September 23, 2019
Every independent pharmacy needs a secondary supplier.
Whether it’s for supplementing inventory, saving some money, or getting through shortages, a good secondary supplier can bolster your bottom line.
But with hundreds of secondary pharmaceutical suppliers vying for your business, how do you know which one is best for your pharmacy? Do rock-bottom prices come with unseen costs? Are there other perks more important than price? What’s the most important feature to look for?
For Dave Randolph, owner of Dave’s Pharmacy with two locations in Nebraska, price is certainly important, but it’s not his number one priority. When he looks for a supplier, he seeks savings through something less tangible but more substantial. “Time is money,” he said. “Anything to save time is huge in our business.”
Kimberlee Austin, manager of business development for BuyLine, an independently owned secondary pharmaceutical supplier, echoed Randolph’s sentiment. “You can actually put a price on your time,” she said, “which for a pharmacist is a considerable amount of money.”
Every minute spent chasing deals, comparing prices, filling out applications, keeping up with varying billing cycles, and setting up new accounts is valuable dollars that could go toward something to grow the company, care for patients, or invest in new opportunities with a real return on your time, Austin said.
Between his two stores, Randolph and his staff spend around 10 to 15 hours a week searching for products among multiple suppliers. “If I could get the best deal from one place that had everything, it would be the ideal,” he said.
If your goal is to cut down to a couple of reliable suppliers to save time and money, you’ll need to choose ones with a broad offering—brands, generics, OTCs, refrigerated items, and controlled substances. You want these select suppliers to become one-stop shops, so they should carry options from more than one manufacturer and should be able to support you whenever your primary has shortages or tries to send high-price substitutions.
Importantly, always check on the supplier’s credentials. “You want to be concerned about where your product is coming from,” Austin said. Substandard products infiltrate the US drug channel far more often than pharmacies realize, especially during shortages and recalls. Make sure their inventory is traceable directly to the manufacturer, that they’re compliant with the Drug Supply Chain Security Act, and that their warehouse has the most credible accreditations. “I won’t even talk to a wholesaler that isn’t VAWD -accredited,” Randolph said.
When Austin worked as a technician in a community pharmacy, she remembers well inputting orders in the middle of a busy day or at the end of a long day. “It was the last thing I wanted to be doing,” she said. “My skillset was too valuable. And honestly, it was just a real hassle juggling multiple suppliers and working through all the different interfaces.”
That’s one reason she’s sought to turn BuyLine into the most convenient and efficient ordering platform, where pharmacies can get everything they need without the hassles. “A lot of companies, they only focus on the business part of it and neglect the part about making the pharmacist’s life easier and the job more enjoyable,” she said.
She suggests finding a supplier whose interface offers features to simplify and speed up the ordering process. Look for options for repeat purchases, previous orders, and an instant search bar with multiple ways to search for a product. Most importantly, seek one that offers electronic ordering within your pharmacy software system (EDI). Being able to pull up the price file right there in your pharmacy software makes comparing prices quick and streamlines the ordering process.
Without EDI, you have to search through a website, which has drawbacks. “If the NDC number doesn’t come up on the initial search,” Austin said, as an example, “now you’re performing an additional search by drug name, then you’re scrolling through the results to look for that particular strength and size. So now you’ve searched maybe three or four times, whereas when you’re ordering through the computer software, the comparison is right there. The price file compared to what you have from your primary or other secondary suppliers.”
The EDI integration also simplifies the process of checking an order into the system and enables users to take advantage of their pharmacy software’s inventory management features.
Austin mentioned several small details that may not be deciding factors on their own, but together can add up to a big difference. Does the supplier allow you to pay with a credit card? Do they offer a line of credit upfront? Do they offer multiple shipping options?
Randolph emphasized delivery reliability. “Do they deliver when they say they will? Not getting a product the next day can cause unhappy patients and double orders.”
He prefers to avoid secondary suppliers that place unnecessary requirements on his ordering, especially when it comes to shipping. “Frustrations include meeting minimum requirements for an order,” he said. “Large minimums for next day delivery or not offering next day delivery is a huge negative for me.”
Another detail to ask about is fees and contracts. There are quality secondary suppliers out there that offer competitive pricing without any sort of additional costs or commitments, so you don’t have to sign a contract or pay anything extra, Austin said.
The final detail Austin mentioned is a loyalty program, which she said is one of the features that distinguishes BuyLine from the crowd. “Not a lot of other secondaries are doing this, and it can truly add up.” Customers earn points for every single generic purchase, and the points spend like cash. Pharmacies have cashed in on nearly $200,000 in savings in a little over a year.
This article was published in our quarterly print magazine, which covers relevant topics in greater depth featuring leading experts in the industry. Subscribe to receive the quarterly print issue in your mailbox. All registered independent pharmacies in the U.S. are eligible to receive a free subscription.
Read more articles from the September issue:
PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy side of their business. The company is an independently owned pharmacy services organization based in Kansas City, Mo., that serves independent pharmacies with group purchasing services, expert contract negotiations, distribution services, and more.
PBA Health, an HDA member, operates its own VAWD-certified warehouse with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products.
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