Chains and Independents See Different Hurdles in '94

By Ukens, Carol | Drug Topics, December 13, 1993 | Go to article overview
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Chains and Independents See Different Hurdles in '94


Ukens, Carol, Drug Topics


For the first time in four years, chain executives and independent pharmacy owners have parted company when it comes to assessing the highest hurdle they'll have a to clear in 1994.

Chain executives have again cast third parties as the Big Bad Wolf. Independents are more worried about turning enough profit just to keep the wolf away from the door.

It seems that years of low third-party reimbursement, closed networks, and multitier pricing are taking a toll on independents. Forty percent of our respondents don't know if they'll be profitable enough to stay in business in 1994. Last year, only 21% felt that way.

A Georgia independent contended that his goal is "to keep the doors open and avoid working so hard that I ruin my health." A North Dakota owner is deciding whether to "drop the pharmacy or just close." A Wisconsin owner lamented, "It's too late; most of us will be gone in five years." One California independent hopes to stave off customer erosion by HMOs, PPOs, and "UFOs." At least he still has a sense of humor.

Chains rated health-care reform a close second to third-party payment as a cause of concern, with 17% of the executives citing the proposed overhaul as a source of some anxiety. Other concerns were about equal; 13% cited eroding gross margins, while 12% were worried about profitability or competition.

One-fourth of the independents surveyed were also concerned about third-party Scrooges, compared with 36% who sang the reimbursement blues last year. Their old nemesis, mail-order pharmacy, is still stalking 16% of our respondents, down from 18% last year. Other factors that keep some independent owners awake nights included competition (9%) and discriminatory pricing (5%), but only 4% saw health-care reform as a cloud.

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