Pharmacy Has a Revenue Problem. But It Also Has an Imagination Problem.

I spend a lot of time talking to pharmacy owners across Canada, and while every pharmacy is different, there are certain conversations that come up almost everywhere I go.

Reimbursement is under pressure. The cost of labour continues to rise. Recruitment is difficult in many markets and the complexity of running a pharmacy has increased, while the expectations placed on pharmacists continues to grow. Owners are trying to manage a business, lead a team, maintain compliance, adopt new technology, deliver more clinical care, respond to changing patient expectations and somehow find enough hours in the day to think strategically about where the business is going next.

These are not small problems, and they are certainly not imagined ones.

Pharmacy has a revenue problem. We need to continue having serious conversations about reimbursement and the economics of pharmacy. We need to advocate for pharmacists to be appropriately compensated for the increasingly important role they play in our healthcare system. And we need funding models that recognize the value of clinical care and the realities of operating a sustainable community pharmacy.

BUT we ALSO need to be willing to have another conversation alongside that one. Because I am increasingly convinced that pharmacy doesn’t only have a revenue problem.

We have an imagination problem too.

I don’t mean that pharmacy owners aren’t innovative. Quite the opposite. Some of the most entrepreneurial, resourceful and creative people I know own pharmacies. They have built businesses in communities where other healthcare services are disappearing. They solve problems every day with limited resources and they adapt constantly. They have survived enormous changes in reimbursement, regulation, technology, competition and patient expectations.

What I mean is that, as a profession and an industry, we still tend to start with the pharmacy business we already know and ask how we can make it work a little better.

Maybe we can fill more prescriptions… maybe we can negotiate better buying… maybe we can trim another expense, schedule more efficiently, automate another process or increase productivity. MAYBE we can add another clinical service and somehow fit it into a day that already feels completely full.

There is value in all those things. Operational efficiency matters enormously, and anyone who knows me knows how much I love a good process. But there is only so much you can optimize before you have to ask whether you are optimizing the right model.

Pharmacy has changed. Has the pharmacy business changed with it?

Think about how dramatically the profession has evolved. Pharmacists are practicing with greater scope and taking on increasingly significant clinical responsibilities. Patients are looking for more convenient and accessible healthcare, particularly as access to other parts of the healthcare system becomes more difficult. Technology has completely changed how consumers interact with businesses and increasingly how they interact with healthcare. The workforce has changed and so have employee expectations. Retail has changed, competition has changed and the economics of dispensing have changed.

Even the role of the pharmacy owner has changed. Owning a pharmacy today requires you to understand far more than pharmacy practice. You are simultaneously operating a healthcare practice, a retail business, an employer, a regulated environment, a technology-enabled organization and, increasingly, a clinical services business. And yet, despite all that change, many pharmacies are still fundamentally organized around a business model that would be very familiar to someone who owned a pharmacy twenty or thirty years ago.

That doesn’t mean the traditional model was wrong. It worked great for a long time, and many parts of it remain essential today. The problem is not that the traditional pharmacy model was wrong. It is that almost everything around it has changed. That distinction matters. When the environment changes but the underlying model doesn’t change with it, eventually you reach a point where incremental improvement is no longer enough.

We can’t efficiency our way out of everything.

When businesses come under financial pressure, there is a natural tendency to look inward and tighten things up. That is often exactly what needs to happen. There are (so many) pharmacies with significant opportunities to improve workflow, inventory management, staffing models, purchasing, technology use and productivity. When we fix those things for them, we have an enormous impact on profitability and on the experience of both patients and employees.

But efficiency has a ceiling. At some point, asking people to work a little faster, scheduling a little tighter or finding another small cost reduction stops solving the larger problem. There is only so much capacity to extract from the same model. The same is true about growth. If the primary economic engine whose margins owners are simultaneously telling me are becoming more difficult.

And if the answer is simply to add more clinical services without changing the operation underneath them, we may make things worse. Expanded scope represents an enormous opportunity for pharmacy, but piling new responsibilities onto already overwhelmed pharmacists isn’t a business model either. This is why pharmacy needs to give itself permission to think much bigger.

Not just about how we improve the pharmacy we have, but about what we would build if we weren’t starting with all our existing assumptions about what a pharmacy is supposed to be.

What if we stopped starting with a dispensary?

For a moment, forget how your pharmacy currently operates.

Imagine someone handed you a physical location in your community, a team of highly trained healthcare professionals, established relationships with thousands of patients, healthcare expertise, purchasing relationships, technology, a trusted brand and years of credibility. Now imagine they told you to build a healthcare business around those assets. Would your first instinct to be to recreate exactly what exists today? Maybe parts of it. Probably not all of it.

That is the thought experiment I think we need to spend more time on. We are so immersed in the existing structure of pharmacy that it becomes very difficult to separate with is truly necessary from what is simply familiar. A process may exist because regulation requires it, because it supports safe practice or because it genuinely creates value. But another process may exist because someone designed it fifteen (or forty?) years ago and nobody has questioned it since.

The same is true of our assumptions about where revenue comes from, how pharmacists should spend their time, what technicians can own, what the front store should be, how patients interact with us, what happens digitally versus physically, which partnerships we pursue and even what a pharmacy should be known for in its community.

Familiarity is powerful. The longer we operate inside a particular model, the more inevitable that models begins to feel. But it isn’t inevitable. It is simply the model we have today.

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