Independent Pharmacy Rx Sales and Profits Are Up

DECEMBER 01, 2004
Ken Rankin

The average independent community pharmacy posted $3.24 million in sales last year. That figure represented a solid 14% increase over 2002 levels, according to the 2004 NCPA-Pfizer Digest.

The 2003 gain was totally attributable to rising prescription drug sales among independents, the National Community Pharmacists Association (NCPA) noted. On a per-store basis, Rx drug dollar volume climbed to a record average of $2.9 million, but real dollar nonprescription sales remained constant, according to the association.

Independent pharmacy also posted stronger profits to accompany those rising sales. Gross margins increased to 24% of total store sales in 2003—a total of $685,915 at the average pharmacy— and pretax net profits also were up.

"In spite of market practices by PBMs [pharmacy benefit managers] that disadvantage community pharmacies, median net profits before taxes were $114,319, representing 4% of sales," according to NCPA. "This was a slight increase from last year's before tax net profit of 3.8% of sales," and "is due in part to the customization of pharmacist services into niche markets such as immunizations, health screenings, and diabetes care centers."

Researchers for the Digest found that blood pressure monitoring is the most frequently offered specialty service, noting that it was available at 59% of the independent pharmacies surveyed. Diabetes education was offered by 48% and asthma education by 28% of pharmacies, whereas nearly 1 in 4 community pharmacies offered immunizations to their patients, according to NCPA.

These findings demonstrate that "independents are developing patient care niches and are seeking out new technologies that allow them to provide better patient care, while at the same time improving efficiency and the bottom line," said NCPA President Sharlea Leatherwood, RPh.