If you were born in the 1950s or earlier, you may remember when most pharmacies were independent businesses that had a unique approach to serving customers in terms of products and services. Independent pharmacies still operate, but their path to success hasn’t been obstacle-free. One of the biggest obstacles has been weathering the emergence of big name pharmacies that draw in a large percentage customers who once used independent pharmacies.
The Decline of Independent Pharmacies
According to a June 2014 report by Fred Ullrich, BA, and Keith J. Mueller, PhD, from March 2003 to December 2013, 12.1 percent of independent pharmacies in the U.S. closed their doors, with the most closures occurring between 2007 and 2009. From 2010 to 2013, the closure trend remained relatively steady, but the decline in independent pharmacies isn’t as pronounced as it was in the previous decade — a fact that bodes well for the independent pharmacist future.
For small businesses that hope to remain profitable in the shadow of big businesses that offer the same products and services, adaptation is the name of the game. One of the primary reasons for the past decline in independent pharmacies is that they offered what big pharmacies did, only on a smaller scale. In order to stay in business, small pharmacies needed to develop unique value propositions that distinctly separated them from their big name counterparts.
In addition, independent pharmacies had to reevaluate their customer base in terms of geography. Big pharmacies have deep coffers that allow them to purchase or lease triple net (NNN) real estate that has highly desirable locations in terms of foot traffic, vehicle traffic, and visibility from main roadways. This fact only reinforced the view that the independent pharmacist future was contingent on developing a unique business model.
The Reemergence of Independent Pharmacies
Today, the decrease in closures of independent pharmacies is largely attributable to their development of business models that focus on serving local populations that have unique healthcare needs, such as the need for compounded medications and liquid suspension medications that can be time consuming or impossible to procure from big pharmacies, the need for highly personalized consultations, and the need to get durable medical equipment fast.
Ulrich and Mueller found that “490 rural communities that had one of more retail [pharmacies] (including independent, chain, or franchise [pharmacies] in March 2003 had no retail pharmacy in December 2013.” The decline of big pharmacies in rural areas during this period was largely revenue-based. Operating a brick and mortar store that didn’t deliver a high return on investment (ROI) meant that the business would relocate to a place that helped generate more revenue.
When the new, more profitable locations of big name pharmacies were combined with the superior marketing power of the businesses, many customers that once used independent pharmacies switched to using corporate pharmacies — a move that made many independent operations go out of business, and reinforced the fact that, if small pharmacies hope to be profitable, they need to offer products and services that large pharmacies often do not.
The Independent Pharmacist Future
The future success of independent pharmacists can be partially quantified by the unique products and services they specialize in supplying, such as compounded medications, a variety of durable medical equipment that can be purchased in store, and novel medication packaging that helps to simplify complex dosing regimens and provides all the information patients need to take their medications according to the recommendations of the prescribing physician.
As long as independent pharmacies use their independence to specialize in providing easy access to products and services that big pharmacies aren’t accustomed to offering, or don’t offer, they can create a dedicated customer base that is tired of breaking through the red tape at big pharmacies to have their special pharmacy healthcare needs met in a timely, affordable manner. The switch from a big pharmacy to an independent one is based on customer service.
How We Help Independent Pharmacies
Drug Package is dedicated to helping independent pharmacies thrive and not just survive. One of the ways we do this is by supplying unique medication packaging that increases medication adherence and helps improve patient health outcomes. The better their health outcomes, the more dedicated customers will be to using your pharmacy instead of a corporate one. By helping small pharmacies provide unique offerings, we help to secure the independent pharmacist future.
For more information about our medication packaging options and other products, call us at (800) 325-6137 to schedule a consultation, or email us today for more information.