As the rise of discount pharmacies and ongoing PBS reforms continue
to put downward pressure on community pharmacy profits, pharmacy owners
must embrace innovation and diversification in order to remain
competitive.
Thankfully, given the volume-based discount model,
there is a growing list of services which your local discount pharmacy
is not likely to compete for. These services bring with them
supplementary income streams and new customers, both of which provide
owners with genuine scope to grow their business.
Here are five niche income streams that could help you boost revenue and separate your pharmacy from its competitors.
Baby Support Services
Recognising
that new mums are willing to invest their time and money into getting
the best possible care for their babies, many pharmacies around
Australia are offering ‘baby clinics’ and other baby support services to
their customers. These offerings vary greatly, from baby health checks,
to feeding consultations, to sleeping advice seminars.
Many
operators are hiring nurses and midwifes to facilitate their programs
and some are even building change rooms, baby weighing stations and
breast-feeding facilities in their stores. Most of these services are
free of charge, however the accompanying product marketing opportunities
can drive significant growth in retail sales.
At AP Group, we recently worked with a Victorian-based pharmacist who created a highly successful brand of colic formula, an idea that stemmed from her role in her pharmacy’s baby support clinic .
HMRs
An initiative the 6CPA, ‘Home Medicines Reviews’ (HMRs) are designed to improve patients’ understanding and usage of medication and minimise the risk of harmful medication misuse in the community. HMR’s involve an accreted pharmacist (on referral from a GP) conducting a thorough review of their patient’s medicines in their home.In terms of remuneration, the pay rate per HMR service is currently $219.69. Each approved service provider may conduct and claim up to a total of 20 HMRs per month – which equates to a maximum of $52,726 in sales – a handy revenue injection for the pharmacy.
Pharmacists can seek approval to provide HMRs via the 6CPA Registration and Claiming Portal registration process.
Immunisations
Flu vaccinations have been administered by appropriately trained pharmacists in most Australian states since 2016. However, as the role of pharmacist within the broader health system continues to expand, the list of immunisations that pharmacists can obtain and administer has grown to include measles, mumps, rubella, whooping cough, diphtheria, tetanus and polio (depending on state legislation). While the fees for immunisations are not always substantial, it is relatively easy service to incorporate into your pharmacy’s services mix and a good way of developing strong and lasting community relationships.
Compounding
Compounding is the process of specialised pharmacists preparing customised drugs to meet specific patient needs. In these highly competitive times, compounding can be a valuable ‘point of difference’ for pharmacists seeking an edge. The demand for customised medication is growing rapidly and compounding is one thing that the ‘Discount Pharmacies’ of the world are unlikely to adopt. Also, the margins are high, so if done well, it can be seriously lucrative. The downside is that it is expensive to start from scratch.
Compounding can only be carried out by pharmacists who have completed the necessary training and compounding pharmacies must adhere to strict design and maintained standards. Nevertheless, if you have the space in your pharmacy and a willingness to learn something new, introducing a compounding lab could transform your business.
Weight Management
Terry White’s widespread marketing of ‘Tony Ferguson’ Shakes brought pharmacy and weight loss into public domain in the mid-2000s. However, only a handful of Australian pharmacies are truly capitalising on the vast demand for weight management products and services in Australia. These pharmacies have established themselves as weight management destinations, committed to helping their patients reach their weight loss (and weight gain) goals.
Their programs include, among other things, nutritionist consultations, recipe and maintenance resources, 24/7 online and phone support, smart phone apps and personalised meal plans. As with baby care services, the opportunity to boost sales with weight management services come predominantly from the promotion of retail products and in forging strong customer relationships. Some pharmacies are partnering with external companies to carry out their programs. A Western Australian pharmacy chain, for example, is offering the ‘Impromy’ weight loss program, which was co-developed by the CSIRO, while Terry White Chemmart has continued to develop its Tony Ferguson program, having acquired the Tony Ferguson brand with Symbion in 2013.
Conclusion
Diversifying your business’s income profile is generally good practice in any retail setting. Not only can it increase profits, but it should also improve revenue security and staff satisfaction. As a pharmacy broker, many of the more profitable independent pharmacies that we come across these days present more like ‘health hubs’ – offering a mix of support, services and advice – rather than just drug dispensaries. Of course, success in creating a multifaceted business doesn’t happen overnight. To implement properly, this strategy can require a significant investment of resources however, it can also yield exceptional results. Pharmacy owners who innovate and adapt tend to be the ones that not only survive, but thrive, in today’s challenging pharmacy landscape.
– Jack Brown, Partner and NSW Sales Manager at AP Group
