Viewpoint: Would fewer doors strengthen pharmacy?

John Kenlon, senior vice president and publisher of Drug Store News, looks at the ideal supply of pharmacies and profitable reimbursement levels.

There are two tax rates at which the government collects nothing from taxpayers, 0% and 100%—0% of whatever we make is zero and at 100%, we won’t work! Somewhere in between is the ideal rate where the government and taxpayers win.

The same goes for retail pharmacy.

If there were just one pharmacy in the United States, it could name its price. And, if there were half a million, there’d be no negotiation—there’d be too much supply, driving prices (reimbursement) down.

Somewhere in between lies the ideal supply of pharmacies and profitable reimbursement levels. Let’s face it, that’s the engine that makes pharmacy go right now and it must improve.

Sure, no one wants fewer stores, especially suppliers. But what would you rather have, fewer profitable and dynamic stores or more barely profitable and boring stores?

Fewer but better-capitalized stores would drive more trips, grow the market basket and solidify pharmacy’s reputation for combining the synergies of health, wellness and beauty.

In turn, this would stimulate more investment back into those stores to develop more capacity to deliver more and better wellness, prevention, diagnostic, chronic and acute healthcare services.

With such a prolific health offering, “Provider Status” would be undeniable and retail pharmacy transformed.

Could that be the flywheel NACDS’s Steve Anderson is talking about?

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