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4 ways to save your veterinary pharmacy
Drowning in fears of online pharmacies and big-box competitors? Study these tips before letting your practice pharmacy sink into despair.
Most veterinarians saw the writing on the wall. We were all aware of the fading relevance of the dispensing pharmacy in our veterinary practice. After all, one-stop shops in any industry are a novelty these days. Try to find a full-service gas station that checks your oil, pumps your gas, and wipes your windows. You can't—these businesses are long gone. Why? Because it's cheaper for consumers. Granted it's less convenient, as is taking a trip down the crowded aisles of Walmart, but not so much that we won't do it in order to score significant savings.
That's why it's interesting to hear that veterinarians are incensed about products being made available to consumers outside the walls of the veterinary practice. The truth is, most of them shop at the same big-box stores as their clients for the very same reason—to save some money.
For many veterinarians, product sales accounted for as much as 25 percent of revenue in the not-too-distant past. So if getting angry doesn't make things better (which it doesn't), what should you do about the loss of your pharmacy sales?
First thing is first: You need to understand that prescription drugs and product sales just won't be as large a percentage of your revenue as they used to. Once we come to terms with that fact, it's a whole lot easier to move on and look at how to manage and benefit from the current reality. Here are four ways to save your pharmacy—or at least go down swinging.
1. Hone down your inventory. Now that almost every product is available via next-day shipping, you don't need a month's worth of your favorite NSAID sitting on the shelf. Be careful about the purchasing promotions you take advantage of. If the product can't be moved quickly, your cash flow will suffer and so will your ability to buy what you need when you need it.
As you trim down to a lean, mean inventory level, however, make sure your clients with pets on medication for chronic conditions know that you'll need a few days' leeway on refills. Even better, after the initial prescription is purchased, schedule reminders to pop up for you or a staff member one week prior to the refill date. Give the client a call and confirm that you should go ahead and reorder. Even better, set up a recurring order via your practice's online pharmacy—human pharmacies do this all the time!
Speaking of online practice pharmacies—make sure clients know you have one. Most of us have done little more than agree that having our own online pharmacy sounds like a good idea. According to the Benchmarks 2012: A Study of Well-Managed Practices (dvm360.com/benchmarks), 51 percent of the veterinary practices surveyed have an online pharmacy and 54 percent of the respondents agreed that they match internet pharmacy pricing on heartworm and flea/tick medication. However, only 5 percent of veterinarians actively recommend and use this tool to control their inventory and encourage veterinary client purchases.
Online practice pharmacy websites have become easier than ever to manage, both for the practice and the pet owner. Plus, these sites then free up your manager to complete other tasks now that there's far less inventory to count.
2. Spell it out for clients. Build trust by posting a note or a sign in the client waiting room that says:
We will gladly provide a written prescription for your pets' needs. This prescription can be filled at the pharmacy of your choice. For your convenience, we're happy to fill these prescriptions here at our practice at a competitive price.
Make sure to adjust your prescription prices accordingly. While clients understand the concept of paying more for convenience, there's a limit to what is deemed reasonable. In the past, practices charged anywhere from $15 to $30 for a 10-day supply of a generic antibiotic, sometimes even adding an additional $10 to $15 prescription fee. These prices just won't fly with today's consumers—we wouldn't suggest charging more than a $10 convenience fee. Put yourself in their shoes—if you could fill the prescription cheaper somewhere else, wouldn't you?
3. Bond with local pharmacies. Let human pharmacists in your area know that they can—and should—call your practice with questions about filling pet prescriptions. Some drugs you commonly use and prescribe, such as thyroid supplements or phenobarbital, are frequently dosed at much different levels than they are for humans. Isn't it far more beneficial to our patients to educate pharmacists ahead of time, rather than blaming their ineptitude after a pet has been given the wrong dosage?
Once you develop a trusted relationship with a specific pharmacy, let your veterinary clients know about this newfound partnership. Recommend they use that pharmacy if they opt to fill prescriptions outside the practice. At least you'll know they're going to a source you trust.
4. Bulk up on services. This is a smart move for two reasons: Services can't ever be outsourced (now or in the future), and they add value to your practice. Study your compliance metrics and you'll find there's incredible room for improvement in multiple areas. (Turn to page 20 for more about increasing compliance in the new What If? column.) Educate your team on communicating the value of these services to clients, set compliance goals, and celebrate successes. The revenue earned by improving the care pets receive, both in dollars and increased client retention, will more than make up for the loss of pharmacy profits.
End the guilt trip
Remember: Throwing in the towel is not the solution. Every time the phone rings, the door opens, or a prescription is refilled or dispensed, we have an opportunity to serve pet owners. Quibbling with clients and arguing that human pharmacists are unable to accurately fill a veterinary prescription makes us look like petulant children who can't get their way. And it's a battle we won't win. Focus on improving quality of care, educating pet owners, and keeping pets healthier longer, you will reap great rewards both personally and financially. No big-box store or online pharmacy can compete with that.
Jessica Goodman Lee, CVPM, is the lead practice management consultant at Brakke Consulting. Dr. Michael Paul is the principal of Magpie Veterinary Consulting.