Secondary wholesalers play a vital role in the pharmacy supply chain; and in addition to primary wholesalers, pharmacies have a plethora of options for finding better deals, finding access to hard-to-find products, and even better payment terms. Almost every primary contract has a carve-out that allows pharmacies to purchase from secondary suppliers, so let’s discuss it!
Q: With negative reimbursements at an all-time high, what’s the best way to shop for brands and generics?
Pharmacies need to find the profitable nuggets and dig deeper to squeeze out more profits. Relying on a single source vendor is often not the best decision. There are over 50 licensed drug wholesalers across the country that have really great prices on the same items the primary suppliers carry.
Q: What products do the secondary wholesalers carry?
While a primary consists of brands, specialities, generics, OTCs, HBAs, and controls, secondaries have one or more of the above. They may carry some brands and many generics, while some will carry only generics and short dates, something the primaries don’t. In addition, while primaries will lean on supplying specific customers with items during a shortage, there are always some secondaries that may have the item when your primary supplier is out.
Q. What prices do the secondary wholesalers have compared to a primary contract?
On many items, secondary wholesalers can have it up to 50% cheaper than a primary. This is even on regular items and not a short date. Secondary suppliers negotiate with a different set of manufacturers that aren’t carried by the primaries and have good deals. In addition, while the primaries are forced to make a margin due to brand constraints, secondaries can sell items for cheaper on a lesser margin.
Q: How do I manage my GCR when buying on the secondary?
Something hard to calculate live is your GCR which leads many pharmacies to overspend toward the end of the month to get a better discount on their brands and higher rebate, and while this looks good on screen, in reality, it’s a juxtaposition, as there are items that can save you thousands in the short run that will have an ever drastic marginal gain in the long run. Pharmacies might want to take a smaller discount on their brands but in turn be able to shop generics, which are often times where the biggest savings are seen and where the primaries are forced to make up their margins on. What’s important to do is set a mental number in your head, say 20%, and if any item is 20% cheaper on the secondary market, buy it there.
Q: How do I know a secondary supplier is a good supplier?
Secondary suppliers should be NABP accredited, meaning they buy every item directly from a manufacturer or close to it. They should have a good list of products, good shipping minimums, and be in good standing with the state board and DEA. Pharmacies should be weary of suppliers selling brand items at discounts larger than a primary.
Q: Do any secondary wholesalers have controls?
Yes, many secondary suppliers have controls and will each have their own parameters for purchase. Some will have CIII and above, while some will carry a select few.
Q: How will DSCSA be managed with a secondary supplier?
Every legitimate supplier will either be completely set up to handle DSCSA requirements or be close to it. Wholesalers should be able to send the EPCIS files directly to a provider of your choice and have the process enabled. While the requirements were delayed for smaller dispensers, they are still required for larger entities, and the deadline is coming up.
Q: How do shipping minimums and delivery times work with secondary wholesalers?
While some exceptions exist, most secondary wholesalers pack items into a box and ship it through either UPS or Fedex. Depending on where they are located in relation to each pharmacy, they may have different minimums and shipping prices. The larger secondary wholesalers should charge between $100 and $150 for overnight delivery, while smaller wholesalers can charge upward of $500 for overnight delivery. Some even ship for Saturday delivery upon request.
Q: I get steady calls from wholesalers every day, is there a way to streamline purchases in an orderly fashion and find the best prices between all of them?
Yes, marketplaces exist that not only allow you to compare prices from different reputable wholesalers but also manage your payments to each of them, allow you to haggle for a better price on products, help with audits, and even connect with your pharmacy software to help perpetual inventory purchases.
About EzriRx
EzriRx is a Marketplace built for chain, LTC, and independent pharmacies to compare prices from 30+ NABP accredited wholesalers, including brands, generics, OTCs, HBAs, and petmeds. It’s the quickest way to ensure you’re getting the best prices across the board. Most importantly, it’s free to sign up and free to use!
