8 Common Independent Pharmacy Risks

8 Common Independent Pharmacy Risks

All small businesses deal with risks, but as a pharmacy, you don’t just lose money if risks become reality — risks can also have a negative impact on your patients’ health and safety.

With that weight on your shoulders, it’s critical to be aware of all the possible ways that things can go wrong in the pharmacy and take steps to mitigate them.

READ NEXT: A Guide to Risk Management for Independent Retail Pharmacy

8 Common Independent Pharmacy Risks

Here are some of the most common pharmacy risks you’ll face as an independent pharmacist and suggestions to keep those risks in check.

1. Personnel problems

Employee risks run the gamut from problems as big as embezzlement or inventory theft to smaller issues like giving poor customer service that leads to bad reviews. You also could face a lawsuit from a former employee who feels like they have been poorly treated.

The best way to address personnel issues is to be thorough during the hiring process. Call candidates’ references to root out bad past behavior and conduct a thorough background check.

After an employee has been hired, document problems in detail to protect you in case of a potential wrongful termination suit.

2. HIPAA violations

Even if you have airtight privacy policies, you can still be held liable if your employees violate HIPAA. Since fines for violations can run up to $50,000, it pays to be vigilant.

Watch out for common privacy issues that can turn into HIPAA fines:

  • Trash with intact labels
  • Compromised digital data
  • Medical histories that are visible to patients
  • Prescriptions in reach of patients
  • Employees inappropriately accessing patient records

3. Medication mix-ups

When you make a medication error by giving a patient the wrong dose or the wrong medication, it can lead to patient injury or even death, not to mention it could seriously damage your reputation within your community.

Implement these best practices to avoid medication mix-ups in the pharmacy:

  • Avoid abbreviations
  • Label clearly and use Tallman lettering
  • Store lookalike and soundalike drugs separately
  • Know the common offenders and create an alert for when they are dispensed
  • Use generic and brand names when possible

Other medication-related pharmacy risks include accidentally purchasing counterfeit or substandard drugs from a fly-by-night secondary supplier. You can eliminate that risk by choosing to purchase from an NABP Accredited Drug Distributor like BuyLine.

4. Failed inspections and audits

In a highly regulated industry, there are several bodies that may pop in to inspect your pharmacy, including state boards of pharmacy, the DEA, CMS, PBMs, and accreditation organizations.

If you don’t pass, you could end up facing fines, canceled contracts, or having your PTAN revoked.

In order to avoid the consequences of a bad inspection, you need to be proactive about training your employees on what to expect during a surprise inspection and how they should behave. You should also have comprehensive policies and procedures about issues like medication errors, recall procedures, inventory, privacy, and more.

5. Death or illness of an owner

While it may not be pleasant to think about, if you unexpectedly die or become disabled, your pharmacy has the potential to fall into disarray.

If you want your pharmacy to continue on when you can no longer work there, it’s critical to have a detailed succession plan in place — this is true even if you’re young and have no plans to retire soon.

Creating a succession plan involves finding a successor and training them so they have the skills and information to run the business. This way, if an accident occurs, there will be someone ready to step up and take the lead during a turbulent time.

6. Cyberattacks

Small businesses are frequent targets of cyberattacks, and if you become a victim, you risk losing money and exposing your patients’ private health information, creating a HIPAA violation.

These are a few of the ways that cybercriminals can breach your digital defenses:

  • Phishing
  • Ransomware
  • Compromised smart devices
  • Targeted attacks

To make things harder on cybercriminals, you can take steps like only granting access to programs to employees as needed, backing up your data frequently, and practicing good “password hygiene” (including creating strong passwords, changing them frequently, and using two-factor authentication).

7. Natural disasters

Natural disasters can cause all sorts of chaos — and even worse, they are completely out of your control. In addition to putting your employees’ health and safety at risk, they can also halt business and cause damage to your pharmacy.

Depending on where your pharmacy is located, extreme weather events like hurricanes, wildfires, blizzards, or tornados could be an inevitability, so it’s important to create a disaster response plan to mitigate the damage.

A response plan should include information about how you will communicate to both employees and patients when a disaster strikes and conditions for when you will close your store.

Make sure that you are fully insured for any natural disaster that could come your way so that you can begin recovering as quickly as possible.

8. Robbery

Convicted thieves say that pharmacies are easy targets for robbery and burglary. Opioids are highly valued by illicit drug dealers, and many perceive pharmacies to have lax security.

If your pharmacy is robbed, you’ll probably lose inventory, but you’ll also lose the trust of your community, which may begin to perceive your business as unsafe.

Invest in preventive measures like a silent alarm system to keep staff safe while summoning the police as well as security features like time-delay safes, bullet-resistant barriers, locking door mechanisms, pass-through drawers.

Keeping Independent Pharmacy Risks in Check 

The U.S. Small Business Administration advises that small businesses think about these factors when assessing risk in your business:

  • List all events that could impact your operations and cash flow
  • Create a business continuity plan to keep things running even when things go wrong
  • Use effective communication, clear expectations, training, insurance, contingency planning, and risk assessment to avoid risks
  • Weigh the cost of insurance against the potential consequences of a risk
  • Recognize the warning signs of common risks
  • Have a plan for seeking assistance
  • Create an exit strategy

If you use these principles to create a risk management strategy for each of the common pharmacy risks listed above, you should be able to minimize the negative consequences of risks.

How much insurance is enough to mitigate pharmacy risks?

Even with the most rigorous risk management strategies in place, issues can still happen. Because you can’t be 100 percent accident-proof all the time, you need to have comprehensive insurance policies in place as a backup to your risk management plan.

These insurance policies can help you keep your pharmacy covered:

  • Property and casualty insurance
  • General liability insurance
  • Professional liability insurance
  • Workers’ compensation
  • Commercial auto insurance
  • Cyber liability insurance
  • Employment practice liability insurance

That may seem like a lot of policies, but even with all those plans in place, you may want to consider adding an umbrella insurance policy to give you even more protection.

Do your research to ensure your insurance policies actually cover what you need — if you are located in a flood-prone area and your property insurance doesn’t cover flood damage, it won’t do you much good. The same goes for professional liability policies that don’t cover things like consulting patients.


A Member-Owned Company Serving Independent Pharmacies

PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy-side of their business. Founded and owned by pharmacists, PBA Health serves independent pharmacies with group purchasing services, wholesaler contract negotiations, proprietary purchasing tools, and more.

An HDA member, PBA Health operates its own NABP-accredited secondary wholesaler with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products — offering the lowest prices in the secondary market.


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Elements is written and produced by PBA Health, a buy-side solutions company.

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