2016 NCPA Digest: A Roadmap for Independent Community Pharmacies

CONTRIBUTOR

B. Douglas Hoey, RPh, MBA

CEO, National Community Pharmacists Association

In today’s hyper-competitive marketplace independent community pharmacy owners need every tool available to keep up with current trends and continue innovating. To that end, the National Community Pharmacists Association (NCPA) publishes the annual NCPA Digest, sponsored by Cardinal Health. The 2016 NCPA Digest offers important findings about which every independent community pharmacy should take note.

NCPA has produced the Digest since 1932 for NCPA members. Of course, we’ve changed it over the years to keep up with times. But one thing remains the same: it is the single best snapshot of the independent community pharmacy marketplace. Publishing the Digest requires countless hours over many months and significant expense. It would not be possible without the sponsorship of Cardinal Health, for which NCPA is very grateful.

The Digest data is essentially a compilation reflecting information provided by independent community pharmacy owners across the country who responded to surveys sent out by NCPA. We greatly appreciate the time that these NCPA members took to advance their profession as a whole.

NCPA members first get access to the Digest at the NCPA Annual Convention in October. Afterward we post a copy to the members-only portion of our website. You can read more about it here and access a copy using your NCPA ID and password:

The 2016 NCPA Digest is a comprehensive overview of independent community pharmacy in the 2015 calendar year. For this blog post I broke down the highlights into four areas: marketplace scope; health care services offered; community involvement of local pharmacy owners and staff; and some cautionary notes for community pharmacy owners.

Scale of the community pharmacy marketplace

Independent community pharmacies remain a major segment of pharmacy – an $81.5 billion marketplace. These pharmacies represent nearly 40 percent of U.S. retail pharmacies. In total, they number 22,160, including single-store pharmacies, family-run regional chain pharmacies and individually owned and operated franchisees.

More than 250,000 individuals are employed on a full or part-time basis by these pharmacies, bolstering state and local economies and tax revenue. Prescription drugs are their focal point, representing 92 percent of total sales revenue.

It’s noteworthy how many independent community pharmacies care for underserved populations. Eighty-two percent of independent community pharmacies are in population areas of 50,000 or less.

Here’s what the average independent community pharmacy looks like:

  • 60,493 prescriptions dispensed annually.
  • 82 percent of prescriptions are filled with generic drugs.
  • Most prescriptions (52 percent) are covered by government programs (Medicare, Medicaid, etc.) with third-party insurance comprising nearly all of the remainder (39 percent).
  • $11.21 average cost of dispensing per prescription.
  • Their pharmacists play an active role in prescription drug decisions, counseling physicians on average 9.7 times each day. Community pharmacists’ generic product recommendations are accepted by doctors 95 percent of the time.
  • An average of 9.4 full-time employees.

Services provided to meet local health needs

Here's what these pharmacies are offering...

83% provide medication therapy management services.

  *Data above is specific to only full-line stores - not all pharmacies surveyed - and varies slightly from the total aggregate data. 

Independent community pharmacies are easily accessible providers of prescription drugs, medication counseling and other important health care services. The 2016 NCPA Digest captures the type of services that they typically offer.

Medication therapy management (MTM) counseling services are offered by 81 percent of independent community pharmacies. Community pharmacists are ideally situated to provide these services given how easily and often patients visit the pharmacy.

Adherence services are provided by nearly 82 percent of independent community pharmacies. These are particularly important for patients with chronic conditions who may rely on multiple, maintenance medications. One common example of an adherence service provided by community pharmacies is medication synchronization, or med sync. Med sync aligns a patient’s prescription refills to fall on one day each month to increase convenience and offer an opportunity for a more detailed medication review to identify any barriers to adherence.

Other highlights of independent community pharmacy services include:

  • 67 percent provide immunizations.
  • 61 percent furnish durable medical goods.
  • 61 percent offer compounded prescription drugs to meet individual health needs.
  • 57 percent perform blood pressure monitoring.
  • Most offer same-day home delivery, usually at no extra charge.

Independent pharmacies’ community involvement

53%

Of owners and/or employees have direct personal relationships with a state representative or a state representative's key staff member.

Independent pharmacies are often revered as pillars of their local communities and the 2016 NCPA Digest backs up that perception. Nearly 70 percent of all community pharmacy owners donated to at least five local organizations. Many owners are also members of their local business association. In addition, the tax and economic revenue generated by community pharmacies helps fuel local commerce and public institutions.

Warning signs

Each year many independent community pharmacies open and each year many close. According to the 2016 NCPA Digest, there was a net reduction in the number of independent pharmacies. Potentially related to that, the total number of prescriptions filled at these pharmacies also declined, likely due in part to 90-day refill requirements, economically coerced use of PBM-owned mail order pharmacies, or exclusionary pharmacy network arrangements.

These numbers are a cautionary note. Independent community pharmacy owners can never become complacent. They must consider alternative revenue sources. NCPA has identified a range of services available to pharmacy owners that can both meet important health and consumer demands while also boosting the bottom line. We’ve featured them on this page of our website.

Conclusion

Independent community pharmacies continue to be a trusted source for prescription medication and expert counseling, according to the 2016 NCPA Digest. In towns and cities across America, independent community pharmacies treat patients like family, adapt to further promote safe and effective medication use, and are active local philanthropists.

At the same time, both decreasing prescription volume and declining prescription drug reimbursement should be alarm bells to community pharmacy owners. Now more than ever, community pharmacy owners should consider any and all options to diversify their revenue while continuing to focus on evaluating the economics of third party reimbursements.