Don’t Risk Losing Your Pharmacy Income

1-800-PetMeds now asks you to provide the next exam due date.


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When faxing prescription authorization requests to veterinarians, 1-800-PetMeds now asks you to provide the next exam due date. Be cautious; this may be a marketing strategy to get your clients to refill prescriptions before their preventive care exams.

If clients already have preventives and other medications, they won’t need to buy drugs from your hospital.

Veterinarians own majority market share of the $4 billion pet medication market.1 But Internet and retail pharmacies have tasted success with flea/tick sales, and now they’re hungry for pet prescriptions, which are projected to grow to $9.3 billion in 2015.2 The American Animal Hospital Association (AAHA) reports that pharmacy, food and over-the-counter product income makes up 26 percent of gross income in small animal practices.3

If pharmacy income shifts to retail and Internet pharmacies, most hospitals couldn’t raise professional fees enough to counter the income decline.

Follow these proactive strategies to protect your in-clinic pharmacy.

Refill medications during exams. Your technician would say, "For your preventive care visit, we will do a nose-to-tail exam, vaccines, intestinal parasite screen, heartworm/tick screen, and refill 12 months of parasite preventives. Is there anything else you want to discuss with the doctor today?”

Telling clients, "We will refill your preventives” is stronger than, "Do you need any heartworm prevention?” This compliance technique will have more clients leaving with medication from your in-house pharmacy.

If pet owners ask about cost, prepare treatment plans or access prices on computers in exam rooms.

Explain manufacturer rebates and the dollar value of free doses. Then say, "Before deciding, let’s have the doctor perform an exam, and then help you prioritize which services and products your pet needs.”

Dollar Values

Promote the dollar value of free doses. Don’t sell promotions short with "When you buy six doses, you’ll get two free.” "Free” has zero value. Instead, tell clients, "When you buy a six-pack of parasite preventives from our hospital, you’ll get two free doses—a value of $40.”

Because $40 is significant, you’ll increase compliance while saving clients money. Your prices are likely better than competitors’ when you add in the free doses.

Offer competitive prices. Intermountain Pet Hospital & Lodge in Meridian, Idaho, strives for a 33 percent margin on competitive drugs.

"Last summer, Costco, Walmart and Kroger started hammering us on flea/tick and heartworm preventives and non-steroidal anti-inflammatory drugs,” says Bob Beede, DVM. "We couldn’t put up with it.”

With its lower prices on shopped drugs, the hospital keeps more pharmacy income. Veterinarians get paid on production, with the highest compensation for professional services and 6 percent on drugs only when doctors perform exams or adjust dosages.

Send refill reminders. Internet pharmacies know email reminders work. Refills account for 81 percent or $185 million of PetMed’s 2013 sales of $228 million, according to its annual report.4 When David Wright DVM, added refill reminders for preventives at his four Collierville, Tenn., hospitals, compliance increased 17 percent.

When setting up preventive reminders in your practice-management software, create distinct codes for singles and six- and 12-packs.

Intermountain Pet Hospital & Lodge sends postal and email reminders for preventives and chronic drugs, which also improves compliance for drug monitoring and heartworm testing.

Choose veterinary drugs first. FDA-approved animal drugs have been through safety and efficacy trials.

Paul Jenkins, DVM, co-owner of Vilonia Animal Clinic in Vilonia, Ark., got rid of generic cephalexin and now reaches for veterinary drugs such as Simplicef and Convenia.

"We tell clients if they have a question or concern about medications, we can help because we filled it,” he says. "Human pharmacists are limited in their knowledge of drugs for animals.”

In 2012, Vilonia Animal Clinic began offering ProHeart 6 injections. Compliance went from 22 percent of active dogs on year-round heartworm prevention to 55 percent. "When we notice a gap in heartworm protection, we immediately talk about ProHeart,” says Dr. Jenkins. "We tell clients they don’t have to remember to give anything.”

Call clients when you get prescription authorization requests. Don’t sign and fax back—you risk losing future refills. Remember, PetMeds gets 81 percent of its sales from refills. Veterinary medicine is a relationship business, so call clients to explain the value, safety and guarantees of buying from your in-clinic pharmacy.

Collaborating

Instead of declining a prescription when a pet is overdue for a heartworm test, turn the conversation from confrontational to collaborative. You want to protect this dog from deadly heartworms, so focus on scheduling an exam where you can perform the needed heartworm test, and then address the prescription request face-to-face.

Have a receptionist or technician call and say, "Mrs. Jones, we received a fax today from an Internet pharmacy for Max’s heartworm prevention. For Max to safely take medication, he needs to have had a physical exam and heartworm test within the last 12 months. Because Max is overdue, we need to schedule an exam. We could see Max at 6 p.m. Thursday or 11 a.m. Friday. Which works for you? During your exam, we’ll explain the quality and safety of our heartworm preventives.”

If the patient is up-to-date, educate the client about the benefits of buying drugs from your pharmacy. Say, "Mrs. Jones, we received a fax today from an Internet pharmacy for Max’s heartworm prevention. Dr. Your Name checked your dog’s medical record and confirmed that he has had an exam and heartworm test within the last 12 months, which is required for him to safely take the medication.

"The Food and Drug Administration has published information warning pet owners about the dangers of buying pets’ medications from Internet pharmacies. Our doctors want to protect Max with safe, high-quality drugs directly from the pharmaceutical company. We guarantee our heartworm preventives, personally know the drug representative, get regular training on medications, and offer competitive prices. Let me tell you about the heartworm preventive that our doctors recommend for Max…”

Pharmacies

Some Internet pharmacies tell pet owners they’ve already charged their credit cards. Technically, the pharmacy has placed a preauthorization on cards, not charged items they can’t legally sell without veterinarians’ authorization of prescriptions. Preauthorization holds the balance as unavailable until the merchant clears the transaction, or the hold falls off one to five days after the transaction date, depending on the bank’s policy.

If a client insists on filling the prescription elsewhere, say, "I will ask Dr. Your Name to write a script for Max’s medication. Because we do not endorse or recommend Internet pharmacies, we will provide the script directly to you. Then you can select the pharmacy you want to use. I can mail the script to you, or you can stop by and pick it up. Which do you prefer?”

Then staple the FDA article on "Purchasing Pet Drugs Online: Buyer Beware” to the script (http://www.fda.gov/ForConsumers/ConsumerUpdates/ucm048164.htm).

Have an online store. One morning in 2009, Intermountain Pet Hospital & Lodge received 25 faxes from Internet pharmacies. Dr. Beede decided to take a pre-emptive approach. "Internet pharmacy threats started in 2008,” he says. "Some of our clients had been out of work for a year, and they were looking at where they could save money.”

Working with a distributor partner, Dr. Beede has created one of the most successful online stores among veterinary hospitals.

His online store accounts for 29 percent of pharmacy sales this year. Preventives, non-steroidal anti-inflammatory drugs and pet food make up the majority of sales. Clients appreciate the convenience of auto refills for diets.

"We determine what food the pet eats and how long the bag will last, and then we set auto refills for clients,” he says. "Our goal is to get clients to walk out of the building with the first bag, and then enroll them in auto refill.”

During exams, clients get fliers about the clinics’ online store. Employees also buy from it so they can share personal experiences.

"Many practice owners tell me they set up online stores and nothing happened,” says Dr. Beede. "You must have a marketing plan.”

Next issue: Word makeovers that improve client service

Wendy S. Myers owns Communication Solutions for Veterinarians and is a partner in Animal Hospital Specialty Center, a 10-doctor AAHA-accredited referral practice in Highlands Ranch, Colo. She helps teams improve compliance and client service through consulting, seminars, and webinars. You can reach her at wmyers@csvets.com or www.csvets.com.

REFERENCES

1. P. Wilder-Smith et. al. "Incision properties and thermal effects …”, Oral Surgery Oral Medicine Oral Pathology, 1995, p.685.

2. P.W.A. Willems et. al. "Contact laser-assisted neuroendoscopy …”, Lasers in Surgery and Medicine, 2001, p. 324.

3. L. B. Rizzo et. al. "Histologic comparison of skin biopsy …”, JAVMA, 2004, p. 1562.

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