The great pharmacy shift: Tips to keep dollars in house again

Online pharmacies have cut into profits, but many clinics are pivoting and setting up their own online stores

Online pharmacies have cut into profits but many clinics are pivoting and setting up their own online stores. PHOTO COURTESY SOLSTOCK / E+ / GETTY IMAGES
Online pharmacies have cut into profits, but many clinics are pivoting and setting up their own online stores.

Over two decades ago, online pharmacies created a huge shift in an area that used to be a given revenue stream for practices. Suddenly, we were receiving prescription requests directly to our fax machines, and our clients were asking for written prescriptions so they could buy from online pharmacies. The inevitable result was products sitting in our practices that used to fly off the shelves.

These companies came into our lives and were taking the proverbial “food right off of our tables.” As a practice manager at the time, I had the exact same sentiment, but the truth is, I also knew they were onto something.

Instead of wallowing in the contention of it all, I started looking at why these online pharmacies were so successful and asking myself how, as a practice, we could compete with this very obvious shift. I began identifying the reasons a client would rather buy their products from an unknown source instead of their local veterinary practice, which should be a trusted and valued part of their pets’ care.

I came up with three very important reasons: cost, convenience, and personal touches. We had never had to think very deeply about why someone purchased pharmaceuticals from us before. They came in, we prescribed, we filled. It was simple. However, online pharmacies had strategized about how they would lure our clients out of our offices to purchase, and lure they did.

They knew buying in large quantities meant they could lower prices and pass the savings on to the consumer. Not to mention they were able to throw in free stuff and incentivize to drive interest. Check cost off the list!

Then, they gave clients the added bonus of product waiting at their door after a long day at work. In the times we live in, it seems like there is truly nothing more important than giving people convenience that pays them back in time. It is somewhat life changing to be at work on a lunch break, order your groceries, and have them delivered 30 minutes after you arrive home from work. In fact, for most, nothing is more important, not even cost. So, any cost associated with convenience is suddenly worth it.

An extra hour with their family is salvaged, and you just can’t put a price on that. Disguising prices of products using free shipping, percentages off if you sign up for auto ship, free toys (which no doubt cost them less than $0.10), and satisfaction guaranteed while paying them back in time with just enough convenience to make it worth it. A virtual recipe for success (pun intended).

However, what about loyalty? How can they win on that end when we are the ones with face-to-face contact? The personal touch. A birthday card, a sympathy card, a “hand-drawn” picture of a pet. When would we have time to hand draw a picture of a pet?

The reality is, we have a huge job to provide the best medical care we can with the pressure of delivering a stellar client experience. We would love to have the time to add personal touches, but by default these things often fall by the wayside and understandably so. Even prior to the pandemic, online pharmacies have grown steadily in popularity as we shifted to a convenience mindset. Now throw in a pandemic. An area of the P & L that used to turn a healthy profit is now struggling and causing practice owners to decide if they will even keep pharmacy products stocked for instant sale.

All is not lost, however. I say we take some notes from these online pharmacies and respond accordingly. Your practice can gain back the loyalty and the dollars spent! Consider what we are faced with as an industry, and what would make the biggest impact in your hospital. Use the great pharmacy shift to positively influence client compliance and practice growth. The “new” reality is practices choosing not to pivot and navigate this new way of the world will continue to be left with full shelves. Some others may choose just to abandon competing altogether. Still, others may opt for more of a hybrid option. There is no right or wrong here. It is just a matter of what works best for your practice.

There are three main objectives no matter what model you decide to go with:

1) Get the team on board

The team is a very important part of the process no matter what avenue works best for your practice. The majority of us consider this profession “a calling,” something that makes us feel like we are helping pets that don’t have their own voice. A contributing factor to burnout and compassion fatigue is lack of client compliance. Yet, we are letting clients walk out the door with either no recommendations or no action taken.

Chronic medications are not followed up on and six months or a year or even more years later, we see the pet back in crisis due to noncompliance with a simple, sometimes even cheap, medication. All of this can be turned around if expectations are set and everyone is delivering a consistent message.

It has to be fun and rewarding. Careful! Not everyone on the team is driven by the same thing. You have some who will work hard for a challenge that will net them some warm chocolate chip cookies (this is me). You have some who will be driven by the pet getting the care it needs, and in turn, raising compliance and that is plenty enough reward. I wouldn’t pick just one avenue and please, no more pizza! Instead, think outside the box. One of my favorite things is the gift of time. Give them a random day off; it works wonders for the soul.

2) Make it easy for the clients

We have talked about convenience quite a bit. It has to be easy! Anything new is scary. It is our job to educate the clients and guide them through the new process. Invest the time on the front end to make the clients comfortable, which will create efficiency on the other side. Encourage them to commit to what method they will use to purchase their pet’s medication prior to walking out the door. Another idea is to put the prescriptions in for them, and don’t forget to check the auto ship box!

3) Add the personal touch

Appoint a dedicated pharmacy contact within the practice. This team member should care for all pharmacy needs—prescription refills, special orders, processing online store requests, as well as redirecting online pharmacy requests. Create reminders for chronic medications and reach out via phone or text. Continue to offer curbside service past the pandemic. Moms with kids in the car will be grateful! Consider adding a delivery service that will take products right to the front door.

Keeping pharmacy revenue in-house

Utilize those injectables! We have products now that I am sure veterinarians only ever dreamed of 30 years ago. Antibiotics lasting two weeks with one injection, a year-long heartworm prevention, and stop the itch for at least 30 days with one poke? Gold! If you are injecting before they leave the practice, then that revenue is not headed to an online pharmacy.

Set up your online store

Setting up an online store for your practice could not be any easier. Each company may have their own unique features, but you can typically set your own prices. While you won’t necessarily realize the same profit from each item, you can price the products super competitively because none of the team has to touch the items or control them in any way. There are also options for free shipping, single-dose auto-shipments, and for the clients who love their “deals,” there are coupons!

The hybrid model

Your practice can realize the best of both worlds with some strategy. Set up your online store and move out your preventives and diets. This alone will save money on your shelf and on labor. It is not a secret; these are products that realize the most shrinkage, therefore, they need to be counted and maintained frequently. Keep the medications your doctors reach for on a regular basis in-house and monitor turnover rate. In general, if you are not turning a product every 30 to 45 days, it needs to be moved to your online store.

Use the great pharmacy shift to positively influence client compliance and practice growth by adopting one of the models and sticking with it. Understand this will continue to change over time, and you must be prepared to pivot. Some people believe pharmacy revenue is a thing of the past. I tend to think there is still quite a lot of benefit to maintaining a healthy in-house pharmacy and/or online store. We are all in this together and for one purpose—to take care of the pets. Remember to share metrics with the team as you improve your methods and celebrate the little victories.

Emily Shiver, CVPM, CCFP, CVBL, is a certified veterinary practice manager serving as the Florida regional director of operations for Family Vet Group. Her passion is creating and maintaining positive, successful workplace cultures as well as helping practices increase revenue and the client experience. Shiver enjoys every aspect of inventory and strives to help practices meet and exceed their inventory goals. She believes that can have the perfect practice—proactive, positive, and profitable. Shiver and her husband reside in Lakeland, Fla., with their two Patterdale terriers and a few other furry family members.

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