Huy Duong, R.Ph., owner of Dale’s Pharmacy in Fort Lupton, Colo., has seen his business’s profits take off since he started using ProfitGuard a year ago. ProfitGuard from PBA Health is a service designed specifically for community pharmacies. It secures pharmacies with the best supplier pricing available, and it provides additional tools to help pharmacy owners and purchasers make informed, money-saving buying decisions every day. We talked with Duong about how he improved his profits and why ProfitGuard is the right solution for him.
Tell us about your pharmacy.
I have a full line independent pharmacy. We offer medical equipment, and services like immunizations, diabetes education and MTM. We also carry more than 1600 NDCs. Purchasing drugs is a very important part of our business. Purchasing correctly pretty much dictates whether or not you survive in this business right now because margins are so low.
How did you handle purchasing before ProfitGuard?
I would audit drugs as I was purchasing them. I’d punch in an NDC to make sure that when I was purchasing it from my wholesaler that I was purchasing the cheapest one, whether it was a rebatable product or not. I find that a lot of wholesalers trick you with that.
I also spent a lot of time trying to keep an eye on changing drug prices, especially the ones where I was negatively reimbursed. I was glancing behind my back whenever I could, rather than having a product like ProfitGuard looking out for me all the time.
How did you hear about ProfitGuard?
I went to the PBA Health conference. I remember hearing a speech about it, and I thought, “That’s the kind of stuff that we as pharmacy owners have been dreaming about.”
Have you seen an increase in your profits since you started using ProfitGuard?
Actually, I’m seeing a substantial improvement in my cash flow and profits. At the same time I’ve talked to some other pharmacy owners and it seems like they are struggling or seeing a decrease in profits. I’ve essentially gotten a pay raise with very minimal effort.
What elements of ProfitGuard are most helpful for your business?
All of it is helpful. I find it to be a truly honest system where it works both ways. For instance, it doesn’t push me to purchase from either my primary or my secondary wholesaler. It just identifies the cheapest possible way to purchase the product and presents it clearly.
I think with this industry, trust is such an important factor, especially when it comes to finding a buying group. That’s the main factor I used when I went with PBA Health; how much I could trust them versus the buying group I was with. Honesty is very important.
What are the advantages of having contract experts negotiate for you?
Pharmacy owners, as much as we think that we are great negotiators and buyers, we’re not really trained in that part. We don’t do it on a constant basis, over and over and over. Owners or operators who want to negotiate their own purchases are doing themselves a big disservice. After they negotiate that contract, there is no way for them to make sure that the wholesaler is making good on the deal they agreed on.
It truly is an art and it takes someone who has a skill set to do that job. To be able to negotiate the best price, get it down on paper and make sure the wholesalers follow through. Wholesalers can offer you a certain deal, but unless you know how to dissect that deal, you don’t know if it’s good or bad.
Do you see any advantages to being in a group of pharmacies?
Yes, I see a lot of advantages. If we’re not in a group, our purchases aren’t substantial enough for the wholesaler to feel a lot of pain if it loses us. Even pharmacy owners that own multiple stores, they’re not going to be better off standing alone with 15 or 20 stores than they are with 30 or 40 stores.
I think essentially what wholesalers want is for you to purchase from their warehouse and not look behind your back any more. But independent pharmacy owners and operators should be able to choose where they purchase products from, especially if there is a financial incentive.
What tips do you have for pharmacists to optimize their purchasing using the Profitguard tools?
The first two months are the most important. The first few times they get the ProfitGuard data, they will make most of their product switches right there. After that, the changes are going to be minimal and easy.
The thing I like about ProfitGuard is that it doesn’t force you to do anything. All it does is tell you how you can purchase better. At the end of the day, the independent pharmacy owner still has all of the control.
Is there anything you would like to add?
ProfitGuard is an excellent product. It’s intuitive. It’s easy to use. Anybody that can use pharmacy software to sell a script to a patient shouldn’t have any difficulties at all using ProfitGuard. It’s a product that clearly gives me a distinct competitive advantage.
