Lisa Faast, PharmD, DiversifyRx CEO

Transparency is a buzzword these days. We hear about it on the nightly news in reports about our government, schools, restaurants, and even social media. Transparency in the pharmacy industry is undoubtedly an active discussion topic, and pharmacy owners have been fighting for it for years with little success. Let’s discuss some key areas where a lack of transparency hurts pharmacy owners and, ultimately, patients. 

Because of past situations involving the over-prescribing and over-dispensing of controlled medication, both the Drug Enforcement Agency (DEA) and wholesalers closely monitor pharmacies’ ordering habits. On the surface, this is a good thing: No one is a proponent of pill mills. However, the lack of transparency in this process hurts pharmacy owners and patients.

Pharmacists will regularly turn away legitimate prescriptions from legitimate patients who present with a new controlled prescription. Why? Likely, these pharmacists are worried about going over ambiguous thresholds and ratio limits. The pharmacist is concerned that if they increase their purchases of these controlled substances, they will trigger a controlled medication audit and perhaps prevent the pharmacy from ordering what they need to fill prescriptions. This confusion comes from a lack of transparency from wholesalers and enforcement agencies. 

Many pharmacy owners have heard horror stories of pharmacies forced to close or their ability to order controlled medications taken away. For West Virginia pharmacist Martin Njoku, these horror stories became real life when the DEA raided Oak Hill Hometown Pharmacy and revoked Njoku’s right to dispense controlled substances. The raid, according to previous reporting,

came a few years after Njoku began dispensing buprenorphine to customers, both local to Fayette County, West Virginia, and those displaced by flooding in nearby counties.

Although Martin was cleared of all wrongdoing, the damage was done. He was forced to close his pharmacy and his community lost critical access to the care it needed. 

There is a shroud of secrecy surrounding everyone from the wholesalers to state and federal agencies about what triggers these drastic actions. No one will talk about it and no one will help pharmacy owners and pharmacists on the front line maneuver legally within the system to best help patients. Pharmacists want to help combat the opioid epidemic; we need transparency and collaboration with the key players to do our part while still providing care for our patients. Instead, we feel like we have no choice but to turn patients away.

Another area that lacks transparency is drug pricing. From the patient’s point of view, there has been some significant, positive headway where drug pricing transparency is concerned. However, many pharmacies must still deal with smoke-and-mirrors pricing in the drug acquisition process.

In the traditional wholesaler model, the pharmacy places orders for medication and pays an “invoice cost,” which is an inflated price for its inventory. The pharmacy can earn rebates over the next several months to lower its acquisition cost, but because rebates come in long after the medication is dispensed, pharmacies don’t know the actual cost of a product at the point of sale. They are left to make educated guesses.

Some pharmacies will not bet on getting the total rebate—as it is not guaranteed—so they keep the invoice cost in their pharmacy management system. In contrast, others will accept the theoretical rebate as a given. The ambiguity of each product’s price leads to decisions at the point of care. If the pharmacy assumes it will lose a significant amount of money, it may choose not to dispense the prescription. Conversely, a pharmacist may think they are making a profit on medication—but in reality, their cost is higher than anticipated and they are now losing money. 

These “leaked” dollars add up to significant unrealized revenue for pharmacy owners. For a typical independent retail pharmacy, between 15% and 20% of the prescriptions it dispenses are a negative reimbursement at the point of sale. This loss not only puts a strain on a pharmacy’s ability to stay in business, but it also impacts both clinical decisions and the service offerings provided to their community. The purchasing process needs to be infused with transparency so pharmacy owners can focus on patient care instead of playing purchasing games. 

A lack of transparency around pharmacy payments has the same deleterious effects as pharmacies not knowing drug costs. Frequently, pharmacists are either left guessing how much money they are losing or assuming they are making money only to never see those revenues realized. 

Confusion on the reimbursement side comes in many forms, but the 2 most egregious culprits are effective rate contracts and direct and indirect remuneration (DIR) fees. 

Under an effective rate contract, the pharmacy has a maximum profit percentage cap across an insurance's entire book of business. This cap causes a reimbursement amount at adjudication to become, essentially, a made-up number, with the payment processor guessing at what the rate should be. A “true-up” will happen later, typically resulting in the pharmacy paying back large sums of money to the pharmacy benefit managers. Pharmacy owners are left in limbo for months, wondering what their actual revenues will be. Any business owner can easily empathize with the trouble this unknowing causes.

DIR fees for Medicare claims are the most significant source of concern for pharmacy owners. The lack of transparency comes from several questions: 

How can the pharmacy improve its performance?

While these seem like easy questions to answer, the lack of transparency makes answering nearly impossible. Each Medicare plan has published DIR fee ranges, but these ranges are wide and the difference to a pharmacy’s bottom line is critical if it is, for example, 11% vs 15%. There also never seems to be a straightforward answer for how each pharmacy earns its score and ensures the data are clean. A patient who passes away, for example, counts as missed fills, lowering the pharmacy’s adherence score for many months until the patient drops from its calculation. No one intended for deceased patients to cost pharmacies thousands of dollars. 

Many pharmacy industry organizations and individuals are fighting long, hard battles to improve transparency throughout the industry. It is critically important to talk to your elected representatives at all levels of government and to support organizations like 

Pharmacists United for Truth and Transparency

 in their quest for change. Most importantly, pharmacy owners must understand the impact that a lack of transparency has on their business. Knowing where there are information blind spots may help owners see the bigger picture and make better choices for patients and the pharmacy alike.

Pattani A. DEA takes aggressive stance toward pharmacies trying to dispense addiction medication. NPR. November 8, 2021. Accessed January 3, 2022. 

https://www.npr.org/sections/health-shots/2021/11/08/1053579556/dea-suboxone-subutex-pharmacies-addiction

Articles

Without transparency, pharmacy owners must clear numerous hurdles to run an effective business. 

Prescribing Transparency as the Solution to Pharmacy Owner Woes 

Cannabidiol (CBD) sales are driving profits for many pharmacies, whereas others seem to be watching from the sidelines. Here are some tips to help increase your pharmacy’s CBD sales.

Many pharmacy owners treat CBD like the field of dreams: If they carry it, sales will come. You may get lucky with a few of these sales, but to create a profitable cash niche with CBD you need to focus on nurturing it. I speak every week with pharmacy owners who do not carry CBD because they lack confidence or simply have not seen sales. I have been able to help many pharmacies turn around their CBD sales with simple tips pharmacists can easily implement.

A limiting mindset shows up in several ways when I speak with pharmacy owners, including the following:
•	I am not a CBD expert.
•	Other pharmacies are already selling CBD.
•	My community does not want CBD.
•	I do not know which brand(s) to carry.

Yes, I think we can all agree you are not Dr Alex Capano, America’s first doctoral degree recipient in CBD studies and a leading industry researcher. However, you do not have to be Dr Capano to help your patients. Individuals get caught up on the word “expert.” Either everyone claims to be experts when they clearly are not, or even highly educated individuals are wary of the word for fear of being called imposters. Here is my definition: If you know more about a topic than the individual to whom you are speaking, you are the expert in that conversation.

You do not have to be an industry expert to sell CBD, but you should be educated. Many CBD companies offer education as part of their service. If you are interested in carrying CBD, I would recommend using a company with a robust educational platform to help you get started. You need to understand CBD as a clinician. Going through a course or continuing education of your choice will bolster your knowledge and confidence. Do not forget about your employees. They also should receive an education in CBD.

This phrase has now become the most common excuse I hear. Pharmacy owners will say, “I don’t carry X brand because the pharmacy down the street carries it already.” Or “I don’t carry CBD because another business next to me carries it.” In summary, many feel they missed out on the CBD opportunity because they are late to the game.

My response is, “Are you trying to sell CBD to the entire community or to your patients?” Far too many pharmacy owners worry about what other pharmacies are doing instead of focusing on how to serve their patients best. My advice is to pick the brands and products that you think are best, provide stellar outcomes, and sell them to your patients. Most pharmacies are sitting on about $100,000 a year in profit with only their patients as CBD customers. Your patients trust you. Your opinion and action in helping them choose a good product could be the nudge they need.

Much of the stigma around CBD has been dispelled. If you find that your community still believes CBD is the same as marijuana, that is an excellent opportunity for your pharmacy. You can rise to the occasion and be the leader in teaching the truth about CBD. Become the local expert by explaining the differences and how quality CBD products will protect the community.

The negative impact of opioids has finally gone mainstream. Medical professionals and patients are looking for alternatives to opioids, controlled drugs, sleep medication, and the chronic use of anxiety medications. Because CBD marketing has become popular, many individuals already associate CBD with helping these types of conditions. Every community, no matter how conservative, is ripe for CBD sales.

I typically recommend that each pharmacy carry 3 to 4 brands of CBD. Many CBD companies have a specialty or a niche product that is special to them. Another strategy is to stock products at different price points. Here is my short list of requirements for choosing a brand to carry in your pharmacy:
•	The company offers education.
•	It accepts returns of unsold products.
•	There is a uniqueness to the products, such as price, combination dosage form, or selling model.
•	It provides stock marketing materials.
Once you pick a few companies that meet your criteria, have your employees receive education and practice discussing the companies and products. Then it is time to let your patients know and start selling to them.

Your patients trust you. They will listen to your recommendations. When you can use their prescription history to make a specific recommendation for a CBD product, the rate of conversion and getting the sale skyrockets. Here are 2 examples involving my 2 favorite products.

Combination of CBD and Melatonin
•	Run a pharmacy management software report for all sleep prescriptions.
•	Call the patients and ask whether they are 100% satisfied with their prescription.
•	Alternatively, you can consult in the pharmacy.
•	Create a bag stuffer for the product and attach it to every bag.
•	Work with your staff to create a comfortable talk track.
•	This product may be particularly good for patients on Medicare, where most sleep medications are not covered or are considered high risk.

Vaginal CBD to Help With Chronic Pain or Infections
•	Run a pharmacy management software report for recent yeast infection or antibiotic scripts.
•	Call the patients and ask whether their treatment was successful and whether they are interested in any prevention products.
•	Alternatively, you can consult in the pharmacy.
•	Create a bag stuffer or flyer and hand it out to every patient to create awareness.
•	Work with your staff to create leading questions to direct patients to talk with the pharmacist (because this can be a sensitive topic).

You can take these steps for patients with pain, anxiety, or any other therapeutic indication. For example, many CBD companies have incredible topical pain formulations. You could target patients taking nonsteroidal anti-inflammatory drugs or opioids. Having a system for identifying patients and then having a conversation will lead you to success.

There is no better awareness method than having a catchy bag stuffer on every prescription bag that leaves your store. Programs like Canva can easily create bag stuffers. You can print them in-house as a low-cost, effective marketing tool. Here is a quick checklist for bag stuffers.
•	Print on bright, neon-colored paper using black ink.
•	Every patient at every visit gets a bag stuffer (do not prescreen).
•	Use the same bag stuffer for an entire month.
•	Employees must also talk about it, not just secretly slide it in the bag.

These are my favorite inside the 4-walls marketing tactics. Cheap and effective—what more could you ask for?

If you want to foster a strong CBD niche, eventually you will have to go outside your current patient database. To increase your reach, it is important to use different tactics.

Marketing CBD on social media quickly became a no-go after Facebook shut off advertising accounts. However, time has passed and much more is known about what you can and cannot do. I am no longer concerned about posting about CBD on social channels if some simple rules are followed.
•	You have no paid ads for CBD, no boosting for CBD or where CBD is mentioned or goes to a page where CBD is mentioned.
•	Be creative. You can discuss the ailments and how your pharmacy has a solution without mentioning CBD. You can also use creative graphics that imply CBD.
•	Live videos are perfect for talking about CBD.

Your local news station, radio, or newspaper often can be great sources to help educate your community and position yourself as the local expert. Start contacting them and ask whether they would be interested in running educational CBD information for their followers. You could include a sample of what you have written or a link to a post you have done. Emphasize educational material, not selling products.

CBD can be a great product that helps your patients and boosts your profits. It is a win-win situation. If you have questions or want some additional support in getting started or in growing your CBD sales in your pharmacy, I am happy to help. You can contact me at info@diversifyrx.com.


Pharmacists interested in driving profit through CBD can start by changing their mindset. 
