Break Free from PBM Dependence
The Road to 20% Non-PBM Revenue for Your Pharmacy
As you start nailing down your workers’ compensation marketing and focusing on non-PBM revenue, you need to first set a goal to aim for. Diversifying revenue streams beyond PBM reimbursements will enhance financial stability and profitability, and the higher your non-PBM KPI percentage is, the better!
This foundational step relies on accurate financial data, which can be gleaned from financial statements or point- of-sale systems for over-the-counter sales and services. Pharmacy Management Systems (PMS) can also provide reports detailing the portion of revenue derived from third-party (PBM) sources.
A significant portion of pharmacy revenue traditionally flows through PBMs — often up to 90% or more. We all know that this heavy reliance can lead to fluctuations in income,
After establishing your baseline, the next step is goal setting. Aim for a significant but realistic improvement within a year. If your non-PBM revenue is in the single digits, doubling or tripling it within a year is a challenging but possible goal. For pharmacies already achieving double-digit non-PBM revenue percentages, doubling may be more difficult, but the ultimate goal remains the same: To reach and surpass the 20% mark .
increased vulnerability to audits, and less-than- favorable reimbursement rates. The goal, then, is to increase your non-PBM revenue, but by how much? How do you even calculate your current non-PBM KPI? Here’s how:
Achieving a 20% non-PBM revenue KPI is transformative, signifying a shift toward greater financial autonomy and stability. This “magic
How to Set Your Non-PBM KPI Goal
When considering KPIs for non-PBM revenue, the question arises: What percentage should
number” has been a turning point for many pharmacy owners, some of whom have successfully pushed their non-PBM revenue to 30%–40%!
pharmacies aim for? A healthy target is to have 20% of revenue coming from non-PBM sources. Achieving this balance reduces dependency on PBM reimbursements, mitigating risks associated with audits and fluctuations in reimbursement rates. At this threshold, you’ll experience improved cash flow, increased profitability, and a more stable business model, lessening concerns over Direct and Indirect Remuneration (DIR) fees.
Leverage Workers’ Compensation Prescriptions
A strategic way to work toward this goal is by setting your sights on workers’ compensation patients. This niche offers a viable path to increasing non-PBM revenue, as these claims are typically processed outside traditional PBM channels. Building relationships with local businesses, health care providers, and legal professionals in the workers’ compensation field can help attract these patients to your pharmacy. While there are numerous forms of non-PBM revenue, workers’ compensation is undoubtedly worth the effort. If you want to dive deeper into the “how” of increasing your non-PBM revenue KPI, our expert coaches are here to help. Head to your member dashboard and schedule a 1:1 call with a coach to get started on the right track. We want you to reach that 20% and beyond!
The Journey to 20%
Transitioning to a model where 80% of revenue comes from PBM sources and 20% from non- PBM revenue is ambitious but definitely still attainable. First, you must calculate your current revenue breakdown. Divide your total PBM revenue by your total revenues from the same period. Multiply that by 100, and you now have your percentage of revenue from a PBM.
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