Reasons to Open an Outpatient Pharmacy

December 2011 - Vol.8 No. 12 - Page #42
Categories: Outpatient Pharmacy Automation, Outpatient Software

When evaluating the viability of opening an outpatient pharmacy at your facility, it is not enough to have sufficient space for the pharmacy and to think, “Why not?”. For the outpatient pharmacy to be successful, there must be a specific need or gap in patient care that the pharmacy will address.

There are three reasons to open an outpatient pharmacy: for profit, to service unique patient needs, and to offer 340B benefits. Making a profit should not be the primary motivating factor in the decision to open an outpatient pharmacy; providing a location for patients to access hard-to-find medications is a better reason, as it results in improved patient care. Taking advantage of 340B discounts is a worthwhile pursuit, but can only be utilized if the facility is 340B-contracted. Some facilities have opened successful 340B outpatient pharmacies inside the lobby gift shop. The 340B program provides enormous cost savings on medications, and patients find it convenient to pick up these deeply discounted drugs at the same time that they purchase other items. Facilities that are 340B-eligible can operate self-sustaining outpatient pharmacies, provided there is a sufficiently high volume of patients.

Determine the Customer
The most important step in evaluating the viability of an outpatient pharmacy is determining who the customer will be, as identifying your market is vital to success. There are three groups of potential pharmacy customers: hospital employees, the general pubic, or a mix of employees and the public.

The size of the facility will dictate whether a pharmacy can be self-sustaining. For instance, having sufficient space in the lobby and adding an outpatient pharmacy for hospital staff only will not be economically viable if prescriptions will average just a few dozen per day. Conversely, an outpatient pharmacy in a hospital lobby geared toward the public will not generate enough revenue if it is more convenient for the public to pick up prescriptions at their local retail pharmacy. Keep in mind that driving to the hospital, finding (and sometimes paying for) parking, and then trekking a long distance to the hospital entrance is not uncommon. Upon arrival in the lobby, customers may be required to provide a reason for their visit at the front desk, and also pass through security before being allowed to proceed. Neither of these scenarios will allow the outpatient pharmacy to generate sufficient revenue to sustain its business. To experience success, there needs to be a specific patient population requiring service and a clear reason to open an outpatient pharmacy.

Identifying Patients’ Needs
Hospitals serving unique patient populations are predisposed to operating successful outpatient pharmacies. For example, pediatric hospitals treat children with often life-threatening diseases who require specific compounded preparations, frequently in liquid form. This specific need can be met by establishing outpatient pharmacies, which provide a convenient place for families to access children’s prescriptions. Such pharmacies are often successful because they improve patient care by guaranteeing that patients have access to the drugs they need. A local retail pharmacy might not be able to provide the unique compounding needs of such patients.

For a patient with a prescription for Oxycontin 80 mg three times per day, who needs to obtain 270 tablets at one time, finding a retail pharmacy that stocks this high volume of pain medication can present challenges. An outpatient pharmacy allows these patients to come in for their office visit and leave with their prescriptions. They do not have to search for a pharmacy with a large enough stock of pain medication to fill their specific needs, as they know the hospital’s outpatient pharmacy will always have their medications in stock. Outpatient pharmacies that focus on pain management often see a high volume of patients, and may also fill a high volume of employee prescriptions; thus, they are likely to become self-sustaining.

Other outpatient pharmacies become successful due to their location in an environment with a dearth of retail pharmacies nearby. Patients living in urban areas may have limited access to retail pharmacies and may find it more convenient to come to the hospital to have their prescriptions filled. Because many of these patients walk in, parking is not an issue. These types of pharmacies are most successful if the pharmacy entrance precedes the security station, allowing patients to pick up their scripts easily without having to spend time going through security during each visit.

A common mistake many facilities make when establishing an outpatient pharmacy is failing to identify their customers up front and failing to determine the volume of prescriptions necessary to keep the pharmacy in business comfortably. In the right circumstances—filling employee prescriptions, satisfying a currently unmet need in a specific patient community, and taking advantage of 340B benefits—outpatient pharmacies can benefit both the facility and an underserved patient population.

Deanne Halvorsen is editorial director at Pharmacy Purchasing & Products magazine. Deanne can be reached at DHalvorsen@

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