Hot topics for NACDS TSE: Retail pharmacies building health services and addressing margin

Looking for solutions to margin problems

The biggest pain point right now in retail pharmacy is margin. As leaders are looking to find ways to address margin pressures, there are two primary directions they are likely to be interested in exploring:

Workflow efficiency and automation

One route you can take to address margin is to automate as much of the existing dispensing business as you possibly can. That's why over the last three years, you’ve seen a lot of retailers leaning into central fill as a solution. By getting the prescription-filling for chronic conditions out of the stores as much as we can and putting that in a center where those tasks are fully automated, you’re being more efficient with the workflow and with human resources. In-store pharmacists have more time to focus on direct consumer needs and patient care services.

Margin and efficiency can also be addressed in more incremental ways by adding digital options in any area where workflow is causing unnecessary stress or waste for pharmacists. For example, digital medication education, distributed to patients through a QR code on their prescription label, reduces the operating expenses of printers, paper, and staples to prepare patient leaflets. And believe it or not, even the time saved in going back-and-forth to the printer and refilling paper is cited by pharmacy staff as a meaningful improvement in administrative burden.

Whether it’s automation, adding efficiencies, or giving more responsibility to pharmacy techs within foundational filling and dispensing to allow the pharmacist to elevate their time more toward clinical services, it all works together. But at the core it's all about margin.

Seeking new margin-rich service lines

In order for the retail pharmacy industry to reposition themselves to be community health centers, they know they’re going to have to expand outside of the core dispensing and filling of medications – whether that’s expanding MTM services, building out capabilities for test and treat, or maybe hiring a dietician to pursue food as medicine.

However, the fact is, if pharmacies want to get into these margin-rich businesses, it means they will have to do a little bit of investing upfront. Most understand that the margin will ultimately more than make up for the investment.

When it comes to dispensing, not all prescriptions are created equal from a margin perspective.

Specialty medications will continue to be an important conversation, as they can be challenging and complex to dispense, but also offer an opportunity to boost revenue to pharmacies. While various healthcare entities define specialty meds differently (high cost, complexity of administration, seriousness of the condition they treat), the fact remains, when appropriate to dispense them, these drugs represent a potential for pharmacies to earn a higher positive net income after costs while also meeting important patient needs.

Among non-specialty, margin-rich opportunities, many pharmacies are eying and will be discussing pet medications.

Most consumers don’t have pet insurance, so they are paying for pet meds with cash. And while they used to just get them at the veterinary clinic, savvy consumers are now more likely to shop around for deals, just like they would for their own meds – whether that’s online or through a local pharmacy.

We forced the consumer to become more educated by the fact that prescriptions aren't the same price everywhere you go, and now they’re putting their knowledge to the test. The reason pet med shoppers are so interesting to retail pharmacy is because it's a total cash business, and there’s no PBM negotiating a reimbursement rate and then adding DIR fees on top of that. It benefits the consumer to save on pet meds, and it benefits the pharmacy from a margin standpoint.

Wolters Kluwer innovates for retail pharmacy

While focusing on community health and clinical services may require upfront investment, pharmacies will ultimately benefit by adapting to patient demand, drawing more consumers with new or expanded service lines that drive new streams of revenue.

The right evidence-based technology can play a role in smoothing these transformations and alleviating some administrative management. That’s why Wolters Kluwer is constantly developing solutions specifically for retail pharmacy teams from the UpToDate® Digital Architect platform:

• Digital Medication Education – With more than 3,900 digitally-accessible medication leaflets, pharmacy teams can reduce paper costs, save time filling prescriptions, and connect patients to the most current medication information across 19 languages. To date, Digital Medication Education is preferred by more than 11,000 pharmacies and used to support over 800 million prescriptions.
• Consumer Education – Using medication leaflets as a digital front door, patients can access interactive education programs and multimedia content mapped to their specific condition designed to drive patient engagement and adherence.

To learn more about our innovations for retail pharmacy workflow, consumer education, and community care clinical services, and to discuss how we can help your organization meet its goals, set up a meeting with a Wolters Kluwer representative at NACDS TSE 2025.