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The Most Overlooked Cost of Pharmacy Inventory Buying

cost of time pharmacy inventory ordering


March 5, 2020


Inside: The search for the best prices on pharmacy inventory can be time-consuming—but it doesn’t have to be. 

Your time is a limited resource. When you allocate it to one task, you take it away from another. And for pharmacists, that resource is worth a lot. According to the 2019 NCPA Digest survey of average hourly wages, a pharmacist’s time is worth $58.82 an hour.

Pharmacists report spending at least an hour per day searching for and ordering inventory. In four weeks, that means time spent ordering ends up costing $1,176 in wages. Over a year, that cost shoots up to $15,293.

Price comparison shopping may get you better deals on a small portion inventory, does the time justify the savings? Theresa Butler, owner of RxShoppe in Grove, Oklahoma, used to approach purchasing that way, as many pharmacies do. “We were simply trying to find the cheapest price out there,” she said. “This might even be for an item that was $3 in savings.”

The most significant cost of time isn’t really in the wages, though — most of the time those wages will remain consistent no matter the task, but they could be allocated to other jobs that generate revenue. Ordering is an operational task and ultimately an expense. Marketing, patient counseling, business development, and physician visits are activities that further business and actually provide a return on the time spent.

Instead of wasting time searching for deals, find an inventory buying solution that ensures you’re getting the best prices in the most efficient manner.

Find a reliable secondary

Instead of searching high and low for the best prices from multiple distributors, you can save time by committing to one or two secondary suppliers for the occasions when your primary wholesaler doesn’t have what you need.

Although price is important, it isn’t the only factor you should consider when deciding on a secondary supplier. Because time is money, your supplier should offer a no-hassle shopping experience that allows you to make orders quickly and simply. Ideally, your supplier will have an EDI interface, so that if you want to view and compare prices, you can do it quickly. It should also offer features for simple and easy ordering, like frequent purchases, order history, and barcode scanning.

You can get all these perks and more when you order from BuyLine®, a online ordering service from PBA Health. Just log in and you’ll find some of the best prices on the market. Next-day shipping options are available so you can get your orders as quickly as possible. Unlike some secondary distributors that sell drugs at bargain barrel prices, BuyLine ships from a PBA Health warehouse that has Drug Distributor Accreditation (VAWD) from the NABP, so you know that you will receive high-quality products that are coming directly from the manufacturers.

There are no contract or membership fees for BuyLine, so you save money in addition to time.

And with BuyLine’s rewards program, pharmacies can save up to 5% on generics and WAC -3.33% on brands.


More articles on purchasing

How to Buy Wholesale Pharmaceuticals to Maximize Pharmacy Profit by Elements magazine | pbahealth.com

How to Buy Wholesale Pharmaceuticals to Maximize Pharmacy Profit

 

Common Purchasing Mistakes That Cost Pharmacies Thousands by Elements magazine | pbahealth.com

Common Purchasing Mistakes That Cost Pharmacies Thousands

 

How to Maximize Wholesaler Rebates and Profitability on Pharmacy Inventory by Elements magazine | pbahealth.com

How to Maximize Rebates and Profitability on Pharmacy Inventory

 


 

Maximize rebates without the hassle

When it comes to your primary wholesaler, your independent pharmacy has the opportunity to save a lot of money with the incentives that are built into your contract. These include things like brand discounts, volume discounts, specialty items, and rebates based on your generic compliance ratio.

Keeping track of all these things to maximize the amount of money you get back takes time, but considering how much money is on the line, you can’t afford not to pay attention to these benefits.

When the average pharmacy reaches the top tier of their wholesaler’s generic compliance rebate structure, they might receive a rebate of $17,500 per month, for example. If they only reach the bottom tier, that rebate might plummet to $2,300.

Purchase optimization tools like ProfitGuard’s Navigation can help ensure that you get all the perks you’re eligible for without spending hours tracking your purchases. It uses predictive data to show you how every purchase will affect your inventory costs and gives you simple recommendations about what to purchase to maximize your rebates.

With ProfitGuard, you’ll receive a Navigation Report every single day. It’s like a GPS for your purchasing strategy that shows you your progress for the month and guides you to the optimal NDCs to purchase from your wholesaler, saving you time, energy, and money.

“The Navigation Report gives me peace of mind,” said Huy Duong, owner of Dale’s Pharmacy in Fort Lupton, Colorado. “It lets me know how my staff is performing on the buy side.”

Pharmacists that use the Navigation tool to help them make purchasing decisions report spending 75 percent less time on ordering. Instead of devoting $15,293 worth of pharmacist’s time to ordering every year, Navigation Report users can whittle that down to $3,823.

At RxShoppe, this time-saving benefit has been a sigh of relief for Teresa Butler and her team. “We were spending way too much time trying to find a better deal, working with too many companies to find the one that worked for one item,” Butler said. The Navigation report has simplified and streamlined her pharmacy’s ordering, freeing up valuable time for her and her employees. “It has definitely made it easier to order,” she said. “We do not have the manpower to devote someone to evaluating all the purchasing data to make the decisions. The Navigation tool narrows this all down for us—makes life easier. Saving time and money.”


 

An Independently Owned Organization Serving Independent Pharmacies

PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy side of their business. The company is a member-owned organization that serves independent pharmacies with group purchasing services, expert contract negotiations, proprietary purchasing tools, distribution services, and more.

An HDA member, PBA Health 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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