So, You Want to Be in the Pharmacy Business? Building from scratch, acquisitions & other considerations.

pharmacy businessBy: Michael Silverman

Like many entrepreneurial endeavors, owning a pharmacy requires careful planning and an astute risk versus reward analysis. However, unlike other industries, venturing into a healthcare business brings with it an entire new world of regulations, and rightly so. Pharmacies don’t sell widgets they sell prescription drugs, and to people whose well-being depends on it being done correctly. As such, there’s a host of state and federal laws a pharmacy must abide by, intended to safeguard patients and the healthcare system as a whole. Don’t let regulatory hurdles alone serve as an insurmountable deterrent from entering into what can be a profitable and fulfilling profession; proactive compliance is the key to success! Here’s an overview of the general steps necessary to become a pharmacy owner, be it from scratch or by acquiring an existing practice. For the purposes of this article, let’s assume it’s a community/retail pharmacy that will be located in Florida.

So what’s better – building from scratch or buying something that’s already out there? Typical lawyer answer – it depends! But I won’t stop there; here are some considerations that must be taken into account to make a proper decision: (1) how quickly does the business need to be up and running? It’s typically a faster process to commence business by acquiring an existing pharmacy rather than buying one, but that depends on (2) what is out there in the current marketplace? If a stock acquisition, all of the known and unknown liabilities will be inherited by the new owner; proper due diligence on the pharmacy’s past is essential.Continue reading

Pharmacy Audits: State of the Industry & Knowing Your Rights!

pharmacy audit pbm

pharmacy audit pbmBy: Michael Silverman

Pharmacy Benefit Managers (“PBMs”) act as the intermediary between insurance companies and pharmacies. PBMs contract with insurance companies on one hand and with pharmacies on the other, connecting the two so that an insured’s pharmaceutical claims may be processed at the rates set forth in the agreement between the PBM and supplying pharmacy. PBMs are paid on both sides of this transaction – by the insurance company for managing their insureds’ benefits – and by the pharmacy for processing the claims that are submitted. Processing claims for private, state, and federally funded insurance programs, PBMs play an integral role in vast majority of prescription drugs dispensed in the United States.

Part of a PBMs function is to audit a pharmacy’s claims to ensure that the claims submitted are in compliance with the PBM and insurance companies’ requirements.

Typical audits come primarily in two forms (1) desktop audit; and (2) field/on-site audit. A selected pharmacy usually will receive a letter or fax from the PBM informing an audit will be taking place.Continue reading