A Strategic 3-Step Framework for Modern Pharmacy Profitability

Independent pharmacies are currently at a crossroads, facing declining dispensing margins and increasing workload complexity. Jonathan Grice, PharmD, MSA, vice president of pharmacy insights at Outcomes, argues that for a pharmacy to thrive in this environment, it must move beyond traditional dispensing and embrace a deliberate 3-step progression, understanding the business, optimizing execution, and achieving clinical success.

During a recent presentation, Grice outlined how pharmacists—who are the most accessible health care providers with 90% of Americans living within 5 miles of a pharmacy—can leverage their position to drive sustainable growth.

Step 1: Driving Profitability Through Business Insights

The foundation of a successful pharmacy is business intelligence (BI). Grice emphasizes that pharmacies must move beyond standard reports to truly understand their prescription base.

• Pharmacies should use BI tools to identify the highest winners and biggest losers by margin. This involves analyzing reimbursements at the payer and therapeutic category levels to identify underpaid claims and the reasons behind them.
• As inventory is a pharmacy’s largest asset, managing it effectively is crucial for maintaining cash flow. A robust reporting platform, such as Outcomes Insights, enables owners to monitor risks, including controlled substance ratios and front-end price points.
• Grice warns against trying to grow an unprofitable operation. "Don’t put fuel on that fire," he said. Only once a business is stable and profitable should it look toward expansion.

Step 2: Operational Execution and Automation

Once a pharmacy is profitable, the next step is to increase efficiency through innovation and automation. The goal of efficiency is not merely to fill more scripts but to free up the bandwidth required for high-value clinical services.

• Grice highlights the importance of pharmacy layout and the use of integrated tools, such as Telepharm, for remote verification and artificial intelligence–driven pill counters that use camera lenses to automatically detect capsule counts.
• Grice describes upcoming automated data entry features as a game-changer for pharmacy throughput. By allowing pharmacy management software to process electronic scripts directly for adjudication, pharmacies can significantly reduce technicians’ manual typing workload.

Step 3: Achieving MTM and Clinical Success

The final stage of the framework is the delivery of clinical services, which Grice views as the reimbursement model for the expertise that pharmacists have traditionally provided free of charge.

• Although many pharmacies use the basic version of Outcomes for mandatory medication therapy management (MTM), Grice encourages a shift to the Premium platform. This module offers expanded opportunities in vaccines, clinical interventions, and patient engagement.
• When pitching clinical services to management, Grice points to a positive return on investment as the primary driver. Beyond revenue, these services establish the pharmacy as a health care destination rather than just a retail location.
• The industry is moving toward total care management, in which pharmacists coordinate all aspects of a patient's health, eventually leading to broader recognition of pharmacists as providers.

Ultimately, this framework is designed to place the pharmacist back at the center of the health care system. By using data to ensure profitability and automation to ensure efficiency, pharmacists can finally dedicate their time to what they were trained to do: taking care of patients and improving health outcomes.

"Our business and the success of it matters to way more people than just us," Grice said, urging pharmacists to see payers, physicians, and patients as partners in this evolution.