Independent Pharmacy Survival Strategies for 2018

By Infinx
April 19, 2018

As an independent pharmacy, you may have held your own in the past. But there is cause for concern in 2018. Falling retail pharmacy reimbursement rates, hidden costs like direct and indirect remuneration (DIR) fees, and market domination by the big three PBMs means you must consider survival and growth strategies. In this blog, we explore possible steps independent pharmacies can take to survive and grow in 2018 and beyond.


Current Pharmacy Trends and the Future of Pharmacy in 2018


Monthly, quarterly and yearly financials are part of every pharmacy owner’s regular business routine. But have you taken a step back to consider the non-financials of your business lately? Start by conducting a SWOT analysis of your business:

  • Strengths: What does your pharmacy do better than others? Is one of your strengths your customer service, consulting services, or exceptional staff members?
  • Weaknesses: In which areas can your pharmacy improve? Are there any unresolved employee issues like high turn-over rate or staffing issues? Is your technology up-to-date or are improvements needed?
  • Opportunities: Where can you grow your pharmacy? What is trending in pharmacy right now that you are not doing? Are your patients happy with your services, or can these be improved?
  • Threats: Are new competitors encroaching on your market or advancing faster than you? Are changes in drug reimbursements, fees, or network policies affecting your profitability?

Taking a broader view of your pharmacy business allows you to analyze more than just your business numbers. A SWOT analysis can identify areas of needed improvement and help you develop a plan to keep up with or perhaps surpass your competition. Below are areas in which other independent pharmacies have recently expanded.


What is Medication Therapy Management Programs?


The 2017 NCPA Digest reports that 87% of the responding independent pharmacies provide MTM services. MTM services are meant to ensure that the drug therapy of Medicare Part D patients has optimized therapeutic outcomes with reduced adverse events. Starting in 2016, CMS factored the Comprehensive Medication Reviews (CMR) completion rate for Medicare Part D into a health plan’s star rating.


Improving Transitions of Care Programs


In 2012, the Affordable Care Act established the Hospital Readmissions Reduction Program. This program penalizes hospitals with excess readmissions. In 2018, the HRRP program focuses on the following measures:

  • Acute myocardial infarction
  • Chronic obstructive pulmonary disease (COPD)
  • Heart failure
  • Pneumonia
  • Coronary artery bypass graft
  • Elective primary total hip or knee arthroplasty

Elderly patients admitted to the hospital are often transferred to rehabilitative centers before returning to nursing homes or other long-term care facilities, making the transition of care arena potentially lucrative — especially for long-term care pharmacies that have relationships with such centers. Pharmacists can play a crucial role in transitions of care programs. In one study, readmission rates from preventable medication issues was a whopping 26%.

Patient Care Services

One significant pharmacy trend is the focus on patient care services. The 2017 NCPA Digest reported that 76% of independent pharmacies had immunization programs and 62% offered blood pressure monitoring. Expanding service offerings may be a way that independent pharmacies can differentiate themselves from their competitors. Below are some services that independents can provide, including some that top retail pharmacies may not offer in all areas.

  • Lab services: Pharmacies are beginning to enter relationships with testing laboratories for anything from health screenings to drug testing without a prescription from a doctor. This is an area that the large, top retail pharmacies have also started to enter. There are an estimated 7 billion lab tests performed each year according to the American Clinical Laboratory Association.
  • Blood pressure monitoring: Offering blood pressure monitoring is a way to stay in touch with your patients and reach potential new ones. Blood pressure monitoring requires patients to come in for regular monitoring, increasing a patient’s interaction with the pharmacy.
  • Immunizations: In 2017, the CDC reported an estimated 145 million doses of the flu vaccine alone were administered. While 76% of reporting independent pharmacies had immunization programs in 2017, those pharmacies that do not are missing an opportunity. This is a way to get new customers through the doors. Long-term care pharmacies can also offer this service to their clients in nursing homes, assisted living, and other places that they serve.


Specialty Pharmacy


In 2017, the Center for Medicare & Medicaid Services (CMS) classified drugs costing more than $670 as specialty drugs. The large PBMs currently dominate this area of pharmacy. However, independent pharmacists can enter this arena armed with an understanding of the market and how it works. Many patients prefer to receive specialty medications from their local pharmacist instead of dealing with phone conversations and mailed medications. The future projected growth of this sector is worth the time it will take to enter it.




Medication adherence and synchronization programs were reportedly used by 92% of the independent pharmacies responding to the 2017 NCPA Digest survey. Other areas where independent pharmacies can utilize technology include:

  • Pharmacy Services Provider: LTC pharmacies can use a pharmacy services provider to handle large prescription volumes in a short turnaround time, without error, saving money and making them highly competitive.
  • Website: Patients are used to going to the internet to get answers for anything from business hours to services offered to health advice. If your pharmacy does not yet have a web presence, that should be a top priority.
  • Social Media: According to Pew Research Center, 69% of adults use at least one social media outlet. Like a website, this is a place where your pharmacy needs to be. This will be especially important as Generations X, Y, and Z age, since social media use is heavy among these generations.


Future of Independent Pharmacy


Independent pharmacies may be getting some help soon when it comes to Medicare Part D prescriptions. The National Community Pharmacists Association (NCPA) reported that the Center for Medicare & Medicaid Services (CMS) final rule for 2019 included possibly good news on DIR fees, specialty pharmacy and inclusion in Part D contracted pharmacy networks.

Though the CMS ruling did not go as far as requiring DIR fees to applied at the point of sale, the ruling did state, “any new requirements regarding the application of rebates at the point of sale would be proposed through notice and comment rulemaking in the future.” Many view this as a step in the right direction. NCPA CEO B. Douglas Hoey, RPh, MBA said, “That’s very promising. This ruling simply telegraphs the next step in the process.”


Future of Specialty Pharmacy


CMS also addressed specialty pharmacy. The final rule states that Plan D sponsors cannot exclude a pharmacy from dispensing specialty drugs as long as they can dispense them, are appropriately licensed under all applicable laws, and willing to meet the sponsor’s terms and conditions per NCPA. This ruling may allow more independent pharmacies to enter the specialty drug market.

Lastly, the CMS ruling states that pharmacies may not be excluded for being “unique or innovative business or care delivery models.” A Part D plan may still “tailor their standard terms and conditions for various types of pharmacies.” Hopefully, this too will allow for more inclusion of independent pharmacies in the Medicare Plan D contracted pharmacy network.



There is hope for the future for independent pharmacies, whether you are a retail or a long-term care business. Knowing the strengths and weaknesses of your business can give you a game plan for the direction to take. Staying up to date on current pharmacy trends and independent pharmacy news can give you a leg up on your competition. You may consider adding services like MTM therapy, transitions of care, or patient care services programs. Lastly, help in the form of better inclusion in Medicare Part D plans and policies looks to be on the way. Secure the future of your independent pharmacy with a strong survival and growth plan.

About the Author



Infinx provides innovative and scalable payment lifecycle solutions for healthcare practices. Combining an intelligent, cloud-based platform driven by AI with our trained and certified coding and billing specialists, we help clients realize revenue, enabling them to shift focus from administrative details to billable patient care.

Leave A Comment