Community Pharmacy Start-Up Benchmarking Report, sponsored by CPA
This publication is the fourth edition of the benchmarking guide for pharmacy start-ups published by the National Community Pharmacists Association, the Voice of the Community Pharmacist®.
Prior to this report, start-up pharmacies had virtually no benchmarking data on comparable pharmacies needed to make financial projections and compare progress against other start-up pharmacies. For numerous reasons, pharmacies operating for more than five years perform at significantly different quantitative levels than new pharmacies and thus do not produce reasonable comparative tools for benchmarking purposes. Measures such as sales volume are significantly impacted by the longevity of the business, which impacts other measures such as total sales and number of full- and part-time employees hired. For these reasons it is imperative that start-up pharmacies have access to benchmarking data from their peers. This report is the only resource available that provides such data.
In a world of low prescription drug margins and excessive DIR fees, it is important that start-up pharmacies develop strategies for diversifying their revenue from the get-go. Offering specialized services tailored to the health care needs of their patients allows start-up pharmacies to grow as small businesses while demonstrating their value as health care providers. Specialized services might include point-of-care testing, compounding, adherence programs, immunizations, and disease management programs. CPESN® USA, a clinically integrated network of community-based pharmacies, is how high performing pharmacies can contract as a group to offer services that improve overall patient care, especially for those with complex, chronic illnesses.
Medicare and Medicaid continue to comprise over 55 percent of independent pharmacies' prescription business. Over 40 percent of the remaining independent prescription business is generated from other third-party contracts. With over 90 percent of prescription sales coming from government or private thirdparty contracts, a pharmacy's keen understanding of these programs and the contracts they offer is imperative for a start-up business to survive.
NCPA's Ownership Workshop and Enhanced Services Boot Camp programs continue to provide expert guidance to entrepreneurs desiring to open their first pharmacy, to chain pharmacists looking to be their own boss, and to current pharmacy owners interested in becoming a multi-store owner. Until this publication, there was limited data on those critical first years of business to incorporate with the techniques and business tools introduced to prospective and new pharmacy owners at the workshops. Another great resource for entrepreneurs is provided by NCPA's popular front-end guru and Senior Director of Store Operations and Marketing, Gabe Trahan. In his book, Gabe's Favorite Tips, he has compiled an extensive collection of tips and suggestions that experience tells him are the most important contributors to pharmacy success outside of the prescription department.
For the fourth year, NCPA has surveyed start-up pharmacies from around the country that have been open five years or less to accumulate this vital benchmark information specific to new businesses. We are proud to provide you with this fourth edition of the NCPA Community Pharmacy Start-up Benchmarking Report, sponsored by Compliant Pharmacy Alliance.