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 in partnership with American Associated Pharmacies sits down with Don Arthur, RPh, a pharmacist and owner of Black Rock Pharmacy in Buffalo and Brighton Eggert Pharmacy in Tonawanda, New York, to discuss what clinical care may look like, the biggest challenges that lay ahead for independent pharmacies, and successes that he's seen in pharmacy.

. We're joined today by Don Arthur, to discuss the challenges that lay ahead for creating the next generation of independent pharmacies, how ground advocacy is shaping clinical care delivery, and what he's implementing to create the improved pharmacy of the future. As we transition into this next phase of the pandemic, what do you think clinical care delivery will look like at independent pharmacies?

Well, I think it's going to take on many different appearances. But I think point-of-care testing is the big theme, you know, that I'd like to talk about today. Some of the other clinical services that independent pharmacies have been providing: medication therapy management, some of the newer programs with diabetes, I think those will continue to have opportunities. I think what's happened to community pharmacies in the last two and a half years now, is how they were able to quickly adapt and become familiar with the various point-of-care testing that's out in our community. So I would say as we transition away from the pandemic, I think antibody testing, still talking about COVID is some opportunities, and I'd like to talk a little bit about that. But I think some of the lab partners that we had not even known of prior to COVID have approached us now to do finger pricks for vitamin deficiency. So lots of clinical opportunities in the near future.

So do you think that this future will require state or federal legislative changes? Or will it be on the ground advocacy work that makes this care a reality?

 Well, I wish it were the latter. I wish it was simply advocating for it, and it would become a thing, but unfortunately, it doesn't work that way and our pharmacy space. We have the federal government involved, obviously, the FDA and others, but we also have states involved: State Board of Pharmacy, state health department's. In community pharmacy, we have to deal with all of those regulatory bodies. But specific to where we are today, emergency orders really created our opportunities. We began COVID testing in November of 2020, 9 months after the pandemic began. It took us that long for our state governor to recognize that independent pharmacies could play a role. And then it took us several months to go through the licensing requirements to become an LSL and receive a CLIA waiver. So I think I'm really hoping, we showed here in Western New York, that we have been able to test our community quickly, efficiently, professionally. We've tested over 92,000 people to date. We continue to test much smaller daily numbers. But our vaccinations, we have vaccinated over 15,000 people since the pandemic began. And I think that that volume, hopefully has shown the regulators or politicians that we are absolutely the best place to receive certain types of point-of-care testing, but it will take permanent legislative action, both at the state and federal levels, for us to be able to do that.

 So what do you foresee as the biggest challenge in creating the next generation of independent pharmacies?

Well, in terms of my family, my dad started our pharmacies back in 1958. And most independent community pharmacies at that time were single pharmacies, opened by graduates of local pharmacy schools. And the average prescription, I think back then was under $10 and there were no such thing as PBMs. We actually, if you look at this historically, when we put our typewriters, I began working in 1977 in our family's pharmacies and in the early 1980s, when pharmacy computers were introduced to independent pharmacy, we took those typewriters that I still remember and put them under the counter, and we began processing prescriptions with our computers. At that time, insurance plans had started to evolve and offer prescription benefits with co-payments for patients and once we went to computers, we needed a platform similar to MasterCard Visa, to just basically handle that transaction for a transactional fee of 25 cents, 30 cents, whatever it was at the time. And they did a phenomenal job at that. But look what they've become, you know, now they're called prescription benefit managers. And unfortunately, even though we were there in the beginning, and we helped create that industry, they're probably our biggest challenge for independent community pharmacies. They are a partner, one would think, but the relationships we have with them are very, very difficult. We all have contracts that we sign independently as community pharmacies. But as I talk to my attorney, friends who do contract law, they're always confused by the lack of negotiation in the contract. So they are contracts, but they don't really feel like contracts because we as independent community pharmacies don't really have any options. And they're unfortunately becoming more and more difficult. On a day-to-day basis, I have two community pharmacies in Western New York, one Black Rock pharmacy opened in 1958. It's a traditional pharmacy, our volume is based on dispensing of tablets and capsules and solutions and liquids. And it's been very challenging to be able to work within this PBM world that's been created. My second pharmacy, Brighton Eggert pharmacy is a little bit different. We are a compounding pharmacy. We do nonsterile compounding. And we've been very fortunate in that regard to get a large amount of support from our physician community and our patients. So we've grown that business, we have a large erectile dysfunction business that we created with neurologists and throughout our area within a 60-mile radius. So, Brighton Eggert has been able to adapt a little more quickly than our traditional Black Rock pharmacy, but we shouldn't have to, these clinical opportunities, these things that pharmacy does, they should supplement an already vibrant, successful pharmacy, if you've been in your community since 1958, you're filling a large volume of prescriptions, which we are because we've developed a relationship with the community, sometimes three generations of families, and they respect us, they trust us, and they want to be with us. But a pharmacy like that should be able to compete to thrive, to be successful in the community, on providing those services, those traditional pharmacy services, if they're able to adapt and add staff and great clinical opportunities, that's fine, but they shouldn't have to do that to keep the lights on. So our biggest challenge is PBMs. And, of course, government, working with government, most independent pharmacies tend to be somewhat moderate, because we're just trying to find somebody out there on the state level and the federal level to help us.

 Okay, and so conversely, what successes have you seen in the industry so far?

 If we can get away from our traditional filling of prescriptions with tablets and capsules and having to interact with PBMs, and I'm always optimistic, I'm hoping that they do recognize the value we have in our community. Certainly our patients recognize and respect that. I think the local politicians in our communities too, but we're just not getting that from the PBMs. I'm hoping we soon have some successes in that area, both at the state and federal legislative level, in our interactions with prescription benefit managers, but in our relationships with our PSAOs, our pharmacy service groups that help us represent us in interacting PBMs. I hope we can come to some kind of an understanding that independent pharmacies truly do have value. We can help outcomes. We can help reduce healthcare costs. We can help make people healthier. So I'm optimistic in that regard. We are involved with CPSEN and CPSEN has grown throughout the 50 states, which is great for independent community pharmacy. They get it. Some of their programs we are working with. In New York state, there are active programs for diabetes. You had a nice article in your last 

 that talked about HbA1c point-of-care testing. I'm very interested in doing that. I think that's a big opportunity for independent community pharmacy. Again we've clearly shown everyone that there are certain health care services that are extremely convenient at independent community pharmacies. We showed that again, I do have 2 pharmacies and we decided to create a drive thru testing facility at my Brighton Eggert pharmacy, to be able to test 92,000 Western New Yorkers and counting and to vaccinate 16,000 people. Well, we didn't do it with our current staff. We were fortunate, we hired at one point 12 RNs working for us on a full time basis, and we were vaccinating 150 people a day. And I'm not any different than other independent community pharmacies throughout the country. I think in the last 24 months, we've shown that vaccinations, point-of-care testing, programs through CPSEN, medication therapy management. The spotlight has clearly been on us, the last two years. I think we've performed exceptionally, and I think that's hopefully going to create opportunities for the next several years and into our future.

 Okay, so in your current pharmacy practice, what kind of programs and practices are you implementing, to help create the improved pharmacy of the future?

I had mentioned our compounding business, and we focus on opportunities in that particular space. We're frustrated. We're fairly new compounders. We aligned ourselves with PCCA, Prescription Compounding Centers of America. And they've been fantastic. My father, we had eight pharmacies, and my father was a former president of NCPA. And my brother Brad, my dad was president in the early 80s and my brother Brad went through the system, and he was president a few years ago. So I've been going NCPA conventions since 1980, when I was in pharmacy school down University of Florida. And compounding was there back in the beginning, and my father and I, we had eight pharmacies. We were big front-end pharmacies at the time. We had gift departments and grocery departments. We sold beer, and we were part of True Value Hardware. And we said, ‘you know what, that's not us. We're pharmacies, we care for our community back in the pharmacy department. But we're also retailers and compounding’s just not something that we have an expertise in, or we're interested in.’ Well, I kept walking by their booth, and five years ago, we decided to start a compounding, a nonsterile compounding business. So we are somewhat new to the industry. But it's really changed our relationship with physicians, we now are problem solvers for our physicians whether it's in pain management, orthopedics, podiatry, or dermatology, but physicians now call us and ask us to help them solve problems. That's pretty neat. I didn't really experience that prior to getting into compounding. So we'll continue to grow that business. But it's this point-of-care testing, which is really exciting to me. We learned so much over the past two and a half years. It's amazing how technology changed from in the beginning of the pandemic. You would have to go to a large lab like Quest labs in our area and you would have to pay $225, wait upwards of seven to 14 days to get results on a COVID test. And now we do rapid antigen testing with results in 15 minutes. We do rapid PCR testing with results within an hour. We have a lab partner where we do lab-based PCR with results the following morning. So it's amazing how technology has been so rapidly evolving in that particular space. With that we met in creative relationships with businesses that I never even knew existed in our community. And we've been partnering with a local lab that has a national and an international presence. And they just received FDA EUA approval for a COVID antibody test that’s simply a fingerprint that gives you an analytical, numerical value. You know, we've been antibody testing in our pharmacies for the last year and a half with we've been using the first step. And it's a great antibody test, but it's just yes or no. So it doesn't really help the person know what level of antibody protection they have at a given time. This test will give you a number and that number equates to what they call the COVID-19 immune index and the number that goes from one to 20. It will define if you're at low risk or at high risk. So we're pretty excited. We think we're within weeks of launching that, again the company received an FDA EUA for this, where our role will be point-of-care testing. We will take the finger prick, we will put the sample into a card, and a courier will pick up those sample later that day. The patient will have very, very specific numeric report of their antibody levels with a very user-friendly explanation. Why is this of value? Probably, we're vaccinating about 25 people a day. Most of those people are age 51 and older, receiving their second boost, their fourth shot. And I think the number one question they have those under age 50, who are not yet eligible unless they have an underlying condition. Their question is, ‘do I need it?’ As I talked to the lab specialists that we work with and really understand and know this much better than I do, they think it's an excellent question, because it's not beneficial to overvaccinate someone. So if we know that people have different levels of antibody, well, we don't know, is it a genetic component? Is it a health component? There are several factors, I'm sure. But they all go back to the point of, if we have an antibody level, that's accurate, we can answer that question. And if your levels are low, it would be appropriate to receive another booster, if your antibody levels are high, you have significant protections still, and it's not necessary at the time. So we think we're going to be doing that, within the next two weeks. We feel it's going to be a covered service under insurance due to the Cares Act back in 2020. We're pretty excited about that. Because unfortunately, fall is right around the corner and we don't know what that's going to bring in the world of COVID. But to have a tool like that, for people to be able to know their antibody levels, and then make a decision based on that as to whether or not to receive another vaccine, I think is exciting.

 Okay, so do you have any final thoughts or takeaways that you'd like to share? Before we wrap up?

The final thoughts are that March of 2020, COVID, it's changed my pharmacy. I don't talk very much about the hand sanitizer, but if you remember in the beginning Purell just wasn't available. And, again, the country came to independent community pharmacies, especially those that had some compounding and lab experience, provided us with a federal formula, and asked if we could compound basically hand sanitizer. We made 10s of 1000s of bottles of hand sanitizer. We were providing in five gallon bottles for companies. We did that. We were able to adapt to do that over several weeks. We were able to gear up and provide a drive thru point-of-care testing for COVID. And the nasal swab as other independents have throughout the country and in very large numbers, up to 1500 in one day, during one of the holiday outbreaks. We were able to adapt to do that. Vaccines we've talked about, we've been vaccinating in New York State for 10 plus years. Unfortunately, the rate of flu vaccines is not as high as we would like it to be. So we would do 10,15, 20 a day during the season. We vaccinate for shingles. We vaccinate for pneumonia. But we had never thought that our staff expanded with some registered nurses could vaccinate up to 150 people a day. We've clearly showed our government that we can do these things. If you remember independent pharmacies throughout the country, it took some of us three months to receive our first vaccine, the government felt it was best to handle in clinic settings, which I think they may or may not have been right. I think those clinics, there was such a demand in the beginning when the vaccination became available, but they could have done better, they could have absolutely opened up those vaccine clinics and communities. I was actually a big part of some of those in our area. At the same time, they should have gotten those vaccines out to independent pharmacies day one. Ee should have been the focal point and chain pharmacies, because we've been vaccinating the community for the past 12 years. The rollout was difficult, but we're still vaccinating 20, 25 people a day. And I don't think there are any vaccine clinics. They've been gone in western New York for over 10 months. So I think government quietly, I wish it was publicly said, ‘wow, independent community pharmacies, look what you've done’, but I think they absolutely know. Tvery time we order vaccines, which we do weekly, New York State calls us and says ‘where are you finding these people? We've got pharmacies that haven't ordered vaccines and months.’ Where are these people coming from? I would say 90% of them are not our current patients. They're people that have heard about what we've done in the community in relationship to COVID and they're driving to us and we're vaccinating them. I'm excited about our future. I've got two boys, third generation working in our two community pharmacies, so I'm excited for them. I don't ignore the challenges we have with prescription benefit managers, but look what's happening around the country, all 50 states seem to be taking a much closer look, the FTC decided to take a look. I bounced around quite a bit today, as I do, but I do think there's lots of opportunities in the future.

Thank you for listening, and we hope to see you next time at the counter.

Don Arthur, RPh, discusses what lays ahead in independent pharmacy, from clinical care to success stories.

Looking to the Future of Independent Pharmacy

. Today, we're joined by Bo Garmon and Drew Hegi, pharmacy loan officers at First Financial Bank, one of the nation's leading small business lenders.

The First Financial Bank lending team has over 80 years of pharmacy experience and includes current and past pharmacy owners. We sat down with Bo and Drew to discuss the ins and outs of the financial side of pharmacy ownership, from the biggest challenges facing first time pharmacy owners to navigating the SBA loan process.

Bo, I'd like to start with you. Can you just give us a quick introduction?

 Hey, Lauren. Yeah, I’m Bo Garmon, pharmacy loan officer with First Financial Bank. I’ve been with the group for well over 9 years now, since we started the pharmacy division. Just a little background on that: We are dedicated to working solely with independent pharmacies as far as providing financing, and we serve our clients nationwide.

Great, thank you so much. And Drew, could you go ahead and introduce yourself?

Yeah, similar to Bo, we both been here almost 10 years. This year, we'll both hit our 10-year anniversary of being in the pharmacy division. We just help practicing pharmacists become store owners, maybe first time buyers get an ownership, or we can help existing pharmacy owners with a number of different projects, whether they're wanting to buy a second store, a third store, or build a building… We can talk more about all the things that we offer. Bo and I are the 2 loan officers in our pharmacy division working each and every day helping pharmacist.

Let's just jump right in. First time pharmacy ownership is a huge undertaking, and I'm sure there are a lot of aspects that potential owners have not considered. Would you be able to share some of the top financial issues to keep in mind?

 I don't mind jumping into that. That's one of the things that we enjoy most about our job—helping those first-time buyers navigate the ins and outs of taking out a loan to buy a store. There's a lot going on in terms of transitioning from an operation standpoint, and pharmacists have enough to worry about—getting that staff and getting to know patients—it's rewarding for us to be able to make the financing process as seamless and as easy as possible.

Bo and I have the benefit of being solely dedicated to 1 specific industry, so we truly can become experts in how to make these deals happen. Things that can trip people up is the SBA process in general; we do mostly Small Business Administration loans, which is a great fit for pharmacies, because there's not a lot of collateral when it comes to drug stores. Most of the value is in the patient files and the cash flow. From a tangible collateral standpoint, there's no real estate or dirt typically, but the businesses can be very valuable.

Our average loan size is around a million and a half dollars probably. It's a big loan, but the application process with any type of government guaranteed loan can be somewhat cumbersome. We try to help the applicants through that process: understanding cash flow and understanding financial statements is a big piece that's always new for first time buyers. [Things like,] tell me more about this [profit and loss] balance sheet, what do you see in what trends, what direction is the business moving in? We can advise and consult with buyers in that regard. Helping them identify cash that's needed—a lot of times a significant down payment will have to be supplied by the buyers—so there’s talking through options there.

Every situation is different. Everybody comes with a different financial background and a different career path. Some are very familiar with independent pharmacy, and some are coming from a chain and don't necessarily understand the role of buying groups and wholesalers and having that relationship and which direction to turn. We try to be a resource, as best we can, to get them in that store [and] have financing process be just 1 less thing that they have to worry about.

Bo, I probably missed some things—is there anything that comes to mind that you would chime in with?

 To make a long story short, at the end of the day, what we're all looking for here—the first thing we're going to evaluate, when we're looking at a potential acquisition target for a customer is the cash flow. What we want to be able to identify is, does the business we're buying generate enough income or cash flow to support our debt to pay them a reasonable salary and have a little cushion left over?

From a financial perspective, could you touch a little bit on the first steps in the pharmacy ownership journey? When you have a pharmacist [come to you], and they say, “I'm ready to set out on my own and own a pharmacy.” Where do they start? What’s the first thing that they need to think about?

 Typically with a phone call. Bo and I receive phone calls all the time from pharmacists who say they have an opportunity in front of them and that they're ready to move forward and want to know how to do that. We have them gather the past 3 years of tax returns for the business; like Bo said, we want to make sure that there's enough cash flow that the business is doing well, it's financially healthy, because you don't want to step into a situation where you're going to be stressed out about paying bills and paying yourself a reasonable salary. We want to make sure the business is doing well, and those tax returns will give us an idea of cash flow.

Mostly, we just do everything over email. Being a nationwide lender like we are, pharmacists aren’t coming into our office to fill out application paperwork, so we'll just email them over the loan application, the personal financial statement to be filled out, a resume template, which gives us an idea of what your work history an education has been to this point, top 100 drugs… There's a number of different reports that we’ll ask for and we'll put all that in a consolidated email. From there, we can quickly move to putting the package together, pulling credit reports, talking through the structure of the deal, [asking] how much working capital do you think you may need?

We typically loan about 90% of the purchase price. But then you also need money in your business bank account to run and operate the business, to pay your staff, to pay your wholesaler while you're waiting on those third-party reimbursements to come in. So, sort of going through that collaborative process of getting the loan amount nailed down, [loan] terms, collateral, things like that.

It's a lot of conversations on the front end. Then we take that and get it approved by our bank board. From there, once it's approved, we’re working on closing, getting purchase agreements, lease agreements, insurance, all of those things that you'll need in the file to close. It sounds like a lot, but again, we try to have everything very spelled out on the front end and set expectations as far as timeline goes. That's usually where we get started and the first steps are.

 There's a number of things that need to take place before approaching the bank. The first step of that journey is, if you're just looking, you have to identify a target. And that might mean that you need to consider some things: Are you willing to relocate? How big of a search area are you looking for? Once that target is identified, then you do some due diligence, gather the financials, and start some negotiations with seller until we can determine a price that's fair for both parties. Once you nail that down, at that point, then you can approach the bank.

Are there any resources from First Financial Bank that you can recommend?

. It's a good exercise to put together some financial projections on any business that you're thinking about taking over in terms of ownership.

If you're buying [a business], look at the historicals, but also create the way you see the next 3 years going. Do you think you can grow top-line revenue? What expenses do you think you can eliminate and cut to reduce your overall spend and create increased profitability? If you're starting a store from scratch—a brand new pharmacy—putting together financial projections, obviously, you're going to be hopefully growing and gaining new patients each and every year. But what does that look like in terms of [profit and loss] and sales and cost of goods sold? How are you going to add staff to keep up with the volume and delivery expenses and things like that? They all go into it. We can definitely provide a projection template.

We also have a pharmacy questionnaire that acts as a mini 

. It's [looks at] if you're buying a store, what's going on right now in terms of the accounting, the marketing, competitors, your relationship with your wholesaler. A lot of that is spelled out in that template, and it can be a resource as you kind of think through what you want your business to look like after you take over. And, it helps us communicate the plan back to our bank board as we get deals approved.

We do have some templates in that regard, and obviously, [clients] can lean on our experience as well, talking through things that we've seen work well with others. Anything else come to mind, Bo, from a resource standpoint?

 out there of items that we need to collect from a borrower to get started that they can access as well.

That that all sounds really helpful. Again, there are just so many intricacies to this process and I'm sure there are things that people aren’t considering, because it's their first time and they've never had to deal with this before.

That leads perfectly into my next question, which is: What are the biggest challenges that first time pharmacy owners might face when they're seeking out financing, and how can those challenges be alleviated?

 The first thing is a down payment, or what we in our world, the SBA world, what we refer to as an equity injection. Most banks are going to want to see at least 2 months’ worth of proof of funds for that down payment in the account. It's important for people to prepare and have savings on hand. A lot of times we're dealing with a large price tag. I think Drew mentioned—and not to get totally in the weeds—but typically we require 10% down of the total project costs. So, if it's a $3 million deal, you're looking at $300,000, which—a lot of people don't carry that kind of liquidity. So that can be a challenge.

There’s some ways around it; there's some things that we can do to help with down payment. In many cases, the sellers can pull a note up to half of that; 5% of the down payment can come from in the form of the seller note. There are some things, some guidelines that are set forth by the SBA for the that note to be eligible for down payment. The main thing is that they can’t receive payments on that for the life of our loan, which is typically 10 years. A lot of times that can be a tough sell, but it's also an avenue to help us to get to that that required equity injection.

 Sometimes, applicants will worry about their amount of student debt. Pharmacy school is very expensive, and a lot of student loans are definitely a part of getting through school. We're okay with that. It's not anything that we haven't seen before. More times than not, it’s not an obstacle that we're not over able to overcome.

I would say one challenging thing is, there's a lot of pharmacies out there that just don't make a lot of money, unfortunately, with the PBM pressures and margin compression, stores just aren't as profitable as they used to be. And so, you have to be somewhat disciplined as a buyer. That store that you think you may want to buy, or have always had hopes of buying sometimes isn't… I would say the majority of our credit decisions, whether we're going to do a deal or not do a deal, is based on the store [and] based on the performance of the pharmacy. We do have to look at a lot of deals where we say, that's not something that you could buy with bank financing because there's just not enough money being generated by the business to pay you a salary and pay us a loan payment. That would either need to be purchased with just solely cash or potentially owner financing.

So, you do have to be somewhat disciplined. A lot of times, we help first-time buyers to understand why this the store may not be worth what the seller wants for it. But really, if you take care of your credit, if you have some cash like Bo mentioned, if the store is a good cash flowing store, we can find a way to make that deals happen almost each and every time.

I really like that you brought up the student loan aspect of it and how that's not necessarily an obstacle. I feel like student loans particularly for the health care profession are just so high. It’s nice to hear that that's not going to necessarily stop someone from being able to progress forward with this whole project.

I know you touched on this earlier, that First Financial Bank is approved to offer SBA loans through the SBA preferred lender program. So, what does this mean for those who are seeking a loan for pharmacy ownership?

 I can touch on that. A lot of pharmacy owners or potential owners take advantage of loan programs offered by the SBA, which is the Small Business Administration. These programs are offered through participating banks that they partner with the SBA to lend money to small businesses. Typically, they are just a commercial loan in which the bank actually lends the money to the small business, and then the SBA provides that lending institution a guarantee based on guidelines set forth by the SBA. Those are going to be consistent through all banks.

The banks do have some flexibility in setting the rates that are offered. But as you mentioned, you're going to want to deal with a bank that has PLP or preferred lender participants status. What that means is that that lender has the ability to offer or issue loan approvals in house and not have to send those off to SBA for their approval, which can greatly reduce the amount of time it takes to get funding. The banks that have that status are typically doing a lot larger volume of SBA loans. Therefore, they're probably a little more familiar with the guidelines set forth by SBA.

Beyond the financing to purchase the pharmacy itself, what kind of support does First Financial Bank offer to its customers and to its clients?

 I think we’re available and accessible, more so than other banks, from my experience, where you really just need 1 phone number, either Bo or myself, in terms of your point of contact. Obviously, we have loan assistants and back office help at our at our corporate office who can help you with anything you may need, but in terms of communicating and getting through the process—and even on an ongoing basis, staying in touch and allowed us to review financial statements and giving you feedback on what we're seeing and what other customers are doing that are successful. We travel to probably 12 to 14 trade shows a year. So, seeing us out and about standing at a tradeshow booth and catching up.

Typically, our customers don't just borrow 1 time from us. They buy that first store and then they may want to go buy another store. The NCPA [National Community Pharmacy Association] has data out there that the average pharmacy owner has multiple stores. And so, that's the way to really get ahead. There's timing, and you’ve got to find the right fit, but once you figure out how to be a store owner-operator, the potential is to go after more stores and build your portfolio from there. Pharmacy is kind of a volume game; the more stores you have, the more opportunity there is for you to build wealth and equity. We're here for you as you sort of get started and as you grow as well.

That's actually a really interesting data point. I didn't realize that, because when I think of independent pharmacies, I think of folks owning just the 1 store and I didn't realize that on average, people are owning multiple stores.

If somebody comes to you and they take out the first loan to open that first store, do they have to finish paying off that loan before they can take out another one with you, or do you work with them to help them open those multiple stores at 1 time?

Most of our loans, unless you have real estate—say you’re just leasing your space—those are going to be 10-year term loans. We have plenty of customers that will have 3, 4, or 5 loans out with us; [it’s] just kind of been [an] every couple of years type thing, would look to add a new a new business. So that's perfectly fine.

We've been doing this for about 10 years. Our first early on customers, they finally made it to the term of their loan with paying their debt off. But we've done plenty of loans along the way, and we're here anytime. The SBA does have a $5 million cap, and so there are—if you buy a store that's worth $4 million, you have $1 million left and you could use that. But once you hit that $5 million mark, your runway essentially is exhausted with SBA. But up until that point, we'll take a look at anything and everything to help our pharmacists and customers.

Awesome, that’s very interesting; I'm glad we were able to touch on that.

Would you be able to share a success story about a client who First Financial Bank was able to help through your pharmacy financing solutions?

 That’s a good question, Lauren. One group that comes to mind is some pharmacists that we helped back in 2013. They were some of our early customers and they came from corporate pharmacy, where they were pharmacy managers but wanted to get into in pharmacy ownership. We helped each of them start a store from scratch. They were hungry and aggressive and did a great job marketing and growing their businesses, respectively. They have since teamed up and acquired several stores over the course of the last 6 or 7 years. We just helped them purchase a store, we closed a loan for them last week and it was their seventh pharmacy.

So, just seeing customers who had no ownership experience, who got started with us many years ago, started [a pharmacy] from scratch—which is not easy to do at all; it's really difficult to start your own pharmacy and to grow it—and to just see those stores and the way they've grown and are still growing each and every year, is a testament to how well they take care of patients and how well they know their communities.

Even thinking beyond those original stores where they bought existing businesses and have navigated the change of ownership experience and successfully done so, they come to mind as really good customers and you just feel proud of them what they've been able to accomplish 8 years into it. They have 7 stores; that's the kind of potential that we like, that's what we want to see from our customers, that they feel that they have the support from us so that they can go accomplish their goals and dreams and add to their portfolio of stores.

We have many stories like that from our 10 years of being in this space, but seeing those that you got started with early really grow and blossom is pretty rewarding.

Awesome, great. Thank you so much for sharing that. I think ending on that high note I think is always really important for our listeners just see, yeah, it’s possible and this is actually an achievable goal.

That was all that I had—is there anything else that we didn't touch on that either of you wants to bring up?

 No, I enjoyed the discussion. Thanks for teeing questions up, they were good questions, Lauren.

We'd love to talk to any listeners who may have questions about financing, or even just about pharmacy ownership in general. Bo and I are always available you can find our contact numbers on our website, and we would love to visit with you.

Thanks again for having us and giving us a chance to talk about pharmacy financing.

Of course. Thank you so much for joining us.

Learn more about the ins and outs of pharmacy ownership from the experts at First Financial Bank. 

Podcast: Pharmacy Financing With First Financial Bank

 Hello, and thanks for listening to Over the Counter, the podcast from 

This podcast series was created in partnership with AmerisourceBergen (AB) and Good Neighbor Pharmacy (GNP) as part of Drug Topics’ coverage of the 2021 ThoughtSpot conference and trade show.

For more exclusive coverage of ThoughtSpot 2021, including more podcast episodes, check out our dedicated 

In this episode, Good Neighbor Pharmacy customers each serving very different communities reflect on the past year and discuss the future of independent pharmacy. Abby Rice of Norton, Kansas, Jennifer Shannon of Johns Creek, Georgia, and Kevin DeMass of Salt Lake City, Utah, share their unique experiences in navigating the front lines of the COVID-19 pandemic.

 Hi, everyone, and thank you so much for tuning in to today's discussion in partnership with 

I'm Jennifer Shannon, and I'm the owner of 

Lily's pharmacy and Wellness Center located in Johns Creek, Georgia.

Our pharmacy is roughly 8 years old this year, and we're located in a very highly populated suburb outside of Atlanta. I am so passionate about being a pharmacist. I have loved watching our pharmacy grow and I loved watching it shine over the last couple of years and see our clinical services, our vaccination services, and our patient services grow at another level.


But I'm super happy to be here today with Abby Rice, my colleague and owner of 

 and Kevin DeMass, owner and pharmacist of 

The Apothecary Shoppe in Salt Lake City, Utah

. Thank you both so much for being here. I'm excited to have the opportunity to speak with these 2 pharmacy owners as we reflect on the last year and share our vision of the future of community pharmacy. Before we get into these topics, I'll pass it over to Abby Rice and Kevin DeMass to introduce themselves and their pharmacies.

 Thank you so much, Jennifer. It's great to be here with you as well. My name is Abby Rice. My husband and I own Moffet Drug in Norton, Kansas. We serve a very small rural farming community with a significant elderly population. We've been in business in this location for 12 years and we are actually the only pharmacy in our community.

 Wow, I need to open a pharmacy there. Well, thanks, Jennifer, and thanks Abby.

My name is Kevin DeMass, and I am one of the pharmacists and owners of The Apothecary Shoppe in Salt Lake City, Utah. Our pharmacy is 48 years old. We have a very diverse patient population. We have college students that are about a mile away at the University of Utah. We serve all the professors there. We have a large refugee population with refugee health located on our hospital campus, that's downtown.

I've got a lot of professionals downtown that are my patients: bankers, lawyers, business consultants. And that mixes in with my wonderful homeless population that's in Salt Lake City. They are wonderful patients of mine. I've got a lot of patients in the substance abuse and misuse community. I have a large population of HIV patients that we service, sex workers, as well as social and behavioral health patients that are in need of our services.

Were a little bit different as a city pharmacy. One differentiator for us, I think is that we've been there for so long that we have kind of earned and we try to maintain our patients’ trust in us. And we've kind of earned and maintained our community's trust in us, our community leaders, as well as those that live and serve in our community.

Another differentiator for my pharmacy, I think the second thing would be our consistency - the consistency with our products, the consistency with the service that the patients receive when they come in, and also the consistency of the improved health outcomes that our patients experience when they come to see us.

And I think the last thing as a differentiator for a city pharmacy is that I have no sign. There is no sign on my building. My pharmacy is located in the basement of a medical office building next to the sleep lab and cardiology and neuroscience center. And so, it's kind of like an old prohibition speakeasy where you got to know a person who knows a person who knows a person that has kind of a secret knock and knows a way to get in. But we are in no way a speakeasy pharmacy. Our doors are wide open, our arms are wide open, and the city can come in and we will love you and take care of you as much as humanly possible.

 Thanks, Kevin. That sounds amazing. I'm excited to dive into the conversation today. At Good Neighbor Pharmacy, there are more than 5000 independent pharmacies in every pocket of the country.

Today, we get to represent 3 of those. In the midst of a tumultuous and unpredictable year, one thing we have learned, for sure, is just how important it is that every single one of these independent pharmacies to their communities. Our patients are at the heart of everything we do and every decision we make. Each of us brings such a unique perspective to the table to share today, as we reflect on this year.

I know for you guys, one of the biggest hurdles was the COVID-19 pandemic and how we had to adapt to the changes in serving patients at this time. Many of our states were in lockdown. Our pharmacy actually changed to only curbside delivery and home delivery during the worst of the pandemic. We had a nursing home that was significantly affected, and we had to prompt those changes to protect their population, as well as others.

It was a challenge to make so many transitions at once. And I know you guys felt that as well. We ended up requiring employees to wear masks, which is a challenge. And I know that our pharmacists didn't like that as well. And we closed our lobby, like I said, and when we opened it back up, we asked the public to wear masks to protect the populations that we serve as well.

Of course, becoming a vaccine provider for COVID-19 and everything that entailed was definitely a challenge. And I know you guys felt it too. Making sure there was equitable vaccine access and our rural community was at the top of our priority list. And we faced significant vaccine hesitancy in our area, so I think educating the population became really important. And being somebody, like you said, Kevin, who is trusted with patient care helped definitely overcome a few of those obstacles.

Good Neighbor Pharmacy customers from rural, suburban, and city areas reflect on the past year and discuss the future of independent pharmacy. 

Community Practice

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