Preparing for the next generation of independent community pharmacy
Independent pharmacies have positioned themselves as leaders in communities across the nation by offering personalized attention, education and healthcare services at a moment’s notice. This level of service has established a legacy of care that patients can rely on when they need it the most.
However, all independent pharmacy owners will reach a point when they must ultimately transition out of their businesses. The ever-shifting healthcare landscape, new competitors entering the market, changes in third-party payer plans, shrinking reimbursement and the health of an owner or their family members are all scenarios that could lead an owner to sell sooner than expected.
While it may be difficult to consider retirement or transitioning out of their business, independent pharmacy owners who start planning an exit strategy years in advance have a better chance of connecting with the right buyer and securing a more favorable deal. It can take a long time to find a qualified buyer who shares the same values and passion for independent pharmacy, which is critical to maintaining patient and staff continuity through the transition.
In my experience working with independent community pharmacy owners across the country, I’ve identified three ways owners can map out their exit strategy and ensure their legacy endures for future generations, even if they are no longer the ones behind the counter.
1. Surround the business with trusted experts
Independent pharmacy owners who engage experts with the skills needed to develop and execute a seamless exit strategy are better positioned to maximize the value of their business when they are ready to transition, especially if they do so at least two years in advance. Business coaches, acquisition advisors, accountants, financial planners and attorneys are vital resources that can help owners plan for their exit, while allowing them to keep their focus on what is most important — their patients. Pharmacy owners should spend time with these experts to give them a clear understanding of what they would like to accomplish through their ownership transition. By doing so, that trusted team could provide the guidance and support that will bring a seller together with a like-minded buyer, who will serve their community with the same level of dedication.
2. Determine the value of the pharmacy
Independent pharmacy owners should be able to gauge what their business is worth by having accurate, detailed and organized records. This information will help generate a realistic estimate for what the pharmacy might command in the marketplace, and ensure buyers feel confident that they are acquiring a reliable business. Having solid answers to questions about average prescription volumes, gross margins, etc., can quickly calm the most common concerns that a buyer might have. Without these details, the perceived value of the pharmacy is likely to decrease, jeopardizing the business’ true value and potential earnings upon the owner’s exit.
3. Improve issues for today and the future
Pharmacy owners should also work with their team to remedy any existing issues that could deter a prospective buyer from acquiring the business. From such superficial issues as outdated fixtures, bad lighting and worn carpeting to more serious problems as narrow profit margins, inaccurate financial statements and declining prescription counts, every detail is significant and can contribute to a declining business evaluation. However, with enough lead time, support and elbow grease, owners can make modest improvements now that have a big impact on the overall value of their business when they are ready to sell.
Community pharmacy owners have plenty of options when it comes to exiting on their own terms. If they take the initiative and plan wisely, it is possible to get the full value for their business and preserve their legacy of care in their community for decades to come.
Charlie Le Bon is the director of pharmacy ownership services at AmerisourceBergen.
Omega-3 makers choose MSC certification to show commitment to sustainability
It’s widely known that omega-3 is good for your heart, brain and bones. For those who don’t regularly consume seafood, supplements are a great way to get these healthy nutrients. Not only are omega-3 supplements good for your body, but some can be good for the environment too. To showcase their commitment to the environment, many companies are choosing to enter their products into the Marine Stewardship Council certification program. Over the last few years, MSC certification of fish and krill oil products has grown at a rapid rate.
The Marine Stewardship Council is a global nonprofit organization dedicated to sustainable fisheries and healthy oceans. The MSC works with fisheries, grocery stores and other businesses to change the way the oceans are fished and to make it simple for consumers to purchase seafood and omega-3 supplements that are sustainable and traceable to a trusted and verified source. As more consumers want to know where their products come from, MSC certification provides that assurance.
According to the GlobeScan 2016 survey of U.S. seafood consumers, more than two-thirds of consumers want to know that their seafood products can be traced back to a known and trusted source. Additionally, 79% of consumers surveyed cited “sustainable sourcing” as an important purchase motivator. The MSC Standard for sustainable fishing is widely recognized as the most credible standard for sustainable seafood, and it’s not limited to whole fish.
The number of omega-3 supplements carrying the MSC label has grown from 11 to more than 500 in the last six years. Nowhere has this growth been greater than in the United States. The U.S. market now accounts for more than 65% of total sales of MSC-certified supplements by volume. The most popular of the MSC-certified supplements are krill (52%) and Alaska pollock (32%).
The MSC-certified krill fishery, Aker BioMarine Antarctic Krill, has been certified since June 2010, and was the first MSC-certified krill supplier. Krill are harvested with a unique, highly selective fishing method that virtually eliminates unwanted catch. The fishery also is highly transparent — operations are monitored by a combination of satellites and on-board observers.
Two MSC-certified Alaska pollock fisheries have been certified since 2005. Both achieved sustainability scores that were among the highest of any MSC-certified fishery. They continually innovate to further reduce their impact on the planet and gain efficiencies in their processes. Alaska pollock fisheries are committed to full utilization of fish harvested so nothing is wasted. In addition to fish oil, Alaska pollock is used to make fillets, surimi, fish meal and other fish products.
These fisheries, along with hake, cod and salmon, are making their way into more fish and krill oil supplements, in response to consumer demands. As this market expands, so too will the MSC’s long-standing commitment to work with fisheries, suppliers and retailers to encourage a more sustainable seafood market.
This year, the MSC celebrates 20 years of safeguarding the future of the world’s oceans. Over time, this has come to include every aspect of the fishing supply chain — from fishermen and processors to restaurants, supermarkets and consumers. And as more supplement producers are seeking sustainable certification, the MSC will continue to serve as the world’s leading standard and to support these efforts.
To find out how your business can support healthy oceans, email the MSC at email@example.com or visit msc.org.
Emily Tripp is the MSC marketing and communications manager, U.S.
Creating the pharmacy experience of tomorrow
Because of new mobile and web-based technologies, the world of retailing has seen more changes during the last few years than it has experienced over the previous decades. Collectively, this trend is known as digitization. It covers everything from the way the Starbucks’ mobile phone app has changed the daily coffee-buying routine for millions of customers to the number of well-known chain stores that have been put out of business by the growing clout of online apps. We now have a generation of young adults who have done most of their shopping virtually on their digital devices.
The same forces that have disrupted brick-and-mortar stores are now closing in on the world of pharmacy retailing. And the results are going to be just as dramatic; a few years from now the pharmacy customer experience will bear little resemblance to its current form.
These changes also will be beneficial for the healthcare system as a whole, as they will give medical professionals new tools to combat some of health care’s most pressing issues. The best example involves making sure that patients continue taking the drugs their doctors prescribe for them. The prestigious Annals of Internal Medicine recently estimated that tackling medication noncompliance would save the U.S. healthcare system an estimated $300 billion, while keeping consumers on their treatment pathway to a healthy state. Patients who are noncompliant also show a higher prevalence within the cost now being spent on chronic disease state.
To understand what the pharmacy of tomorrow might look like, let’s first consider the drug store of today. While some chains allow customers to schedule refills online, actually picking up the drugs typically involves a long wait in line. Pharmacists are usually scrambling to fill prescriptions, and too often have little time to spend with those patients who have questions about the drugs they are about to take, even those that come with significant side effects.
Overall, the pharmacy of the future is going to be designed for consultation and empowerment. In a time when anyone can order anything via Amazon, pharmacies will need to have a value proposition in order for people to continue to use them. Technology will help them deliver it.
Changes to the pharmacy experience aren’t going to be limited to the store. Because of new digital technologies, they will be following consumers back to their homes. For example, mobile phone apps will allow consumers to track whether or not they are taking their medicine per their doctor’s orders. If they go off schedule, both their pharmacy and their healthcare provider will be alerted automatically. The pharmacy of the future also will play a major role to help ensuring that patients are not admitted or readmitted to a hospital due to missed medications.
Also, technologies will support a new breed of remote monitoring devices to support patients with chronic conditions to have such crucial metrics as pulse and heartbeat transmitted automatically to their healthcare providers. This can serve as an early-warning system, allowing everyone involved with the patient’s care, from pharmacy to primary care provider, to intervene and stave off a full-blown medical emergency.
Today’s pharmacies should not be caught blindsided. The list of businesses that were caught blindsided by the Internet and other digital technologies is a long one. Pharmacies have the opportunity to succeed where the others failed. Pharmacies should embrace newer technologies and transform their in-store culture from fulfillment to the consumer experience.
Customers visiting the pharmacy should walk back with a positive experience beyond pills. A successful pharmacy of the future will have a good balance of customer experience culture and technologies in order to transform health care one community at a time. Can the existing big players make this shift, or is this market ready for disruption from newer players similar to the rest of the retail industry?
Prasanna Parthasarathy is worldwide vice president/GM, medication management (Pyxis and Rowa technologies) at BD.