Are most chains even making money?

[a student]

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I'm a p3 and I've had two grocery store sites. Both pharmacy managers constantly complain about how their store is losing money because of medicaid and my states free insurance. I can that understand grocery store pharmacies don't really have to make money but what about pharmacy chains like walgreens and riteaid? Are they losing money as well even after all the understaffing?

 

[npage148]

The pharmacy manager likely has zero idea of how much money the store is making. They don't know real aquisition costs or reimbursements. the best idea they get is their ebita numbers

But do you really think chains are letting locations run negative?

 

[BenJammin]

Seriously? Walgreens didn't make $70+ billion in revenue last year by operating stores at a loss.

 

[Deja]

that's what i thought too when I first started working as a pharmacist, my previous job, our store did 1800 scripts per week, but it always seems like we are "losing" money and i was like WTF?! lol I wonder how much money was really made

 

[Pharmgrlnxdor]

There is a reason why the pharmacists at chains don't have any idea how much money the location is actually making. If they knew how much money it was they would reconsider opening their own store. But if the company hides the data and twists the data so there is no real way to know what the bottom line profit is then people can be told anything. At my current location, a big box store, we get to see much more info, and let me tell you it is PLENTY of profit....plenty.

 

[ChalupaBatman86]

He's been watching too much Fox News Channel.

 

[CynicalIntern]

I actually spoke with David Stanley (Drugmonkey) about this out of curiosity, because I did the math in my store and was like "where the **** is this money going if we're not making it?"

It behooves any corporation, from tax purposes and employee knowledge purposes, to say that individual locations are not profitable. So your profit statement does not include only the individual ins and outs of your store. It will also include a prorated amount of the salary of every supervisor above you (so you're paying 0.001% of Larry Merlo's salary which is no insignificant) and vague "advertising costs"

His basic rundown is "if you're filling at least 100 prescriptions in a day and making at least 10 dollars per script, either you're doing something horribly wrong or you're making a profit. Maybe not a sustainable profit, but a profit nonetheless."

 

[MountainPharmD]

Chain pharmacists have no idea how much money the pharmacy makes. This is by design. That type of information is proprietary and not something you would want every single employee knowing.

Owning a pharmacy can be profitable. It seems to get harder and harder everyday.

 

[Ackj]

You lose money on certain rx for sure. Certain Medicaid rx you definitely will, for example when they require DAW Adderall, yet reimburse you at the cost of the generic, yeah, you lose over $100 on that. Some rx cost you $0.20 and you get reimbursed $0.25, so after the cost of the vial, cap, label, and manpower, you lose money. At the end of the day, however, you should still be making more than you lost.

If you're a slow grocery store, it's possible that labor costs > reimbursement, and you're there as a loss leader to keep store traffic up, but that's when you're filling like 50-100 rx per day. If you're filling 1800/week I guarantee you are making a considerable profit.

 

[SClENCE]

All the pharmacies in my neighborhood stopped accepting a certain Medicaid plan with the exception of Walmart/Giant Eagle this year.

On a good day we'd make 20 cents filling a prescription for this plan and that doesn't account for the cost of paper/vial/labor.

 

[Lucky One]

Looking at their stock prices and revenue as fortune 500 companies I'd say they are making bank overall considering a majority of their revenue comes from prescriptions. 🤣

 

[pharm B]

You lose money on certain rx for sure. Certain Medicaid rx you definitely will, for example when they require DAW Adderall, yet reimburse you at the cost of the generic, yeah, you lose over $100 on that.

I had something like this happen. I called our corporate office to ask WTF, and was told "we will not turn a patient away based on reimbursement rate." So I basically watched someone burn a few hundred dollars to pick up their medication from my pharmacy.

 

[southpharmindy]

They're making close to 30% profit margin and sometimes more at the chains. What that means is that if your store does 1,2o0 to 1,300 a week they're doing close to 3,000,000 a year in sales. You take 30% of that and you're making close to 900,000 before salaries an such. After salaries the owner is making close to 500,000 or 600,000.

The chains you work for don't want you to have that information. My favorite quote on here was when somebody tried to tell me CVS was making "pennies per script". You believe that nonsense you're exactly the type of employee those guys are looking for.

 

[KidMelody]

They're making close to 30% profit margin and sometimes more at the chains. What that means is that if your store does 1,2o0 to 1,300 a week they're doing close to 3,000,000 a year in sales. You take 30% of that and you're making close to 900,000 before salaries an such. After salaries the owner is making close to 500,000 or 600,000.

The chains you work for don't want you to have that information. My favorite quote on here was when somebody tried to tell me CVS was making "pennies per script". You believe that nonsense you're exactly the type of employee those guys are looking for.

Even more now with 340b contracts and not hiring help for the extra work

 

[Lnsean]

this is silly. the existence of any business in this world is to make money.

 

[Wheresmyaricept]

Every time someone pays 11.99 for a cheap generic at walgreens, that's probably 1000% profit considering the 1000 count bottle probably cost 2.50. Money is in the generic drugs, which is why the chains have been freaking out that the prices of generics have been going up the last few years.

That's why the chains are starting to invest heavily in wholesalers, so they have a large buying group and can buy generics for a huge discount. Last I checked, my state Medicaid reimbursement was AWP-17% +0.05 cents. If I'm getting the drug for considerably lower than AWP, I'm still turning a profit. Not every insurance uses this, some use MAC or some other mysterious numbers behind the curtain. Regardless, chain employees will never know the details of an insurance contact and will be kept in the dark. If a store wasn't making money, they would close it (Walgreens recently closed a couple stores because they weren't turning a high enough profit). There's no way that a store that does 1800/week wasn't making a profit.

 

[Ackj]

Every time someone pays 11.99 for a cheap generic at walgreens, that's probably 1000% profit considering the 1000 count bottle probably cost 2.50. Money is in the generic drugs, which is why the chains have been freaking out that the prices of generics have been going up the last few years.

That's why the chains are starting to invest heavily in wholesalers, so they have a large buying group and can buy generics for a huge discount. Last I checked, my state Medicaid reimbursement was AWP-17% +0.05 cents. If I'm getting the drug for considerably lower than AWP, I'm still turning a profit. Not every insurance uses this, some use MAC or some other mysterious numbers behind the curtain. Regardless, chain employees will never know the details of an insurance contact and will be kept in the dark. If a store wasn't making money, they would close it (Walgreens recently closed a couple stores because they weren't turning a high enough profit). There's no way that a store that does 1800/week wasn't making a profit.

Margin on the generic drugs is great, but you're relying on volume for that. For simplicity's sake in your example, say you're earning $10 for that generic (that's probably generous, there are MANY times where you're earning under $1). Would you rather sell 30 of those to earn $300, or one Enbrel for a $300 profit? That's why specialty drugs are so important right now. One big rx can beat a whole day's worth of lisinopril, hctz, simvastatin, and omeprazole.

 

[ChalupaBatman86]

Margin on the generic drugs is great, but you're relying on volume for that. For simplicity's sake in your example, say you're earning $10 for that generic (that's probably generous, there are MANY times where you're earning under $1). Would you rather sell 30 of those to earn $300, or one Enbrel for a $300 profit? That's why specialty drugs are so important right now. One big rx can beat a whole day's worth of lisinopril, hctz, simvastatin, and omeprazole.

Not at retail reimbursement rates. Specialty pharmacies get reimbursed at a higher rate.