Focus on What Matters: Sustaining Your Pharmacy in 2025

For years, industry experts have advised pharmacy owners to diversify their services and move beyond relying on pharmacy benefit manager revenue. With the rise of clinical services and the shift toward becoming a health and wellness hub, community pharmacies now have more opportunities than ever. However, many store owners find this narrative frustrating: At the core of their business is drug dispensing, which demands most of their time, resources, and energy. Meanwhile, staff and owners feel burned out by declining prescription margins.

In such a high-pressure environment, focusing only on the immediate risks rather than niche services and products is natural. What are some key strategies for keeping your pharmacy thriving in 2025?

While the industry awaits potential legislative relief from the FTC and Congress, pharmacies must focus on working “smarter, not harder.” | image credit: M Einero/peopleimages.com / stock.adobe.com

Leverage Technology for Smarter Inventory Management

Utilizing technology to manage inventory and optimize purchasing decisions is essential in today’s complex market. Advanced systems can help pharmacy owners monitor their purchasing and dispensing data to make informed decisions. Relying on staff for manual ordering introduces the risk of human error, making integrating automated systems into your workflow vital. Whether it is a perpetual inventory system in your pharmacy management software or a more advanced tool like Pharmacy Marketplace or SureCost, these technologies can drastically reduce the burden on your staff and streamline operations.

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Maximize Generic Dispensing

A pharmacy’s profitability is closely tied to generic drugs, as dispensing generic prescriptions typically offers higher margins. It is crucial to closely monitor your generic dispensing ratio and ensure that appropriate therapeutic alternatives are provided whenever possible. Failing to optimize generic dispensing can lead to cash flow issues and squeeze profit margins. Additionally, be selective with providers and patients who primarily use brand-name drugs, as these can further strain your bottom line without balancing with higher-margin alternatives.

Know the Community’s Insurance Landscape

Unfortunately, the pharmacy business is not as straightforward as others, where more business equals more revenue. Today, certain insurance contract—both commercial and Medicare—are simply bad for profitability. Pharmacies relying heavily on drug dispensing may struggle under these plans, whereas larger retailers like grocery stores may fare better. It is essential to be aware of the insurance makeup of your customer base and, where necessary, encourage certain customers to consider switching plans. Some may be willing to do so in exchange for a more personal, convenient relationship with their pharmacist. Offer low-cost generics off insurance when that is a better option for your customer and your store.

Explore Compounding Opportunities

Compounding is a dispensing niche that can significantly enhance your pharmacy’s profitability. If you are not located in a heavy Medicaid area to help offset reimbursement challenges, compounding can offer a viable alternative. Even a modest increase in volume can go a long way toward improving your overall dispensing strategy and generating additional revenue.

Please continue to diversify. Please know there is empathy toward the dysfunction of the core of this business model. While the industry awaits potential legislative relief from the Federal Trade Commission and the US Congress, pharmacies must focus on working “smarter, not harder.” Data analytics, advanced technology, and cash-based dispensing can all play a critical role in building a sustainable business model.

Kris Rhea is the director of business development at Pharmacy Marketplace.

To read these stories and more, download the PDF of the Total Pharmacy February issue here.

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