Can It Be Done?
It may not be easy, but it is possible to come up with a business model that allows for a singular pharmacy or even a small chain to compete with the big dogs.
It was a simple question really. I wanted to use the vast social media world as a spring board to send it out and see what bounced back my way. I wanted to know whether others thought it was still possible for someone to open an independent pharmacy and survive.
I admit I was leading with my question. I asked if we’ve reached a point where it’s no longer possible to open an independent pharmacy. Is there still hope left for pharmacists with that entrepreneurial spirit or is the current retail environment too challenging? Realistically, would any of us have a shot if we tried to do it?
Those were my questions. And the answers I received were as interesting as they were varied. From one person who was just about to do what I was asking to another saying it was impossible, I heard it all.
I led into the discussion by pointing out my negative bias. I felt that the current retail environment was too tough for a start-up pharmacy. I felt that it wasn’t “financially viable” as I phrased it. I argued that unless you were buying into an existing pharmacy with a well established customer base it was just too difficult to do.
For all their faults, the chains do at least offer some sort of stability. They also offer paid time off, benefits, and the ability to relocate. There is a department for computer problems or hardware malfunctions. You call a corporate number and have all those hassles taken care of by someone else.
Having an indy is different. YOU are tech support. Or you have to find someone to do it for you. YOU are payroll. Or you have to hire someone to do it. YOU work late and come in on the weekends. And those paid vacations may not be possible. But no one said it would be easy. And to be fair, I asked if it was possible not easy.
But as soon as I could reel off several reasons why it’s impossible to open a new independent pharmacy, I had opposing views coming my way in waves. Be a niche provider and specialize one, pharmacist told me. Get involved in compounding or find some specialty service like durable medical equipment (DME) sales or mobility enhancement services. Fill a need in some community that the big chains can’t or won’t provide.
All the points mentioned above are valid ones. But can it really be done? Can you compete against the likes of Walgreens and their thousands of stores or is it simply not possible? They have the advantages of scale and you don’t. Does that even matter?
The reason why I asked those questions wasn’t simply for my curiosity. I’ve had thoughts for years about opening my own pharmacy. I’ve often wondered if I had the work ethic, drive, and determination needed to be able to open my own pharmacy. Could I do it if I really wanted to try?
After asking if it could be done the other night, I was given multiple examples of success stories from all over the country. People told me about independent pharmacies that were successful. These pharmacies offered a laundry list of services to patients in their respective communities. And they were not only surviving, but thriving in this admittedly difficult retail pharmacy environment.
But just to play devil’s advocate, I couldn’t help but wonder how many of those successful pharmacies were older and were established back in earlier eras that were kinder to the corner drugstore. And I was interested in starting a pharmacy now, not is some previous period of good fortune for community pharmacy.
Think from a purely business perspective for a moment. Community pharmacy is almost a case study in the worst business model ever. We have high competition, low margins, extensive regulatory burdens, unstable politics, and strong outside forces like PBMs influencing our business. If you asked a class of business students to come up with an example of the absolute worst business model, retail pharmacy might not be a bad answer.
Yet despite all the negatives, I can’t completely dismiss the idea. I still believe that it’s possible to come up with some sort of business model that allows for a singular pharmacy or even a small chain to compete with the likes of Walmart or CVS.
I can’t help but think something like a well developed herbal supplement and natural products business could bring some revenue stability to a new pharmacy. What about individualized hormone replacement therapy? Or maybe compounding products for veterinary care? Wouldn’t some edge like medication therapy management services for patients with chronic diseases give an independent pharmacy some kind of edge?
I guess I should just be thankful I have a job. I should let some big grocery store chain like my employer take on all the risks involved with pharmacy ownership and be happily employed. You know, a couple of weeks vacation every year and the chance to go home at night and have a life. That is the safe play or the path of least resistance.
But for those willing to take that chance and do something on their own, can they survive longer than the average small business? Will these terrible third party contracts and poor reimbursement rates keep an indy from making it? Or are there real ways for someone with guts and good ideas to make it?
I may never take the plunge and try my hand at pharmacy ownership. I may never work for myself in that sense. But I can’t help but wonder what could be if I dared to try. Is it possible to open an independent pharmacy right now and survive? Can it be done? What do you think?