Many independent pharmacies want to expand their business. They often look at buying a pharmacy from another independent. There are around 22,000 independent pharmacies in the US, with about 900 changing ownership each year. So, there’s definitely opportunity for you to grow.
But how will you know if it’s a solid purchase? How will you be able to make an unbiased assessment of the pharmacy’s performance?
If you depend solely on the pharmacy to provide you with their financials and records, it may not provide you with all the information you need. You also won’t know if it’s completely accurate. That’s why many pharmacies look to third parties for acquisition analysis.
Acquisition Analytics provides a neutral view of operations
To ensure the most thorough and impartial review of a pharmacy, using a third party is a smart move. InfoWerks offers Acquisition Analytics to help pharmacies assess potential purchases. The process includes a data pull of the last two years of information in their pharmacy management system. The pull is handled securely and compliantly. That data is then put into buckets, providing insights on profits, volume, and more. All PHI is removed from the report as well.
What Makes the Purchase a Good One?
So, what exactly do you need to pay attention to when it comes to reviewing the operational data of the pharmacy for sell? Typically, you want to be able to discern what patients you think you can retain. The retention of these customers will set up your future profitability. Look at these data points when buying a pharmacy:
- Average weekly scripts and volume: do a year over year comparison to determine ebbs and flows in business and if there has been a significant decrease in the past 12 months
- Percentage of new prescriptions vs. refills: see the trends of return patients
- 90-day fill numbers: look at these fill types as a percentage of total fills
- Prescriber information: find out the top prescribers associated with the pharmacy to determine if there are existing relationships that you can continue to nurture
- Patient volume information: learn how many “high value” patients that frequent the pharmacy, meaning they have a large number of scripts filled annually;
- Patient location: determine how close the majority of patients are to the pharmacy; this information could help you decide if the site is feasible
- Payer information: see which plans are used most often by the patients of a pharmacy; if Medicare is a leading payer
These data points will provide you with a good grasp on the profitability and performance of a pharmacy. But there are additional data elements you’ll also want to analyze to ensure that the purchase is a shrewd one. One thing of importance would be the percentage of controlled script fills. A higher rate could mean the purchase may be risky. If the percentage seems higher than your pharmacy, it’s advised to dig into this deeper to ensure that no fraudulent actions are occurring.
What Else Do You Need to Know?
These data points will provide you with a good grasp on the profitability and performance of a pharmacy. But there are additional data elements you’ll also want to analyze to ensure that the purchase is a shrewd one. One thing of importance would be the percentage of controlled script fills. A higher rate could mean the purchase may be risky. If the percentage seems higher than your pharmacy, it’s advised to dig into this deeper to ensure that no fraudulent actions are occurring.
You may also want to find out what percentage of patients using the pharmacy are over 65. This intel would provide you insights about how many Medicare users you have and long-term patient retention.
Buying a pharmacy can be a complicated process. You have many considerations from financing to viability. Before you make the decision to purchase, consider requesting an Acquisition Analytics report. Find out more information about this report by contacting us today.