the most.

1.) I do not know how to value my pharmacy and thus do not know if I am getting a fair offer.

This can be difficult but don’t worry it really comes down to whether you are selling to a chain or another independent. Most will want to know both prior to receiving offers, so you are prepared. Chains typically base the purchase price on a multiple (typically $10 to $25) of the total scripts filled per year. Independents will typically take a multiple (average is 3) of your EBITDA (earnings before interest, taxes, depreciation and amortization).

2.) How do I deliver the news to my employees?