Let’s dive into 5 popular ideas to help you increase your pharmacy profit.
There is always a way to win. I firmly believe that. If you are struggling with low profitability in your pharmacy, there is a way for you to increase your profits. We just need to find you the right strategy. Each pharmacy has its own set of unique challenges and issues when it comes to staying profitable. No matter what stage of business you’re in, maintaining and increasing your profits is possible.
Don’t do it alone. That’s why we are here. DiversifyRx is committed to bringing you ideas, tips, and strategies to help your pharmacy become more profitable and achieve even more success. So buckle up, and let’s get started!
A More Profitable Pharmacy
Many pharmacy owners are passive when it comes to their profitability. They may be actively watching it or even tracking it, but they rarely implement new strategies to change it. Don’t be the typical pharmacy owner. Pick just one of the below strategies to implement in your pharmacy. If none of these is a fit for you, then reach out to us, and we would be happy to find one that is perfect.
Pharmacy Profit Idea #1 Optimizing Pricing Tables
Have you optimized your pricing tables lately? If you are anything like me, you probably haven’t thought of your pharmacy management systems’ pricing tables in years. That all changed with a phone call from an old friend. I ended up implementing Lifeline Rx Solutions in my newest pharmacy earlier this year, and so far, it’s produced some pretty profitable results.
In the beginning, I was skeptical. After being active for several months, here is how my numbers are doing. Our net profit per prescription has increased five-fold, while our average gross margin per prescription took an $8 jump.
When you have a good amount of volume, you can easily make a massive impact on your bottom line. Other pharmacy owners have told me this was the easiest money they ever made in pharmacy. On top of being easy, Lifeline Rx Solutions offers a money-back guarantee for their service when you mention you came from DiversifyRx. There is no downside to giving this a try, and it takes minimal effort from you or your staff. You can contact Robbie, the CEO, by clicking HERE.
This strategy is a no-brainer.
Pharmacy Profit Idea #2 Direct Bill Worker’s Comp
How many workers comp patients do you have? Having even just one makes this strategy worthwhile.
Direct billing for worker’s compensation prescriptions is one of my favorite niches for most pharmacies. This strategy is good in almost all states. A “good” state has laws that support you as a pharmacy and support direct billing for workers’ comp prescriptions.
When you bill workers comp prescriptions through traditional programs like Timesys or MyMatrixx, the reimbursements are crap because you get the PBM’s poor rates. However, when you bill direct, most states reimburse close to full AWP. For example, a Gabapentin reimbursement could be $5.69 from ESI, and when you direct bill, all of a sudden, you can get up to $95 for the same prescription. Not only that, but the state and the insurer aren’t paying any more when you direct bill. Instead, you just see more of the reimbursement without the PBM taking 95%.
While some patients may be on medications for a short time and others take them longer, when taking the whole average, each worker’s comp patient can be worth at least $1,000 in profit per year. Typically, the older, cheaper prescriptions end up being more profitable for you. There is no cost and minimal effort to get started. DiversifyRx recommends StreamCare for direct billing.
Pharmacy Profit Idea #3: Monetize Your Pharmacy Data
Are you monetizing your pharmacy data?
Scriptera is a company that helps you unlock the power of your pharmacy data and monetize it. Check out my earlier article here about it. Scriptera packages high-level data and sells it in a very similar manner to what switches do. The difference here is you get to share in the revenue rather than the switch keeping it all.
Scriptera has the power to help you make mailbox money, about $300 to $1,000 a month if you fill about 200 scripts a day. The great thing is there’s not a lot you have to do to maintain the program, just the initial setup. Get more details HERE.
Pharmacy Profit Idea #4: High Margin Drugs
Do you have a few high margin drugs? Every pharmacy needs a couple to help keep them thriving.
I recommend you focus on a few high-margin prescriptions amongst all your regular prescriptions. There’s no reason to go overboard as just a few opportunities that make your patients’ live better can also help your bottom line. I recommend tools like EZScriptRx, which makes benefit claims checks easy to understand, actionable, and user-friendly. Benefit claims checks are the compliant alternative to test claims. You can choose a better therapy for your patient that you know is covered, rather than guessing and going back and forth with the prescriber’s office.
A benefit claims check is different than a test claim as it will NOT give you the reimbursement amount. This way, the information can’t be abused or influence your therapeutic recommendation. It is fully compliant with all PBMs. There is a cost for this software, which I think is very reasonable for all the benefits you get and the problems it solves for.
Pharmacy Profit Idea #5: Direct Insurance Contracting
Have you considered going direct and dumping the PSAO to get better contracts?
You might say it’s contrary to the bargaining power of economics; however, going direct and controlling your contracts could be a significant benefit to your pharmacy.
By going direct, you could eliminate your effective rate on your commercial plans. The effective rate is a cap on how much profit you can make. These effective rate contracts are very convoluted and confusing, making them very detrimental to pharmacies. Effective rate contracts are sneaky little ninjas sucking away your profit. So eliminate that anchor and go direct and ditch the PSAO.
Give It A Go
Many retail pharmacy owners struggle with increasing their profits. Use any of these helpful ideas and apply the recommendations that resonate with you and make the most sense for your business. Using these tips will help increase profits for your pharmacy sooner than you think!