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Here Are the Most Important Independent Pharmacy Trends for 2018

Here Are the Most Important Independent Pharmacy Trends for 2018 by Elements magazine |

December 14, 2017

As industry trends change, independent community pharmacies need to watch and evolve to stay successful.

The 2017 NCPA Digest, an annual publication from the National Community Pharmacists Association (NCPA) that profiles the $79.8 billion independent community pharmacy market, reveals some troubling and promising trends.

And these trends can affect your pharmacy business in big ways in the coming year. Check out these important pharmacy trends for 2018.

The troubling trends to know

Reimbursements continue to shrink. Exclusionary networks keep expanding. DIR fees are swelling to unprecedented proportions. Those factors drive down prescription sales and force pharmacies to evolve and expand beyond dispensing.

“Pharmacies must consider alternative revenue sources,” said John Norton, director of public relations at NCPA. “They must identify a range of services available to pharmacy owners that can both meet important health and consumer demands while also boosting the bottom line.”

Although pharmacies have long dealt with below-cost reimbursements, Norton said DIR fees are shaking up the industry beyond expectation. “The explosion of DIR fees over the past couple of years has been so dramatic that it has overtaken other issues, such as generic prescription drug reimbursement and preferred pharmacy networks in Medicare Part D, as the top concern of our members,” he said.

Even so, preferred networks still strain independent community pharmacies. “Continued expansion of preferred networks created by PBMs make it difficult for independents to compete for patients in the Medicare Part D program,” Norton said. More than half of independent pharmacy prescriptions come from Medicare and Medicaid, which can mean a large chunk of lost business for many independent pharmacies.

These negative trends have resulted in independent pharmacy profit margins dropping each year for the last three years.

The total number of independent pharmacies and the total amount of prescriptions filled have fallen since 2015.

“These numbers sound a cautionary note,” Norton said. “Independent community pharmacy owners can’t afford to be complacent.”

Promising pharmacy trends for 2018

“Despite a challenging marketplace, independent community pharmacy owners are finding ways to expand,” Norton said.

Between 2014 and 2016, the number of stores owned by a community pharmacy owner rose from 1.69 to 1.96. And, 29 percent of independent community pharmacy owners had ownership in two or more pharmacies in 2016, up from 27 percent in 2015.

Independent pharmacies find success by offering more niche services to counteract DIR fees and below- cost reimbursements. “The rapid implementation of med sync, collaborative agreements, and alternative value-based care are allowing pharmacies to innovate and adapt to a changing environment,” Norton said.

Medication synchronization programs nearly doubled in the last three years. About 80 percent of independent pharmacies offer them. Medication synchronization helps boost the bottom line, Norton said, by reducing operating expenses, increasing script count and increasing adherence.

Collaborative agreements have grown as health care providers continue to gain trust in pharmacists. Providers in 2016 accepted 95 percent of pharmacists’ brand-to-generic drug recommendations and 80 percent of drug therapy changes. This growing trust has resulted in a 4 percent rise in collaborative care agreements since 2015.

Trending for the future

If pharmacies want to survive, they need to evolve beyond simply dispensing prescriptions. Payment models have already shifted focus to value, quality, and outcomes.

“They’re causing all health care providers to relook at what they are doing, how they are doing it, and who they are doing it with,” Norton said. “This leads to new collaborations, new ways of working together across health care professions, and new revenue models.”

NCPA is encouraging pharmacies to get involved with a Community Pharmacy Enhanced Services Network (CPESN). “They link pharmacies that provide enhanced services into a network of community pharmacies that can assist payers in improving patient health and reducing overall health care spend, especially for patients with the greatest care needs,” Norton said.

And because independent pharmacy growth depends on government legislation, getting involved matters.

A lack of third-party regulation keeps PBMs in power. And restrictions hold pharmacies back. “Independent community pharmacists must find time to advocate for the pharmacy-friendly policies at the federal and state level,” Norton said.

Independent pharmacies today can’t abide by the status quo. “It’s important for independents to diversify their product line to include services beyond traditional dispensing of prescriptions,” Norton said.


By the numbers

Here’s a breakdown of the niche services independent community pharmacies provide to diversify their services today.

92 percent – Medication adherence/ synchronization
87 percent – Medication therapy management
76 percent – Immunizations
72 percent – Home or worksite delivery
62 percent – Blood pressure monitoring
63 percent – Compliance packaging
44 percent – Hospice
44 percent – Long-term care

Source: 2017 NCPA Digest


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