Is there opportunity for new community pharmacies?
The Community Pharmacy marketplace has been declining for years and that spells opportunity for
young pharmacists and entrepreneurs.
Yes according to yearly studies done by the National Community Pharmacy Association (NCPA) the community pharmacy industry has seen continued decline in both sales, total stores and profit. But as entrepreneurs we always have to ask why?
It is true that some of the above is due to flat prescription volume, a low volume of new none generic drugs, an increased number of generics coming to market, poor reimbursement from PBM's and the increased use of 90 day refills.
However if we look at the total store decrease for years now we see opportunity. For 20 or 30 years now pharmacists have been compensated very well right out of college. We as owners were paying the college tuition for prospective pharmacist, giving them a car and paying them more than we made annually. This was due to a shortage of pharmacy students and thus an increased demand for there skills. Because of this the industry had very few new pharmacies being established and more importantly all the individuals who started a pharmacy 30 years ago were and still are selling to chains rather than other entrepreneurs.
So lets review we had lots of owners selling to chains and very few new pharmacies being created. As an entrepreneur, I ask who is filling the void that the thousands of stores no longer in business once serviced? They didn't go out of business due to poor revenues they simply cashed in on there many years of hard work. The answer is in many cases no one. My advice, look around, is your area under serviced, are people driving 10 miles to get to a pharmacy? Well it may be because a community pharmacy left and no one filled the need of the community.