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What Is an Independent Pharmacy Cooperative?

What Is an Independent Pharmacy Cooperative?by Elements magazine |

September 24, 2019

Inside: Learn how independent pharmacy cooperatives can give you the purchasing power of chain pharmacies. 

As a small independent pharmacy, it might seem impossible to compete with the chain store around the corner.

And it would be impossible if you were going it alone. But by joining an independent pharmacy cooperative, you get power in numbers and a leg up on your chain store competition.

What Is an Independent Pharmacy Cooperative?

An independent pharmacy cooperative is a member-owned organization, usually offering group purchasing services. They don’t have outside interests or investors to cater to. Instead, they invest all their resources in serving and satisfying their members.

When you align your business with other independent pharmacies, you increase your volume and get better deals from wholesalers. It’s the best of both worlds: you get to maintain and run your independent pharmacy on your own terms while reaping the same rewards as a chain store.

Before joining an independent pharmacy cooperative, make sure the organization is offering you all the benefits you deserve.

Get Better Returns With an Independent Pharmacy Cooperative

Not all independent pharmacy cooperatives are created equal. The cooperative you work with should be able to ensure that you’re getting a better deal with their services than you could get on your own. Before you commit to a cooperative, make sure they are offering you at least these perks.

Big Business Benefits

Joining an independent pharmacy cooperative should open up a whole new world when it comes to your wholesaler relationship. No longer are you a single, tiny fish in the ocean struggling for a scrap of algae. Now, you’re a part of an entire school of fish, commanding attention and resources.

You’ll become a much more enticing “get” for wholesalers when your business is pooled with other pharmacies. As a part of a buying group, your volume is now a lot closer to small chain pharmacies. With the volume of a chain, you also get the leverage of a chain.

If wholesalers don’t offer you a good deal, they risk not only losing your business but the business of every independent pharmacy in your buying group. That means they are incentivized to offer you significantly better pricing terms to win you over, which in turn means more profits for your pharmacy.

Negotiation Know-How

Even though your wholesaler is now more likely to offer you a better contract, your independent pharmacy cooperative should help you navigate through this process by negotiating for you, as well as educating you throughout the whole process so you can gain more control over your contracts going forward.

Your cooperative shouldn’t send in just anyone to negotiate— that might not give you better results than when you negotiate for yourself. They should employ negotiators who have formal training and a proven track record.

A wholesaler contract is complicated, laden with jargon and complex incentive structures. But an expert negotiator will know exactly which details to look for and help you understand the terms. By the end of the process, you’ll be able to make the most out of your wholesaler relationship.

The negotiator should solicit bids from multiple wholesalers. This makes your business more competitive, and wholesalers will lower their prices to outbid the competition. Having multiple bids on the table also gives you more control over the terms of your contract.

Most importantly, the negotiation process should put you in total control. Only you get to decide if the contract is right for your pharmacy.

Quality Backup Supplier

Your relationship with your independent pharmacy cooperative shouldn’t stop with your primary wholesaler. Occasionally, you’ll need a medication that your primary wholesaler doesn’t have on hand, but your cooperative should still have your back.

You need to be able to count on a quality secondary supplier to ensure that you don’t have any gaps in your inventory, and your cooperative should help you establish that relationship.

Because there are so many fly-by-night pharmaceutical distributors, the backup supplier your cooperative sets you up with should have these qualifications:


With a quality backup supplier on hand, you will not only ensure you have all the products your patients need, you’ll also save money on items that fall outside of your primary contract.

How to Get Even Better Results

Independent pharmacy cooperatives can do a lot for your pharmacy, but some groups can do even more

PBA Health is a membership company exclusively owned by the independent pharmacy owners it serves, and it goes above and beyond to get positive results and higher profits for its members.

ProfitGuard® is PBA Health’s group purchasing organization. In addition to providing all the perks mentioned above, it not only guarantees a better wholesaler contract but also offers a unique way to dramatically increase your rebates and profitability by leveraging your contract for maximum benefit.

Most cooperatives don’t offer a rigorous and robust solution to maximize savings after the contract has been signed. But ProfitGuard offers a proprietary purchasing optimization tool that helps you optimize your inventory decisions every single day. The Navigation tool takes all the pharmacy’s contract information and purchasing information–incentives, current prices, availability, volume commitments, personal preferences, etc–and simulates all possible variations in your product and supplier purchasing mix, ultimately landing on a targeted model that maximizes your rebates and savings.

Many pharmacies have averaged six-percent savings on their total volume with ProfitGuard and the Navigation tool. For the independent pharmacy whose cost of goods is $2,768,280—the annual average according to the NCPA Digest—that’s $166,096 straight into their pocket by the end of the year. Many have averaged even more.

While all independent pharmacy cooperatives give you the advantage of size, PBA Health’s ProfitGuard is the only group purchasing organization that gives you access to these cutting edge tools.


A Member-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.

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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