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WINNING PRODUCTS These are the top front-end items to get on your pharmacy shelves

BEYOND TRANSACTIONS How to reap more revenue with your point-of-sale system

Total Purchasing Solution How to maximize rebates and profitability on pharmacy inventory


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FEATURE | Total Purchasing Solution How to maximize rebates and profitability on pharmacy inventory



NEWS | Path to Adherence Recent studies show mobile apps’ promise to improve medication adherence

FEATURE | Total Purchasing Solution



TRENDS | Winning Products


RETAIL | Lay of the Land


SOLUTIONS | Rave Reviews


SPOTLIGHT | Call to Action


MONEY | Beyond Transactions


OUTLOOK | Harm’s Way

These are the top front-end items to get on your pharmacy shelves

The essential guide to retail pharmacy layouts

How to get five-star reviews online and why you can’t afford anything less

Pharmacist Byron Berry raises his voice for industry change

How to reap more revenue with your point-of-sale system

How safe is your pharmacy from a robbery?

ELEMENTS | The business magazine for independent pharmacy | JUNE 2019

TRENDS | Winning Products




The business magazine for independent pharmacy

ON THE WEB Find more strategies, tips, and expert advice to improve your business at pbahealth.com/elements


Is Owning a Pharmacy Profitable? PUBLISHER & EDITORIAL DIRECTOR Matthew Shamet

Owning an independent community pharmacy requires a large investment—financially, physically, and emotionally. But is owning


a pharmacy profitable? We’re here to help

Greyson Honaker

you find out. Read more at pbahealth.com/ is-owning-a-pharmacy-profitable.


25 Irresistible Pharmacy Promotion Ideas to Get More Patients If you don’t promote your independent pharmacy, it won’t grow. Use these easy

INTERESTED IN ADVERTISING? elements@pbahealth.com

pharmacy promotion ideas sure to attract new patients to your pharmacy. Read more at pbahealth.com/pharmacy-promotion-ideas.

These Are the Most Important Pharmacy Metrics Learn 30+ formulas to calculate the most important metrics for independent pharmacies. You’ll understand how to think like a retailer, discover the methods to track and measure meaningful pharmacy metrics, and learn ways to use metrics to get insight into business performance. Read more at pbahealth.com/metrics-to-know-the-mostimportant-numbers-for-pharmacies-to-measure.

Follow Elements magazine on Facebook and Twitter for pharmacy business tips and advice, news announcements, industry Elements magazine is published quarterly by PBA Health. Copyright© 2019 PBA Health. All rights reserved. Neither this publication nor any part of it may be reproduced without written permission by PBA Health.

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For more information on local CPESN networks in your area, contact Casey Schwartz at cschwartz@cpesn.com For more information on CPESN visit www.cpesn.com 032518

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PATH TO ADHERENCE Recent studies show mobile apps’ promise to improve medication adherence

Perfect medication adherence has long been a holy grail of

someone to missed doses, and keep track of doses—didn’t help. All

healthcare—with promises of longer, healthier lives and fatter,

patients needed was a simple reminder.

healthier wallets for everyone. Nearly half of the four billion

“These apps seem to be an effective way to minimize

prescriptions filled each year aren’t taken as prescribed, which

forgetfulness by regularly reminding the patients about their

leads to increased re-hospitalization, mortality, and morbidity,

medications in a non-intrusive way, especially given that nowadays

costing an estimated $300 billion annually. And the less compliant

people usually have their mobile phones with them the majority of

patients are, the less medicine your pharmacy sells.

the time,” Santo said.

Various attempts have been made to reach the ever-evasive goal, from smart pill boxes to appointment-based models to


making meds more affordable. Many of them have been effective,

How can pharmacists incorporate these findings into their routine

but each solution is only one road on the map to the destination.

care of their patients? “A pharmacy can always recommend the use

One of the latest paths is mobile applications. At least five

of a medication reminder app to its customers, especially those

studies in the past five years, including two last year, have revealed

who are prescribed long-term medications for chronic conditions,”

mobile apps’ promise to increase adherence. Unlike many previous

Santo said.

studies, last year’s were both randomized controlled trials, the

There are upwards of 700 medication adherence apps,

most credible type of study. One studied adherence in patients

according to a comprehensive review published this year in JMIR

with hypertension and the other studied patients with coronary

mHealth and uHealth. Narrowing the list down for patients will

heart disease. In both studies, those who used medication

save them a lot of time and stress. Using the correct search terms

reminder apps were more adherent than those who didn’t. This

will filter out a good portion of irrelevant results, the study said.

recent slew of studies could set the stage for adherence strategies

Instead of searching for “adherence” and “compliance,” look for

for independent pharmacists going forward.

“medication” and “pills,” which yield significantly more relevant results.


In the coronary heart study, patients were assisted in

Patients with strict regimens requiring several medications and

downloading the app, inputting their list of current medications,

multiple doses daily, like those with heart disease, are the main

and setting daily reminders. Pharmacists can help their patients

targets and beneficiaries of this mobile technology. Most of the

adhere to their medication by engaging in these tasks, which Santo

apps work by mitigating the effects of juggling so much all at once.

said were valued the most by the study’s patients. “Pharmacies

“As we know, forgetfulness is one of the main barriers to maintain good medication adherence, especially for those individuals taking long-term medications for chronic conditions,

should probably train their pharmacists to provide this initial training on how to use the app to their customers,” she said. Although much remains to be tested and discovered in the

such as cardiovascular diseases and coronary heart disease,” said

ever-evolving arena of mobile adherence apps, the studies show

Karla Santo, MD, who led the 2018 study on medication reminder

promise. And pharmacists have another tool to safely employ in

apps for patients with coronary heart disease.

the quest to keep their patients adherent and healthy.

In Santo’s study, published in Heart, patients were split into three groups: one using a basic medication reminder app, one an advanced reminder app, and one with no app at all. None of the participants had been using adherence apps before the study. After three months, the groups using a reminder app fared better than those who didn’t use an app. “Low adherence” decreased by 10 percent in the groups using the apps. However, the advanced features—such as the ability track adherence statistics, alert

Top Five Adherence Apps Medisafe Pill Reminder CareZone

MyTherapy Round Health Based on user ratings

ELEMENTS | The business magazine for independent pharmacy | JUNE 2019



WINNING PRODUCTS These are the top front-end items to get on your pharmacy shelves In 2018, Hamacher Resource Group (HRG) evaluated a whopping

guide their inventory choices for improved turnover and increased

2,587 new products to determine which were most suitable for

front-end sales. Start with the top-ten and top-five lists provided in

independent pharmacies. The result of the company’s rigorous

this article. If you need to remove items from your shelves to make

review process is a surefire list of top-performing products

room for top performers, Kaifesh advises first getting rid of any

independent pharmacies can’t afford to miss out on.

discontinued items that aren’t available to reorder as well as any

“These are items that we believe are going to do well in the

particularly slow-moving products. If there are multiple sizes of one

near future across all the different categories,” said Tara Kaifesh, a

product on the shelf—for example, a 30 count, 90 count, and 120

category analyst at HRG.

count—consider trimming that selection down for a potential hot

Items that made the list survived a fierce evaluation: Of 2,587 items reviewed, a mere 208 health, beauty, and wellness items

seller. Make sure to promote new items and have signage that calls

were awarded a Star Rating. This coveted designation means an

attention to them. People need to know you’re stocking particular

item has a high potential for success when placed on the shelves

items so, as Kaifesh pointed out, “they’re not thinking, ‘Oh, I can’t

of an independent pharmacy, according to HRG’s New Item Review

get that here, so I’ll go somewhere else.’”

team. Products expected to perform well can earn up to three

Product performance is always changing, so make sure to keep

Stars. A product that’s been awarded three Stars is, in the eyes of

your finger on the pulse of new trends to give your pharmacy

HRG’s review team, one you need to get on your shelves, pronto.

an edge. Follow HRG on their company website and join HRG’s

The review process takes into account factors like innovation, promotional support from the manufacturer, potential for growth,

Independent Pharmacy Facebook group, where they post monthly merchandising tips including new product information.

and more. A product needs to be well-rounded in all areas to earn at least one Star. “We’re usually pretty spot on with our

Hamacher Resource Group focuses on improving results across the

assessments of new items,” said Colleen Volheim, HRG’s category

retail supply chain by addressing dynamic needs such as assortment

research and analysis manager.

planning and placement, retail execution strategy, fixture coordination,

Last year, new products from names like Robitussin and BandAid topped their rankings, but more niche products, like specialty toothpastes and refrigerated probiotics, also made appearances. This year, the analysts said the market is trending toward products that are completely or partially natural. “People want to know what they’re putting into their bodies,” Kaifesh said. Face masks and bath salts have proven popular, along with lidocaine pain relief treatments. Charcoal products have begun to pop up everywhere, from oral care to skin care to hair care. Cough and cold products containing elderberry are also sought after. One craze that was hot in 2018 and is only getting hotter? CBD. “We’re really going from zero to ‘everybody wants to get a piece of the CBD pie,’” Kaifesh said, noting that products containing CBD were going to be “huge” in the coming year. COMPETITVE ADVANTAGE Independent pharmacies can use HRG’s ratings and rankings to

8 8


item database management, brand marketing, and analytics.

Top 10 Products Introduced in 2018 for Independent Pharmacy Based on analysis by Hamacher Resource Group, Inc.

Pain Relief .

Aleve Back & Muscle Pain Tablets 50 Count

Biofreeze Soothing Pain Relief Cream 3oz

ASPERCREME Lidocaine Patches XL 3 Count

ICY HOT Pain Relieving Cream Lidocaine plus Menthol 2.5oz

ThermaCare Ultra Pain Relieving Cream 2.5oz

Aleve Back & Muscle Pain Tablets 24 Count

Aleve Back & Muscle Pain Tablets 50 Count

Bausch + Lomb Lumify Redness Reliever Eye Drops 2.5ml

Robitussin Adult Honey Cough + Chest Congestion DM Liquid 4oz

Biofreeze Soothing Pain Relief Cream 3oz


Sensodyne Rapid Relief Toothpaste Extra Fresh 3.4oz

Emergen-C Energy Plus Gummies Orange Zest 30 Count

Band-Aid Hydro Seal Blister Heels Hydrocolloid Gel Bandages 6

Natrol Melatonin 10 mg Gummies Strawberry 90 Count


Bausch + Lomb PreserVision AREDS 2 Chewables Mixed Berry

ASPERCREME Lidocaine Patches XL 3 Count

Systane Complete Optimal Dry Eye Relief Lubricant Eye Drops

Flavor 60 Count •

10ml •

TUMS with Gas Relief Antacid/Antigas Chewy Bites Lemon &

Gummies 60 Count •

Strawberry 28 Count •

One A Day Women’s With Nature’s Medley Complete Multivitamin Schiff Move Free Ultra 2 in 1 Joint Health Coated Tablets 30 Count

Vicks VapoCool Severe Medicated Drops Winterfrost 18 Count

Skin Care

Top products in 2018 for independent pharmacy by category Based on analysis by Hamacher Resource Group, Inc.

Cold & Allergy •

Robitussin Adult Honey Cough + Chest Congestion DM Liquid 4oz

Vicks VapoCool Severe Medicated Drops Winterfrost 18 Count

DayQuil/NyQuil Severe Cold & Flu LiquiCaps 16+8 Count

Halls Real Honey Cough Drops Honey Vanilla 30 Count

Mucinex Sinus-Max Pressure Pain and Cough Caplets 20 Count

Digestive Health •

TUMS with Gas Relief Antacid/Antigas Chewy Bites Lemon & Strawberry 28 Count

Alka-Seltzer PM Heartburn Relief + Sleep Support Gummies Mixed Berry 46 Count

TUMS Extra Strength 750 Antacid Chewable Tablets Sugar-Free Melon Berry 80 Count

Dramamine-N Long Lasting Formula Tablets 10 Count

Pepto-Bismol Ultra Caplets 12 Count

Dr. Teal’s Pure Epsom Salt Soaking Solution Activated Charcoal 3lb

Gold Bond Ultimate Cracked Skin Relief Fill & Protect Cream .75oz

Neutrogena Hydro Boost Hand Gel Cream 3oz

Vanicream Gentle Body Wash 12oz

Burt’s Bees Hydrating Sheet Mask with Clary Sage1 Count


LAY OF THE LAND The essential guide to retail pharmacy layouts Think about your last experience in a retail store. Did you pause

essentially be your guide as to where you’re going to merchandise

for a brief moment at the front of the store, and then turn right?

everything,” Mayslak said. “For example, if CBD has been a big

You’re not the only one. Did certain fixtures or displays catch your

boost to your sales in the past six months, we want to make sure

eye as you made your way to the product you wanted? That’s not

that everybody gets to see them. If we know the traffic pattern then

a coincidence. Was the most necessary item on your list located at

we know predictably where you’re going to go. We can have that be

the back of the store? Not an accident.

right in an area displayed to where you can’t help but stop and look

“Everything, everything in retail is done for a reason,” said Bob Mayslak, a retail design consultant with Gladson Design Group, a

at it.” Your pharmacy layout influences your customer experience,

Syndigo company that helps retailers plan and execute in-store

for better or for worse. “Knowing how to best flow your customers

arrangements. “There’s quite a bit more science to it than you

through that space won’t only affect your bottom line, but it will

would think.”

impact how your customers perceive you,” said Jason Trail, a senior

The science of store layouts has been studied, tested, and

enterprise solutions architect and floor and space planning expert

honed by corporate retailers and big-box giants for decades. In

for Plantensive. “It will greatly impact the customer’s perception of

the end, the science is about money. How do you arrange your

how well-managed and well-run some locations are. So, unless you

store layout to move the most merchandise? And to enhance the

use your space appropriately, just putting out more merchandise

customer experience so they keep coming back?

isn’t necessarily going to help. It actually could hurt you in the long

A layout primarily refers to the floor plan and the arrangement


of fixtures in your front end, which reflects how you want to flow your space and present your merchandise. The best layouts


increase sales at every stage of the shopper’s journey through the

There are certain universal truths about how shoppers move


through, perceive, and experience a retail space. These tried-and-

“If you can create a predictable traffic flow pattern, that will



true concepts apply to every retail layout and should influence how

you design your front end. When people first walk in the store, they enter the

shoppers will make the whole loop around the front end. As shoppers work their way through the store, they should

decompression zone. This is the first 10 or so feet of space just

experience speed bumps along the way. “The idea of speed bumps

after the entrance of your pharmacy. “It’s essentially like an invisible

is to slow them down and actually make them stop and look at

vestibule where you stop and gather yourself when you walk into

something that they may not have thought about before,” Trail said.

a place,” Mayslak said. “It puts everyone into a calmer frame of

“The big thing is to think about getting a display that will draw them

mind. Everybody needs to decompress when they get into a new

in. The display can be interactive, it can be demonstrative, or it

environment. So that’s a very important area.” It should always be

could even provide an overall solution.”

clear of ads or merchandise so visitors can orient themselves in the new space. After leaving the decompression zone, almost everyone will turn to the right and work through the store counter-clockwise, Trail said. Because of this, most stores place a display known as a

“Essentially,” Mayslak said, “it’s anything that will get you to stop your natural flow of walking through the store to engage in some of the things that you’re trying to sell additionally.” With these core concepts in mind, you can begin to draw up your layout.

power wall directly to the right of the front door. It contains their highest-margin products or premium products they’re interested


in promoting. The tendency of people to move counter-clockwise

Designing a layout is a little bit art and a little bit science. There’s no

is also why many pharmacies put the pharmacy counter in the

one-size-fits-all for community pharmacies. The only universal truth

back of the store, depending on the location of the entrance, so

is the placement of the pharmacy counter. “Having the pharmacy at the back is the most ideal scenario for independent pharmacy,”

“Everything in retail is done for a reason.”

Mayslak said. “Use the pharmacy as an anchor and have that be the guide through the store.” Other than that, your layout will depend on several factors, starting with your goals. “It’s all going to be dictated upon what it is that you’re trying to accomplish,” Mayslak said. “You want to highlight whatever it is that you’re known for or want to be known for and expose everybody to as much of what you’re offering as

The Language of Layouts

possible. And keep the future in mind. Don’t design it for what you’re doing right now. Design it for what you’re doing five years from now, so you’re not doing this project every ten years.”

Are you fluent in the vocabulary of retail layouts? Here are some key terms to know.

Decompression zone: The area around a store

He gave the example of a pharmacy that specialized in compounding—that was the engine of the business, what drew patients through the pharmacy doors. Instead of designing the space around the compounding area—adding unique features like

entrance where the customers will get their bearings

a window into the lab—they went with a traditional layout with lots

before proceeding through your space.

of front-end space. That choice cost them. “They wanted to focus

Power wall: A large, visually appealing display in the area to the right of the decompression zone. This

on something else rather than what we already knew was their bread and butter,” Mayslak said. Two other factors that Trail said should shape your layout

is typically a customer’s first interaction with your

choices are your space and your customers, which vary from

merchandise after entering the store.

pharmacy to pharmacy. Don’t assume you can mimic any other

Speed bump: Strategically placed displays in the store

store and plug in some standard pharmacy layout. Mayslak echoed that sentiment. “Work with the space that’s

that attempt to grab the attention of the customer and

there as opposed to trying to take what you know in a more

get them to slow down and browse.

traditional setting and make that work,” he said. “Make sure you

Planogram: A diagram for arranging products in categories on retail shelves to maximize front-end sales.

Gondola: A freestanding, shelved fixture used to

allocate your bread and butter and then work around the stuff you want to add.” Carefully consider the overall square footage and the shape of your building. With that in mind, think broadly about where the different departments should live, where the pharmacy counter

display merchandise.

ELEMENTS | The business magazine for independent pharmacy | JUNE 2019


basic floor plans GRid:

will be, where the checkouts should go. As you consider each of these factors, tailor your choices to what’s most important to your pharmacy, Trail said. Then factor in elements that could pose a challenge: Do you

The traditional grid floor plan allows you to maximize

have large columns or load-bearing walls that can’t be moved?

the use of your available floor space to display the most

Is your fire exit at risk of being blocked? Is the store’s shape


highly irregular? Pharmacies can adapt their building to highlight the space’s strengths and minimize its challenges. “Look at the constraints of the building as an asset to differentiate yourself,” Trail said. For example, Trail has seen businesses with extremely long, narrow properties utilize different floor tiles to help indicate a clearer path through the store. Other pharmacies may employ techniques like “waterfall” fixture heights to pull patients’ attention to the back of the store. For unusual or irregular shapes, it might


make sense to combine multiple layout patterns, Trail said. For example, a store that’s narrow up front and wide in back could use

The loop floor plan forces customers to walk a certain

a main aisle in the narrow space which opens up to a racetrack in

path, giving you complete control over traffic flow and

the wide space.

guaranteeing extra exposure to your products.

Once you take your space, priorities, and restraints into account, consider who patronizes your pharmacy and who’s competing with you down the street. Are you in an area where your customers just want to get in and out quickly? Are you the go-to stop for retail products? Is your store the only place for local and boutique merchandise? What do you want to be known for? “Start thinking about your customer base and how you want to flow them through the area,” Trail said. “That’s where you can decide how much space you’re going to give to the individual


merchandise categories for your sales floor.” After you’ve finished your layout and customers come

The freeform floor plan allows you to prominently and

streaming through your store, there’s still work to do. Mayslak

creatively highlight products and provides an attractive,

said to keep close track of your sales data for every category and

comfortable space for customers to walk through.

area of the store, which will allow you to adjust your fixtures and merchandising decisions to find an optimal arrangement that maximizes your sales. “I know you’re never, as an independent pharmacy, you’re never going to do 40 or 50 percent out front,” Mayslak said. “But if you can raise that revenue number 10, 15 percent, that’s a significant amount of additional revenue that would be very helpful to every small business owner.”

combination: The combination floor plan utilizes multiple floor plans to suit your store’s particular needs and strengths.

“Knowing how to best flow your customers through that space won’t only affect your bottom line, but it will impact how your customers perceive you.”

Quick Tips From the Experts

shoppers search for their intended products on the inner aisles, they’ll have to pass the outer aisles to get there. “Having a reminder that it’s there might get me to stop and buy something that I didn’t

A retail layout is only as good as the merchandising it’s paired with. Retail design experts Bob Mayslak and Jason Trail give some layout

necessarily intend to buy,” Mayslak said.

and merchandising recommendations for strategic and commonly

End caps

neglected areas of your store.

End caps can bring people’s attention to an item they wouldn’t

Pharmacy counter

have seen in the aisle and lead to more sales. Switch up your end caps at least once a month, but ideally twice a month. “If you have

Use the area near the pharmacy counter for items that can benefit

the same item in an aisle versus on the end cap, you’re going to

from a pharmacist’s expertise, like vitamins and supplements or

sell roughly 25 to 30 percent more, so changing those things out is

CBD products. Keeping them close to the pharmacy counter makes

going to get them to buy a little bit more,” Mayslak said.

it easier for curious shoppers to ask questions about unfamiliar products and helps pharmacists more easily recommend items to


patients. “About 98 percent of the time when a pharmacist hands

Every layout should include strategically placed areas for people

you a product, you’re going to buy it,” Mayslak said.

to slow down. “You want to give them areas to naturally stop


and survey the products that are out there,” Mayslak said. “And that’s why the end caps or promo aisle or anything that kind of

A common pitfall in checkouts is an inefficient or confusing setup.

draws your eye to it is rather important as far as retailing and

Mayslak and Trail both stressed the value of clear paths and


signage that guide customers to the right checkout lines. The checkout should also be arranged to minimize cluttered space and


long lines. “If it gets frustrating enough, somebody’s going to set

As you’re drawing up your layout plans, don’t neglect any details of

their product down and walk out the door,” Trail said.

your store design. “Make sure that you look at every little thing, as it

Product placement

affects something else. How you want that place to be perceived is going to be affected by all the decisions you make from the ceiling

Put items that shoppers aren’t typically coming into the store to

tiles down to the flooring, down to where the shelving is and how

buy, such as impulse items and promotional products, in outside

the pharmacy is set up,” Mayslak said. “So take everything into

aisles where there’s high visibility and traffic. Put your “seek-and-

consideration when you’re doing it.”

destroy” products, like cough and cold, in your inner aisles. As

ELEMENTS | The business magazine for independent pharmacy | JUNE 2019




How to earn five stars on review websites The prevalence of online reviews on websites like Google, Facebook, and Yelp have completely changed how people discover

So, how do you increase your reviews and boost your ratings to five stars? Try these strategies.

and choose where they shop, especially for small businesses like independent pharmacies. According to a consumer survey from BrightLocal, a company

REQUEST REVIEWS “The best way to get more reviews is to ask your patients,” said

specializing in search engine optimization tools, 90 percent of

Malcolm Stone, founder of ReviewIgnite, an online reputation

consumers read online reviews before visiting a business. That

management firm. You already have a large patient base that views

means almost everyone will find your pharmacy online and read

you as a five-star pharmacy. More than likely, those patients will

reviews before deciding to visit.

happily leave a review. In the BrightLocal survey, almost three-

“Online reviews have quickly become the way that consumers find local businesses, replacing window shopping, Yellow Pages,

fourths of customers said they’d leave a review if asked. When you ask for a review, make it as easy as possible on your

and even word-of-mouth,” said Brad Plothow, vice president of

patients. You can request reviews in person, but patients may

marketing and communications at Womply, which helps small

forget as soon as they walk out of your pharmacy. Requesting

brick-and-mortar businesses manage their online presences.

electronically allows them to immediately go to the website while

“Businesses that ignore online reviews are ignoring the most

they’re already on their phone or computer. In an email, text, or

effective channel for acquiring new customers.”

social media post, include a link to the review website. For patients

None of the trust that has long empowered word-of-mouth marketing is lost when recommendations move from the living room to the internet: Nearly 90 percent of consumers view online

who don’t know how to leave a review, offer to show them in the store, or have step-by-step instructions handy. Make sure to ask for reviews at appropriate times. The best

reviews as trustworthy as personal recommendations. And while

moment is when a patient compliments or thanks you. Use this

traditional word-of-mouth might reach a handful of people in

opportunity to tell them you’re glad to hear that and ask if they’d

someone’s circle of friends and family, online reviews reach

like to share their experience on a Google or Facebook review.

thousands of people in the entire community. This free, far-reaching, and effective advertising is particularly

“The owner should make it a policy and train the pharmacists and technicians on staff regarding when and how to ask for

good news for small businesses like your independent pharmacy.

reviews,” Stone said. “You can also automate this process by

No longer do deep resources and high visibility give CVS and

using one of the many online reputation management software

Walgreens a huge leg up. People who once would have never heard

platforms available.”

of your pharmacy can now easily discover you. When people search for a pharmacy online, your pharmacy’s name will appear just as


readily as the national chains.

Even if patients are happy with your pharmacy, they may need

Psychology research tells us that people are more inclined

more than a nudge to do the work of reviewing and rating your

toward businesses they’re familiar with than to ones they know

business. Rewarding people for their honest reviews will give them

nothing about. Patients know what they’re getting at Walgreens

an incentive to get it done.

and CVS, but your independent pharmacy is unique. Reviews give patients a way to become familiar with you. Of course, the benefits of online reviews depend on the

Consider giving patients a front-end discount, entering them into a contest for a prize, or offering a coupon to anyone who posts a review within a certain timeframe. The combination of a reward

strength and number of your ratings and reviews. In one consumer

plus a time limit—two classic advertising techniques—will drive

survey, more than half of respondents said they won’t patronize a

people to post a review.

business with less than four stars. And if the business has four or five stars, more than 70 percent of people will be inclined to visit it.


However, according to the research from BrightLocal, it takes about

It’s good policy to respond to every review directly. The

40 reviews for people to trust the average star rating.

ReviewTracker survey revealed that 80 percent of consumers

ELEMENTS | The business magazine for independent pharmacy | JUNE 2019

15 13

believe a business cares more about them when its management

on addressing angry patients before they take their issue to the

responds to their reviews. And almost 90 percent say they read the

internet. Head off complaints in person before they get posted

business’s responses.

online by making sure patients don’t leave your pharmacy upset.

“The worst thing you can do is let reviews pile up without

Even if you can’t fully solve their problem right then, you can soften

any response,” Plothow said. “Most consumers see a measured,

their anger and begin proactive steps to meet their needs, which

thoughtful response to a negative or positive review as evidence

might be enough to deter them from posting a negative review.

that the business cares about customer service.” For positive reviews, respond by thanking them for the review


and mentioning that you’re happy to have them as a patient. For

In a Drug Store News survey, 94 percent of patients said that the

negative reviews, respond promptly, apologize, offer an honest

most important factor in choosing a pharmacy is convenience. The

explanation, and then find a way to make amends. Take the

survey respondents noted that short wait times were the most

conversation to a private message or phone call.

important convenience, followed by hours of operation.


independent community pharmacies this includes flexible store

What if your pharmacy doesn’t actually deserve a five-star review?

hours, prescription delivery, website access, onsite flu shots, etc.

When enough patients give the same feedback, it’s time to take a

Helping your patients out in these ways will drive more five-star

look at what they’re saying. Consistent negative reviews can reveal


“Make it easy to do business with you,” Stone said. “For

real problems with your pharmacy. Fixing those problems will give your patients a better experience, eventually turning those low-star


reviews into five-star reviews.

Patients’ experience of your pharmacy is the single most important

“Independent pharmacies need to commit to taking reviews

factor that influences reviews. No strategies can overcome a poor

seriously,” Stone said. “The pharmacy owner should share all

experience, and no tactics can earn better pharmacy reviews than

reviews and feedback with their staff and, depending on the

great care.

staff size, appoint one or two individuals to analyze and work on

“Deliver a ‘wow’ patient experience,” Stone said. “Getting

improvements to their customer experience delivery. Then conduct

more five-star reviews starts with the pharmacy staff. This means

a customer experience training session with the entire staff—which

having a patient experience plan in place. And as the owner of the

should be repeated regularly—to make sure the negative situation

pharmacy, you should be setting the tone for what a good patient

does not happen again.”

experience looks like.”


Learn how to provide a great pharmacy experience at pbahealth.com/

Negativity influences people more easily than positivity. So, focus




These Are the Most Important Review Websites Your Pharmacy Needs to Know

page, before other review websites like Foursquare, when people search. That’s significant because 63 percent of consumers use a search engine to find online reviews. How to set up your business on Yelp

Review websites are the easiest, cheapest, and most effective

• Claim your business page

way to attract new patients. Which review websites should you be

• Someone else may have already listed your business on Yelp. If

paying attention to?


so, contact Yelp to claim that you’re the owner and to verify that

all the information is correct.

More people will find your pharmacy through Google than through


any other review website. Google’s search engine and Google Maps

Like Yelp, Foursquare helps people discover new places with

guide consumers to 1.5 billion destinations every year. Nearly two-

recommendations from the community. More than 50 million

thirds of consumers say Google is their first choice for checking on

people use Foursquare every month. Although Foursquare isn’t as

a business. And it’s the site people are most likely to use to leave

popular as Yelp, you need to have a positive presence on it. People


who use Foursquare might not use Yelp and vice versa. This means you’re missing out on a large number of potential customers if you

How to set up your business on Google

don’t focus on both websites.

• Search for your pharmacy and make sure it’s listed on Google My Business • If you don’t see it, or if information is incorrect, follow the instructions on Google’s website to set up your business page

Facebook Facebook isn’t technically a review website, but it has ratings and reviews for businesses. The social platform has more than two

How to set up your business on Foursquare • Check to see if you’re already listed on the site • If so, claim your pharmacy • You’ll get access to its business tools to help you maximize your

presence on the site and gain valuable marketing data on users who visit your listing • If you’re not already listed, follow the instructions on the website

billion active users per month and Facebook pages receive nearly five billion comments every month. It’s second only to Google when it comes to business reviews. People are far more likely to share or like your business page on Facebook than any other website, including Google, and those shares can generate more traffic to your business page socially. One survey revealed that Facebook is the most popular way consumers recommend or review local businesses. How to set up your business on Facebook • Create a Facebook business page • Use Facebook’s free tools to help you understand who visits your page and how to engage with them better

Yelp Yelp is a website and mobile app that connects people with local businesses, attracting more than 170 million users per month. It’s also the most trusted of all review websites. Yelp’s influence on consumers has been so strong that critics have asked whether it

“Businesses risk losing as many as 22 percent of customers when just one negative review is found, 44 percent for two negatives, 59.2 percent for three negatives, and 70 percent for four negatives.” Source: Moz Survey

has too much power over consumer choice. According to an article from the Harvard Business School, a one-star increase on Yelp leads to a 5 to 9 percent increase in revenue. Yelp reviews also rank high on search engines. That means your pharmacy’s Yelp business listing will display near the top of the

ELEMENTS | The business magazine for independent pharmacy | JUNE 2019



refills and free delivery.

Negative reviews have a disproportionate effect on your business.

Plothow said. “It’s tempting to get defensive and emotional when

A spotless record can be tarnished with a single complaint. In

responding to negative online reviews, but that’s self-defeating.”

“Be measured, thoughtful, and brief in your response,”

one survey, 94 percent of shoppers said an online review has convinced them to avoid a business. And a study from Convergys


concluded that a single negative online review can cost businesses

Sometimes, your staff will make a mistake. When you’re at fault, do

30 customers.

whatever it takes to resolve the issue until the patient is satisfied.

For community pharmacies, a tarnished reputation will be

Then make sure to explain what steps you’re taking to ensure it

difficult to overcome. “Local reputation is critical—and negative

never happens again. Thank them for their review and their time to

reviews live forever,” said Nicole Pinero, a specialist with

help improve your pharmacy’s service.

Evergreen Partners, a public relations firm specializing in crisis communications, reputation management, litigation support, and


issues management consulting.

It’s tricky to determine when you should and when you shouldn’t

But negative reviews don’t have to leave a permanent mark on

provide patients who complain with compensation. A good practice

your business. With the right responses, you can turn a poor review

is to offer online reviewers compensation only if you or your

into a positive. Preserve your pharmacy’s reputation with these

employees made a legitimate mistake or oversight. Any obvious

proven PR strategies when you encounter negative reviews.

customer service issue, like unfriendly techs or clerks, also warrants

RESPOND PROMPTLY Don’t let the patient’s complaints go unanswered for long. “Jump on

some kind of compensation. But do it privately, through email or by phone.

it and keep it simple,” Pinero said. “Be personable and apologetic.”


Assign someone to monitor your online reviews daily so you’re

“The first thing is to have a plan for responding to negative

always on top of negative posts.

reviews,” Malcom Stone said. Consider putting together a script

In your response, invite the person to continue the conversation

with general responses, keeping them brief and HIPAA-compliant.

privately by phone or email. “Leaving a manager’s name and

Establishing a protocol or policy will enable quick and consistent

contact information is good customer service,” Pinero said. “It


shows a level of commitment to the customer by wanting to resolve the problem. A personal response to a negative review can open the door for the reviewer write a positive review about how the business responded.”


The POWER OF ONLINE REVIEWS Online reviews are too powerful to be ignored, no matter how small your pharmacy business.

Don’t divert, justify, or make excuses when someone lodges a complaint. And definitely don’t tell patients they’re wrong. Try to

empathize with the negative reviewer, even if the complaint seems unreasonable. “The customer isn’t always right, but we absolutely

don’t want them to feel they’ve been wronged,” Pinero said. •

73% trust a local business more if has positive reviews

49% need at least a four-star rating before they

experience may have occurred and how it will be improved in the future. For example, say a patient complains about a long

90% say that positive online reviews influence what they decide to buy

Face the gripe head on first by apologizing for their poor experience. Follow that with an honest explanation for why the

97% use the internet to find local businesses

wait time when she went to your pharmacy at 5 p.m. to fill a new

choose to use a business

prescription. Politely respond by saying that your pharmacy offers opening hours beyond just 8 a.m. to 5 p.m. to accommodate patients with regular work schedules, but note that the pharmacy often gets busy around 5 p.m. Give an explanation of the options you provide to patients to avoid long wait times, like automatic



75% who use their smartphones to search for something nearby end up visiting a local business within a day

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TOTAL PURCHASING SOLUTION How to maximize rebates and profitability on pharmacy inventory

Of the many ways retail pharmacies differ from other retailers, managing the cost of inventory might be the most significant. For traditional retailers, inventory costs are simple. They pay a flat price for their product, which they know upfront, and nothing they

It’s Complicated: Factors That Determine Your Final Cost of Inventory

do after that will alter the cost. Not so for pharmacy inventory, of

A host of factors influence a pharmacy’s total cost of inventory

which the sticker price is only a small piece of a large pricing puzzle.

beyond the sticker price. Most of the factors are interdependent—

“There’s an array of complex, interconnected factors that

changing one affects another. All of them depend on the

determine a pharmacy’s ultimate cost of goods, including their

pharmacy’s buying behavior. To truly achieve the lowest cost of

buying behavior,” said Clark Balcom, senior vice president

inventory, you need to continuously monitor and optimize every

and COO of PBA Health, a company that helps independent

factor simultaneously every month. Below are some those factors

pharmacies improve the buy-side of their business with purchasing

that could influence a pharmacy’s cost of inventory.

optimization technology, group purchasing services, expert contract negotiations, and VAWD-accredited distribution services. A pharmacy’s cost of goods is primarily tied to a variety of complicated terms and incentives found within their wholesaler contracts. For example, a pharmacy wholesaler contract may

Generic rebate based on Generic Compliance Ratio Rebates for reaching specified ratio of generic purchase volume relative to overall Rx volume

include a brand discount, brand rebate, and generic rebate, each

Generic rebate based on Generic dollar volume

with its own tiered incentive structure based on a certain volume

Rebates for reaching a specified dollar volume of generic purchases

of purchases relative to certain commitments in certain categories and with certain formularies. Sound like a mouthful? That’s because

Brand discount

it is. And any given purchase affects your compliance to those

Upfront, or off-invoice, savings the pharmacy receives on every

incentives, meaning any given purchase could reduce your rebates

brand purchase

if you buy incorrectly. “You have to be able to track and predict how every purchase

Brand discount based on volume

will affect your incentives in addition to ever-changing prices and

Additional brand savings after reaching specified dollar volumes or

availability,” Balcom said. “And to even begin to do that you have to

other incentives

have a complete grasp of all your contract terms and arrangements in the first place.” Without understanding how every single purchase at any moment affects your overall arrangement now and at the end of the month, you can’t know how much the true cost of any item is. That cost complexity means that getting the lowest cost of

Additional performance/program related incentives Rebates based on participation in certain programs or specified performance metrics

Current pricing and availability

inventory takes much more commitment and resources than most

Lowest sticker price across primary wholesaler and secondary

independent pharmacies are able to give to their purchasing. “As


managing the financial and operational costs of inventory has become more complex, the most costly mistake we see pharmacies

Specified contract items

make is failing to have a comprehensive purchasing strategy that is

Portfolio of generic contract items that are eligible for rebate

supported by formalized management systems and procedures,” Balcom said. “It’s just an inexcusable flaw existent in too many

Designated specialty items

pharmacies today.”

More expensive brand items that factor into incentive structures differently than traditional brand items

COSTLY CHOICES Because every contract contains incentive structures, the

Pay terms

amount you end up spending on inventory depends on repeated

Additional discounts based on how quickly the pharmacy pays

purchasing decisions. On any given day, those decisions may

for the inventory

not seem consequential, but they could be catastrophic when compounded. “Habitually making suboptimal purchasing decisions

Total dollar volume commitments

is a pharmacy’s fastest path to business failure,” Balcom said.

Total dollar amount the pharmacy agreed to commit to purchase from wholesaler

Percentage of volume commitments Percentage of purchases the pharmacy agreed to commit to purchase from wholesaler

suppliers hunting for the best deal, a task that involved tracking down prices from up to six different suppliers. “We were simply

“Habitually making suboptimal purchasing decisions is a pharmacy’s fastest path to business failure.”

trying to find the cheapest price out there,” she said. “This might even be for an item that was $3 in savings—it’s hard to change this habit in employees.” In Balcom’s 20 years working behind the scenes on independent pharmacy wholesaler contracts, he’s seen this scenario everywhere—even from the smartest and most successful owners like Butler. “Without exception, we find losses in rebates and other incentives offsetting the savings these pharmacies intended,” he said. “Worse, frustration and complaints about the time and effort it takes to ultimately make wrong purchasing

Consequences are so steep because of the monumental cost of a pharmacy’s inventory, which makes up 80 percent of an average pharmacy’s total expenses. A compass skewed one degree won’t

decisions is a real pain point. Unfortunately, we come across these scenarios every day.” In other cases, pharmacies will be diligent in meeting their

take you too far off track when you’re traveling one mile. But use

primary volume commitments needed to achieve incentive

that same compass to cross the Atlantic and you’ll end up in wrong

requirements, but then they end up overcommitting and missing

country. Likewise, each incorrect purchase nudges your pharmacy

out on thousands in sticker price savings. “Saving money is a good

off the course of your incentives and eventually lands miles away

thing,” Balcom said. “There are times when purchasing from a

from your maximum rebates.

secondary supplier is both necessary and beneficial. Finding the

Poor purchasing choices are perpetuated by failing to know exactly where you stand and exactly what effect every purchase has

right balance that produces maximum benefits is key.” These common purchasing woes are only some of what

on your overall contract arrangement. Much of the time, purchases

Balcom sees consistently in pharmacies. And the unfortunate truth

that appear smart end up smarting.

is that no matter what they do, pharmacies can’t truly optimize

For example, take one of the most common purchasing

their savings because than can’t really know if any purchase will

strategies pharmacies use to try to reduce costs: chasing cheap

ultimately save them or cost them, he said. “Pharmacies don’t know

deals from secondary suppliers. Say you find discounted amoxicillin

where the line is. Pharmacy cost of inventory is really a challenging

from a secondary supplier for $100 in savings. Looking at the

game of effective portfolio management. It’s a very complex set of

sticker price comparison alone, that’s a good move. But what you

mathematical problems that must be recalculated every day and

didn’t realize is that shifting that purchase away from your primary

take into consideration all purchases made since the beginning of

contract dropped you a tier on your generic rebate structure.

a month, as well as all purchases that’ll be made throughout the

Instead of getting 30 percent back this month, now you’ll be

remainder of a month. And these calculations need to account

getting 25 percent. For the average pharmacy, that’s a potential

for contract incentive structures, purchase volumes, product mix,

loss of $3,000. And that’s only one of your incentives that has been

multiple suppliers, availability of product, and daily price changes.”

skewed—your purchase decision may have also reduced other rebates available in your contract.


“If you only do item-by-item comparisons, then you’re likely

So then, what can a pharmacy do? Even though a person can’t fully

going to force yourself to miss your incentives. You might save ten

optimize purchasing, technology can. “Large chains like Walgreens

dollars only to give up fifteen. And that’s usually what pharmacies

have had extensive decision support systems in place for over two

do,” Balcom said. “If you start spreading your purchases among

decades to help them make optimal daily purchasing decisions,”

several different suppliers, then you’ve probably hit the point

Balcom said. “Independent pharmacies should have the same

where you can’t optimize because you’re spreading your volume in

advanced solutions and benefits. It’s time to modernize and employ

so many different directions that you can’t get the benefit of that

technologies and tools to operate a lot more effectively.”

volume. Or you’re spreading the best part of your volume, which

ProfitGuard Navigation, a purchasing optimization tool from

is your generics, to where you can’t get your mix to be healthy

PBA Health, can calculate how every purchase will affect your

anywhere.” He added, “And what does this say about the overall

total cost of inventory. And it harnesses that precise, predictive

quality of your primary wholesaler arrangement in the first place?”

data to maximize your savings. “It’s taken over twenty years and

That was the case for Teresa Butler, owner of RxShoppe in Grove, Oklahoma. Her team habitually spread purchases across



countless resources to build up the assets, processes, and systems that comprise a total management solution,” Balcom said. “There’s

The Most Important Purchasing Factor Pharmacies Neglect It’s no secret that wholesalers make their money on generics.

by total Rx purchases—but most underestimate just how much

But it’s easy to forget how important that is to your total cost of

money they stand to gain or lose from it.

inventory. “Generic product mix is a fundamental economic driver

Take a look at this sample rebate matrix for an average

to every pharmaceutical customer-supplier arrangement,” Balcom

independent pharmacy, which illustrates the substantial difference

said. “Whether it’s hidden or explicit and how it works for them or

in monthly savings a pharmacy can earn or lose based on its

against them are the important questions.”

generic compliance.

Wholesalers will typically include incentives in your contract

Notice how a seemingly innocuous purchase outside the

to motivate generic volume purchases. Buying more generics

primary contract may take you from 18% to 17.99%, which would

typically earns the pharmacy rebates as well as deeper brand

drop you a tier and lose you more than $4,000. Also take note

discounts, both of which add up quickly. If you spread your generic

of the difference between meeting the top compliance goal and

volume among other wholesalers and miss your generic volume

meeting none of the goals: $15,000 for a single month. By the end

requirement, you stand to lose a considerable amount of money.

of the year, pharmacies could be looking at savings upwards of

Most pharmacy owners are aware of their Generic Compliance

several hundred thousand dollars.

Ratio (GCR)—usually measured as total generic purchases divided




Total Rebate $*





















* Monthly numbers based on the average pharmacy’s annual costs of goods, per the NCPA Digest.

“It’s time to modernize and employ technologies and tools to operate a lot more effectively.”

ELEMENTS | The business magazine for independent pharmacy | JUNE 2019


nobody else that provides pharmacies with an entire end-to-end

part. And that is the action plan. The control tower says, ‘I need

solution that takes into consideration all possible economic factors

you to go to 31,000 feet and I need you to change your heading X

associated with achieving maximum rebates and profitability.”

degrees, here’s the adjustments you need to make.’ The Navigation

The Navigation tool takes all the pharmacy’s contract

report is the control tower coming back to you, as the pilot of your

information and every purchase from the last 90 days and

business, and giving you the timely and clear adjustments you need

puts it into a sophisticated modeling system. The system takes

to make to stay on heading for where you need to get to in order to

everything into account: all contract incentives from your primary

achieve maximum financial performance.”

wholesaler and PBA Health, current prices, availability, volume

For example, the report may guide you to swap your Actavis

commitments, personal preferences, etc. Using this information,

methylphenidate for SpecGx methylphenidate. And it may tell

it recursively simulates all possible variations in your product and

you to stop buying the methylphenidate from one supplier and

supplier purchasing mix, ultimately landing on a targeted model to

start buying it from another. In one pharmacy’s model, that

maximize your rebates and savings.

methylphenidate switch saved them nearly $300 from that single

“We use predictive modeling to help pharmacies figure out the optimal purchases they should make with their primary wholesaler to meet their contractual commitments while earning

item change. “Now take that times fifty to a hundred purchases a day times thirty days a month,” Balcom said. And the report does this calculation for every item in your inventory. Every day. “We recalculate every day based on the purchasing

the most dollars they can under their performance

decisions a pharmacy has made throughout the

incentives.” Balcom said. “And many times, this leads

month and up to and including the day

to us helping pharmacies negotiate needed

before,” Balcom said. “We then adjust

improvements to their wholesaler

our guidance to recalibrate and

contracts such that the exchange of purchases for incentives is a win-win for both the pharmacy and wholesaler.” The tool then takes the model’s computations and turns them into simple and actionable recommendations for the pharmacy. If the recommendations are implemented by the pharmacy, it will maximize rebates and profitability, arriving at the lowest total cost of inventory possible.

“The Navigation report is short and to the point, allowing us to maximize our rebates by allocating purchases to the proper supplier.”


make sure they remain on a peak performance trajectory.” Many pharmacies have averaged a four-percent savings on their total volume with ProfitGuard and the Navigation tool. For the independent pharmacy whose cost of goods is $2,768,280—the annual average according to the NCPA Digest—that’s $110,731 straight into their pocket by the end of the year. Many have averaged even more. “The Navigation report is short

and to the point, allowing us to maximize

The pharmacy receives these recommendations in

our rebates by allocating purchases to the proper

a daily Navigation report, which can be thought of as a

supplier,” said Dick Roberts, owner of Eureka Pharmacy

GPS. Every day, the report provides step-by-step instructions

in Eureka, Kansas. Before using the Navigation report, Roberts

to guide you to your end destination: maximum rebates and

hadn’t been keeping up with his generic compliance and had been


“making adjustments on the fly,” he said. “Now we are able to move

The report shows you where you’re currently located with your

purchases from Cardinal to PBA Health or from PBA Health to

purchasing for the month. Then, using the predictive modeling

Cardinal to maximize our GCR on both accounts and maximize our

information, it guides you to the optimal NDCs and dollar volumes


to purchase from your primary wholesaler. “If you’re in the cockpit of a plane, you have heading, speed,

If you’re already purchasing correctly, the report won’t make recommendations, just as a GPS won’t talk to you until it’s time

and turn indicators as well as an altimeter, all of which are

to change direction. “We’re only correcting what’s not optimized,”

important to knowing where you’re at, whether you’re level, and

Balcom explained.

whether you’re going where you need to go. That’s the first part

And the good news for skeptical owners is that you’ll get a

of the Navigation report,” Balcom said. “But just like the pilot of

walkthrough of how exactly these savings occur, which means you

an aircraft relies on air traffic control and guidance systems to see

don’t have to take PBA Health’s word for it.

what the pilot cannot easily see, the Navigation report has a second




them. “We provide all the systems, analysis, and reporting, but the

The Navigation tool not only maximizes rebates and profitability,

pharmacies still make the final decision as to what’s best for them,”

it also makes your purchasing easy. “What every pharmacy wants

Balcom said. “It’s the perfect mix between getting the benefit of that

is to make the most money they can while expending the least

holistic analysis and guidance but with your degree of control that

amount of time and effort,” Balcom said. “The more pharmacies

you want to have.”

use the tool, the more money they make and the more resources they conserve.” At RxShoppe, this time-saving benefit has been a sigh of relief

Everything about the Navigation tool is designed to make life easier and more profitable for independent pharmacists and pharmacy owners. A membership company exclusively owned by

for Butler and her team. “We were spending way too much time

the independent pharmacy owners it serves, PBA Health’s end goal

trying to find a better deal, working with too many companies to

is to help independent pharmacies better manage the buy-side

find the one that worked for one item,” Butler said. The Navigation

of their business, so they achieve better profitability. And in turn,

report has simplified and streamlined her pharmacy’s ordering,

better care for their patients.

freeing up valuable time for her and her employees. “It has

“Our mission is to help every pharmacy as much as we can and

definitely made it easier to order,” she said. “We do not have the

as much as each pharmacy will permit us to,” Balcom said. “With

manpower to devote someone to evaluating all the purchasing data

all the pain we see pharmacies facing on the payor-side of the

to make the decisions. The Navigation tool narrows this all down

business, it’s good to know we can bring them benefits that make

for us—makes life easier. Saving time and money.”

their lives better and allow them to go home feeling successful on

The same goes for Roberts. “It’s very easy to use and it makes

the buy-side of the business.”

summaries of both accounts that I did not take the time to do,” he said. “It is very user friendly.” And it does that while preserving the pharmacy’s autonomy and control. It’s entirely up to you to make the changes or ignore

ELEMENTS | The business magazine for independent pharmacy | JUNE 2019



CALL TO ACTION Pharmacist Byron Berry raises his voice for industry change Independent pharmacy runs through Byron Berry’s veins. Graduating from pharmacy school in 1974 and buying his first


pharmacy in 1986, Berry has been steeped in the industry for the

The biggest problem standing in the way of a thriving future for

better part of his life. After spending the last 30 years growing his

independent pharmacy? Pharmacy benefits managers, Berry

single location into a line of seven pharmacies across Illinois, he’s

said. “PBMs are determining winners and losers. They are doing it

gained a clear-eyed view of the challenges facing independent

cloaked in secrecy, while costing healthcare billions of dollars.”

pharmacy. “Something needs to be done to save independent pharmacy

Originally spun as an efficient way to help manage prescription drug claims, PBMs have come under increasing scrutiny in recent

for the future and healthcare for our patients,” Berry said,

years. Just a few PBMs control more than three-quarters of

whose seven pharmacies include full-line remote dispensing

pharmacy benefits in the United States, and critics say their lack of

and traditional pharmacy locations operating under the banner

transparency affects everyone from patients to pharmacies to plan

Pharmacy Plus. “Pharmacy has been good to me in the 47 years


I have been involved, and I want it to be rewarding for future

As one of their harshest critics, Berry has no qualms

generations of pharmacists and for the patients they serve.”

pointing out the laundry list of PBM schemes that have been

For Berry, saving the future of independent pharmacy starts in

harming patients and eroding the bottom line of independent

Congress, where the country’s decision-makers control legislation

pharmacies. These include “mandatory 90-day supplies with lower

without truly understanding the complex industry. Their views, he

reimbursement formulas, forced mail order, preferred pharmacies,

says, are informed by self-interested corporate entities rather than

forced use of PBM-owned pharmacies,” among others.

by patient-centered independent pharmacies. “If independents don’t step up and educate legislators, the

Berry lists those in addition to the more well-known tactics, such as spread pricing, which inflates drug costs; “unconscionable

legislators only have lobbyists from PBMs, chains, and insurance

reimbursements,” which have been plummeting since 2010,

companies to rely on for information,” Berry said. “Unfortunately,

according to the 2018 NCPA Digest; DIR clawbacks, which were voted

these giant corporations are primarily concerned with corporate

the top legislative or regulatory obstacle by community pharmacies

profits and not our patients. If pharmacists and our patients aren’t

in 2018; and audits, where the PBMs punish pharmacies for small

calling or emailing, legislators are voting on what the PBM lobbyists

administrative errors for their own financial gain.

are telling them. And the lobbyists are not telling them the true facts.” Correcting this misinformation has been the primary focus of Berry’s persistent advocacy efforts. He’s always contacting and

The unrelenting carousel of PBM maneuvers takes a significant toll on pharmacy business. “All of these factors affect pharmacy’s bottom line,” Berry said. “DIR fees, low reimbursement, and audits are all destroying independent pharmacy.”

developing relationships with local, state, and federal legislators through any means—visiting them at their offices, inviting them to


his store, speaking to them on the phone, writing them letters, and

Although pharmacies face the brunt of PBM bullying, Berry’s

emailing. He’ll also take to the local news and his social media to

concern extends to the patients he cares for every day, who suffer

spread awareness and prod other pharmacists to action.

from increasingly high prescription drug costs. Among the many

“I try to encourage every pharmacist to get involved in the

unsavory PBM dealings that affect patients—such as requiring

political process, not party politics,” he said. “Legislators need to

pharmacies to charge copays that are higher than the cost of

hear from us. We are the ones on the front line. We are the ones

the drug—are the backdoor handouts that PBMs receive from

that actually care for patients. We need to speak up and tell our





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inflate the costs of drugs and incentivize PBMs to cover the more expensive drugs on their formularies. And the rebates are not

that would increase transparency. The consensus that something must be done to change the

shared equitably with the plan sponsors, who then charge patients

PBM-run system and rapidly inflating prescription drug prices is a

higher premiums. Those factors mean prescription drugs are more

rare point of unity for Democrats and Republicans, with Georgia

costly for everyone except PBMs.

representative Buddy Carter promising at the Energy & Commerce

“The PBMs insulated the consumer from the price of prescription drugs and the pharmaceutical manufacturers saw

hearing, “This is going to end.” Though the light being shone on PBMs in Congress is

an opportunity to inflate prices,” Berry said. “Most people in our

promising, Berry said pharmacists shouldn’t be content to just

communities can no longer afford any brand name drug if they

wait for change. “No one can afford to stay behind the counter

were paying cash.”

and not tell their legislators about the PBM corruption,” he said.

And that’s only a small representation of the various tactics

“Look at your business and understand the effects the PBMs are

PBMs employ that burden both patients and pharmacies, which

having on your ability to serve your patients and stay profitable.

fuels Berry’s passion for advocacy.

Give legislators examples from your pharmacies and published facts that they can use to contradict the PBM lobbyists. Give them


information to make an educated decision.”

Overcoming the entrenched giants may seem a distant dream, but

He suggests crafting a personal story to tell legislators and then

there are signs that the tables are beginning to turn. Congress has

using various methods to connect with them, such as letters, phone

recently begun to examine PBMs more closely, with politicians on

calls, emails, and store visits. “There are few limits to your options.

both sides of the aisle advocating for regulation and transparency.

Use any method you can think of to get attention to facts.”

In April, executives from drug manufacturers and PBMs alike

For Berry, advocacy is ultimately about enabling independent

were brought in for oversight hearings in front of the House of

pharmacists to do what they got into the profession for in the

Representatives’ Energy & Commerce Committee and the Senate

first place. “I have enjoyed the ability to determine how I care for

Finance Committee. Both posed tough questions about industry

my patients, my community,” he said. “I want future generations

pricing practices.

of pharmacists to have that same opportunity. Now, more than

Radical changes have been proposed, including a suggestion

ever before, is the time to be vocal. If you have never thought of

from Maryland representative John Sarbanes to treat PBMs as

advocacy as part of pharmacy, you must rethink what is required

public utilities or convert them into nonprofits. Senator Ron Wyden

of your profession. We can make a difference, but it takes all

of Oregon brought up the possibility of a ban on spread pricing

independent pharmacies working together to educate our


congressmen. Do it for yourself. Do it for your patients. Do it for the

PBMs have traditionally been adamant about playing their

future of pharmacy and the future of healthcare for all.”

pricing decisions close to the vest, but under the scrutiny of Congress, executives expressed openness to moderate changes

ELEMENTS | The business magazine for independent pharmacy | JUNE 2019



Food, Pharma and the Role of Nutrition in Detoxification: Leveraging the Independent Community Pharmacist in Patient Transformation

Saturday, September 7, 2019 JW Marriott Indianapolis Indianapolis, IN

HIGHLIGHTS • Understand the changing health care needs of your community and gain the critical skills necessary to become a trusted clinical resource • Identify ways to leverage lifestyle-based therapies to enhance detoxification and discuss therapeutic options for functional disorders • Review the challenges of drugs and toxin build up, discuss the challenges of this condition, go over the science and mechanics of detoxification elimination • Identify and review the macro and micronutrients needed by the body every day, and explore the American diet and macro and micronutrient consumption • Comprehend the bidirectional relationship between nutrition (the diet) and the gut microbiome • Discuss the use of functional foods on patients presenting with common clinical challenges and review the use of functional foods to personalized patient care


Approved 6.5 hours of CE available




BEYOND TRANSACTIONS How to reap more revenue with your point-of-sale system Every day you use a system that’s hiding profit right under

Once you know which products you can’t afford to understock,

your nose. Often relegated to simply processing transactions,

set your system to alert you or to automatically reorder products

the pharmacy point-of-sale (POS) system houses all kinds of

when you start to get low.

information about your products and your customers that can be harnessed to benefit the bottom line. “There are multiple ways that pharmacies can use their

On the flipside of understocking, pharmacies also lose money by letting products linger too long on the shelf. If items are slow moving or don’t sell at all, they should be replaced with ones that

point-of-sale system data to generate sales,” said Brad Jones,

will, according to Jones. During a previous job, Jones would walk

CEO of Retail Management Solutions (RMS), an industry leader in

with owners through their store, going over inventory tracking with

pharmacy POS technology for retail and outpatient pharmacies.

their POS system. He’d ask them how long a particular item had

“Most, unfortunately, do it the wrong way. Because they don’t ever

been on the shelf. “They would give me, ‘Oh, you know, we just got

use their data.”

that in. We’ve only had that for six months.’ And I would show them

Jones has been a part of the pharmacy world since he was a child. His father owned three pharmacies, and he worked with technology on the wholesaler side of the business before founding

the code and I would say, ‘That’s been sitting there for two and a half years, taking up space.’” Once you pinpoint items that aren’t selling, Jones suggests a

RMS 20 years ago. With this experience, he realized valuable POS

simple strategy for moving them quickly. “It’s amazing what you can

data often goes to waste. Many pharmacies fail to use the data at

do on a clearance table,” he said. “You don’t have to give it away.

all, and the pharmacies that do look at the data typically only use it

You just have to put it there and show some markdown and things

for accounting purposes, not to drive more sales.

that haven’t sold for two and a half years will fly off the shelf.”

If pharmacies took the time to mine the data for useful insights,

After they’re gone, replace those products with something

they’d find troves of opportunity to generate additional revenue in

better. “There are millions of products out there,” Jones said. “You

their front end.

need to make sure that the ones you’re carrying are actually selling in your market.”

INVENTORY CONTROL One of those major opportunities is inventory management. POS data, such as product turnover and sales, can help ensure you stock the right amount of inventory and the right kinds of inventory. “Probably the most common mistake that independent pharmacists make is being out of things that they should never be out of,” Jones said. “You’d be shocked at how many independent businesses are out on a regular basis of those things that represent a huge portion of their revenue.” Pharmacies should use the 80/20 rule to figure out which products to always have stocked, Jones said. Those are the 20 percent of your products that produce 80 percent of your revenue, which you can calculate with your POS data.

“You’d be shocked at how many independent businesses are out on a regular basis of those things that represent a huge portion of their revenue.”

ELEMENTS | The business magazine for independent pharmacy | JUNE 2019



The most common use of customer purchase history is

Your POS system can uncover specific sales trends in your front

target marketing, which tailors communications to each patient’s

end, down to the individual items in every category, which you

particular buying habits and preferences. Although it’s an effective

can use to make adjustments to improve your sales. For example,

use of POS data, Jones said making personal connections is more

if your front-end revenue is down, the data can tell you not only

important for community pharmacies.

which broad categories are faltering, but which specific items within those categories are the source of the problem. One way to do this is to use the “Fine Line” structure, created

He suggests using POS data to find out who your most frequent shoppers are and give them extra special attention. Personal connection is what brings many people to independent

by Hamacher Resource Group, which labels each product with

pharmacies, he said, so emphasizing and improving that

four digits. The first two digits indicate the department, the third

connection with your top shoppers can help keep them happy and

indicates the category, and the fourth indicates specific types


of items within that category. Jones gave the example of an

Another successful strategy Jones has seen from other

independent pharmacy that saw its sales plummet in its hair care

pharmacies is offering to match customers’ rewards points with

department. The data revealed specifically hair color products as

donations to a local organization. For example, for every reward

the culprit, which were taking up sixteen feet of space and facing

point a patient earns, the pharmacy donates a specific amount to

stiff competition from a new Walmart down the street. Once they

the local elementary school. This approach boosted front-end sales

realized this was the issue, they reduced that section and changed

for one small-town pharmacy, which heavily marketed its weeklong

their product selection.

match offer.

“They vastly improved that department,” Jones said. “That’s using your data to go ‘I’ve got to make a change.’” Another way to use sales trends to improve front-end revenue is to perform a basket analysis to discover surprising connections

“It’s not something you can do every week, but it’s certainly something that you can do,” Jones said. “Be creative with ideas and things you can do with loyalty data and loyalty information. I think most don’t even look at that.”

among products. “When you do a net basket analysis, you’ll find that there are things that you didn’t realize go together,” Jones said.


With that information, you can start to cross-merchandise to boost

Don’t wait to start using your POS data, but don’t try to do

add-on sales and impulse buys, making the shopping experience

everything at once. Jones said it’s common for pharmacy owners

easier on your patients.

to get excited about the opportunities and burn themselves out by trying to do too much.


“We try to teach our customers and tell them, start small,” he

Data from your loyalty rewards program can provide precious

said. “Don’t try to look at it all, just pick one thing. And if you don’t

insight on your customers that you can use to drive more sales.

know how to get to it, then ask your POS provider, ‘How do I do

“Independents have an opportunity to take their customer

this?’ and just take it one small step at a time.”

purchase history and do some special things,” Jones said.



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OUTLOOK percent said three would discourage them. The most effective—and expensive—deterrents include timedelay safes, bullet-resistant barriers, locking door mechanisms, pass-through drawers, and guards.


How safe is your pharmacy from a robbery?

Your staff stands on the front line during robberies, so it’s essential they know how to react during one. Conduct annual training with your employees. If you want to outsource the high-stakes instruction, private companies like Veritas Training Consultants and PharmaSafe offer pharmacy-specific online courses. Some state and local organizations have created similar

As America’s opioid epidemic rages, the risk of pharmacy robberies

programs to help business owners prepare for the possibility of

and burglaries is rising. New regulations mean prescription opioids

burglary or armed robbery.

are increasingly difficult to acquire legitimately. But demand hasn’t waned. That leads to a big opportunity for illicit drug dealers to


profit from providing narcotics to the millions of Americans who

Seventy-two percent of offenders reported they had visited the

abuse the addictive substances.

targeted pharmacy before the crime, and most did so while

Since 2001, at least 5,014 robberies and 2,541 burglaries

filling a prescription. Because of that, Pharmacists

occurred at pharmacies, according to RxPatrol, a national database

Mutual recommends watching for suspicious

that tracks, analyzes, and provides information on pharmacy crime.

behavior, including “people avoiding

In 2016 alone, pharmacies reported 1,268 burglaries and 822

eye contact, and folks who have

armed robberies.

an unusual interest in the

“It’s the only place of business in today’s society that you

cameras, motion detectors,

can go in and steal the product that it offers and get more than

and layout behind the

what it’s worth,” said one convicted thief to sociologist Tara

counter.” Take notice of

O’Connor Shelley, PhD, in a multi-year study from Colorado State

calls asking about specific

University on pharmacy robbery and burglary. The majority of

opioids by name or asking

study participants called pharmacies “easy targets” because of a

other suspicious questions.

perceived lack of security.

Make a note each time

Even if your pharmacy’s insurance covers theft, it still harms

these calls occur. If you

your business in several ways. Missing stock means reduced

notice several of them in a

cash flow, lost sales, and potentially lost patients. Plus, you suffer

few days, give the police a

opportunity costs for the time you’ll spend restocking, managing

heads up.

insurance claims, and dealing with employee and patient unease. And beyond your business, the consequences of losing opioids

Crime risk varies widely from town to town and

to theft are steep: Opioids contributed to 42,249 overdose deaths

even block to block. Check

in 2016 and an estimated 49,060 in 2017.

the violent and property crime rates in your area to assess your risk.


When considering taking more expensive

The Colorado State study said 42 percent of pharmacy robbers and

security measures, weigh the upfront cost against

burglars targeted a locally owned store. Many of them perceived

your area’s specific risk.

“mom and pop” stores as having more security weaknesses they could potentially exploit. Prove the perpetrators wrong with some preventive measures.

Resist the urge to rely on your idea of your neighborhood as a “safe” or “unsafe” place. Opioid addiction occurs in communities of all kinds, which means illicit opioid sales are likely to occur in

More than half of the offenders said cameras outside the building

communities of all kinds—making pharmacy theft a possibility

would deter them from the crime. Only half said an alarm system is

virtually anywhere.

an effective deterrent, but a silent alarm allows your staff to calmly comply with the robber’s demands while ensuring help is on the way. The fewer staff working, the higher your vulnerability—90 percent said a lone employee would encourage a robbery and 67



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Let Spectrum Help You Become Compliant Spectrum offers 2-day and 1-day USP <800> courses in which you’ll learn to: • Describe the components and strategies available to protect all compounding and administration personnel in handling HD’s • Outline three major characteristics of a fully compliant HD compounding location / pharmacy / physical plant • Understand the critical characteristics of a compliant HD storage plan

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Elements Magazine - June 2019 Vol.8 Iss.2  

Elements Magazine - June 2019 Vol.8 Iss.2  

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