CONTRIBUTOR

B. Douglas Hoey, RPh, MBA
CEO, National Community Pharmacists Association
“If you can’t measure it, you can’t manage it,” goes the old business axiom.
With that in mind, the National Community Pharmacists Association and Cardinal Health published the 2017 NCPA Digest.
The Digest helps community pharmacy owners manage their businesses better by providing facts, figures, and profiles — essential data that describes the impact community pharmacies have on patients and the communities they serve. It’s in these communities that independent pharmacies have their greatest effect, not only economically, but through civic contributions that help make their communities better places to live.
For more than eight decades, the Digest has provided the most comprehensive report available on the state of independent community pharmacy, allowing pharmacy owners to make prudent business decisions and equipping elected officials with the information they need to craft sound policy. The health care landscape has changed dramatically since the very first Digest. Through it all, the devotion and care independent pharmacists show to their patients and their community has remained a steadfast anchor.
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 is essentially a compilation of data provided by independent community pharmacy owners across the country who respond to NCPA’s annual survey. We greatly appreciate the time these NCPA members take to share information that can help advance their profession.
NCPA members got early access to the Digest at the NCPA Annual Convention in October. NCPA members can access a copy at www.ncpanet.org/digest using their NCPA ID and password.
What the data says
1. The independent community pharmacy marketplace
Independent community pharmacies remain a major segment of pharmacy – an $80 billion marketplace. These pharmacies represent 36 percent of U.S. retail pharmacies. In total, they number 22,041, including single and multiple store pharmacies, family-run regional chain pharmacies, and individually owned and operated franchisees.
Twenty-nine percent of independent community pharmacy owners have ownership in two or more pharmacies, and the average number of pharmacies in which each independent owner has ownership is 1.96.
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-one percent of independent community pharmacies are situated in population areas of 50,000 or less.
Other highlights:
- Prescription volume decreased from 60,493 prescriptions annually in 2016 to 59,746 in 2017, likely due in part to 90-day refill requirements, patients being steered to PBM-owned mail order pharmacies, and exclusionary pharmacy network arrangements.
- Generic drugs comprise 84 percent of all prescriptions dispensed.
- Fifty-two percent of total prescriptions are covered by the Medicare Part D and Medicaid programs.
- Ninety percent of community pharmacies are offering some type of medication adherence program.
- Below-cost reimbursements, exacerbated by DIR fees in Medicare Part D, contribute to gross margins falling by 5 percent over the past five years.
2. Services provided to meet local health needs
Long-term care services
Adherence services
Specialty Medication
Other highlights of independent community pharmacy services include:
3. Community involvement
More highlights of independent pharmacies' civic and charitable involvement:
Conclusion
In towns and cities across America, independent community pharmacies treat patients like family, promote safe and effective medication use, and actively participate in community life.
At the same time, both decreasing prescription volume and declining prescription drug reimbursement reflect a changing marketplace to which community pharmacy owners must adjust their business model. 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.