Pharma Shopping 101

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The pharmaceutical industry is the research and production of medicines used to cure, treat, and prevent disease. It is also one of the fastest-growing areas of business, according to Forbes. If you’re interested in entering this profitable and fulfilling field, then buying an existing pharmacy may be the right fit for you. But before you take the plunge, make sure to do your homework.

Purchasing wholesale pharmaceuticals is one of the largest expenses for any pharmacy. And while it’s important to always have the medications your patients need on hand, excessive inventory can eat into profits.

To help manage this risk, most pharmacies have primary and secondary wholesalers. These wholesalers offer discounts off the manufacturer’s wholesale acquisition cost, or WAC. Usually, the larger a pharmacy’s purchasing power is, the better discount they receive. Pharmacies often use a pharmacy services administration organization, or PSAO, to negotiate prices with wholesalers and PBMs on their behalf.

Using a secondary wholesaler can offer additional savings, especially for medications not covered by insurance. But if you’re tied to a contract with your primary wholesaler, going off-contract could cost you in terms of rebates and other perks that are negotiated into your pharmacy’s agreement with them.

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