Three Ways to Kill Your Pharmacy Business

This is a reissue of an article I originally wrote for the Exclusive Series on Multibriefs.com. It appeared on April 7, 2014.  It is a simple description of the reasons why many pharmacies fail to thrive.

ORIGINAL POST

The More things change the more they remain the same

When I started in pharmacy in 1975, doctors could check a box on the prescription that said “do not label,” and we would not be allowed to tell the patient what was in the bottle. There were no pharmacy technicians, no computers, no patient profiles and no clinical coursework was required in pharmacy school.

Now we have interactive voice-response systems, robotic dispensing devices, cellphones, iPads and fancy electronic point-of-sale cash registers. Computers not only print the labels and manage profiles, but also perform all of the billing for prescriptions.

The funny thing is that through all of these changes in scope of practice and technology, the simple principles of running a drugstore have not changed.

If you have a good location and a good pharmacist, the store will do well. If you put a bad pharmacist in a good location, sales will go down. If you put a good pharmacist in a bad location, sales will go up.

I started working in the retail drugstore business in 1975. I’ve worked for four different drug chains and several independent drugstores. I’ve been a regional pharmacy manager of 110 stores and owned and operated a pharmacy filling 1,000 scripts a day.

As I watch the current practices of modern drugstore operators, I am truly amazed that they continue to make the same stupid mistakes that kill sales, aggravate their employees and undermine the professionalism of the pharmacy degree. These are the same mistakes that nonpharmacist business people have been making for the last 30 years and you would think at some point they would learn their lesson.

So just in case anyone is paying attention, let me explain the three best ways that a drugstore operator can kill their business.

1. Understaff the pharmacy

Retail pharmacy is a service business. If you don’t serve the customers quickly and efficiently, they will find someplace else to spend their money. Given the fact that co-pays are the same at every drugstore, customers will gravitate toward where they get the best service.

2. Run your business on bad metrics

Business-school types are fond of making up esoteric metrics that have nothing to do with actually running a pharmacy and managing patient care. They will invent checklists, call sheets and rubrics of all kinds and use these silly rubrics to aggravate and annoy their employees.

If your employees are too busy making marketing calls and completing checklists to properly service their customers, the net impact of these silly metrics is that you will lose sales.

3. Cause your employees to disengage

The vast majority of pharmacists went to pharmacy school to help customers manage their medications. Understaffing the pharmacy and penalizing pharmacists for not making marketing phone calls causes them to not be enthusiastic about working for your company.

Pharmacists who do not enjoy the company they work for will not go the extra mile in service of that company and its customers. Customers sense when the employees are unhappy with their work and their company, and the bad vibe is transmitted outward.

Disengaged employees do not grow sales. They chase sales away. If they chase sales away the company reacts by cutting payroll hours. And the vicious downward cycle spirals out of control.

This has been true since the dawn of time, and it will be true after I am no longer on this planet. But somewhere out there some new business genius will invariably follow this three-step formula to destroying a company.

Please note: I reserve the right to delete comments that are offensive or off-topic.

  • Judy

    You are right on. I’ve worked for a few chains myself. The only problem is–the employers never learn. They either don’t give you a tech &/or too few pharmacists. In MN there are more pharmacists than jobs, age discrimination in the form of ‘you can’t handle a fast pace, why is their work left over?’ Then they just can’t seem to find anymore hours for you so either you leave or they just drop you from their pool. While there is a sucker employee born every day it is I that is unemployed.