• LATEST PHARMACY NEWS AND EDITORIAL

    LATEST PHARMACY NEWS AND EDITORIAL

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

Mark Nelson Joins Independent Rx Consulting as Partner and Vice President of Business Development


Mark Nelson Joins Independent Rx Consulting as Partner and Vice President of Business Development

Independent Rx Consulting Expands Executive Team with Key New Hire


Dayton, OH,  May 11, 2020

Mark Nelson, Partner and Vice President of Business Development

Independent Rx Consulting is pleased to announce and welcome Mark Nelson as Partner and Vice President of Business Development.

His primary role will be to develop and execute a broadened range of new value added sales initiatives. Mark is uniquely positioned to expand Independent Rx Consulting's services offerings via his proven expertise in strategic sales planning, relationship building, and passion for helping independent pharmacies succeed.

“There are few people in the industry who could provide our current and future clients the depth of knowledge he will bring. He is a key addition to our executive team.” says Owen BonDurant, Partner at Independent Rx Consulting.

Mark has over a decade of experience in the independent pharmacy industry, most recently as Vice President of Sales at PioneerRx, a leading pharmacy software company. From installing software and training staff to helping industry leaders optimize their pharmacy operations, Mark’s extensive technology background, industry experience and business development skills will be instrumental in helping Independent Rx Consulting continue to expand both its service offerings and industry reach.

“I am beyond thrilled to be a part of the Independent Rx team,” said Mark. “I have the ability to continue working with the customers I know and love in an industry that I’m extremely passionate about. For years I’ve worked with pharmacists to help them realize their dream of owning their own business, and it feels good to take the same leap myself.”

Clients and friends are invited to send their messages of congratulations and welcome.

Independent Rx Consulting provides business services addressing needs throughout the entire life cycle of independent pharmacy ownership, from the initial purchase or starting of the pharmacy to its ultimate transition. Services offered at all stages of the pharmacy ownership life cycle include accounting, data dashboards, operational consulting and start/buy consulting.  



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What is a Buying Group?

What is a Buying Group?
One of the most common questions we receive is, what is a buying group, also know as a group purchasing organizations (GPO). This makes sense for our clients starting or buying their first pharmacy. But we get this question from our accounting clients and from seasoned pharmacy owners too.

As such we decided to write an article. Below we will cover how buying groups came about, what purpose they serve and how they benefit you. I am sure we have not covered every aspect but this should give you an understanding.

Buying groups or GPOs first appeared around 1910 in New York. However the number of buying groups barely grew until the 1970s and 1980s. Growth began because GPOs were excluded from Safe Harbour Laws. In addition, hospitals and independents needed outlets to negotiate better prices. As pressure on reimbursement grew independent pharmacies in particular did not have the time or knowledge to negotiate and the number of GPOs grew.

Today there are over 600 but only a few are a big influence in the independent pharmacy space. Examples would be
The main function of a buying group is to negotiate lower prices on prescription drugs for its members. Essentially they take the collect volume of thousands of independent pharmacies and negotiate with the wholesalers (McKesson - www.mckesson.com, Cardinal Health - https://www.cardinalhealth.com/ and AmerisourceBergen - https://www.amerisourcebergen.com/) for better pricing. But they have also developed other functions over the years. Most GPOs are member owned non-profits and as such they will distribute rebates, hold the wholesaler accountable and provide other services to their members. Some of these services including consulting, software, other vendor discounts and more.

Hopefully this provides you some insight into a buying groups function. We would encourage you to spendsome time getting know the people at your buying group and the services offered.  Doing so will help your business in many ways - I know it has helped ours!
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Key notes about Insurance Contracts and Licensing when Buying or Starting a Pharmacy


If you are buying or starting a pharmacy one of the first things to understand is what you will have to do to receive your licenses and PBM contracts.   Not doing this could cause you to lose business or delay your opening/purchase. Below are key items to do to ensure you know what is required for licensing and insurance contracts.

1.       Call your State Board – understand what the process is for license approval. Are they going to do an inspection, when will the inspection occur, what is required to pass? What is the timeline? Some states require a board meeting you must attend. These are just examples and will differ from state to state, so call them understand it.

2.       Does your state require a state control license? Some states require a separate number via a separate application and if they do it can delay your process.

3.       Call Medicaid – every states process for receiving a Medicaid number will differ. Call Medicaid understand what is required to obtain. If buying, will you keep the number, will the number change, and do they require approval in advance of sale? If starting how long will it take?

4.       Do managed Medicaid plans require Medicaid approval? - In some states if you contract with the managed care company you automatically can bill Medicaid, in other states you have to have the Medicaid number to activate the managed care.

5.       Are you in a Hot Zone? CMS has Hot Zones and if you are in a hot zone you will be forced to wait on contracts with certain Medicare plans, sometimes up to 1 year.

6.       If buying are you doing an asset or stock sale? – this will impact all your licensing, if asset sale you will most likely get all new licenses and PBM contracts if you are doing a stock sale you will probably try to keep all the licenses and contracts. The stock sale will cause you to follow a different process and you may or may not be able to keep the licenses so make sure you understand this early in the purchase process.

7.       Are you going to bill Med B for diabetic supplies, immunizations or anything else? – Med B is not included with your PSAO like Medicare Part D and will require a separate application. Med B for immunizations can be obtained with a simple application however diabetic supplies is considered DME and all DME requires an accreditation which can take some time.

8.       Some PBMs will require an inspection – the PBMs will at times require an inspection and you will have to be open prior to them doing so. Call the key providers in your area and understand if they will or not.
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The Importance of Med Sync for Independent Pharmacies

This article maybe a little late to the game but as consultants and accountants to the independent pharmacy industry we view the operations of many more pharmacies than the average person and have noticed the focus of medication synchronization has dropped off. It was the “popular” subject at every tradeshow and at nearly every pharmacy for several years but now we do not hear it as much.   We are also not seeing the % of patients on med sync rising year on year as much as we once did.

Medication Synchronization should be a continued focus in almost every independent pharmacy. The reason why, it is the only process that impacts the 3 most important levers in a pharmacy, revenue, inventory/cost of goods sold and payroll. Med Sync increases revenue because the patients on Med Sync are more likely to get all their refills on time, it allows you to practice a true just in time inventory, whereby you order inventory when the patient needs improving your cash position and it reduces payroll in several ways (reduces number of inbound calls, reduces number of check outs/deliveries and reduces amount of separate fills you have to data entry, count, bag, etc.).

With lowering reimbursement pharmacies have to be more efficient and the process that makes the largest impact on efficiency is med sync. So, if you have 30% of your patient base on med sync we encourage you to strive for 60% and if you are starting or buying a pharmacy make med sync one of the priorities when you take over!
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Think Bigger when Starting a Pharmacy

I am asked a lot, what is the difference between very successful pharmacy businesses and those that are just okay. My answer is always the owner thinks bigger. Your typical pharmacy is primarily retail and will do traditional marketing, provide the typical services, rely on great service and market to 2 or 3 mile radius. All these are important but the great pharmacies will go big and do things that are uncomfortable. Examples include:

·         Looking at the target market not just as a 2 mile radius but as a 10 or 20 or even 50 mile radius.

·         Seeing the customer as not only the patient walking in the door but also as the prescriber, hospital, facility, pharmaceutical reps, other businesses in the community, etc.

·         Not being afraid to seek out multiple lines of business, compounding, long term care, retail and specialty.

·         Owning multiple pharmacy locations not just in the local area but maybe hours away or even a full state or two away.

·         Creating programs specifically designed for a doctor’s office, hospital or other partner.

·         Focusing on one or two disease states to drive business from a large community of patients.

·         Having a call center to attract and solicit new patients.
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