Pharmacy Purchasing and Compliance with IPC
Simplify Your Pharmacy Purchasing Process, Saving You Money and Time
Since day one of your ownership journey you know that managing your costs is critical to the success of your store. It’s critical if you want to stay in business to serve your patients and your community, to live the life you dreamed of when you became a pharmacist. Knowing how important it is doesn’t mean it is clear or easy to implement the best system for your store. IPC has been working with thousands of stores for over 40 years to develop the resources and tools you need to implement a system that works for you.
IPC delivers this in four ways:
- World-Class Supply Agreement: With options for you to choose from, IPC’s supply agreement can save you thousands on your purchases, while giving you the option to choose which purchasing method is right for your pharmacy.
- Secondary Wholesaler Sourcing: Find competitive pricing on brands and generics to keep your costs low with the IPC Warehouse.
- The Nation’s Premier Backup Generic Contract with Pharmacy Select (RTL-2): Access to over 8,300 products including generic and OTC branded medications directly through McKesson Connect.
- Purchasing Compliance: As supply agreements and primary vendor agreements have evolved, they now include compliance ratios you need to meet to maximize rebates. Navigating these ratios while purchasing from the right vendor at the right price is incredibly complex.
Does this sound familiar?
It’s another day for the owner of a community pharmacy, Pat sits at the desk staring glass-eyed at the computer screen as 50 tabs of Google Chrome stare back, trying to make sense of the end of day order. Constantly hunting from website to website trying to find the best deals for brand and generic drugs to order. Pat then looks at the store’s P&L, balance sheet and several previous month’s rebate statements and can’t tell if COGS are optimized. Are the cost savings from buying the lowest price each day on individual orders plus the rebates truly the lowest cost of goods achievable?
What if Pat could achieve — a simplified purchasing process, savings with lower costs, and compliance—with less stress?
At Independent Pharmacy Cooperative (IPC), we make it possible.
A pharmacy purchasing strategy implementation plan
With the clarity of the four elements of an effective strategy where would you start with implementation?
The best place to start is by setting yourself a goal. The most recent NCPA Digest states that most stores are operating around a 20% gross margin, or another way of saying it is 80% of that revenue is spent on cost of goods sold (COGS). With that understanding, a 1-2% improvement in COGS is a huge improvement! For a $5MM store a 2% improvement is $100,000 straight to the bottom line.
Pat looks at the store’s P&L and recognizes that the gross profit is 19%, which means there is room for improvement. Pat decides the target should be a 2% reduction in COGS in 12 months and 3% in 18 months. The store’s prime vendor agreement (PVA) is up in six months which means Pat is ready to meet with IPC and explore how the IPC supply agreement + Pharmacy Select + 100% of rebates and admin fees + owning your own secondary + a compliance solution can meet the target.
If your current agreement doesn’t end for a year or more, here is one step you can take today. The IPC warehouse is used as a secondary wholesaler for over 7,000 stores nationwide to purchase both brands and generics at very competitive prices. Until you get closer to the end of your agreement take advantage of the value of what IPC has to offer to every independent pharmacy owner.
Why IPC is the Right Partner to Implement Your Purchasing Strategy
We understand the challenges you face because IPC is led by a Board of Directors who are pharmacy owners just like you and our members are owners of the cooperative, meaning you have a say in how we develop and deliver the right solutions at the right time. Our solutions are brought to you by an amazing group of people looking to help you not just survive but thrive in your pharmacy. That’s why we’ve built purchasing strategies and solutions that meet you where you are:
- Lower your costs.
- Receive 100% of the rebates and admin fees you earned.
- Save time with tools and resources designed to simplify your workflow.
We know owning a pharmacy is hard and it is critical that you have the right partner. Take the first step to understand how IPC can deliver the right purchasing solutions to your store and your community, giving you the Freedom to Pharm.
Your Next Steps
At IPC, we are committed to empowering our member stores through defined strategies in key areas of your business.
Growth and Expansion
Growing your pharmacy means different things to different owners. It could be adding new patients from the nursing home nearby or increasing the number of immunizations you give each year or expanding into 340B. Telemedicine, medical at home, clinical services, or even OTC and retail merchandising are even more options.
Do you need a partner to help identify how you should expand your pharmacy model?
Operational Efficiency
If you are still operating the way you did ten years ago or even two years ago, then it might be time to rethink things. Pharmacy is changing faster than ever and you need to adapt. Whether it is leveraging technology or altering a process, change can be a critical step to improving your pharmacy.
What if you could implement changes that your staff supports?
Financial Clarity
Some people have a knack for being able to read a profit and loss statement and a balance sheet. Many, however, find it hard to digest all the data to understand what it means to the health of their business. Most find it is easier to just look at their bank account.
How much more confident would you be if you understood your financial statements and how they can help you make better decisions?
Team Empowerment
You can’t do it alone and yet you’re not sure how to get your team fully engaged. Sometimes they’re excited and committed and other times they are just going through the motions. Leadership and management are skills just like any other and it’s time to shed your self-doubt.
If your team were fully engaged, leaving you with time to work “on” your business and not “in” your business, where would you focus?
