When it comes to your pharmacy’s services, it’s not necessarily about casting a wide net
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Finding a niche in the market is essential for any successful business.
For Frank Odeh, president and co-owner of Preston’s Pharmacy in Arlington, Virginia, finding his niche has been a lifeline during a challenging time for many independent pharmacies.
Two of the three pharmacies he operates are considered niche pharmacies: one that primarily serves patients undergoing fertility treatments and another that serves patients who seek treatment at HIV clinics.
Although his third pharmacy is a more traditional retail pharmacy, it also has found its niche by offering drug compounding.
“At the end of the day, as a community pharmacy, you have to specialize in something that sets you apart from what the traditional big-box chains are doing,” Odeh explained. “We specialize in certain medications and diseases, and then market those services to specialty doctors like infectious disease doctors or reproductive endocrinologists on the fertility side.”
Physicians then refer patients to one of the Preston’s Pharmacy locations through prescriptions for highly specialized medications.
“These are the medicines that are not stocked in normal drug stores, where pharmacists don’t have the specialist training you need to handle them,” Odeh said.
Are niche services for every pharmacy? Not necessarily, Odeh says.
Some independent pharmacies may not feel comfortable investing in or spending the upfront costs and time associated with offering specialty drugs.
However, offering niche services can provide independent pharmacies with additional revenue streams and growth, he says.
To help other independent pharmacies navigate some of their options in today’s market, Odeh answered some frequently asked questions about including niche services, the challenges in offering them and the benefits they provide.
What type of training must pharmacies have to offer specialty drugs, such as HIV medications or fertility drugs?
We work closely with the drug manufacturers who make these medications, and they provide a lot of the training. This training goes beyond handling the drugs and filling the prescriptions. You must communicate effectively with insurance companies, working through pre-authorizations. There’s a whole slew of additional items required above and beyond what a typical community pharmacy would provide. Many of these medications need to be shipped and stored differently, often requiring cold storage.
Why don’t other pharmacies offer similar niche services?
It’s not easy. There are costs and risks involved. You carry costly drugs on your shelves. There are a lot of upfront costs for those medications. Often, people aren’t willing to take those risks and want to remain in their lane, filling traditional pharmacy roles.
Why do you think offering niche services is worth the risk?
It’s a differentiator. You’re not only fulfilling traditional diabetes, blood pressure and other medications. These are highly specialized medications, so you have professional satisfaction that you’re working hand-in-hand with the doctor. You’re one of the very few pharmacies in the country with the training and experience to do that.
There’s also more profitability with these products if you’re able to do it right. You have to hire more experienced people and salespeople to handle the marketing, but it can be profitable if you do it right.
How much of your business is dedicated to niche services?
We have one specialty pharmacy where 95% of the business is a fertility business. At the other location, a significant amount of what we do is HIV business. The third location is a traditional retail pharmacy, but we do a lot of human drug compounding there to offer an additional revenue stream.
How do you earn the trust of physicians so that they send patients to you?
Show your expertise. The doctors are happy when their patients are happy. When prescriptions are sent to a traditional pharmacy that doesn’t have the drug in stock or takes too long to reorder, they will often get kicked back to the doctor’s office. The doctors we are close with know that if they send specific orders to our pharmacy, the patients will be taken care of in a professional and expert matter: That elevates our reputation.
Are there any other niches that pharmacies could succeed in beyond specialized medications like HIV and fertility?
Some pharmacies specialize in vaccines. Right now, that’s getting a ton of publicity because of the COVID-19 vaccine, but there’s a slew of other vaccines out there that people need, from travel to pediatric vaccines.
Pharmacists, in general, have been a massive contributor during the pandemic. They have come to the forefront and have been given a more significant role in healthcare. One notable thing that has come out of COVID-19 is that pharmacies and pharmacists have elevated their importance in the role and trajectory of a patient’s healthcare journey.
Is there anything else that independent pharmacists who may be considering ways to increase their revenue should know?
To compete with big-box retailers, pharmacies need to do something that will differentiate them, whether getting into a specialty, compounding or other services that generate additional revenue streams. We’re not going to make it just filling prescriptions anymore.
Different revenue streams are how you can be a thriving community pharmacy in the 21st century.