Focus On: Pharma Logistics’ speed keeps it and its customers thriving
Think of it like money in the bank — and who does not like that?
That is what Michael Zaccaro wants the retail pharmacies his company, Pharma Logistics, works with to focus on. Along with a number of services, the Libertyville, Ill.-based reverse pharmaceutical distribution company can guarantee its retail partners, who participate in its Rapid Credit Program, payment in as little as 14 days on their returned pharmaceuticals through a program that puts the onus on Pharma Logistics, not the pharmacy.
“The bottom line is that we can accelerate payment to our customers,” said Zaccaro, who founded Pharma Logistics in 1996 and now serves as its president and CEO. “In an industry where the standard for payment is about one year, and some retail pharmacies can wait up to two years for payment, our Rapid Credit Program gets them their much-needed cash in hand in about two weeks. And, that allows them to do what they need with the money, including quickly reinvesting it back into the company or perhaps meeting payroll.”
The key, Zaccaro said, is that Pharma Logistics’ experienced reconciliation team is able to quickly and accurately value the worth of the returned pharmaceuticals and then send the customer a check for that value. “The bottom line is that our retail partners do not have the time to do this, or might leave money on the table due to changes in manufacturer policies,” he said. “So, we assume the risk. We give them the fair value of the product and then we work with the manufacturer to recover the credit. We remove all the burden from the pharmacy, which allows them to be more focused on patient care and making more money from their own operation.”
“There is no downside for the retailer. While our expedited service fee might be a bit higher than the traditional service fee, in the end, our retail partners come out ahead because we get them all of their expected return value, and we get it to them in a very timely manner as opposed to having them wait for months or even years for their money, which in the end might be as little as 50% of what they expected.”
Knowing the business seems to play a huge role in Pharma Logistics’ success. Zaccaro and his team have years of experience working with manufacturers and wholesalers, and are able to weave their way through the bureaucracy that can hold up payments. Plus, the company’s relationship with companies — large and small — allows team members to determine the value of the products and work to get any money due.
Alleviating the burden on retailers, who are under more and more pressure as fees increase, competition increases and drug prices fluctuate, seems to be the focus for Pharma Logistics and its 200 employees. What started as a regional company in the basement of Zaccaro’s home in northern Illinois nearly 24 years ago has blossomed into a company that services more than 7,000 independent and small retail pharmacy locations in all 50 states and Puerto Rico.
Compliance is another big area that Pharma Logistics can help retail pharmacies with. “We have expertise in that area and can help relieve retailers of a lot of responsibility and, again, let them concentrate on what they need to do,” Zaccaro said.
To that end, the company is hosting an event in Rosemont, Ill., called “Navigating the EPA: Compliance not Confusion,” on Oct. 6 and 7, 2020 to educate pharmacies about such issues as Environmental Protection Agency regulations, regulating pharmaceutical waste, controlled substance returns, and waste management and hazardous pharmaceutical waste enforcement.
Zaccaro and Pharma Logistics’ nearly 24-year journey, he said, has been an interesting one. “Basically, I needed a job,” Zaccaro said about the time when he founded the company. “I had some experience working with pharmaceutical inventory, so working out of my basement for about three years, I did it all — selling, service, processing and accounting. My first big break came when I signed up a pharmacy called Ross Pharmacy in Highland Park, Ill., and Ballin Pharmacy in Chicago in my first week.
Growth was slow and steady. The company was able to move into a 2,100-sq.-ft. facility in Mundelein, Ill., around 2000, and eventually into a 40,000-sq.ft. facility around 2010 when it inked a deal to provide its services to the U.S. Department of Defense. Now, with its focus on its Rapid Credit Program, as well as the traditional on-site and box-and-ship services that ensure compliant, efficient pharmaceutical return services, the company is in the process of expanding again. Zaccaro said that it is building a 126,000-sq.-ft. headquarters and processing facility in Libertyville that should open in the first quarter of 2020.
“What were our other big breaks?” Zaccaro said. “Frankly, we caught a ton of breaks, which all added up for us. The Department of Defense deal, for example, doubled our business and forced us to expand our facilities and staff. Getting a group of 35 pharmacies in the Midwest when the company was only a few months old was another big break.”
The company also is growing through acquisition. In October, Pharma Logistics purchased the pharmaceutical reverse-distribution division of Stericycle, adding more than 1,000 pharmacies, including about 600 in Puerto Rico, to its growing list of retail clients.
“We are happy to welcome Stericycle’s returns customers into the Pharma Logistics family,” Zaccaro said. “The strategic acquisition of Stericycle’s pharmaceutical reverse-distribution division will further strengthen our position as the leader in the independent retail market, in addition to expanding our international service footprint to include the island of Puerto Rico. Our Rapid Credit Program will continue to accelerate much needed cash flow for these pharmacies, while also providing them with safe and effective pharmaceutical disposal options.”
Zaccaro said that box and ship and on-site Stericycle customers will see no interruption in service, with the processing of these returns moving immediately to the Pharma Logistics’ processing center in Libertyville. Pharma Logistics’ Customer Advocates will work closely with the former Stericycle customers to ensure a smooth transition, he said.
Even with the retail pharmacy world in a state of constant evolution, Zaccaro said the future looks bright for Pharma Logistics. “With an increase in automation, we think our role will shift to helping retailers to better manage their pharmacies and get a better handle on where their money is going,” he said. “We think we can work closely with retailers to help them maintain and grow a profitable business. We will help them continue to operate.”