May 14, 2012
Pharmacy Healthcare Solutions Inc. (PHSI)
Consultants for pharmaceutical manufacturers, PBMs, retail pharmacy chains, and software companies on strategic business and marketing issues. Consulting projects across these market segments provide PHSI with the latest information on emerging trends as well as new products and services. Our consultants have extensive retail, mail service and managed care experience to create actionable recommendations for our clients’ challenging business issues.
· For years pharmacy management 101 has dictated to pharmacy owners to improve their efficiency and margins by reducing their inventory and increasing their number of inventory turns.
· PHSI evaluated the financial impact of lowering inventory and found that lower is not always better.
· Economic downturn has resulted in lower cost of money (i.e. low interest rate and lower returns on investments)
· Reduced number of small molecule blockbusters from brand manufacturers and the current generic patent cliff has increased the brand inflation rate.
· With interest or returns on investments at 3-5% and brand price inflation rates of around 9%, there is financial benefit to holding brand inventory on your shelf.
· Low opportunity cost and high price inflation
· We worked through some typical pharmacy numbers. All of these numbers are available on our PHSI website which listeners can access at http://www.PHSIRx.com/blog