Increasing revenues from your pharmacy- How?
Are you running a clinic/hospital with your own pharmacy? If Yes, congratulate yourselves 
If not, go ahead and do something about it. Why? Coz it’s the definitely profitable entity of your hospital. You simply make a profit for every drug you sell!!! and the margins on average is 35-40% (An easy 4 lacs for every 10 lacs sold). These margins are one of the highest in any industry.
Now how to increase your revenues and profits, beyond just selling the medicines. Here are some takeaways- we will leave it to you to take it or throw it away.
- Prescription conversions- Study the percentage of prescriptions handed over to those purchased. Why lose the revenue to someone else when the patient is yours. If there’s a significant loss of conversion, find the reason and address it(discounts by a pharmacy across the road; long waiting lines; inadequate staffing, etc).
- Prescription leakage- Conversions may be good, but patients may not have been buying the entire quota of prescribed medicines. Looking into it, the factors could be stock unavailability, higher costs and not having UPI/card systems of payments(lack of cash in hand), discounts in nearby pharmacies, etc could be factors. Seal the leaks ASAP.
- Cross-selling- In addition to patients, you could have children visiting the hospitals, where you can sell biscuits, chocolates, etc, IP patients requiring dental kits, nighties, magazines, etc which could be additional sources of revenue. These have to be hospital-specific -identify and stock them
- Stock-outs- You might have visiting doctors who shall be writing a crazy set of drugs which may not be available. Talk to them, identify their needs – get them stocked – update the drug formulary and keep it handy for everyone’s reference including you.
- Generic drugs- Generic drugs aren’t bad as believed by many. Poor patients can benefit from this who might otherwise go away not buying anything!
- Analyze margins- Each drug has many manufacturers these days. Look at the most commonly used drugs (80% of business will come from 20% of products), look for alternative manufacturers with better margins/offers and replace appropriately. Don’t forget to update the formulary!!
- Stockist discount- The stockists work on a 10% margin formula. So with a good payment schedule, one can get upto 6% discounts, hence go ahead and negotiate!
- Manufacturer discount – Although the costs to hospitals are fixed, if you command a volume of certain brands, negotiate with the manufacturer for additional discounts, yes! it’s possible !!!
- Offers – Every company has a target; Close to target dates, you might be given good offers (10+10 etc ), use them wisely- make sure you don’t overstock when the benefit might even out
- Cask backs- Every manufacturer has a marketing budget, smaller companies might give it as cash backs, bigger ones in the names of CME/conference sponsorships etc. Keep a note of the business given over time, and get back your money smartly!
Being ethical is a mandate but Being ethically smart is a choice !!!
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