Inside: If your independent community pharmacy buys pharmaceuticals from a wholesaler or supplier that’s not VAWD-certified, it could put your business at risk.
Does your pharmacy buy drugs from smaller secondary wholesalers?
Maybe you shop outside your primary wholesaler contract to snatch up quick discounts. Or, you buy from secondary wholesalers to fulfill all of your pharmaceutical needs.
But shopping secondary wholesalers could hurt your business more than it helps if you aren’t careful.
Especially if you’re shopping from a secondary wholesaler without the proper accreditation.
With hundreds of secondary wholesalers vying for your business, it’s easy to get caught up on prices without paying attention to who’s giving you that low price. And how.
Before you buy from another secondary wholesaler, you’ll want to make sure they’re a Verified-Accredited Wholesale Distributor (VAWD).
Otherwise, your pharmacy business could face financial consequences.
What Is VAWD Accreditation?
Every state has its own standards of practice required for wholesalers to obtain licenses.
Some states have stricter requirements than others, which makes it easier for distributors to become licensed in some states and makes it harder for pharmacies to know which distributors they can trust.
The National Association of Boards of Pharmacy (NABP) wanted to set a higher and more unified standard.
So, it created its own accreditation program. Wholesalers that pass the NABP’s compliance review process become VAWD-certified.
Unlike licensure, VAWD standards apply equally to every pharmacy no matter the state they reside in.
The VAWD certification review process includes:
- Rigorous review of operating policies and procedures
- Licensure verification
- Survey of a facility’s operations
- Screening through the NABP Clearinghouse
When you work with VAWD-certified wholesalers, you know they’ve met the strictest standards out there. And you know they’re all meeting the same standards.
Several states including Indiana, North Dakota and Wyoming even require VAWD accreditation for licensure.
Why’s VAWD Certification So Important?
Before drugs reach patients, they can change hands more times than you can keep track of.
Sometimes ingredients are sourced from one country, packaged in another, and then repacked in another.
Within the distribution channel, drugs may bounce from one manufacturer to several different wholesalers before finally ending up at your pharmacy.
Because of the convoluted nature of the drug channel, and despite regulatory efforts to track prescription drugs through it, it’s susceptible to counterfeiting, contamination, and diversion.
Ways drugs can be compromised in the drug channel include:
- Storage in unsanitary or non-temperature-controlled conditions
- Illegal importation that evades inspection
- Previously dispensed drugs re-entering the drug channel
- False documentation
The sad truth is illegitimate wholesalers and suppliers exist. You could be buying from one right now.
Oftentimes, the illegitimate wholesalers have the cheapest prices because they’re selling counterfeit or altered goods.
Or, you might buy from a legitimate wholesaler that has no idea some of its products have been compromised.
The Consequences of Using a Wholesaler That’s Not VAWD-Certified
The bottom line is your pharmacy you could suffer significant business consequences if you buy from wholesalers that aren’t VAWD-certified.
Those consequences could cost you revenue, patients, and possibly your business.
Wholesalers that aren’t VAWD-certified could harm your patients
You may save money from secondary wholesalers that aren’t VAWD-accredited, but is it worth risking your patients’ health?
Without the certainty of a drug’s integrity, you could hand patients a drug that could harm them.
The safety of a drug can be compromised by many things, including improper storage, deliberate alteration or improper labeling. Why risk it?
VAWD certification ensures that your patients consume safe prescription drugs.
Wholesalers that aren’t VAWD-certified could harm your business
Imagine if one of your patients is harmed because of a contaminated drug.
You’d certainly lose that patient’s business forever.
But you’d also lose every patient they know, as well as any other patient who found out, whether through word-of-mouth, online reviews, or the media.
There’s no way to gain back trust from a mistake with dangerous consequences.
Beyond that, if you don’t use only VAWD-certified wholesalers, you could face financial consequences from one of the largest pharmacy benefit managers, Optum. In 2016, the company announced that pharmacies that contract with the company must only buy from VAWD-certified wholesalers.
Optum will no longer pay for any claims that don’t come from VAWD-certified wholesalers. And, it could charge additional clawbacks and may even revoke contracts.
Optum processes nearly 20 percent of the nation’s prescriptions. For many independent community pharmacies, that number could be even higher.
Losing that contract could shatter your pharmacy business. And paying additional clawbacks would drain the little margins you’re making.
How to Look for a VAWD-Certified Wholesaler for Your Pharmacy
The easiest way to verify if a wholesaler has achieved VAWD accreditation is to check the NABP’s VAWD-accredited facilities list.
You can also check to see if the wholesaler displays the VAWD Seal.
Technically only VAWD-certified distributors can display the seal on their ordering platforms or websites, but theoretically, a distributor could still display the seal even if it isn’t VAWD-certified. While not a foolproof method to verify VAWD accreditation, you can still use it as a first check.
And while you’re at it, check to make sure the wholesaler is an HDA distributor, too.
Here’s a Better Way to Increase Profit Margins Through Wholesale Purchasing
Buying from several secondary wholesalers can make it seem like you save money here and there.
But those savings can come with great risk to your patients and your business.
And those are risks you don’t need to take. Because you have a better, safer, and easier way to significantly boost profit margins with a lower cost of inventory.
There’s a way to make better margins than small-wholesaler-hopping while ensuring you source your products from accredited facilities.
It’s called ProfitGuard™.
ProfitGuard is a primary wholesaler contract negotiation and management service offered by PBA Health, an independently owned pharmaceutical distributor with its own VAWD-certified warehouse that can serve as a secondary source of product.
ProfitGuard guarantees you a better primary wholesaler contract than you have now with a VAWD-accredited primary wholesaler.
And if you do need to go outside the contract to source specific products, PBA Health’s VAWD-certified warehouse will have what you need for a competitive price.
ProfitGuard is the safest, easiest, and most lucrative way to buy the pharmaceuticals you need.
Buying from VAWD-certified wholesalers is better for business than temporary savings from unreliable sources.
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.