Here’s Everything You Need to Learn About Orphan Drugs

The field of medicine is one of the most studied areas of science for a good reason. With thousands of diseases affecting millions of people around the world, it’s been a mission for many countries to find the right treatments and medications to improve quality of life and prevent mortality rates from skyrocketing to unprecedented numbers.

But while most of us know about popular diseases like diabetes mellitus, cardiovascular disease, cancer and hypertension, there are also those orphan diseases that are so rare they only affect a small percentage of the world’s population. They are usually treated using medications called orphan drugs.

Orphan diseases and orphan drugs: A closer look

 To gain a better understanding of orphan drugs, we need to learn about what orphan diseases are and how they affect the world’s population.

Orphan disease defined

A disease is categorized as a rare or orphan disease when it only affects a small number of people in comparison with the general population. In European standards, for instance, a disease is considered rare when it affects only one in every 2,000 individuals. In general, 1 in 17 people will suffer from a rare disease in their lifetime.

Today, there are at least 7,000 types of rare diseases, many of which are considered chronic and life threatening. Most orphan diseases also appear early in life where 30% of children affected by them die before their fifth birthday.

More than 250 new medical conditions are also being described in medical literature every year. However, there is still no proper definition of orphan diseases because they differ in each territory.

The most notable orphan diseases

Medical breakthroughs and the development of orphan drugs may have saved millions of lives, but more than 350 million people around the world are still suffering from a group of orphan diseases. The most common types of rare diseases include:

    • Multiple sclerosis

Multiple sclerosis is a potentially disabling disease of the brain and central nervous system where the immune system attacks the myelin sheath that covers the nerve fibers causing miscommunication problems between the brain and the rest of the body.

It affects 90 in every 100,000 individuals and if not treated with orphan drugs, it can cause permanent damage to the nerves.

    • Narcolepsy

Narcolepsy is a neurological disorder where the individual has difficulty controlling sleep and wakefulness. It is characterized by hallucinations, excessive sleepiness, sleep paralysis and even episodes of cataplexy where the patient experiences partial or total loss of muscle control. Narcolepsy affects 50 in every 100,000 individuals.

    • Primary biliary cholangitis

Formerly known as primary biliary cirrhosis, primary biliary cholangitis is an autoimmune disease of the liver resulting from a slow and progressive destruction of the liver’s small bile ducts. This results in a buildup of toxins in the liver called cholestasis. This orphan disease affects 40 in every 100,000 individuals.

    • Fabry disease

Also known as Anderson-Fabry disease, this rare genetic disease is part of a group of conditions known as lysosomal storage disease. It affects the skin, kidneys and heart due the genetic mutation that interferes with the function of sphingolipids. Fabry disease is usually diagnosed in childhood and affects 30 in every 100,000 individuals.

    • Cystic fibrosis

Cystic fibrosis is a rare inherited disease that affects the lungs, digestive system and other organs of the body. A defective gene that affects the cell’s ability to produce sweat, mucus and digestive juices usually causes the disease and it affects 25 in every 100,000 individuals.

Orphan drugs defined

With at least 90% of the known orphan diseases still lacking treatment, the need for high quality orphan drugs has never been more important. An orphan drug is generally defined as a pharmaceutical agent that is developed specifically to treat medical conditions called rare or orphan diseases.

Because orphan drugs are used for conditions that are so rare, developing them would not be profitable enough for private pharmaceutical companies without the help of the government.

In many countries, research and development for orphan drugs is often a subject of public policy and those with the right support from the government have resulted to breakthroughs that otherwise might not have been possible if only private companies funded them.  But patients with orphan diseases are still spending more for treatments because orphan drugs are priced higher because of their limited availability.

As of 2014, 281 orphan drugs are available on the market while more than 400 are still undergoing clinical trials. The United States is leading the development of these drugs with more than 300 clinical trials underway followed by Europe. There is a total of 600 clinical trials today, 231 of which are on phase 2.

The cost of orphan drugs

Since orphan diseases are not widely known around the world, the cost of developing orphan drugs are considered higher than traditional drugs. However, many countries are starting to find ways to back the research and development of these drugs to help give patients better quality of life.

The United States is leading the charge with government-backed incentives like tax credits for the cost of research and development and clinical trials. This will help lower the cost of orphan drugs and speed up their delivery to the market. Countries like Australia, Europe and Japan are also following the same strategy.

The estimated worth of pharmaceutical companies focusing on developing medications for rare diseases are about half a trillion, roughly about 17.5% of the total value of the big pharmaceutical industry. The total enterprise value of the market is at $508 billion.

In the United States, the average cost of an orphan drug for every American patient can reach up to $151,000 per year as compared to only $34,000 for non-orphan drugs. This cost is set to grow further in the future, as orphan drugs will make up one-fifth of the total prescription sales around the world by 2024.

It’s easier for pharmaceutical companies to get marketing approval for an orphan drug in the United States and Europe because of initiatives that are geared towards encouraging the development of these types of drugs. This can include financial incentives and extended exclusivity periods for producers to enjoy sole rights to market their drug.

The Orphan Drug Act (ODA) of 1983

On January 4, 1983, President Ronald Reagan signed the Orphan Drug Act (ODA) into law to help incentivize the research and development of orphan drugs.

    • What is the purpose of the act?

The main goal of the ODA is to encourage pharmaceutical companies to develop more drugs to treat rare or orphan diseases.

The act was amended in 1984 to classify rare diseases as those affecting less than 200,00 people in the United States, but it also covers drugs for medical conditions that affect more than 200,000 but the cost of making them would exceed their revenue if marketed in the United States.

    • What are the incentives of the ODA?

One of the biggest incentives provided by the ODA is the 7-year marketing exclusivity of orphan drugs for pharmaceutical manufacturers. This gives them the chance to get their investment back without pricing their drugs too high. The ODA also awards several grants to academic-based researchers and pharmaceutical companies annually for the development of orphan drugs and offers a 50% tax credit for expenses incurred during the evaluation of an orphan drug.

There are also some exemptions given only to companies developing orphan drugs. Although they follow the same development path as regular drugs, the government acknowledges that since rare diseases affect only a small percentage of the population, it may not be possible to test the drug on 1,000 patients during a phase III clinical trial.

    • What is the impact of the ODA?

Since it was enacted in 1983, the ODA already had a huge impact on the development of orphan drugs. A 2011 paper by Aaron S. Kesselheim of the Harvard Medical School showed that from a single orphan designation in 1983, the number increased to 40 in 1984 and as high as 121 in 2007.

From January 1983 to May 2010, the FDA already approved 353 orphan drugs and granted designations to 2,116 compounds. And as of 2010, 200 of the 7,000 officially designated rare diseases are now treatable.

Roche is one of the biggest manufacturers of orphan drugs in the world producing Rituxan, a drug primarily used to treat rheumatoid arthritis. When combined together with another Switzerland-based company Novartis, both companies were able to generate more than $20 billion in worldwide revenues for orphan drugs in 2018.

Although not designated as an orphan disease, the FDA has approved the use of the ODA for the research and development and creation of orphan drugs to treat AIDS. In 1995, 13 of the 19 FDA-approved drugs were designated orphan status, 10 of which have received marketing rights. There are also more than 70 designated orphan drugs for the treatment of other HIV-related conditions.

    • What are some of the popular orphan drugs?

With the help of the ODA and EU legislation, several orphan drugs have been developed to treat rare diseases such as cystic fibrosis, glioma, snake venom poisoning, multiple myeloma and phenylketonuria.

One of the first orphan drugs to be developed was for cystic fibrosis. In the 80s, patients diagnosed with this rare disease didn’t survive beyond their early teenage years. But with the development of Tobramycin and Pulmozyme, the life expectancy and prognosis of patients with cystic fibrosis have improved immensely.

Wilson’s disease is another rare disease that’s now treating using an orphan drug. The hereditary medical condition results in the body accumulating fatal levels of copper. Penicillamine was developed specifically for the treatment of Wilson’s disease, but it has been tested to be effective in treating arthritis as well. Another drug, Bis-choline tetrathiomolybdate is now under investigation as another treatment for the disease.

Another huge breakthrough in orphan drugs is the development of statin drugs to treat familial hypercholesterolemia. Two researchers who worked on the drug, which is now used to treat high cholesterol received a Nobel Prize in 1985.

    • What is the future of the ODA?

While the goal of the ODA is clearly benefiting those suffering from orphan diseases, the act hasn’t been free from controversies. Some skeptics believe that pharmaceutical companies are manipulating the benefits of the ODA to take advantage of bigger revenues.

According to America’s Health Insurance Plans, the pharmaceutical industry has reportedly “gamed the system” by turning orphan drugs into multibillion-dollar products. An investigation published by Kaiser Health News in 2017 showed some drugs being designated as orphan drugs after first being designated as non-orphan.

These issues are not falling on deaf ears. Last year, FDA Commissioner Scott Gottlieb, MD said that he was open about the possibility of re-evaluating some aspects of the Orphan Drug Act. In a statement to Kaiser, Gottlieb said that it’s time to ask, “Do we have the right incentives in place?” He also mentioned in a separate blog post that the agency would study the proper application of orphan incentives.

The Rare Diseases Act was also enacted in 2002 to amend the Public Health Service Act, which aims to properly designate and control orphan diseases and orphan drugs. The act also increased funding for the research and development of orphan drugs to help people suffering from orphan diseases.

The European Union (EU) has followed suit in enacting a similar legislation from the ODA. In 2000, Regulation (EC) No 141/2000 was enacted and it referred to orphan drugs as “orphan medicinal products.”

Aside from diseases affecting only a small number of the world’s population, the EU’s definition of orphan diseases also include some tropical diseases that are mainly found in developing countries. The European Commission offers a 10-year marketing exclusivity benefit for an orphan drug after its approval. The European Medicines Agency (EMA) and the Committee on Orphan Medicinal Products administer this legislation.

Over the years, other countries have also implemented legislations that support the development of orphan drugs. Nations like Singapore, Japan and Australia have offered subsidies and other incentives for researchers and pharmaceutical companies that want to develop drugs to treat different orphan diseases.


Latest Counterfeit Scare Underscores Technology’s Role in Pharmacy Drug Safety

U.S. pharmacists received a startling reminder of the urgent need for drug safety, when in November 2019, a statement was issued by the Drug Enforcement Agency (DEA) warning the public about an alarming number of counterfeit pills that had been seized throughout the nation.  “Mexican drug cartels are manufacturing mass quantities of counterfeit prescription pills containing fentanyl, a dangerous synthetic opioid that is lethal in minute doses, for distribution throughout North America,” the statement read.

The DEA said that 27 percent of the drugs seized contained potentially lethal doses of fentanyl.  Special Agent in Charge Ray Donovan, of the agency’s New York Division warned:  “Counterfeit pills have hidden dangers causing one in four users to die, according to DEA field testing.  This is a warning and a plea for parents to talk to their children about using counterfeit or diverted prescription pills – either one of them ends with death and/or devastation.”

News of the surge in potentially-lethal drugs comes as U.S. drug manufacturers, wholesale distributors, pharmacies and other parties involved in prescription drug distribution continue to implement key provisions of the 2013 Drug Quality and Security Act, which is intended to prevent counterfeit, stolen, contaminated or otherwise harmful drugs from entering the nation’s drug supply chain.


Drug Supply Chain Security Act – Working Toward a Track-and-Trace System

Specifically, Title II of that legislation, the Drug Supply Chain Security Act (DSCSA) mandates creation of “an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States.”  The system, referred to as “track and trace,” is being spearheaded by the U.S. Food and Drug Administration (FDA), and is mandated to be operational by 2023.  When fully implemented, the system will be capable of tracking a drug at the unit level throughout its supply chain.

The FDA is working to build that system, namely by working with supply chain stakeholders, and through a pilot program that was launched earlier this year to identify, build, and test required capabilities.

DSCSA Implemented in Phases

As that work continues, progress is being made to implement other provisions of the law.


A. Product Tracing

In 2015, manufacturers, wholesale drug distributors, repackagers and dispensers (primarily pharmacies) were required to provide information about the handling history of each drug sold in the U.S. market.  Specifically, each drug transaction must now be accompanied by three separate documents that include FDA-required information including:

          Transaction information (TI)

        • Proprietary or established name of the product
        • Strength and dosage form of the product
        • NDC number of the product
        • Container size
        • Number of containers
        • Lot number of the product
        • Date of the transaction
        • Date of the shipment, if more than 24 hours after the date of the transaction
        • Business name and address of the person from whom and to whom ownership is being transferred.

          Transaction history (TH)

A statement in paper or electronic form, including the transaction information for each prior transaction going back to the manufacturer of the product.

Transaction statement (TS)

A statement, in paper or electronic form that affirms the following points:

        • The entity transferring ownership in a transaction is authorized as required by DSCSA;
        • The product was received from a person who is authorized as required by DSCSA;
        • Transaction information and a transaction statement were received from the prior owner of the product, as required under the law;
        • The entity did not knowingly ship a suspect or illegitimate product;
        • The entity has system and processes in place to comply with verification requirements under the law; and
        • The entity did not knowingly provide false information, and did not knowingly alter the transaction history.

B. Product Verification

Also beginning in 2015, stakeholders are required to have in place systems and processes to comply with product verification requirements.  Specifically, this includes the ability to handle “suspect” and “Illegitimate products” that may be counterfeit, diverted, stolen, intentionally adulterated or appear otherwise unfit for distribution.

Stakeholders must have in place a process to:

    • Respond to verification requests from the FDA about suspected products;
    • Quarantine and investigate any suspect product to determine if it is illegitimate;
    • Notify trading partners and the FDA of any illegitimate product;
    • Respond to notifications of illegitimate product; and
    • Satisfy recordkeeping requirements.

C. Product Identification (Serialization)

The law established requirements for manufacturers and repackagers to print or affix a unique product identifier on the smallest individual sellable unit.  The product identifier is composed of four specific data elements:

    • National Drug Code
    • Serial number
    • Lot number
    • Expiration date.

The product identifier must be “human and machine readable,” with a two-dimensional (2-D) bar code adopted as the standard for machine processing.

The law sets out specific deadlines for compliance within each stakeholder group:

    • November 2017: Manufacturers
    • November 2018: Repackagers
    • November 2019: Wholesalers will only trade products with product identifiers
    • November 2020: Dispensers (Pharmacies) will only trade products with product identifiers.

2019:  Pharmacy Specific Requirements

Pew Charitable Trusts refers to pharmacies as “the last stop in the distribution supply chain before medicines reach patients,” and calls their participation “an essential component of the new DSCSA system.  It’s not surprising then, that several of the important components already implemented, directly affect pharmacies.  Current pharmacy responsibilities include:

1. Confirm all trading partners are properly licensed or registered.

a. Check the registration of manufacturers and repackagers by accessing the FDA’s Drug Establishments Current Registration Site — DECRS.

b. Check the licensing of wholesale distributors and third-party logistics providers. This can be done by searching the FDA’s Wholesale Distributor and Third-Party Logistics Providers Reporting database.

c. Check the licensing of pharmacies through the respective state authority.

2. Receive, store and provide product tracing documentation.

a. Only accept prescription drugs that are accompanied by three pieces of product tracing documentation:

i. Transaction Information

ii. Transaction History

iii. Transaction Statement.

b. Store the product tracing documentation in paper or electronic format for six years.

c. Generate and provide all product tracing documentation whenever a prescription drug is sold to a trading partner. (This documentation does not need to be provided when a prescription is dispensed to a patient, or sold to another pharmacy for dispensing to a patient.)

3. Investigate and properly handle suspect and illegitimate drugs.

a. Quarantine and investigate suspect prescription drugs to determine if they are illegitimate.

b. If a drug is found to be illegitimate, a pharmacy must work with the manufacturer and take specific steps to avoid inadvertent dispensing to patients. The pharmacy must also notify the FDA and the trading partner from whom the drug was purchased, and to which it may have been sold.

Looking ahead, pharmacies will face additional responsibilities that include:

    • 2020: Pharmacies will only be permitted to purchase products that include a unique product identifier.
    • 2023: The entire drug supply chain – including pharmacies – will be required to utilize the electronic track-and-trace system.


Protecting Drug Safety – the Role of Technology

As the “final link” in the drug supply chain, pharmacists have a tremendous role in the successful implementation of the DSCSA.  By the time a drug is received by a pharmacy, it has already passed through several other trade partners, and is just one step away from being dispensed to a patient.

Therefore, pharmacies must have a fail-safe process in place to ensure — not only full compliance with DSCSA – but accuracy and safety of its overall operations.  In today’s busy pharmacies, that process increasingly comes in the form of a fully-integrated technology system.  Certain technology solutions, including the PrimeRx™ system offered by Micro Merchant Systems, can allow a pharmacy to seamlessly manage compliance requirements, monitor patient wellbeing, protect against expired drugs, and seamlessly maintain records and documentation.

Important to note though, not every technology system offers the same capabilities.  This means a pharmacy manager must spend time carefully reviewing different systems, to ensure a system has the required functionality.  With regard to compliance with the Drug Supply Chain Security Act, for example, it’s important to ensure that a system’s manufacturer is aware of the evolving requirements, and understands the need to provide required capabilities.  With regard to PrimeRx™, DSCSA and safety-related competencies include:

Access to National Drug Code and other databases.  Pharmacies have long recognized the need for immediate access to the National Drug Code listing as a way to verify prescribed medications and list proper drug codes on all documentation.  Going forward, the NDC code will be an integral part of each drug’s unique identifier, which means access to the NDC registry will be essential.  In addition, pharmacies must have access to the required FDA databases to validate trading partners’ proper licensing and certification.  PrimeRx™ offers seamless access to this information, and allows pharmacy staff to quickly confirm and document all required information.

Recordkeeping.  The PrimeRx™ system offers extensive recordkeeping that allows pharmacy managers to efficiently store documentation and information about essentially all aspects of pharmacy operations.  This includes the ability to record unique notes and observations about patient interactions, along with extensive medication histories.  The system also allows for detailed inventory-related records management, including chains of custody for all drugs, expiration dates, and dispensing histories.  With regard to DSCSA compliance, the system can seamlessly process and store mandated transaction documents.  Should those documents need to be transmitted to another pharmacy, the system can automatically send the required materials.

Report generation.   In addition to storing this information, PrimeRx™ allows the pharmacy manager to generate detailed reports on a wide range of patient, inventory and operations topics.  This includes reports to satisfy FDA information requests regarding specific transactions, or drug investigations.  Should a pharmacy determine that a drug is illegitimate, PrimeRx™ can facilitate compliance with all FDA reporting requirements.

Bar Code Scanning.  Since the DSCSA requires all product identifiers to be available in 2-D format, it’s essential for a pharmacy technology system to be able to easily import that information.  PrimeRx™ offers the required scanning capability, and allows for information to be quickly and accurately loaded and filed.

Continuous Upgrades.  Micro Merchant Systems is a leader in the pharmacy technology industry, and has long been a pioneer in anticipating pharmacy needs.  As the FDA continues its work to identify core components of the national track-and-trace system, Micro Merchant Systems will again be at the forefront with required capabilities.  As such, PrimeRx™ customers can be assured that as the system is developed, the necessary software upgrades will be provided in a timely, efficient manner.

Counterfeit and contaminated drugs pose a legitimate threat to the global drug supply chain.  The World Health Organization reports one in 10 drugs sold in developing countries is fake or substandard, “leading to tens of thousands of deaths, many of them of African children given ineffective treatments for pneumonia and malaria.”

And while developing countries may bear the brunt of the counterfeit drug problem, no country is immune.  In a single week, officials from Health Canada seized $2.5 million worth of fake pharmaceuticals at the border.  Earlier this year the WHO reported on fake leukemia medicine circulating across Europe.  And in the United States, which has the safest drug supply in the world, as many as 19 million Americans buy medicines from foreign online pharmacies or other unlicensed sources.

Clearly, the DSCSA comes at a good time for the U.S. prescription drug industry – and American consumers. And armed with a fully-integrated technology system, the nation’s pharmacies will continue to be at the forefront of efforts to protect patients from harmful prescription drugs.

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Categoriesnews,  PBM,  Pharmacy Technology,  Uncategorized

Pharmacy Technology Solutions For The DIR Fee Profit Squeeze 

Pharmacy Technology Solutions For The DIR Fee Profit Squeeze


Pharmacy technology – Earlier this year, New York City pharmacy owner Bob Hopkins told local television station WPIX that his drug reimbursement rates had decreased by 40 percent over the previous six months. “Which means,” the report noted, “every time he rings up a drug, he might be losing money.” This is why having the right pharmacy technology solutions in place to manage reimbursement data is important for your pharmacy.

This experience was echoed by another New York City pharmacist, Stephen Cilento, who co-owns Bridge Pharmacy in Bay Ridge, Brooklyn. Cilento told local publication The Brooklyn Daily Eagle as many as one-third of prescriptions filled by his pharmacy are reimbursed at a rate below his whole-sale purchase price.

Each of these pharmacy owners attributed responsibility for the reduced reimbursement rates to pharmacy benefit managers (PBMs) – the third parties that act on behalf of insurance companies and other payers to negotiate prescription drug prices with manufacturers, and determine pharmacy reimbursement rates through pharmacy technology solutions.

These examples follow findings of a study commissioned by the Pharmacists Society of the State of New York (PSSNY), which examined PBM practices statewide and found:

  • Pharmacy gross profit margins on generic drugs were reduced by 83 percent between Q1 2016 and Q4 2017;
  • Pharmacies were paid less than what it cost them to dispense a generic drug 99 percent of the time during Q4 2017; and
  • Pharmacies were paid less than the national average invoice cost of generic drugs 46 percent of the time. “In other words,” the study noted, “pharmacies were underwater on nearly half of claims.”

New York wasn’t the only state to delve into current pharmacy practices.

Last year Arkansas joined 37 other states in enacting legislation – the PBM Licensure Act – which promised to hold PBMs more accountable by requiring licensing by the state insurance department. But a year after the law took effect, pharmacy technology solutions show reports of declining reimbursement rates are still prevalent.

“There have been some improvements, but it’s far from a fixed problem,” John Vinson, executive vice president and CEO of the Arkansas Pharmacists Association told Arkansas TB&D news website. Vinson noted that just the day before, he received a call from a pharmacist who was reimbursed $20 for a drug that had cost $105 to purchase. The reimbursement rate had been $150 just a month before. Having the right pharmacy technology solutions in place will help you better keep track of your reimbursement rates.

Similar stories can be found among pharmacies nationwide. PBMs reject the notion they are at fault, and in response to the New York survey, the Pharmaceutical Care Management Association (PCMA) issued a statement that noted, in part: “The role of PBMs is to reduce prescription drug costs and improve the quality of pharmacy benefits for their clients. It is not to enrich independent drug stores, who are continuously pushing an agenda that increases their bottom line at the expense of patients.” However, having the right pharmacy technology solutions will help the pharmacy owner keep track of DIR and GER fees.

Regardless of where the fault lines, the fact remains that pharmacies have seen a sustained decrease in reimbursement rates that is affecting profitability and for many, their very existence.

But falling reimbursement rates aren’t the only profit pressures felt by today’s pharmacies. Omnipresent threats of DIR fees, price “spread” practices and reduced dispensing fees are also considerations.

According to the Healthcare Information and Management Systems Society (HIMSS), spread pricing “occurs when health plans contract with a pharmacy benefit manager to manage their prescription drug benefits, and PBMs keep a portion of the amount paid to them by the health plans for prescription drugs, instead of passing the full payments on to pharmacies. Pharmacy technology solutions can help your pharmacy better manage spread pricing.

“The spread,” HIMSS notes “is the amount between what the health plan pays the PBM and the amount the PBM reimburses the pharmacy for the beneficiary’s prescription.”

A 2019 investigative report by the New York State Senate’s Committee on Investigations and Government Operations called spread pricing a source of “significant revenue” for PBMs.

Spread pricing is most often used in conjunction with generic drugs, which account for almost 90 percent of all prescriptions dispensed in the United States. Last year, investigative reporters at Bloomberg took a nationwide look at the practice, and determined that spread pricing costs state Medicaid plans and insurance providers millions of dollars annually.

The Bloomberg reporters examined pricing and reimbursement practices for 90 different generics, across multiple state programs. This included pricing practices for aripiprazole, a generic anti-psychotic drug. The investigation found that although the market price for the drug dropped to about $20 per month during 2017, “many state Medicaid plans, including in Ohio, New York, Arizona and Texas, were still paying more than $140 a month.”

Similarly, the study found that in late 2017, “private Medicaid plans in Indiana spent more than $800 for a 30-day supply of entecavir, a hepatitis B pill that costs pharmacies less than $140 to buy. State plans paid more than $100 per prescription for generic versions of the heartburn drug Nexium, which cost pharmacies less than $25 at the time.” However, when asked, Indiana pharmacists claimed they were only receiving a “tiny slice” of those markups. “We’ve seen nothing but declining margins,” one independent pharmacy owner told the Bloomberg team. Using pharmacy technology solutions will come in handy during a pharmacy audit.

Direct and indirect remuneration (DIR) fees, according to the American Pharmacists Association (APhA), refer to “price concessions not reflected at POS for pharmacies participating in Medicare Part D networks. Accessed weeks or months after Part D beneficiaries prescriptions are filled, the retroactive fees complicate decisions about staffing and whether to expand or even keep open a business. Pharmacies may not realize until long after a prescription is filled that they didn’t even recoup their costs.”

In addition to recouping rebates and other post-POS price concessions, DIR fees can be assessed based on arbitrary factors, usually with little advance notice to the pharmacy. The New York Senate report cites DIR fees which include “costs for pharmacies to participate in a Part D preferred network, price reconciliations based on contractual rates, and compliance fees for contract-based metrics.”

National Community Pharmacists Association (NCPA) Director of Congressional Affairs Adam Harbison said in a 2019 presentation that pharmacy DIR fees “have increased 45,000 percent in less than 10 years, raising drug prices and putting many pharmacies out of business.”

Reduced Dispensing Fees Through Pharmacy Technology Solutions

Dispensing fees refer to the amount paid to a pharmacy to cover the costs of providing a drug to a patient. Several factors fall under the umbrella of a dispensing fee including labor costs, transportation, storage and patient counseling. According to RxSafe™, “the national average cost of dispensing medications is $10.55 per prescription – not including pharmacy profit – but Medicaid only reimburses a dispensing fee on average of $4.50 per prescription. Under Medicare, the pharmacist is paid even less — $2.27 per prescription. This is why pharmacy technology solutions are important. In group-health plans or private insurance, a PBM negotiates the dispensing fee with the individual pharmacies, typically at 40 percent off the usual and customary dispensing fee charge.”

For many pharmacies, the cumulative effect of reduced reimbursement rates, increased DIR fees, decreased dispensing fees, and spread pricing can seem overwhelming. And it probably helps explain why a 2019 survey of New York City pharmacists found 99 percent are concerned about negative consequences for their businesses, with 70 percent saying they had already laid off workers or reduced store hours.

Pharmacists Seek Legislative, Regulatory Relief

With so much at stake, it’s not surprising that pharmacies across the nation are joining forces to fight what many perceive to be existential threats. At the federal regulatory level, a 2019 industry-led effort came close to persuading the U.S. Department of Health and Human Services to revise Medicare Part D pricing structures so that point-of-sale pricing would include all pharmacy price concessions. Although that effort ultimately failed, it marked the closest the agency has come to addressing the issue.

Legislation has also been introduced in the U.S. Congress, S.988/H.R. 803, the “Improving Transparency and Accuracy in Medicare Part D Spending Act,” which among things, would prohibit retroactive pharmacy DIR fees.

At the state level, the National Conference of State Legislators (NCSL) reports state auditors in Kentucky, New York, Ohio, Pennsylvania, Texas and West Virginia have begun looking into pharmacy spread pricing practices in their states, although no legislative solutions have yet been enacted.

Also at the state level, laws have been enacted in 38 states seeking to hold PBAs accountable by imposing limits on pharmacy audits, and/or by imposing PBA registration requirements.

Pharmacy Technology Solutions to the Rescue

It just may be though, that a pharmacy’s best weapon could be its pharmacy technology system – the same system that serves as “command central” in managing everything from daily workflow to seamless refills to inventory and records management.

Pharmacy managers may be surprised to learn they are really just scratching the surface when it comes to accessing the full scope of their pharmacy technology system’s capabilities. A pharmacy that relies on its system for “refill management,” for example, may not take the next logical step of linking to an automated inventory management system.

A pharmacy manager may be pleasantly surprised to learn that its existing technology system offers significant options to improve efficiency, thereby off-setting some of the onerous and costly effects of declining reimbursement rates and other PBA-related issues.

  • Minimize mistakes. Since a pharmacy has little control over its drug reimbursements, it can better manage the dispensing process to minimize mistakes and ensure full reimbursements are received. Pharmacy technology solutions can help in several key areas:
    • Proper drug codes. An advanced pharmacy technology system will be linked to the National Drug Code, which will ensure proper identification codes are included on claims. Erroneous classifications can lead to improper reimbursement, and even outright claims denial.
    • Proper dispensing. An automatic pharmacy dispensing system will ensure that accurate quantities of a drug are measured. This eliminates any risk of human error, which can occur when a pharmacy technician becomes distracted, or simply makes a mistake.
    • On-time refills. Refills-filled-too-soon is another top reason for reimbursement denials. A pharmacy technology based refill system will automatically monitor a patient’s record, and alert the pharmacist if a refill order has been requested before the appropriate date. Improper refills are also a major “red flag” for PBM auditors, so a refill-management process has the added benefit of helping to minimize the risk of an audit.
  • Improved pharmacy inventory management. With a pharmacy technology solution enabled, automatic order system in place, a pharmacy can minimize the risk of holding expired or obsolete drugs in its inventory. In addition, pharmacy technology solutions will continually track bin contents, and alert pharmacy staff when a prescription has not been picked up. The system will generate a reminder to the patient and, ultimately, will add any unclaimed medication back into inventory.

Not only will improved pharmacy inventory management help control spending, but a pharmacy can also free up valuable storage space, to offer additional in-demand products.

  • Pharmacy eCare Plans. A relatively new trend in healthcare management is the emergence of pharmacy eCare plans. Through an eCare plan, a pharmacy maintains – and regularly updates — comprehensive records for all services provided to a patient including medication history, consultations, lifestyle plans, and medication adherence strategies. The eCare plan can be shared across a patient’s team of healthcare providers, and used to validate pharmacy reimbursement claims for value-added services.


  • Increasing number of prescriptions. An obvious way for a pharmacy to improve profitability is to increase the number of prescriptions filled. A pharmacy can achieve this by improving patient adherence rates (described below), or by expanding its viability as a “preferred network pharmacy.” This can be accomplished through metric-based reporting, which will allow a pharmacy to easily document its efficiency to health plans and PBMs.


  • Demonstrate efficiency for plans looking to boost star ratings. A pharmacy can also use metric-based reporting to demonstrate its performance to health plans looking to maintain – or improve – their “star rating.”

A pharmacy that prioritizes responsiveness to Centers for Medicare and Medicaid Services (CMS) Five-Star Rating requirements could improve its appeal as a “preferred pharmacy,” thereby potentially increasing its customer base. Pharmacy Technology related capabilities include:

  • Medication Adherence: A Pharmacy technology system provides the pharmacist with ready access to a patient’s medication history, which can be used to explain how a particular drug works, and discuss any potential side effects.

In addition, a pharmacy can automatically generate outbound text messages, emails and phone calls, as a way to remind patients about renewals and pickups.

  • Comprehensive Medication Review. An integrated system can manage CMR process requirements in key ways that include:
    • Identification of eligible patients
    • Determination of ideal medication dosages and usage schedules
    • Syncing of all medications so that all pick-ups occur on a single day
    • Availability of information describing purpose of each medication, along with information about potential side effects
    • Tracking of all pharmacist-patient interactions
    • Outbound texts and phone calls to remind patients about scheduled refills.
  • Ease of Obtaining Medications. A comprehensive pharmacy technology system will allow electronic transmission of a prescription, and seamless processing from the point it is received and recorded, entered into the queue, filled and marked for pickup.

In addition, many systems now offer apps that allow for 24/7 refill orders, whereby a patient can quickly request a refill from any internet-connected device.

  • Use of Statins. With CMS now assessing information about diabetes patients who are prescribed statins, a pharmacy’s technology system can easily identify affected patients, notify them about the role of statins in diabetes management, and initiate the process for obtaining a prescription.


  • Key Performance Indicators. A pharmacy can rely on its pharmacy technology system for customized reporting on self-identified metrics. An advanced system will allow detailed analysis of that data, and provide a pharmacy manager quick access to reports and graphs detailing performance across a range of functions. This detailed reporting can help a pharmacy manager easily determine strengths and weaknesses within the operation.

As pharmacists continue to face an array of profit-squeezing forces, they can find relief by unleashing the full power of their pharmacy technology system. Although technology can’t eliminate these fees and processes, it can help a pharmacy fight back, and even identify new opportunities for profit and growth.

by Micro Merchant Systems

Categoriesnews,  Pharmacy Audits

Pharmacy Audits Are On The Rise – Pharmacy Audit Solution

Pharmacy Audits are on the Rise

A Comprehensive Pharmacy Audit Solution Ensures 24/7 Readiness

A few years ago, the Michigan Pharmacists Association hosted a webinar on the topic of “pharmacy audits,” during which former state attorney general John Wright advised pharmacists that “because of technology, technically, you are always being audited.”

Wright went on to explain:  “Pharmacy Auditors have automated systems to look at your processes and what is happening in pharmacies, and are always looking at data for clues they can use to trigger pharmacy audits, so really you are always being audited.”

This bleak assessment would seem to be supported by reports from different pharmacists about the frequency and scope of audits their pharmacies have experienced in recent times.

A popular blog written by an Iowa pharmacy owner, for example, detailed the author’s pharmacy audit experiences.

“Over my career as a pharmacy owner, we have faced over $1,000,000 worth of pharmacy audited claims, and the PBMs have attempted to charge back over 10% of that amount,” the author wrote.  “A single pharmacy audit may include over 100 individual prescriptions representing as many as 250 dispense dates and may represent over $100,000 in sales.”

This particular pharmacist went on to note his near-100 percent success rate in defending his pharmacies from unfair charge-backs – a process that required a considerable investment of time and energy.

Similar examples were reported by Health Mart, which cited one Pennsylvania pharmacy owner whose three stores were audited “about 30 times” in a single year.  Another owner of five pharmacies in Ohio said his staff typically handles three-to-five pharmacy audits at any given time.

It would certainly seem then, that pharmacy audits have become an inevitable part of today’s pharmacy operations.  For a pharmacy that has not yet been subject to a pharmacy audit, the question is not “if” an audit is in its future, but “when” will it occur?

Stay focused on the underlying purpose of a pharmacy audit.

As a pharmacy owner considers the potential implications of a pharmacy audit, it’s important to stay focused on the underlying purpose of a pharmacy audit:  Parties paying for services want to make sure they are not paying too much, and that organizations with which they engage are acting in good faith, and in full compliance with all regulatory requirements.

That said, it’s critical for a pharmacy owner to have a good understanding of current pharmacy audit practices, and information about how to proactively prepare for an audit. That preparation begins with meticulous documentation and record-keeping as a way to minimize the disruption and adverse consequences of a pharmacy audit.  A comprehensive pharmacy software solution can provide a high degree of confidence that all records are in order, but a pharmacy owner must have an appreciation for the “bigger picture” of today’s pharmacy audit practices.

pharmacy audit

For starters, a pharmacy manager must realize that pharmacy audits can come at any time, and in many forms.

In general, pharmacy audits are usually initiated by a party which may include:

  • Pharmacy Benefit Managers. (Caremark, Express Scripts, OptumRx, etc.)
  • Private insurance companies. In many instances, pharmacy audits are outsourced to external audit companies that operate on a “bounty” basis whereby the auditor is paid a percentage of monies recovered in the pharmacy audit. Thus, these companies have a financial incentive to uncover wrongdoing.
  • Government Agencies (Medicaid/Medicare or, if fraud is suspected, the Drug Enforcement Agency).

Regardless of which party initiates the pharmacy audit, the goal is generally the same – to uncover wrongdoing and recover funds believed to have been erroneously paid to the pharmacy.

Many Different Types of Pharmacy Audits

According to the American Pharmacy Cooperative, Inc. (ACPI),  common types of pharmacy audits include:

  • Desk/mail audits. An auditor will contact a pharmacy by automated means and request specific pharmacy claims and/or additional information. The pharmacy will accumulate the requested information and send the documents to the auditor.  According to ACPI, the desk audit is “set up to evaluate  prescribing patterns, physician referral patterns, utilization overrides, ingredient cost integrity, geographic prescription reports, payment reports, and billing issues to identify possible abusive or fraudulent activity.”
  • Telephone pharmacy audit. The pharmacy receives a phone call from an auditor and is asked to clarify information included on a single claim, or a small number of claims.
  • Prescriber audits. Claims provided by a pharmacy are “thoroughly verified” by a prescriber/physician to ensure all parties records coincide. The prescriber audit is essentially handled the same way as a desk audit.
  • Member audits. Claims provided by a pharmacy are validated by specific patients/members. This type of audit is also handled in the same manner as desk audits.
  • On-site/Field pharmacy audits. As the name implies, this type of pharmacy audit takes place within the pharmacy, with an auditor being on-site for an undetermined length of time.  ACPI notes key features of the on-site audit which include physical observations, prescription reviews, inventory, and checks for compliance with Part D regulations and procedures.

Pharmacy Owner Audit

Pharmacy Audit Notification

Most pharmacy owners are notified 2-3 weeks in advance, and informed about the scope of the pharmacy audit.  This provides the pharmacy owner with time to assemble the requested documents – something that can easily be accomplished via a good pharmacy software system. Requested information may include:

  • List of prescriptions filled during specific date range
  • Signature logs
  • Billing records
  • Policies and procedures
  • Compound formula worksheets
  • Written policies regarding compounding.

According to Pharmacy Times, the on-site pharmacy audit has “the potential to become a really big deal.”  A typical pharmacy audit will review claims going back 24 months, with an auditor reviewing as many as 100 prescriptions in one afternoon.  Any discrepancies may be subject to an adjustment, unless a pharmacy manager can produce documentation to support the claim.  “Something as simple as an undocumented refill in the computer may amount to thousands of dollars in adjustments.”

In some instances – “rare instances” according to ACPI – pharmacy owners are not notified in advance.  This type of “unannounced” pharmacy audit can result in a less efficient investigation, since the pharmacy owner has not had time to prepare necessary records and documents.  But, the unannounced visit can provide a more reliable indication of a pharmacy’s day-to-day operations.  Should a pharmacy owner face an unexpected visit from the pharmacy auditor, Cardinal Health provides a few steps to follow:

  • Verify the identity of the individual. Request identification and call the phone number listed on the individual’s business card to verify employment.
  • Inquire about the scope of the pharmacy audit and document the answer in writing.
  • Ask how long the auditor will be on-site and determine the number of records that will be subject to examination.
  • Ask for time to ensure proper staff coverage.
  • Direct pharmacy staff that all questions should be directed to the pharmacy owner or manager.
  • Ensure staff is aware of pharmacy policies for partial refills, prescriptions that are not picked up, procedure for drugs not covered by Medicare Part D, and other key pharmacy processes, in case questions are asked of them.
  • Do not allow the auditor to roam the pharmacy unattended. Instead, if the pharmacy auditor wants to check on refrigerator temperature, or manually review shelf inventory, or any other process, the pharmacy manger should either accompany the auditor, or provide the requested information.


  • Investigational Audit. According to ACPI, “providers are contacted normally by telephone or mail and asked to provide photocopies of specific documents and records related to claims paid to the provider during a specified period of time.  Documentation may include copies of original prescriptions, signature logs, computer records, and invoices showing purchase or receipt of dispensed medications.  These can be as simple as comparing National Drug Codes (NDCs) ordered versus those dispensed, or a more  complex investigation involving the prescriber, member or potential pharmacy fraud.”


  • Invoice Audits. In this type of audit, auditors review NDCs and amounts for medications submitted by pharmacies from wholesaler receipts.  According to ACPI, invoice pharmacy audits can be classified as “investigational” audits, and are in accordance with third party payor agreements.

Pharmacy Audit Documentation and Record-keeping

Hanging over all pharmacy audits, of course, is the threat of financial repercussions, including claw backs of fees determined to have been paid in error, penalties, contract cancellations, and the possibility of an audit finding triggering a larger investigation.  One Ohio pharmacist told Pharmacy Today that his five community pharmacies were under such scrutiny by pharmacy auditors that two staff members were assigned to deal with audit matters. “The problem,” he noted, “was that the large sums of money Pharmacy Benefit Managers (PBMs) wanted were for minute errors like misspelling a person’s name.

“We were getting audited for reasons that didn’t affect the patient outcomes, or the payer in a negative way,” the pharmacy owner noted. “It was mostly clerical errors.”

While no two pharmacy audits are ever exactly the same, most have a few key elements in common, namely the need to provide seamless documentation trails for all critical pharmacy transactions, including prescribing and billing practices, invoice and inventory records and controlled substance management.

Which is why the most important audit just might be the one that takes place proactively within a pharmacy, before the pharmacy audit notice arrives, or an unannounced pharmacy auditor arrives on a pharmacy’s doorstep. A pharmacy self-audit can allow a pharmacy to self-identify potential areas of vulnerability, and implement quality best practices that will ensure top-notch record-keeping.

Improper documentation is a top reason for pharmacy audit penalties.

“Think about what you do, how you handle your documentation now,” advised John Wright in the Michigan Pharmacists Association webinar.  “Don’t wait until the pharmacy auditor comes in and you’re kicking yourself because you’re going to lose $10-or-$20,000 because you didn’t have your documentation filled out correctly.”

But what exactly are the documentation snafus that can trigger a pharmacy audit?  Elements magazine, produced by PBA Health lists five common mistakes:

  • Filling unauthorized prescription refills, and failure to accurately document refills.
  • Failure to maintain hard copies of prescription records.
  • Failure to dispense correct drug quantity
  • Using incorrect Dispense-as-Written (DAW) codes.
  • Insufficient directions for use.

Your Pharmacy Audit Software Solution – An Essential Tool in Audit Preparedness

The good news for pharmacy managers though, is that whereas locating required documentation and records used to mean hours spent hunting through file boxes, today that information can be just a few clicks away.  A pharmacy’s technology solution, which already serves as the pharmacy workhorse by facilitating pharmacy workflow and prescription filling processes, can also be a one-stop solution for most-requested pharmacy audit documents.

A comprehensive pharmacy software system will allow for the capture, archiving and storage of critical capabilities including:

  • Electronic signature logs
  • Proof of prescription pick-ups and deliveries
  • Copies of all prescriptions, both front and back
  • Payment documentation
  • Coordination of benefits
  • Prescription inventory records
  • Copies of all pharmacy correspondence, including exchanges between the pharmacy and patient
  • Automatic inventory management and reordering procedures
  • Automatic inventory adjustments to reflect medications returned to stock
  • Verification of prescriber credentials
  • Assignment of NDC codes
  • Proper billing practices for generic and brand-name drugs
  • Documentation for controlled substance handling
  • Automatic warning trigger for potential over-prescribing of opioids and other controlled drug categories.
  • Automatic triggers to reduce dispensing errors; and
  • Seamless insurance claims management.

Easy access to any of these data elements can be a tremendous time-saver in preparing for a pharmacy audit, and allow pharmacy managers to address auditor documentation requests.

Although pharmacy audits have become almost inevitable, they no longer have to strike fear and dread within pharmacy managers and owners.  Instead, as Michigan’s John Wright notes, they are “survivable,” especially for a pharmacy that has done its due diligence and has good internal controls and records management processes in place.


Green Valley Pharmacy Interview

Transcript Below

1.)  What was your journey like to get where you are today?

The journey was fun for the most part but challenging at times. We recently opened our second location in Rancho Cucamonga, with the first pharmacy in Yucaipa, so things are going very well now, but as I look back, I’m amazed by the twists and turns in my adventure. I graduated from Loma Linda University School of Pharmacy 2010. Thinking that I really wanted to go into residency to specialize in transplant, I interned at the university medical center throughout pharmacy school. During my internship, I realized that I actually enjoy working more in a social environment, which doesn’t necessary happen in a hospital setting. Up to that point, community practice had not crossed my mind, so I went on to select clinical rotations that I felt focused more on interactions with people. I selected the pharmaceutical Industry rotation with Allergan and Oncology Research at the NIH in particular, because I saw myself interacting with many other healthcare professionals on a regular basis. In the end, I did not go into either of those fields for various reasons. While I like to interact with people, it’s difficult for me to engage when I feel the interaction is tainted. I am not saying there is anything immoral or inappropriate, but if my purpose is to promote a certain product or to push a certain agenda I do not believe in, it’s very difficult for me.

There were two separate experiences that pointed me towards community practice and made me want to open an independent pharmacy eventually. The first one happened during my time as an In-patient intern at LLUMC. There was a period of time that the outpatient pharmacy needed coverage, so I was called to help at the outpatient side. Maybe it was a different vibe or just higher energy at the outpatient side, but I really felt at home. And as I mentioned earlier, that’s when I realized I enjoy working with people in a more social, interactive environment. The LLUMC out-patient pharmacy team was great with good personalities, good leadership and overall good energy, which motivated me to go to work. The second experience I had was when I was rotating through Waterman pharmacy, an independent. The owner, Dennis, was my supervisor, and he was an amazing pharmacist/business owner. He modeled how a pharmacist should appropriately interact with his patients and how pharmaceutical care should be provided. I was blown away. It was then that I saw the tremendous value of a good community pharmacist to his patients and providers. It was literally life-changing, and I thought, “Now that’s a career I can get behind and do for the rest of my life!”

2.)  In one word, describe yourself.

Motivated. I am motivated because I have plenty of good motivations and motivators. Let me explain. I believe happy people find meaning in what they do and then they do it with a passion. In a way, I have it easy as a healthcare provider to find meaning at work. For me, being a pharmacist really means making a positive impact on the lives of my staff, my patients, and my providers, and there’s plenty of meaning in that, right? As a business owner, being able to provide for my staff and my family, while growing the business to bring more positive interactions, to make more positive impact, now that’s just the cherry on top. I am also motivated to improve our practice and share our experience with the next generation of pharmacists. I am constantly thinking of ways to improve our service and people’s quality of life. If you have my job, you’ll be motivated too!

3.)  How do you see the industry changing in three years?

It’s hard to say. In community pharmacy practice, I do see more and more clinical applications and collaboration with local providers, so I think that trend is going to continue. Eventually pharmacies may become the preferred locations for follow-up visits for certain chronic disease states like diabetes and hypertension, but maybe not in three years time. I do believe we need to stay on top of our skills so we don’t get left behind, and for that exact reason, I recently got certified as one of the first 500 Advance Practice Pharmacist (APh) in California. For those who are interested, you can look up the details, but in a nut shell that means you are making a commitment to stay current on the new treatment approach for different diseases and be able to collaborate with other providers and clinics when necessary. For pharmacists to be recognized as a crucial member of the medical system, we need to learn to communicate using the same platform with the same medical/legal language. I think that’s an important step we can take in the next three years

4.)  What are your top 3 professional accomplishments?

One is opening our independent practice so that we can provide the quality and the kind of care we want without having to deal with corporations and bureaucracy. Having an independent pharmacy also means that we have a platform to start a movement to improve community pharmacy practice.  My second top achievement is getting certified as an APh, which I see as becoming a specialist besides having my general practice in the community pharmacy world.

The third is not really an accomplishment, but something of which I am very proud. I lectured on the topic of independent practice at both Loma Linda University and Western University schools of pharmacy.  I also have had pharmacy students at our pharmacy for different school activities in an attempt to inspire the next generation of community pharmacists. Perhaps it is just my own perception, but I feel that the modern pharmacy school curriculum focuses heavily on clinical practice (and I can understand why) but at the same time, discourages community pharmacy practice. Community practice seemed to be viewed as lesser or inferior to any other practice, with Clinical being on the top of the pyramid. I know that community practice is the most common and does not require additional training, but that does not mean mediocracy. Perhaps it’s the lack of passion or enthusiasm people see from many chain pharmacy staff members who are burnt out, or the lack of meaning community pharmacists find in their practice. I believe we can change the culture of pharmacy practice if we can show pharmacy students the true positive impact of a good community practice on patients and the community. Then, more great community pharmacists will graduate and push our profession to new heights.

5.)  Who do you look up to?

Professionally, three of my old bosses were incredible pharmacists and successful business owners. William, my previous district manager at Rite Aid is now the owner of multiple pharmacies. He’s one of the most intelligent persons I know and the best district manager to work for. Then there is Dennis, a resourceful visionary. From community practice to specialty pharmacy, he’s involved in a multitude of pharmacy practices. And I also look up to Brandon, a very nice guy who successfully owned and operated six pharmacies at the same time and developed his own pharmacy software, and still managed to have time for his family. Impressive!

6.)  Think back and share a story about a personal life experience that defines who you are today. What was the value/lesson?

I’m not sure about a single story but rather a series of life events that helped shape me. But the first crucial event I can remember was when I started to attend the only boarding school in Hong Kong when I was 11, by choice, surprisingly. That period of time made me understand early on that decisions you make along the way will lead you down a certain path and each with its own consequences, heaven or hell. I remembered that I was somewhat of a ringleader among a group of trouble-makers in the dormitories, the only group really. Long story short, police got involved due to some damaged property, and I was under a tremendous amount of stress from my school. Friends, who I thought were solid, all left and disappeared when the situation went south. It was clear to me that I would end up somewhere ruinous if I were to stay the current course. So I made the decision to aim high to do something positive and not to stay angry and cause more suffering (mostly to myself). I learned that by acting and conducting oneself properly in the world, it will lead to an overall positive outcome, and vice versa. And since that point, I’ve been looking for areas that are intuitive to me and finding ways to apply myself effectively to bring some good eventually.

7.)  Would you explain a little bit about Green Valley Pharmacy and your role there?

So what is Green Valley Pharmacy? The right question is why. GVP’s mission is straightforward: to improve quality of life for everyone we come into contact with. Being educated at Loma Linda University, our school motto was “To Make Man Whole;” our pharmacy mission echoes that message. We are a group of people who care about the well-being of others. Besides doing what pharmacies traditionally do (like processing prescriptions, filling medications, auto refills…), we care about our patients’ health as a whole and our goal is to help them stay healthy so they are able to do what’s meaningful to them. We believe that each of our patients has a purpose and we are here to help them fulfill theirs with treatments and pharmaceutical care. We listen to their life struggles, let them know they are part of by a community. And we often see people take better care of themselves when they know that someone else also cares about them, that’s a cool phenomenon. We also focus on finding ways to better the lives of our employees’ and our local providers’ throughout our practice.

Besides being a full time pharmacist, my primary objective is to improve the quality of the services we are providing. I often collaborate and discuss how to handle various situations with my staff and how to tackle certain problems that come up. It’s also my job to learn about new services we can implement and to build relationships with the local providers and community.

8.)  What’s the biggest challenge facing your profession today?

The three biggest challenges we face today is low insurance reimbursements, insurance processing fees, and their exclusive contracts with the big box stores and their mail order pharmacies. For instance, certain plans will charge their patients higher co-pays when they fill their prescriptions anywhere else but their preferred chain pharmacy. For patients who can afford the higher co-pay and prefer our pharmacy due to our friendly service, they stay with us knowing that they are paying more. But that’s not always feasible for those who don’t have the financial means. Some insurance plans even limit their members to only their own mail order pharmacy. Another challenge we face today is the increased insurance processing fees which vary depending on the insurance company and the drug dispensed. In certain situations, these processing fees are more than the actual insurance reimbursement amount.

9.)  What advice would you share with pharmacists looking to start their own pharmacy?

As a pharmacist, you’ve got to have heart! People will see right through you if your motivation is not genuine. Your patients and your staff won’t feel empowered if you don’t believe in why you do what you do. In terms of the business aspect, independent pharmacies tend to do better when they can find a niche and are able to fill a need. In other words, you will need to identify a service that is meaningful to the local community you are serving, either to perfect what is existing or to introduce and deliver a brand new service.

10.)                     How can our viewers/readers reach you?

All of our information is available on our website Additionally, guests can always visit us at our Yucaipa location at the city center across from Vons or our Rancho Cucamonga location near Victoria Gardens.


How Long Does Facebook Marketing Take To Work For My Pharmacy?

“It feels as if I’m wasting my money. I advertise and nothing happens”

As a pharmacy owner who has tried Facebook ads (or any advertising), you know you’ve said that before.

I feel your pain. I’ve said it before too.

When I first started using Facebook ads, I had read so many great things about it that I assumed I’d put an ad up and within minutes customers would be knocking at my door. Instead, a day would go by and nothing. Another day would pass, and more silence. By the 4th day, I’d pull the ad.

I would do this with all of my advertising, and month-by-month I’d be shocked that I wasn’t growing as much as I thought I would. Finally, after a few years of mediocre growth, I hired a business coach, and that’s when I was reminded of the fundamental truth in all advertising with 10 simple words.

The fundamental truth – people will only buy from you if they know, like, and trust you.
And guess what?

No one is going to get to know, like, and trust you after just ONE ad. In fact, research says it often takes 8+ ads to get someone who doesn’t know you to buy from you.

For example, last night I purchased this 3D printer for my daughter.

I had never dealt with the company before nor have I even heard of them. So, guess how many ads it took me to pull the trigger and make the purchase?

Easily over 12 ads.

The very first ad I saw was a video ad on Facebook. Intrigued by the 3D printer, I clicked the link and went through the website. Although I immediately thought my daughter and nephews would love it, I didn’t make the purchase. I guess I didn’t want to make a $350 impulse buy.

Then the very next day I get on Instagram, and I see another ad for it. Over the next 5 days, I was bombarded with ads for it on Facebook and Instagram (the beauty of the Facebook pixel and remarketing). I watched every video, read every comment under the ads, and learned as much as I could about it. I visited the website at least 5 different times and even had it in my cart 2 different times. Finally, I made the purchase.

Now, if the old me was running that company, I would have given up after the first ad and lost a $350 sale. Not now though. Now that I understand the value of building “top-of-mind-tip-of-tongue” awareness, I would have been relentless just like that company was. Is it any surprise that that company is going to be featured on Shark Tank? They have a great product and know how to market it.

Think about this for a second….
Do you ever purchase anything from a company you don’t have a relationship with after just one ad? Doesn’t it usually take 3, 4, or even 10 ads before you pull the trigger? You’ll read the comments, search for reviews, talk to friends about it, and possibly even email the company before you make the purchase. Right?

So, obviously, our marketing wasn’t the problem. Our patience was.

What’s the takeaway then?
It’s extremely important that if we want to grow, we need to invest in marketing that’s designed to build “top-of-mind-tip-of-tongue” awareness, or as some marketers call it omnipresence.


Because almost all of the people we’re targeting are probably already patients at another pharmacy. After one ad, they probably aren’t likely to switch over. However, if they keep seeing your face everywhere, read glowing testimonials, and appreciate the value you put out in your content marketing, as soon as they do think about switching pharmacies, you’ll be the first pharmacy they think about.

Right now there are thousands of unhappy patients at Walgreens and Walmart. Between the poor customer service, the long wait times, and the prices, they’re constantly triggered.

Why don’t they leave then?

Simple. They don’t know they have another option. That is unless there’s an astute independent pharmacy owner in their area that’s constantly building top-of-mind-tip-of-tongue awareness.

So how can a pharmacy build “top-of-mind-tip-of-tongue” awareness using Facebook ads?
A Simple 15-second video targeting your entire zip code
This doesn’t have to be Oscar-worthy. Some of the most successful videos are made with nothing more than an Iphone. A simple, “Hi, I’m John Smith, owner of John Smith’s pharmacy in Smithville, IL. If you’re not getting great service from your pharmacy, I’d love to have you as a patient.” A few bullets with things like free delivery, no long lines, etc. Bam. It’s done. Budget $5 per day and run it for a few weeks, alternating between a few different videos/ad copies. As soon as the mere thought of switching pharmacies pops in your market’s head, they’ll think of John Smith.

A geo-targeted Facebook ad around the local physicians’ offices
Smart marketers know that if they can get in front of potential customers at the right time, they’ll have a much higher likelihood of turning them into actual customers. When is a person most likely to need your services? You guessed it – after leaving the physician’s office.

With this ad, we’ll drop a pin at the address of the physician’s office, limit it to only mobile devices, and even geofence around the physician’s office so the ad is limited to just the physician office and not the 1-mile radius around it you’re limited to with a pin drop. Our hope is that as patients are browsing Facebook or Instagram on their phones in the waiting room, our ad will pop up with our services. Bam. “Top-of-mind-tip-of-tongue” awareness. Budget $5 per day. This ad can run for months since most people aren’t at the doctor every day.

A geo-targeted Facebook ad around your competitor’s pharmacy.
Not too long ago a pharmacist posted in one of the independent pharmacy Facebook groups I’m a part of about how opening his pharmacy across the street from Walgreens was the best decision he’s made. In his words, Walgreens essentially acts like a funnel for him, bringing in new patients almost daily.

Unfortunately, we all can’t pick up our pharmacy and move it next to a CVS or Walgreens. However, with Facebook ads, we can do it virtually. Drop a pin at the address of your competitor, select only mobile devices, and geo-fence around it so your ads will only be shown to people physically at the pharmacy, not the 1-mile radius dropping a pin is limited to. As Walgreens makes a patient wait 30 minutes for a prescription, he’ll be browsing Facebook, see our ad, and realize there’s a more convenient solution.

Pro tip: If you know your competitor’s weakness, include that in the ad. For example, the large majority of patients we get from Walmart come to us because of the 30+ minute wait at the Walmart pharmacy. If we were targeting this WalMart, the first line of our ad would say something, “Are you tired of waiting for your prescription? We know your time is limited so we can get you in and out of the pharmacy in 10 minutes.” A $5 per day budget is ideal. This ad can run for months since patients will see it infrequently.

What were those 10 simple words that completely changed how I advertise?
If they don’t know you, they won’t buy from you.

Top-of-Mind-Tip-of-Tongue Awareness.

Author: TJ Allan


How Physician and Pharmacist Integration Generates Innovation

Physicians didn’t spend long years in school to have two-thirds of their work-day be comprised of data entry task.

Pharmacists didn’t spend long years of school to have two-thirds of their work-day consist of filling and dispensing medications.

Both professions went to school so that they can perform at the top of their license and modernize today’s healthcare era; bringing revolutionary solutions to the healthcare industry. It’s already apparent that we prefer to avoid the administrative burden, as it disrupts our workflow and takes time away from spending with the patient.

Our reimbursement model has changed and went from fee for service to now value-based care.

Physicians are the Medicine experts, while Pharmacists are the medication experts. Both professions are considered predominant healthcare leaders in the industry.

Physicians are the first point of contact to diagnose and assess appropriately, while Pharmacists are the last line of defense to verify that the appropriate treatments were prescribed.

It’s clear that both professions possess a high pedigree of clinical knowledge.

Why do we separate the two entities, instead of bringing them closer together?

Primary-care physicians, participation in a care-team program can ease the burden associated with the management of complex-care patients. It also provides a way to better manage the cost of these patients by optimizing their health and functional status, decreasing excess healthcare use, minimizing emergency department visits and other hospital utilization (including readmissions), and preventing long-term nursing home placement.

What’s going on in the Physician private practice world, is also going on in the pharmacy private practice world.

According to the American Medical Association, less than half of physicians own their medical practice. “First-time ever” its been this low.

According to the NCPA (National Community Pharmacist Association) digest report, there has been a steep drop in independently owned pharmacy practices compared to previous years.

Ownership and employment shifts reflect the industry’s increasing compliance costs and new payment models.

Health systems have been aggressively mopping up the physician practices, while the Large-chained pharmacies have been aggressively mopping up the small mom and pop independent pharmacies.

The common reasons shared for selling their practice:

  •  Low reimbursements
  •  High overhead cost
  •  Burnout
  •  Increased competition by bigger players
  •  Lack of innovation

With the collaboration of Physician and Pharmacy private practices, it can help eradicate a bulk of the problems both professions face and help revolutionize healthcare.

Ways a Pharmacist can help improved value-based care models for Physicians:

  •  Disease-state management therapy– Most physicians are trained only to know the contraindications of medications for individual disease states. Where they may lack is the Pharmacokinetics/Pharmacodynamics profile, Medicinal chemistry, and the robust intelligence of clinical literature of drugs in certain classes. All of these small intangible things relating to a drug have a significant impact on its effectiveness.
  •  Primary care Pharmacist plans– Yes, Pharmacist can provide care plans. A clinical pharmacist can also put together a care plan to better assess the patient and provide useful treatment recommendations for the Physicians review. This can help reduce the administrative task physicians may have to deal with, which in return allows the physician to spend more time with their patient to go over the pathophysiology of their condition.
  •  Pharmacoeconomics– the Pharmacist, have the due-diligent training to evaluate the cost and effectiveness of a pharmaceutical agent against another. This can be referred to as a cost-benefit analysis.  Hence, pharmacoeconomics can help guide optimal healthcare resource allocation and provide more buy-in from Insurance companies.

How can a Physician be of aid to a Pharmacist:

  •  Pathophysiology– Physicians are experts and well-trained in the pathophysiology of a patient. This is knowledge pharmacist may lack the substance of knowledge in pathophysiology. Physicians are sharply intelligent in diagnosis criteria’s and general assessment of a patient.
  •  Medical Knowledge– Physicians have the medical knowledge to help consult with patients on preventative skills to live a more proactive healthy lifestyle. The more time the Physician has with the patient, the better the outcomes.

In hindsight, Physician & Pharmacist collaboration has the potential to create a robust HealthSystem for patients and also produce a stronger buy-in from insurance companies.

Population health is the current and future trend of healthcare. We can start synergizing our talents and bring out the best in value-based care practice models.

The more prominent players are already adopting vertical integration strategies to help create a more user-friendly and efficient healthcare system. Why can’t we?

In essence, “we have to STOP advertising and START innovating.”




How many times has a patient presented to you a prescription for a “specialty medication” that you are unable to fill?  It could be that you are not able to order the medication from your wholesaler. Or worse, the patient’s insurance is mandating a specific pharmacy different than yours.  It can be frustrating when a current or prospective customer is coming to you, the pharmacist, for a solution to their chronic and sometimes rare, condition.


There is no finite definition for what qualifies as a “specialty medication“.  In general, specialty medications are used to treat chronic or complex conditions and usually require special handling or administration and close monitoring of the patient.  Sometimes, these prescription medications are indicated for rare diseases, which means that the disease affects less than 10,000 people. And they are therefore given “orphan drug status” under the Orphan Drug Act of 1983.  This Act allows for fast-track FDA approval for drugs intended to treat these rare diseases due to limited therapies available on the market.  Obtaining fast-track approval allows the medicine to be available as quickly as possible to the patients that need it the most.  This also means that the medication does not have to go through as many lengthy clinical studies as the “more” traditional therapies.  Often, as a stipulation of being given fast-track approval status, the FDA may require additional aftermarket studies to be completed, meaning that the drug is available to be prescribed but the patients taking the medicine are monitored for safety and efficacy of the therapy.  This is referred to as a Phase IV clinical trial.  Any pharmacy that dispenses one of these drugs must understand this process and accommodate the patient and drug manufacturer for any required documentation or data.


Some specialty drug manufacturers may limit the number of pharmacies who have access to order their medication.  These are deemed “Limited Distribution Drugs,” or LDDs for short.  When attempting to order one of these medications from your wholesaler, you may notice that the drug’s name is not listed in the system. Or it may take you straight to a screen that reads, “due to manufacturer limitations, this product is only available through a limited distribution network” and to contact the manufacturer directly.  This can be very disheartening for a pharmacist or pharmacy owner.


Upon calling the manufacturer, you may find out that in order to gain access to this drug, there are many rigorous requirements to meet first.  It is also worth mentioning that all manufacturers are different and have different specifications that must be met.  Many require weekly data reports so it would be prudent to know if your pharmacy’s dispensing software can accommodate customized and automatic reports.  The manufacturer may also request proof that you, as the pharmacy, have a way to monitor the patient for adherence and therapy response.  A common theme among these manufacturers is some sort of “specialty accreditation”.  This is often the first step to becoming a Specialty Pharmacy.


Achieving accreditation proves a commitment to quality and standards that are becoming the norm in the specialty space.  Accrediting bodies such as the Accreditation Commission for Health Care (ACHC) and the Utilization Review Accreditation Commission (URAC) are arguably the most reputable in the field.  Both sets of standards set the stage for core activities such as:

o   Patient Care

o   Coordination of Care and/or Delegation

o   Information Management

o   Compliance Program

o Quality Management and Continuous Quality Improvement, etc.

Accreditation is strongly recommended but could become mandatory by payers in the near future in order to ascertain preferred contracts for reimbursement purposes.  This means extra revenue for your pharmacy by adding a specialty line of business.  The entire process can take up to six months to a year for full accreditation and can be very arduous and labor intensive.


If all of this is intimidating to you, just know that you are not alone.  The key is to connect with a professional who has been through the process. Ideally, they should have been able to achieve and has maintained accreditation for some time.  Embarking on a project like this size could be overwhelming and a competent expert can guide you through the process.


There are many resources available though, if you choose to take on a project independently.  However, there is a lot of competition out there in specialty pharmacy but accreditation can set you apart from others.  Visit or to learn more about the various programs in accreditation.



We recommend using CSI Specialty Group for all of your specialty pharmacy consulting needs. Click Here 



10 Pharmacy Startups and Innovators

For a long time, the pharmacy space was dominated by big and long-established pharmacies. There was a major lack of startups and innovators were also lacking.

It was only recently when there was a rapid growth in pharmacy startups that areas in the pharmacy space, that have remained untouched for a long time, were disrupted. These include medication dispensing, delivery, cost-savings, prescribing, information, storage, vitamins and supplements, and specialty pharmacy services.

Below is a list of startups that have excelled in one or more areas of the pharmacy industry that are in need of improvement.

  1. DeliverCareRx

DeliverCareRx takes medication delivery to another level. Not only does the pharmacy offer free home delivery for more than three prescriptions per month but also synchronizes your prescription needs. This means your prescriptions are delivered to your door at the exact time that you need to replenish your supply.

This makes prescription acquisition convenient and timely. You never have to miss a refill for any reason. This also saves you money from fare or gasoline.

DeliverCareRx also offers free prescription management. No need to go to the doctor’s office and visit your insurance provider because they will handle the scripts/paperwork for you.

  1. ZappRx

ZappRx offers patients a quick and easy way to process the specialty drug orders through the ZappRx digital platform. You can order specialty medications online quickly and easily.

Considering that specialty prescribing takes time, the shortcut that the pharmacy offers makes a huge difference. Apart from streamlining the process of specialty med ordering, ZappRx also helps with the communication between providers.

  1. NowRx

NowRx hand delivers your prescription medication the same day you place your order. Since you only need to use an app to place an order, you can skip the long queues and have your prescription filled without leaving home.

You can send your prescription to them or have your doctor send it directly to the pharmacy. So after your checkup, you can go straight home instead of going to the pharmacy to purchase your prescription because your doctor can send the prescription on your behalf.

Upon fulfillment, you will receive a notification. Your card will be charged automatically.

You also have an option to video chat with your pharmacist for consultation and for whatever queries you might have.

  1. Blink Health

Blink Health lets you buy your prescription meds at a more affordable price. They guarantee the lowest drug prices on all generic medications.

This is one of the startup drug companies dedicated to providing patients with medication cost savings. Unlike other pharmacies offering the same service, Blink Health does not require membership fees or coupons.

You can also pick up your prescription medication at local pharmacies near you. Just pay online and your order will be ready for pick up. Enjoy an average of 70% cost saving per prescription filled.

  1. GoGoMeds

Run by Specialty Medical Drugstore, a full-service pharmaceutical provider based in Greater Cincinnati, GoGoMeds offers low-cost prescription medications and other specialty pharmacy services.

You can have your prescription filled without the need to leave your home. Just send your prescription via mail or have your doctor fax it directly to specialty medical drugstore.

If you want to transfer from one pharmacy to GoGoMeds, just provide the name and phone number of the pharmacy when you process your order. Upon fulfillment, your medicine can be shipped to you directly or delivered according to your instructions.

  1. Alto Pharmacy

Alto Pharmacy fills your prescription and delivers your meds for free. The pharmacy stocks all common medication and specialty treatments and sells them to you at the best price. With the same copay and free delivery, you’re sure to achieve medicine cost savings.

With the acquisition of Round Health, Alto Pharmacy helps ensure people actually take their medicine. The reminder app not only takes note of your schedule for taking your medication but also the patterns and rhythms of your life. This allows the app to remind you of your medication more effectively.

You also have the option to have your prescription refilled at a specific schedule and right on time.

  1. NimbleRx

Fast and reliable medication dispensing is what NimbleRx is all about. They offer fast delivered pharmacy services that ensure patients get their prescription on time.

Delivery is always free, and you get to choose when and where you want to receive your prescription. Just have your doctor send your prescription directly to the pharmacy and they will take care of the rest.

If you need to manage your refills, just use the Nimble Pharmacy app. It’s easy to manage and will speed up purchase and delivery services.

  1. MedAvail

MedAvail has created medication pick up points, self-serve pharmacy kiosks where patients can pick up their prescriptions and over-the-counter medications.

The MedCenter, as the kiosk is called, is remotely controlled by a pharmacist who interacts with clients through audio and video network connection. Think of it as an ATM that dispenses medication on the spot instead of notes.

You can choose from over 500 medications through this 24-hour, on-the-spot pharmacy.

  1. GoodRx

With the outrageous costs of drug prices, pharmacy start-ups that offer medication cost savings will save patients from financial worries. GoodRx is one of the drug coupon companies that provides patients with information as to where they can buy the prescription medication for the lowest price.

Using coupons, clients can save so much more.

Through GoodRx, you can compare drug prices from over 60,000 pharmacies in the US, print free coupons, and save up to 80% on your medication. You can also save a copy of the coupon on your phone and show it to partner pharmacies.

  1. Capsule

With Capsule, your prescription can be filled right from the doctor’s office. Just tell your doctor that your pharmacy is Capsule and wait for a text with a checkout link. Here, you can place your order and schedule same-day delivery.

You can go home right after your checkup and then wait for your prescription to be delivered right at your doorstep.

But their pharmaceutical services don’t stop there. You have the option to transfer a refill from your old pharmacy, have capsule take care of your refills, and ask questions related to your prescription.






The American Pharmacy Purchasing Alliance is a community of pharmacy owners, pharmaceutical experts and professionals dedicated towards the recognition and advancement of the specialized industry  pharmacy, patient care & pharmaceutical purchasing. 

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