One Community Pharmacy’s Best Strategy for Surviving PBMs and DIR Fees

John McNeill, owner of Nichols Southside Pharmacy in Corpus Christi, Texas, is facing the same challenges confronting all independent pharmacy owners today: bottom-barrel reimbursements and unpredictable DIR fees from PBMs. These challenges make it hard to thrive, and McNeill doesn’t know if he could maintain a profit on his prescription business without the rebates he receives every month from his wholesaler, which were negotiated and optimized for him by ProfitGuard®.

“Because with these insurance plans we have to deal with, if we didn’t have the rebates we’d be losing money on a lot of them,” he said. “The rebates have definitely helped us. It’s almost a necessity.”

ProfitGuard, PBA Health’s group purchasing service, is a different take on a buying group. Valuing the true individuality of independents, it gives members an entirely customized approach best suited to each pharmacy’s individualized needs. Whether you want a contract negotiated especially for you or you want to join a group that has already negotiated a lucrative deal, the choice is yours. Either way, ProfitGuard manages primary wholesaler negotiations to get pharmacies the best overall cost of goods. It also provides a proprietary purchasing tool that maximizes rebates and savings every day, ensuring pharmacies are getting optimal benefits from their contract.

A better wholesaler contract, guaranteed

With experience negotiating more than $12.8 billion in contracts for independent pharmacies, the experts at ProfitGuard guarantee contracts with better terms, rebates, and pricing. Besides bringing more than 30 years of pharmacy contract experience to the table, they also bid the pharmacies’ business across multiple national wholesalers to get a true market-competitive contract.

A member of ProfitGuard for more than ten years, McNeill has been through several renegotiations with his primary wholesaler, and every time they go to the table, he gets an even better deal. “They have done a great job of negotiating for us, so we haven’t had to stress out about that,” he said. “Each time there’s been an improvement. We’re always happy with it.”

A unique purchasing solution

With ProfitGuard, securing a better contract is only the beginning. Its purchasing optimization solution ensures pharmacies get the most out of their contract every single day. The pharmacy receives a daily report to guide purchasing decisions based on all of its contract terms and incentives, as well as numerous other factors that can only be measured by ProfitGuard’s proprietary technology. The report identifies when a product should be purchased through the primary or secondary wholesaler, through a different manufacturer, or in an alternative package size in order to get the lowest net cost of goods by the end of the month.

If the pharmacy prefers to have the entire process automated, PBA Health can do that as well. Instead of receiving a report and manually inputting the recommended changes, PBA Health will make the switches and the pharmacy will simply receive the benefits.

“PBA Health has been doing a great job with our ordering system, making sure we get the cheapest one,” McNeill said. “They do it automatically, they pick it out for us, so that’s been helpful. They always find the cheapest price.”

The Navigation tool not only saves McNeill money, it also saves him time. “I was definitely spending more time ordering than I wanted to. I would have to spend time on our computer program having to go in to make sure we were buying the right product,” he explained. “I was having to go onto both websites, see which was the cheapest, and then change the product. Now, they automatically pick out the cheapest one.”

McNeill also likes that he’s always kept up to date on where he stands with his rebate structure and the other compliance requirements in his contract. “We always know where we’re at with our percentages,” he said.

The total solution

Between the terms, prices, and rebate structure ProfitGuard negotiated into McNeill’s contract along with the automatic purchasing tool it gave him on the back-end, McNeill can count on robust rebates each month—and instant sticker-price savings on each order—to help keep his pharmacy business in the black.

“It’s worked great for us,” he said. “It saves us a lot of time. It’s been great for our pharmacy in terms of maximizing our rebate percentages.”

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.


Editor’s Picks


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

Sign up for a FREE subscription to Elements magazine!


Sign up to receive PBA Health’s e-newsletter to get the latest Elements web articles in your inbox every other week, along with industry news, supply chain insights, and exclusive offers.

Related Articles

Popular Articles