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25 Trends in Independent Community Pharmacy


November 8, 2018


Inside: The NCPA compiled statistics about the state of independent community pharmacy. Here’s what stood out.

America’s 21,909 independent community pharmacies are always evolving. They’re meeting new challenges with new tools and smart business models to better serve their communities.

Each year, the National Community Pharmacists Association (NCPA) compiles data on independent community pharmacy in the NCPA Digest. The findings can help you find inspiration, innovation, and smart business practices from other owners to make sure you stay ahead of the curve.

Here’s a rundown of the latest trends in independent community pharmacy from the 2018 NCPA Digest.

1. Flat growth overall

The average independent community pharmacy location dispensed 59,137 prescriptions in 2017. That’s a slight decrease from the 59,764 dispensed in 2016. The digest suggests rural pharmacy closings, preferred networks, and mandatory mail order may have contributed to these flat numbers.

2. Decrease in average sales per location

Average annual sales are were $3,540,013 per location, down slightly from $3,619,000 in 2016.

3. Decrease in gross margins

For the fourth straight year, gross margins shrank. In 2017 they were 21.8 percent of sales, down from 23.2 percent in 2008. The digest attributes this primarily to below-cost reimbursement and unpredictable DIR fees in Medicare Part D. In its eleventh year, Medicare Part D continued to grow while state Medicaid programs remained steady.

4. Decrease in payroll expenses

Payroll expenses, as a percentage of sales, decreased slightly from 13.1 percent to 13 percent.

5. Increase in cost of goods sold

Average cost of goods sold grew from 77.9 percent in 2016 to 78.2 percent in 2017. It has increased every year since 2014.

6. Staff bringing home more money

Average staff pharmacist wages increased by $.89 per hour to $58.10. Pharmacy technician wages increased to $15.05 and clerk/cashier wages increased to $11.05.

7. Fewer staff positions (sort of)

Overall, staffing levels saw little change. The average total number of non-owner employees dropped from 8.1 to 8. Non-owner pharmacists dropped from 1.6 to 1.5, while technicians increased from 3.1 to 3.3.

8. Cost of dispensing drops

The cost of dispensing for all pharmacies dropped to $10.79 from $11.09.

9. Generic prescriptions dominating

Eighty-five percent of prescriptions dispensed in 2017 were generic, a small increase from 84 percent in 2016.

10. Delivery remains the standard

Last year, 71 percent of pharmacies surveyed offered delivery service. Many pharmacies have delivered prescriptions to patients for years, but this service is becoming even more crucial as national chains launch their own delivery programs.

11. Independents deliver value

Seventy-six percent of the independent pharmacies that offer delivery service don’t charge for it. Fifty-nine percent deliver most orders in less than six hours, with 8 percent delivering most prescriptions in two hours. Compared to CVS, which charges $4.99 for two-day delivery by mail or $8.99 for same-day delivery in select major cities, independent pharmacy delivery services are a tremendous value.

12. Serving rural areas

Independent pharmacies have big presence in small towns. According to the digest, 35 percent are located in an area with a population under 20,000. Another 40 percent operate in areas with populations between 20,000 and 50,000.

13. More than just pills

Vaccines are an important source of revenue for the 70 percent of independent pharmacies that provide immunizations. That’s a bit of a drop from the 74 percent in 2016 and small jump from 67 percent in 2015. But it remains the most popular disease state management service for independent pharmacies.

14. Blood pressure monitoring levels off

The second most common disease state management service is blood pressure monitoring, with 57 percent of independent pharmacies offering it. That’s a decrease from 61 percent in 2016 and a return to 2015’s level.

15. Decrease in total number of independent pharmacies

Closures outpaced startups in 2017, and the real number of independent pharmacies declined from 22,041 to 21,909.

16. Diabetes training down slightly

In 2017, the portion of independent pharmacies offering diabetes training dropped from 41 percent to 35 percent, even with 2015 numbers. It’s still the third most popular disease state management service, as more than 100 million American adults live with diabetes or prediabetes, according to the Center for Disease Control and Prevention (CDC).

17. Other disease state services less common

Less than a quarter (24 percent) of independent pharmacies offer smoking cessation services, and there’s a sharp drop from there to other disease state management services. Just 16 percent offer asthma management services, 12 percent weight management services, and 7 percent lipid monitoring.

18. Government programs picking up the tab

More than half (53 percent) of prescriptions are covered by government programs. Medicare Part D covers 36 percent and Medicaid 17 percent at independent pharmacies.

19. Cash customers present challenge, opportunity

With 11 percent of prescriptions being paid by cash customers, it’s clear that a small but significant portion of patients will need help making the most cost-effective choices. Working with these patients and their doctors to choose less expensive medications when appropriate and to use other cost-saving measures can help you retain their business.

20. Embracing mobile

Smartphones are in the hands or pockets of nearly every patient now, and 69 percent of independent pharmacies have capitalized on that shift with a mobile app. That’s a bit of an increase from 2016, when 64 percent of pharmacies offered a mobile app.

21. Facebook is the baseline social media

Independent pharmacies have largely embraced the internet’s largest social media platform—86 percent said they have a Facebook page. That number remains steady from 2016 to 2017. The survey indicates 24 percent of independent pharmacies use Twitter (up from 23 percent in 2016) and just 6 percent use YouTube (down from 7 percent in 2016).

22. POS tops workflow technologies

A robust 87 percent of pharmacies surveyed use a point-of-sale system. That number is down slightly from 88 percent in 2016 and up from 84 percent in 2015. It remains the most popular workflow technology by a significant margin.

23. Growth in automated dispensing counters

Use of automated dispensing counters grew from 51 percent in 2015 and 56 percent in 2016 to 60 percent in 2017.

24. Telephone IVR takes narrow majority

For the first time since the survey began, more than half (51 percent) of independent pharmacies are using telephone interactive voice response (IVR). This is the second straight year of growth, with 50 percent using telephone IVR in 2016 and 42 percent using it in 2015.

25. Other technologies common but not standard

Forty-four percent of surveyed pharmacies use mobile commerce/signature capture (up from 42 percent in 2016) and 30 percent use an automated dispensing system.

Members can access the full Digest through the NCPA website.


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