Contributor: Nicholas Shanos, RPh, Owner, Suburban Pharmacy, Inc.
What are the advantages of using multiple wholesalers versus one primary vendor?
• Availability: When there’s a drug shortage or an interruption of drug supply we have the choice of more wholesalers to increase the odds of receiving the product.
• Price Comparison: We gain the ability to have the choice to compare different drug prices and optimize the best cost-to-reimbursement ratio.
How did the decision come about to use multiple wholesalers?
We began using multiple NABP certified (formally VAWD certified) wholesalers about five years ago. The unconscionable PBM (pharmacy benefit managers) prescription reimbursement is the reason for starting this process. It’s so much easier to order from one primary vendor but, unfortunately, with the low reimbursement rates, that’s not reality if we want to stay alive as a small independent retail pharmacy. The PBM reimbursements of certain drugs are less than what the drug actually costs. The first step that was taken to resolve this issue was to contact the PBM to submit a reimbursement appeal form. However, that fell on deaf ears and the underpaid reimbursements remained the same. It was then that we began utilizing multiple wholesalers in order to find one that would charge us a price at or below the PBM reimbursement rate.
How often do you buy from multiple wholesalers? On average, how much money are you able to save?
We order and receive shipments six days a week and perform price comparisons on a daily basis. We have been able to save up to 30% on the cost of a drug by performing this daily task. Yet, ordering from multiple wholesalers remains a strategic process because we also have to stay within the generic compliance ratio (GCR) among all of our wholesalers. Specifically, we must abide by our wholesaler contract regarding the ratio of generic drugs to brand drugs. So, essentially when performing these price comparisons, not only do we have to take into account how much we would be saving by buying a generic drug from a different wholesaler, but we have to bear in mind our GCR contractual obligation.
Are patients able to benefit from this process?
Yes, patients can definitely benefit from the process of using multiple wholesalers because we have a higher chance of obtaining their medication when it’s unavailable from one or more wholesalers. For example, specific lots of losartan have been recalled and the drug has been on backorder for some time now from our main wholesaler. It has been valuable to have the option of other NABP certified wholesalers to be able to continue to supply our patients without having any gaps in their care.
What is the biggest obstacle to overcome when comparing prices?
The biggest obstacle is the time that it takes to perform this daily duty. It is a manual and very tedious process. To compare prices, you need to log into every wholesaler’s website with your ID and password, and individually search every drug. At the end of each month you inevitably end up with an excessive number of billing statements to keep track of and then pay on time. Many independents don’t have the staff to keep up with this time-consuming bookkeeping task.
Time seems to be a big concern with this process. How do you find the time?
Well, it’s an overwhelming and time-consuming process when comparing and ordering from each wholesaler through each separate website. One of the ways that we are able to speed up the process is by using a website that serves as a drug marketplace platform. Several companies carry out this function, but here at Suburban Pharmacy, we use EzriRx.com. This company is a search engine that represents 30 wholesalers. Their website allows you to search for a drug by the drug name or NDC and then simultaneously compare the different prices among the other wholesalers. The price details, shipping parameters, expiration dates, available quantity, and order minimums are all organized on the same screen for a simplified, streamlined use. Also, integrated into the platform is the ability to download our pharmacy’s daily drug order report from our pharmacy software directly into their website to do price comparisons and eliminate the entering of each individual drug.
As previously mentioned, bookkeeping and monthly statements can start to build up and become a hassle. EzriRx has created a time-saving solution by initiating an automated monthly payment to each wholesaler we buy from. There is an initial payment setup (EFT or credit card) based on the parameters of each wholesaler. Then, EzriRx automatically pays the wholesaler invoices when they are due. Through this process, our staff has been able to save time and enhance our price comparison strategy.
Why has it been crucial for your independent pharmacy to use multiple wholesalers?
We do all of this in order to save money so that we can become profitable as we deal with the unfair practices of the PBMs. Honestly, this is necessary to stay in business and be able to provide medications and services to our patients while also being a valuable asset to our community. Shanos states, “at this point, it’s not a matter of convenience, it’s a matter of survival!”
