How to Be an Entrepreneur, Lesson 2: Find a niche
By Nicole Carter
Auxiliary Label Staff
Midlothian Apothecary is an independent pharmacy in Chesterfield County, just outside Richmond, that has survived under the same management since 1990. I met with Janet Darby, a VCU School of Pharmacy alumna, to talk about the business of independent pharmacy today.
Auxiliary Label: What is your biggest revenue source?
Darby: It’s not drugs any more. With generics, I almost have to give them away for free. Brand-name drugs are still profitable. We do vaccinations and they pay well on those. Also, home health-care products such as durable medical equipment, but we don’t bill Medicare for that. Medicare has a designated location for patients to buy DME [durable medical equipment] but a lot of people don’t want to go through the hassle so we just sell it straight to the customer.
What do you think has the biggest growth potential out of all the services you offer?
We’re starting to do point-of-care testing for flu, strep throat, cholesterol and blood glucose. We can charge for that. The problem is, though, in Virginia I can’t write a prescription if I find out somebody is positive for flu. … We are setting up a collaborative practice agreement so that after I get the test result, I can call the doctor and then get the prescription.
How do you bill for the point-of-care testing?
It’s out of pocket. In Virginia we can’t bill insurance unless we are the one who writes the prescription. Last year, with the big flu epidemic, no doctor could see anyone [because they were too busy] — people were having the flu and couldn’t get any medications. The doctors are looking for help too because they can’t see everybody.
How is having the fountain in the pharmacy an asset to the business?
It’s always busy. It’s kind of like paying for advertising: A lot of people come in here [for the fountain] not knowing about the pharmacy, and some people come in not knowing about the fountain. So it brings in people and kind of keeps things hopping all the time. You can’t say it’s a moneymaker because you have to sell a lot of food to make money. But we see the money that goes toward the fountain as money we would have otherwise spent on advertising.
What is the biggest threat to independent pharmacy?
PBMs, the processors for insurance companies, right now they are ruining pharmacy. They mandate how much we get paid. And the insurance company pays them one thing and then they pay us something else. Now for generics they are using the average for the year. So if they think they paid us too much for the first six months of the year then they take money back. But they don’t give us a reason. It’s really crooked.
Competition isn’t a threat because I offer something entirely different. We provide individualized care that other pharmacies just don’t.
What is the biggest opportunity for independent pharmacy?
There is a niche. You got to want to do customer service. You’ve got to want to do a lot more than just fill a prescription. And you’ve got to answer question upon question. There are people out there that want that individual service.
What advice do you have for pharmacy students?
You’ve got to want to work. And you’ve got to want to work hard. If you can’t multitask you can’t be a pharmacist. And you’ve got to want to work long hours. It’s a great profession if you like people. You’ve just got to know what niche you want and what you want to do.
Auxiliary Label is a student-created blog examining pharmacy life, education and research at the VCU School of Pharmacy from a student perspective. It is overseen by Greg Weatherford, the school’s director of communications. Contact him here.