Fix the Leaks Before You Fill the Bucket How to Reduce Negative Margins and Keep More Cash in Your Pharmacy
WHAT IS YOUR NEGATIVE MARGIN PERCENTAGE? Before you can fix the problem, you need to measure it. Your negative margin percentage is the proportion of prescriptions you fill at or below cost. We have no universal industry benchmark, but here’s the reality — your goal should always be to bring this number down.
Every owner knows that filling prescriptions is only part of the game. But what happens when a good chunk of those prescriptions actively costs you money? That’s where negative margin prescriptions come into play. These are drugs you’re dispensing at a loss, eating away at your bottom line like a slow leak in a sinking boat. I recently spoke with a pharmacy owner who had unknowingly lost $100,000 in a single month on negative margin prescriptions. His strategy? Fill more prescriptions, focus on more profitable drugs, and try to outpace the losses. But here’s the cold, hard truth: You can’t fill a bathtub by pouring in more water when the drain is wide open. You have to plug the leaks first.
•
If you’re at 10%, aim for 5%.
•
If you’re at 5%, shoot for 3%.
1. Losing Money on Brand-Name Drugs You can’t win with brand-name drugs. PBMs are going to dictate the reimbursement, and in most cases, you have zero control over how little they’re paying you. If you consistently lose money on a brand-name medication, the best strategy is to stop filling it.
•
If you’re below 3%, keep pushing lower.
The lower your negative margin percentage, the healthier your pharmacy’s financial future will be. WHY ARE YOU LOSING MONEY ON PRESCRIPTIONS? You have two main culprits when it comes to negative margins:
Continued on Page 8 ...
TAKE A BREAK
ARBOR ARIES
DIAMOND FOOLS GARDEN KITE RAINBOW SHOWERS
BASEBALL CHERRIES CHOCOLATE DAISY
DiversifyRx.com 3
Made with FlippingBook Ebook Creator