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LTCs—Your Pharmacy’s Next Win?
We often talk about how a personalized approach can make a big difference in finding and retaining new customers, and that is especially true for the lucrative market of servicing Long Term Care facilities.
LTC facilities represent many attractive things to independent pharmacies—a large group of patients often with many prescriptions, no DIR fees, and fatter profit margins. It’s estimated that the average patient in a LTC is taking 12 prescriptions a month, over 70% of which are brands, with gross margins averaging 30-40%. One VP at NCPA estimated that a 100 resident LTC facility represented $500,000 in business, as a conservative estimation.
LTC facilities often prefer working with local pharmacies over chains because of the high-touch and personalized approach they can offer over chain pharmacies. This is where your role as an independent pharmacy can give you a big advantage. By offering services like shingles vaccines, medication management reviews, and consultations, you can add the personal touch and trust LTCs want in a pharmacy.
So all this sounds great, more customers, higher margins—what’s the catch? While your current pharmacy license should allow you to operate as a combo pharmacy, becoming one will require some effort to secure contracts with LTCs, as well as additional labor and investment to service them properly. LTC facilities often require medications to be dispensed in compliance packaging like blister packs, this alone will add to your workload both in training staff and dispensing. Because of the unique (and profitable) pricing with LTC prescriptions, segregating medications may be necessary for your facility too.
Finding facilities to service will also take some time, but the best way to do it is to ingratiate yourself in the community by offering free consultations, drug disposals, vaccine clinics, or even by bringing treats to residents. By building relationships with facilities, you can become an attractive option for a facility that would rather do business with someone nearby who can handle emergencies with the fluidity and friendliness of a local pharmacy.
If you are interested in servicing LTC facilities, you can join NCPA’s Long Term Care Division who has many resources to guide you in the process. You can also read more about the benefits of servicing LTC facilities at PBAHealth.com