How Much of Your Pharmacy’s Revenue Should PBMs Control?

Non-PBM pharmacy revenue is one of those numbers I think every independent pharmacy owner should know.

And yet, if I asked you right now: “What percentage of your pharmacy’s revenue comes from sources that aren’t controlled by a PBM?”

Could you answer me?

Not approximately.

Not, “Well, we do some compounding and vaccines and sell a decent amount of supplements…”

I mean an actual percentage.

Because if you don’t know that number, there’s a pretty good chance you don’t know just how financially dependent your business is on companies you have almost no control over.

And considering how wonderfully PBMs have treated independent pharmacies over the years…

Maybe we should know that number, right?

Why Non-PBM Pharmacy Revenue Matters So Much Right Now

Let’s start with something that looks really good until you look underneath it.

Independent pharmacy sales are up.

According to the 2025 NCPA Digest, independent community pharmacy represented a $103 billion marketplace in 2024, and average annual pharmacy sales reached a 10-year high.

Sounds wonderful, right?

Except gross profit hit a 10-year low.

NCPA reported that gross profit margin fell from 19.7% in 2023 to just 18.2% in 2024. More than 95% of independent pharmacy sales came from the prescription department, while NCPA specifically pointed to high-cost, high-volume drugs such as GLP-1s and low or below-cost third-party reimbursement as contributors to the pressure on gross profit.

That’s the part I want pharmacy owners to pay attention to.

More revenue does not automatically mean a healthier pharmacy.

You can fill more prescriptions… generate more revenue… keep your staff busier… watch millions of dollars move through your pharmacy…

…and still wonder why there isn’t enough money in the bank account.

We’ve talked about that before in Busy Pharmacy, Empty Bank Account?, because understanding your cash flow and KPIs is absolutely critical.

But there’s another number I want you looking at:

How much of your revenue can somebody else control?

The PBM Dependency Test

Here’s the calculation.

Take the amount of revenue your pharmacy receives through PBM-controlled prescription business during a defined period.

Divide it by your total pharmacy revenue for that same period.

Then multiply by 100.

PBM Revenue ÷ Total Pharmacy Revenue × 100 = PBM Dependency Percentage

For example, let’s say your pharmacy generates $4 million in annual revenue.

If $3.8 million comes through PBM-controlled prescription business:

$3,800,000 ÷ $4,000,000 = 95%

That means 95% of your revenue is dependent on PBM-controlled business.

Now flip it around.

Only 5% is coming from elsewhere.

That could include cash sales, clinical programs, direct billing, compounding, wellness products, employer relationships, or other revenue streams that aren’t being dictated by a PBM.

And suddenly, the problem becomes a lot easier to see.

Your pharmacy may technically be an independent business.

But financially?

One group of outside companies has enormous influence over the economics of 95 cents out of every dollar coming through your business.

That’s not the kind of independence I want for you.

So, How Much Non-PBM Pharmacy Revenue Should You Have?

For years, I’ve taught pharmacy owners to work toward getting at least 20% of their revenue from non-PBM sources.

That doesn’t mean 20% is some magical number where a choir starts singing, the clouds part, and PBMs suddenly stop being annoying.

Unfortunately.

It means you’re beginning to build enough meaningful revenue outside the traditional PBM model that changes in reimbursement don’t automatically dictate the fate of your entire business.

And I want to be clear about something here.

20% is a benchmark, not a finish line.

If you’re currently at 4%, getting to 20% is a big deal.

If you’re already at 20%, I’d probably be asking what it would take to get to 25% or 30%.

Your ideal mix depends on your pharmacy, market, capabilities, patient population, staffing, and business model.

However, the direction should be obvious:

I want more of your pharmacy’s financial future controlled by you.

Not less.

Why 20% Non-PBM Pharmacy Revenue Can Change the Math

Let’s go back to our hypothetical $4 million pharmacy.

At 5% non-PBM revenue:

$200,000 comes from outside PBM-controlled business.

At 20%:

$800,000 does.

That’s a $600,000 shift in annual revenue mix.

Now, I am deliberately saying revenue, not profit.

A dollar of non-PBM revenue isn’t automatically a wonderful dollar. You can absolutely create an unprofitable cash-pay service if you price it badly, carry too much inventory, or require three employees to perform something that generates twelve bucks.

Trust me. Pharmacy owners are very creative. We can find ways to lose money almost anywhere. 😂

So you still have to look at:

• Gross margin
• Labor
• Inventory requirements
• Payment timing
• Marketing costs
• Scalability
• Recurring revenue potential

But here’s the important difference:

You have more ability to design the economics.

• With a cash-pay wellness product, you set the price.
• For certain clinical services, you choose whether the reimbursement makes sense before building the program around it.
• If you’re considering direct employer relationships, you can negotiate directly.
• For compounding revenue streams, you can select niches and build referral relationships.
• And with memberships or other direct-pay services, you can determine what the offer includes and what patients pay.

That’s a very different business relationship from receiving a PBM contract and discovering what somebody else has decided your work is worth.

Your Pharmacy Revenue Mix Matters More Than Revenue Alone

This is the bigger strategic point.

I don’t want you asking only:

“How do I grow my pharmacy’s revenue?”

I want you asking:

“What kind of revenue am I growing?”

Those questions can produce very different businesses.

Imagine two pharmacies that each generate $5 million.

Pharmacy A generates nearly all of that through traditional PBM prescription revenue.

Pharmacy B has deliberately built meaningful revenue from dispensing plus cash-pay products, clinical services, compounding, direct billing, employer relationships, and other profitable programs.

Same top-line revenue.

Very different risk.

Very different control.

Potentially very different cash flow and profitability.

That’s why I don’t get terribly excited when an owner tells me:

“Lisa! We added 400 prescriptions this month!”

Great.

Did we make money on them?

What did they do to inventory?

What did they do to payroll?

When do you get paid?

What happens if reimbursement changes?

Growing the wrong revenue can make a pharmacy bigger without making it better.

And the industry numbers are showing us exactly why that distinction matters. In 2024, independent pharmacies reached record sales while gross profit simultaneously fell to a 10-year low.

If that doesn’t convince you to stop worshipping top-line revenue, I’m not sure what will.

PBM Dependence Isn’t Just a Profitability Problem

There’s another reason I care so much about non-PBM pharmacy revenue.

Control.

The Federal Trade Commission reported in 2024 that the six largest PBMs manage nearly 95% of prescriptions filled in the United States. Its investigation also found evidence that PBM contract terms can disadvantage smaller unaffiliated pharmacies and that reimbursement can sometimes fall below an independent pharmacy’s costs.

That should bother you as a business owner.

Because when another company controls the contract, network, reimbursement structure, and many of the rules surrounding your largest source of revenue, you’re carrying concentration risk.

Think about it like investing.

Would you put 95% of your retirement account into one company?

Probably not.

Yet pharmacy owners routinely build businesses where an enormous percentage of revenue is exposed to essentially the same outside economic force.

Of course, dispensing prescriptions remains fundamental to what we do.

I’m not telling you to stop filling prescriptions.

I’m telling you to stop building a business where prescriptions controlled by PBM economics are the only meaningful way you know how to make money.

Those are very different things.

What Should Your Pharmacy Revenue Mix Actually Look Like?

I’m not going to give you some ridiculous universal pie chart and tell every independent pharmacy in America that it needs exactly:

17% compounding.

6% supplements.

4% clinical services.

3% workers’ comp.

That’s not how independent pharmacy works.

A rural pharmacy serving 4,000 people has different opportunities from a pharmacy next to six dermatology practices in Dallas.

Instead, I want you thinking in revenue categories.

1. PBM-Controlled Revenue

This is your traditional third-party prescription business.

Know what percentage of your total revenue it represents, the margins, and which contracts and drug categories create problems.

Don’t just celebrate volume.

2. Cash-Pay Revenue

These are transactions where the patient pays you directly.

Depending on your pharmacy, this could include:

• OTC products
• Supplements
• Wellness products
• Cash-pay prescriptions
• Weight-management products
• Testing
• Membership programs
• Other direct-to-patient offerings

Cash is wonderful because you don’t have to wait 14–30 days wondering whether someone will pay you what you expected.

I’m a fan of that.

3. Non-PBM Billed Revenue

This is an important distinction in the framework I teach.

Not every non-PBM dollar is cash.

There are revenue streams where you’re still billing another entity, but that entity isn’t a PBM.

Depending on your pharmacy and state, examples may include:

• Workers’ compensation
• Hospice
• Certain clinical programs
• Employer contracts
• Medical billing opportunities
• Other direct payer relationships

You still need to understand reimbursement and collection.

But you’ve diversified the payer mix.

4. Specialized Pharmacy Revenue

This can include areas such as:

• Compounding
• Long-term care
• Specialty niches
• Clinical programs
• Pharmacogenomics
• Other services that fit your expertise and market

And here’s the key:

You don’t need all of them.

Please don’t read this article and launch eight new revenue streams by Friday.

I will personally come confiscate your whiteboard.

You need the right few for your pharmacy.

How to Start Increasing Non-PBM Pharmacy Revenue

Here’s what I’d do this week.

Not someday.

This week.

Step 1: Calculate Your Current Percentage

Pull your last completed month’s numbers.

Calculate:

PBM Revenue ÷ Total Revenue × 100

Then calculate the inverse.

If PBM revenue is 92%, your current non-PBM percentage is 8%.

Write both numbers down.

Now we have a baseline.

Step 2: List Every Existing Non-PBM Revenue Stream

You may already have more than you realize.

Write down every source of revenue that isn’t traditional PBM-controlled dispensing.

Then put the annual or monthly revenue next to each one.

Don’t judge it yet.

Just see what’s there.

Step 3: Look for What Is Already Working

This is where owners frequently make things harder than necessary.

If you’re already generating $8,000 per month from something profitable, I would probably investigate how to make that $12,000 before chasing a completely new program you saw somebody mention on Facebook yesterday.

Ask:

• Is demand already there?
• Is it profitable?
• Does my team know how to sell or deliver it?
• Could we market it better?
• Could we increase patient participation?
• Could we build more referral partners?
• Could we make it recurring?

Often, your next revenue opportunity is already sitting inside your pharmacy.

Step 4: Choose ONE New Revenue Stream If You Need It

If your existing programs can’t realistically move the number enough, then evaluate new opportunities.

But use a filter.

How fast can we launch it?

What does implementation cost?

What margin can it produce?

How much staff time does it require?

How complicated is billing?

Do our patients actually want it?

Can we market it?

Can it become recurring?

We’ve covered dozens of possibilities inside DiversifyRx over the years, from compounding and clinical services to wellness, direct billing, peptides, memberships, employer programs, and more.

The question isn’t:

“Which one is hottest?”

It’s:

“Which one fits my pharmacy?”

That’s a much better business question.

And if you want more specific guidance on how to choose the right revenue stream, this article here shows you 5 additional non-PBM revenue streams you can consider.

Step 5: Set a 90-Day Revenue-Mix Goal

Let’s say you’re currently at 7% non-PBM revenue.

Don’t write 20% on the wall and then stare at it for a year.

Pick the next achievable milestone.

Maybe that’s 10%.

Then calculate the dollars required to get there.

If you’re doing $300,000 per month in total revenue:

7% = $21,000 per month

10% = $30,000 per month

Your actual target isn’t:

“Improve diversification.”

It’s:

Create another $9,000 per month of sustainable non-PBM revenue.

Now we can build a plan.

That is something your team can understand.

Don’t Build 17 Tiny Revenue Streams

Diversification can go too far.

Yes, I said it.

Sometimes owners hear me talk about multiple revenue streams and interpret that as:

“Lisa wants me to sell everything to everybody.”

No.

I want you to build meaningful, profitable revenue streams.

I’d rather see you build three programs generating serious recurring profit than 17 little side projects producing $600 each while exhausting your staff.

Think about your revenue mix like a table.

PBM dispensing may still be the biggest leg.

Fine.

But I want other strong legs underneath the business so that if one gets kicked, the entire table doesn’t immediately hit the floor.

That’s diversification.

The 20% Benchmark Isn’t Really About PBMs

Here’s the funny part.

This article sounds like it’s about PBMs.

It really isn’t.

It’s about you.

It’s about building a pharmacy where you have more control over:

• What you sell
• What you charge
• Who you serve
• How you get paid
• Which opportunities you pursue
• How quickly you get your money
• Where your future growth comes from

That is what independence is supposed to mean.

And it’s also why I’ve spent years telling pharmacy owners that profit isn’t a dirty word. It’s your duty.

Your patients need you to stay open.

The team that you’ve worked so hard to build needs a healthy company signing their paychecks.

You definitely 100% deserve to have your pharmacy reward you and your family for the enormous amount of risk and work you’ve put into it.

And you need a business that isn’t one reimbursement change away from ruining your month.

One Last Thought About Non-PBM Pharmacy Revenue

The latest industry numbers should get every owner’s attention.

Independent pharmacy sales reached a 10-year high in 2024.

Gross profit reached a 10-year low.

More than 95% of independent pharmacy sales still came through the prescription department.

Those three facts belong in the same conversation.

Because the future of independent pharmacy cannot simply be:

Fill more prescriptions and hope the economics improve.

Hope isn’t a business strategy.

Know your PBM dependency percentage, your non-PBM revenue percentage, and which revenue streams actually create profit for your business.

Then deliberately move the mix in your favor.

If you’re at 5%, get to 10%.

If you’re at 10%, work toward 20%.

And once you hit 20%, don’t assume you’re finished.

The exact destination will look different for every pharmacy.

But the direction is simple:

Every profitable dollar you build outside PBM control gives you a little more control over your pharmacy’s future.

And I’ll take as much of that as we can get.

Want Help Building the Right Revenue Mix for YOUR Pharmacy?

This is exactly what we work on inside Pharmacy Badass University.

I don’t want you chasing every shiny new revenue idea you hear about at a conference. After more than 25 years in independent pharmacy, I’ve learned that the continuously profitable pharmacies aren’t necessarily doing more things. They’re doing the right things for their pharmacy, measuring them correctly, and building them into systems that produce consistent profit.

Inside PBU, we help you understand your numbers, identify the biggest opportunities in your pharmacy, build profitable non-PBM and cash-pay revenue, improve your operations, and actually implement the strategies instead of adding another training to your “I’ll watch this someday” folder.

Because getting to 20% non-PBM revenue isn’t the real goal.

Building a pharmacy whose financial future you control is.

See How Pharmacy Badass University Works.