Cash only model for independent pharmacies

[Pharmgrlnxdor]

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Hi there!

What do you all think about the cash model for independent pharmacies? Here are two pharmacies that are functioning using this model by selling generic medications at a cash price and not taking insurance. One is in Austin, Texas and the other one (actually there are four in this small independent chain) in Oklahoma. These pharmacies have been open since the early 2000s.

Medsavers: MedSavers Pharmacy - MedSavers Pharmacy | Your Local Austin Pharmacy

Genscripts: Pharmacy In Tulsa | Cheap Pharmacies - Save up to 80% on Meds

Here is an article regarding the medsavers location: Med Prices You Can Swallow and another article regarding them. Cash-Only Pharmacy Offers Savings on Medicines

 

[VictorOfHungerGames]

This seems like a good idea since indies get audited by PBMs all the time and that could cause all sorts of issues. Losing contracts due to some stupid reason that PBMs will pull from their behind...

I know several compounding pharmacies that only take cash and they seem to be doing really well. Only thing is that you would have to market your pharmacy well to patients and to doctors offices.

 

[mentos]

So only rich people go there? Must be fun filling C2s.

 

[lord999]

Sure, if you want to be red flagged, by all means.

 

[beautifulrobot]

Back in my pharmacy student days i rotated through an indie compounding pharmacy that was cash only, and they seemed to have good, steady business. But they also got frequent visits from the DEA.

Here's a timely article about how some independent pharmacies are trying to push back on reduced reimbursement rates: Amazon is threatening the future of independent pharmacies. Here's how they're fighting back.

 

[VictorOfHungerGames]

Back in my pharmacy student days i rotated through an indie compounding pharmacy that was cash only, and they seemed to have good, steady business. But they also got frequent visits from the DEA.

Here's a timely article about how some independent pharmacies are trying to push back on reduced reimbursement rates: Amazon is threatening the future of independent pharmacies. Here's how they're fighting back.

Unless they were compounding controls, I don't see why there would've been frequent visits from DEA.

 

[beautifulrobot]

Unless they were compounding controls, I don't see why there would've been frequent visits from DEA.

They were definitely compounding controls. I don't think you can have a sustainable pharmacy business that doesn't sell controlled substances.

 

[ExpressMaiL]

You'll never know until you try it. You will need to absorb delivery costs to compete with competitors. That will hurt your bottom line.

It's possible to run an independent pharmacy with zero scheduled rx but you will run into other issues.

 

[Rakeless-rph]

Pharmacists are most undervalued health care professionals in the US health care system; no doubt about it. After going through many avenues i.e. board certifications, residency I'm planning to start my own practice. I am buying an existing Pharmacy to start my own practice. The pharmacy I'm buying has annual sales over 3M, I'm buying with the building , has annual gross profit of 600k, has compounding, the building itself costs 800k, and i have reached a deal to acquire it for 2M. Wondering the members have any insight or suggestion how can i sustain the business and grow it.

 

[MatCauthon]

Pharmacists are most undervalued health care professionals in the US health care system; no doubt about it. After going through many avenues i.e. board certifications, residency I'm planning to start my own practice. I am buying an existing Pharmacy to start my own practice. The pharmacy I'm buying has annual sales over 3M, I'm buying with the building , has annual gross profit of 600k, has compounding, the building itself costs 800k, and i have reached a deal to acquire it for 2M. Wondering the members have any insight or suggestion how can i sustain the business and grow it.

will you get a loan for 2million? I'm always curious, it seems we would need a lot of collateral to start a business. might be hard to do without a partner?

 

[VictorOfHungerGames]

Pharmacists are most undervalued health care professionals in the US health care system; no doubt about it. After going through many avenues i.e. board certifications, residency I'm planning to start my own practice. I am buying an existing Pharmacy to start my own practice. The pharmacy I'm buying has annual sales over 3M, I'm buying with the building , has annual gross profit of 600k, has compounding, the building itself costs 800k, and i have reached a deal to acquire it for 2M. Wondering the members have any insight or suggestion how can i sustain the business and grow it.

This sounds like a decent pharmacy if it did not have any issues in the past with PBMs. Make sure pharmacy is operating with audit-proof protocols otherwise you'll lose PBMs real fast.

 

[CetiAlphaFive]

Hi there!

What do you all think about the cash model for independent pharmacies? Here are two pharmacies that are functioning using this model by selling generic medications at a cash price and not taking insurance. One is in Austin, Texas and the other one (actually there are four in this small independent chain) in Oklahoma. These pharmacies have been open since the early 2000s.

Medsavers: MedSavers Pharmacy - MedSavers Pharmacy | Your Local Austin Pharmacy

Genscripts: Pharmacy In Tulsa | Cheap Pharmacies - Save up to 80% on Meds

Here is an article regarding the medsavers location: Med Prices You Can Swallow and another article regarding them. Cash-Only Pharmacy Offers Savings on Medicines

Chris does an amazing job.

However, there's a reason there's only two.
His part of town is unique.
*He* and his situation are unique.

 

[Sparda29]

It wouldn't work here in NYC. Most people who live in NYC have either Medicaid or Managed Medicaid via HealthFirst, Fidelis, MetroPlus.

 

[Rakeless-rph]

will you get a loan for 2million? I'm always curious, it seems we would need a lot of collateral to start a business. might be hard to do without a partner?

So far it seems i will, since real estate is involved the bank is more interested in longer term (15-17 years). I guess more than the loan, interest rate is more important. If i am not wrong , the current market rate is almost 7%.......I know it is lot. I am trying to get conventional rather than SBA loan. Does anyone knows where else i can get better rate ?

 

[Rakeless-rph]

This sounds like a decent pharmacy if it did not have any issues in the past with PBMs. Make sure pharmacy is operating with audit-proof protocols otherwise you'll lose PBMs real fast.

I will check with due diligence, can you elaborate a little more, how do i do that ?

 

[Modest_anteater]

So only rich people go there? Must be fun filling C2s.

When i hear the words cash only I think

-disproportionate filling of C2s
-Income tax evasion
-Sales tax collection fraud

 

[CetiAlphaFive]

When i hear the words cash only I think
-disproportionate filling of C2s
-Income tax evasion
-Sales tax collection fraud

People who have actually worked in a pharmacy before understand that "cash only" means "no insurance."

It has nothing to do with how the person pays st the register.

 

[Riskybusiness]

They work depending on the region. Southern states, Texas and other parts of the country where health insurance coverage is low and retail rents are cheap. Retail space with good foot traffic and access in new england is $32sq/year . You would never survive unless you hit higher margin rx's compounding specialty ect.

 

[VictorOfHungerGames]

I will check with due diligence, can you elaborate a little more, how do i do that ?

Make sure you read PBM contracts closely. i.e. Optum is SUPER sensitive about deviating from their contract policies. BXBS have weird policies where they only want you to dispense a certain amount of meds. PBMs will audit you on dumbest things. Ask the current owners about those contacts and maybe even have a healthcare lawyer read it before you sign. One PBM lost could be detrimental for your business especially if you're banking close to $1mil per year.

 

[BenJammin]

When i hear the words cash only I think

-disproportionate filling of C2s
-Income tax evasion
-Sales tax collection fraud

Uhhh what?

 

[CetiAlphaFive]

Uhhh what?

I think they're a foreign national or person with a history of ____-abuse that stopped by to troll and just never left