While most independent community pharmacies are under contract with a primary wholesaler, most also develop strong relationships with secondary suppliers.
Whether it’s to supplement existing inventory, save a bit of money, or make it through shortages or outages, a good secondary pharmaceutical supplier is a vital piece of a successful business.
Like everything else in the pharmaceutical world, the secondary marketplace has been undergoing significant shifts and changes. Some long-time suppliers are exiting the business completely while others are merging or being acquired.
With industry churn and uncertainty expected to continue, how can you find the right secondary supplier for your pharmacy? Even more important, how can you find a secondary supplier that will help you become more profitable?
What makes a good pharmacy supplier
Before anything, determine the credibility of any secondary supplier—even if it’s for a one-time purchase. Substandard products infiltrate the U.S. drug supply chain far more often than you may realize, especially during shortages, recalls, and popular trends.
In fact, one longtime community pharmacist refuses to purchase from any supplier that isn’t certified by the National Association of Boards of Pharmacy. The ability to track and trace every pharmaceutical product in your business is even more important than ever with the requirements of the Drug Supply Chain Security Act (DSCSA).
Once you’ve established a supplier is well-credentialed, think about your needs and expectations. How much time do you and your team currently spend shopping on the secondary market? How valuable is that time? Are rock-bottom prices your goal or have you been burned by prioritizing price previously? What about other perks?
Time is actually money
Spending around 10 to 15 hours a week searching for products on the secondary market is about average for most pharmacies. Think about your hourly wage or the hourly wage of the employee doing the shopping. Say it’s $20 an hour. That means you’re spending $200 to $300 a week—or $800 to $1200 each month—to comparison shop among secondaries.
Now think of the opportunity cost of those 10 to 15 hours. What could you or your pharmacy tech be doing instead?
Take this opportunity to simplify and streamline your purchasing. Perhaps choose two or three of the most reliable and trustworthy options instead of comparison shopping among multiple secondaries. You’ll want to select secondary suppliers with a broad offering, preferably including brands, generics, refrigerated items, controlled substances, and over-the-counter products. BuyLine, a part of PBA Health, is one such full-line supplier.
If you reduce time spent by even 5 hours, you’ll save $100 a week—and have time to counsel patients, develop new skills, or work on special projects.
Convenience matters
You might want to take advantage of EDI, which stands for Electronic Data Interchange. If your secondary supplier has EDI capabilities, your system and their system can talk directly to each other.
This process allows seamless, accurate communication that reduces red tape and gets the needed products to you and your patients more quickly.
With EDI, you find the item you need in your system and pull up the price file. Then you make the purchase without ever having to make a phone call or open a new program on your computer. The order is automatically sent to your supplier’s system, which gets the ball rolling on shipping the order as soon as possible. The transaction is nearly instantaneous, reducing any back-and-forth business of invoices or purchase orders.
Make sure the EDI system has options for repeat purchases, previous orders, and an instant search bar with multiple ways to look for a specific product.
Watch the give and take
What “extras” are involved with your secondary supplier?
Do they “take” by requiring contracts or other types of long-term commitments? Do hidden fees pop up just before you’re ready to hit “send?”
What about shipping options? Do they use major delivery carriers such as UPS or FedEx or a fly-by-night service you’ve never heard of? Do they offer next-day delivery or is there a minimum order you must fulfill before qualifying for next-day delivery?
Be sure to check all the fine print before purchasing from a new secondary supplier.
On the other hand, what do they “give” you?
Do they allow you to pay with a credit card? You might want to gain points or spread out a payment. The system should be set up with your convenience and benefit in mind, not theirs. You’re the customer, after all.
Speaking of customer, what’s their service like? Do they have knowledgeable customer service representatives? BuyLine, a popular secondary supplier, has dedicated business improvement specialists. They work specifically on your account, even letting you know when there’s a good deal on a popular medication or when a hard-to-find item is in stock.
How easy is the entire process? Is the verification onerous and lengthy, requiring time that you don’t have? Is the website fast and easy to use? Are the prices listed right up front or are they buried under a lot of other information?
Finally, does your secondary supplier offer a cash rebate? With BuyLine, tiered rebate levels are 5%, 7%, and 10%, and cash rebates are issued each month. In fact, if you carefully balance your purchasing between your primary wholesaler and BuyLine, you might find yourself getting two rebates—one from your wholesaler and one from your secondary.
You can actually save more time and make more money by carefully reviewing your needs and selecting the right secondary supplier.
Questions to consider
- Is the business NABP-certified?
- Does the supplier offer a full line of products, including brand, generic, controls, refrigerated products, and over-the-counter items?
- Are you eligible for any rebates? If so, are those rebates cash based or is it a point system for future discounts? If cash based, do those rebates come to you reliably and promptly?
- Are there unexpected fees, commitments, or contracts?
- Do they take payment by credit card?
- Is customer service readily available?
- Do the customer service representatives have
in-depth industry knowledge and experience? - How long has the business been in business?
More articles from the March 2025 issue
- Sight-Loss Support
- PBMs and How They Affect Your Pharmacy
- White Label vs. Private Label Products
- Welcoming AI into Your Pharmacy
- AI-Powered Patient Counseling
- Diagnosing Childhood Asthma
- New Weight-Loss Drugs
- Secondary Stress
A Member-Owned Company Serving Independent Pharmacies
PBA Health is dedicated to helping independent pharmacies reach their full potential on the buy-side of their business. Founded and run by pharmacists, PBA Health serves independent pharmacies with group purchasing services, wholesaler contract negotiations, proprietary purchasing tools, and more.
An HDA member, PBA Health operates its own NABP-accredited warehouse with more than 6,000 SKUs, including brands, generics, narcotics CII-CV, cold-storage products, and over-the-counter (OTC) products — offering the lowest prices in the secondary market.
