INSTITUTION A Business Plan for a Mail Order Pharmacy

straightbeggarMechanics

Nov 5, 2013 (4 years and 7 days ago)

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1



Developed collaboratively by the ASHP Research and

Education Foundation,
the ASHP Section of Pharmacy Practice Managers, and ASHP Advantage.

Visit www.pharmacycsuitetoolkit.org





INSTITUTION A



Business Plan for a


Mail Order Pharmacy








Prepared
<Date>







2



Developed collaboratively by the ASHP Research and

Education Foundation,
the ASHP Section of Pharmacy Practice Managers, and ASHP Advantage.

Visit www.pharmacycsuitetoolkit.org



TABLE OF CONTENTS


TABLE OF CONTENTS

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2

Executive Summary

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3

Program Description

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4

Market Ana
lysis

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4

Competitor Analysis

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4

Program Start
-
Up

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..................

5

Capital Requ
irements

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5

Other Start
-
Up Expenses/Requirements

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5

Operating Capital

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6

Staffing RequirementS

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6

Regulato
ry and License Requirements

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6

Contractual Arrangements

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7

Project Time Frame

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7

Positioning (Niches/Differentiation)

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8

Pricing

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9

Management and Organization

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9

Operations

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9

Equipment and Tech
nology

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9

Staff and Training Requirements

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.

9

Evaluation

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10

Data Management/Co
ntinuous Quality Improvement

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10









3



Developed collaboratively by the ASHP Research and

Education Foundation,
the ASHP Section of Pharmacy Practice Managers, and ASHP Advantage.

Visit www.pharmacycsuitetoolkit.org



Executive Summary

Proposal is made to put a mail order pharmacy, herein called I
NSTITUION A
Mail Order
Pharmacy, in a 2,546 square foot space at the
Location A.

A capital investment of approximately $262,200 would be required be for initial tenant
improvement,

phone systems
, and equipment costs prior to opening. An additional $222,530
in non
-
ca
pital start
-
up expenses to cover licensure requirements, initial inventory, mailing
supplies, workstations, communication and minor equipment will be required at opening.
INSTITUTION A
Development has agreed to help fund our project at $7 per square foot
as part
of tenant improvement. Thus, this will decrease our start
-
up expenses by $17,822.

INSTITUTION A Mail Order Pharmacy business model is to be a primary “Central Fill” facility for
all INSTITUTION A retail locations. We will transition approximately
35% of current business,
including mailing for INSTITUTION A Specialty Pharmacy business, to this location to alleviate
space constraints and challenging access to our pharmacies. Utilizing INSTITUTION A Mail
Order Pharmacy as a central fill facility will

allow retail pharmacy staff to focus service to our
new patients which, in turn, will bring additional refill business to this facility. Management of
the INSTITUTION A Mail Order Pharmacy would be structured and operated as a “closed”
pharmacy. Our goals

are to maximize operational efficiency, decrease pharmaceutical
expenses, and increase revenue.


In conjunction with the INSTITUTION A
b
enefits office, the Pharmacy is participating in the
revision of the employee prescription benefit in order to potentia
lly increase the capture of
prescriptions filled for employees from the current 18%. It is anticipated that the pharmacy will
capture 50% of employee prescriptions generated annually. The capture of 50% will represent
a volume of 75,000 prescriptions ann
ually.

We anticipate additional mail order volume from over
-
the
-
counter sales and specialty
pharmacy services.

We would like to complete this project by December 20
XX

to coordinate with the annual
change in employee benefits. This space is being designed
with a view to future expansion as
other opportunities present.

Since the plan is to transition refill business to mail order from our current retail locations,
current pharmacy staff will be relocated to the facility to meets its demand. On start up, we w
ill
hire and train 1 FTE for customer service and mailing/delivery services, 1 FTE Computer User
Support Analyst for computer support, and 1 FTE for Pharmacy Operations Manager. We will
increase additional staff as our volume increases.





4



Developed collaboratively by the ASHP Research and

Education Foundation,
the ASHP Section of Pharmacy Practice Managers, and ASHP Advantage.

Visit www.pharmacycsuitetoolkit.org



Program Descripti
on

The INSTITUTION A Mail Order Pharmacy will be located in
XXX Building
. The 2,546 square foot
pharmacy will reside in space available on the first floor near loading dock area.

For the purposes of this business plan, INSTITUTION A Mail Order Pharmacy
would operate
Monday through Friday from 8:00AM to 5:00PM (excluding holidays).

Our current retail locations dispense of 60% new prescriptions and 40% refill prescriptions.
Statistically, new prescriptions tend to require substantially longer turn
-
around
time to process.
In order to provide a highly satisfied “first time” experience with INSTITUTION A retail locations,
transitioning their refill business to a central fill facility will increase patient satisfaction; thus,
increase our refill prescriptions
rate.

Provision of prescription services to INSTITUTION A employees are a part of the current medical
insurance benefit. Potential savings to the organization can be derived if INSTITUTION A is
capable of providing most of the all these services from one
of its retail locations.

Savings can be maximized by providing these services from a mail order facility where
automation and volume purchasing can be implemented. Mail order facilities are typically
operated as “closed” pharmacies. This eliminates dis
traction of on demand services and allows
processes to be streamlined and automated more easily. These are typically high volume
operations.

Because the facility will be operated by
INSTITUTION S
, it will qualify as a 340B ship to site,
allowing us to tak
e advantage of these lower priced contracts. We can use the same
automation resources as are used in our other retail pharmacies, which will minimize the need
for interface build. We can use the INSTITUTION A network as a platform, which will permit
oper
ation as an integrated facility from the patient perspective.


Additionally, the mail order pharmacy would provide inventory of non
-
prescription items (OTC
drugs) offer at volume
-
based discounted price savings.


Market Analysis

COMPETITOR ANALYSIS





5



Developed collaboratively by the ASHP Research and

Education Foundation,
the ASHP Section of Pharmacy Practice Managers, and ASHP Advantage.

Visit www.pharmacycsuitetoolkit.org



Pharmacy Name

Prescription
Number YTD

(#)

XXX
Mail Order (INSTITUTION A employees)

14,088

Current INSTITUTION A Mail Order Pharmacy

15,600

YYY

Mail Order Pharmacy

(additional employees)


270,000

Current INSTITUTION A Outpatient Pharmacy
Refill Business

36,612

Program Start
-
Up

CAPITAL REQUIREMENTS


Start
-
up Capital Expenses
-

Mail Order



Shelving

$90,000

Security

$30,000

Construction/ Plan design

$70,000

Refrigerators (2)

$10,000

Safe

$3,500

INSTITUTION A Project Management

$15,000

Project Contingency (20% per INSTITUTION A Facilities)

$43,700


TOTAL START
-
UP EXPENSES

$262,200


OTHER START
-
UP EXPENSES/REQUIREM
ENTS


Stationery/Office Supplies

$2,500

Centricity Software licensing

$
6
0,000

XXX and YYY

Data Conversion

$1,500

Licenses

$2,000

Freezer

$
500

Printer

$6,000

Phones (10)

$2,000

Chairs/Tables

$1,000

Workstations (8)

$12,000

Faxes (2)

$800

Moving

$5,000

Initial Inventory

$
100
,000

C
ash register/credit card machine

$9,000




6



Developed collaboratively by the ASHP Research and

Education Foundation,
the ASHP Section of Pharmacy Practice Managers, and ASHP Advantage.

Visit www.pharmacycsuitetoolkit.org



Project Contingency
(10% per INSTITUTION A Facilities)

$20,230


TOTAL
OTHER
START
-
UP EXPENSES

$
222
,
53
0


OPERATING CAPITAL

Location A will require financial capital resources in order to convert from a non
-
healthcare
facility to a healthcare facility to maintain standards and compliance with
The Joint
Commission, Board of Pharmacy, Drug Enforcement Agency, and other regulatory

agencies.


STAFFING REQUIREMENT
S

In order to keep up with the projected volume, we will recruit 1 FTE Administrative Assistant
trained in mail order pharmacy operations. The following staffing model is necessary for
providing INSTITUTION A employees pres
criptions and expansion of other services such as
specialty pharmacy, Medication Therapy Management (MTM), DUR Outcome, compounding,
and OTC sales:



Pharmacy Operations Manager

(1)


This manager will be responsible for the
responsible for the overall perfo
rmance of the operations. This manager will report to
the
a
ssistant
d
irector
.



Pharmacist
-
In
-
Charge/Lead Pharmacist (1)



This pharmacist will be responsible for the
overall aspect of pharmacy operations in terms of regulatory standards & compliance,
workf
low efficiency, dispensing, script/revenue growth initiatives, scheduling, formulary
management, inventory control, and patient/employee satisfaction.



Technicians (2)


These technicians duties include but not limited to supporting the
pharmacists, data en
try, mailings, inventory control, patients/providers
communications, and patient/employee satisfaction.



Administrative Assistant (1)


Duties
include but not limited to supporting the
pharmacists, mailings, inventory control,
patients/providers communicat
ions,
patient/employee satisfaction.




Computer User Support Analyst 3

(1)


The CUSA will be responsible for maintaining the
information systems and computer operations for the mail order facility and also
support the other retail pharmacy operations.



Phar
macists
-
In
-
Charge and two technicians are currently INSTITUTION A retail staff who
will be transition over to mail order.


REGULATORY AND LICEN
SE REQUIREMENTS




Board of Pharmacy as a Mail Order facility



Licensing in other states that require licensure for
mailing




7



Developed collaboratively by the ASHP Research and

Education Foundation,
the ASHP Section of Pharmacy Practice Managers, and ASHP Advantage.

Visit www.pharmacycsuitetoolkit.org





City licensing for floor plan approval



Drug Enforcement Agency



OPA


Office of Pharmacy Affairs (340b registration)



DME Certification



CONTRACTUAL ARRANGEM
ENTS



XXX

Licensing



Wholesale Drug Distribution



S
helving



H
ardware



Security System Agreemen
t



Third Party Contracts (Medicare, Medicaid, Private Payors)



Pharmacy Benefit Manager



NABP/NPI Enrollment



Office of Pharmacy Affairs for 340B Discounted Drug Pricing



P
hone system



Third Party Reconciliation

System


Project Time Frame

Phase 1


Plan
approval and Startup (end of July 20
XX
)







Business Plan Approval








Capital Investment Approval







Tenant Improvement Plan Design








Recruit & Hire Pharmacy Personnel/Pharmacy Operation Manager




Pharmacy Benefit Managers Selection







P
hase 2


Tenant Improvement, Move
-
In (July
-

September 2009)






Secure Location









Initiate Tenant Improvement Build
-
out




8



Developed collaboratively by the ASHP Research and

Education Foundation,
the ASHP Section of Pharmacy Practice Managers, and ASHP Advantage.

Visit www.pharmacycsuitetoolkit.org





Install Shelving






Install Security System








Complete purchase orders for equipment/technology




Initiate Direct Mail
er Marketing campaign





Order inventory and stock Prescription and OTC




Complete and Submit Board of Pharmacy Application



Complete and Submit DEA Application



Complete and Submit NABP Application



Complete and Submit with OPA for 340B Discounted D
rug Pricing





Phase 3


Building Business / Measuring Results (September
-

December 20
XX
)





Monitor & evaluate pharmacy financial summary compared to plan





Continue advertising attached to employee check stubs



Continual Business development and
expansion of specialty pharmacy business



Patients/Employees Satisfaction Index




Marketing Plan


POSITIONING (NICHES/
DIFFERENTIATION)

The major part of our marketing strategy is to ensure that patients will recognize INSTITUTION
A pharmacy as a place of

convenience despite challenging access to pharmacy. Current retail
staff will focus on service to new patients while the mail order pharmacy staff will market a mail
order option for prescriptions and the over
-
the
-
counter medications for patient convenie
nce.

Pharmacy leadership team is working closely with INSTITUTION A
b
enefit
d
epartment to
market/introduce INSTITUTION A Mail Order Pharmacy as an option to employees via Open
Enrollment Materials.




9



Developed collaboratively by the ASHP Research and

Education Foundation,
the ASHP Section of Pharmacy Practice Managers, and ASHP Advantage.

Visit www.pharmacycsuitetoolkit.org



PRICING

Pricing is based on AWP (Average Wholesale Pri
ce) not acquisition cost, and will be dependent
on third party contracting arrangements.

Management and Organization

The full
-
time pharmacist will be registered as Pharmacist
-
In
-
Charge (PIC) in compliance with
requirements by State Board of Pharmacy. The

PIC shall be responsible for daily management
and all regulatory compliance issues.

The Pharmacist
-
In
-
Charge shall report to the INSTITUTION A Pharmacy Operations Manager for
mail order.

Pharmacy Operations Manager, reporting to
a
ssistant
d
irector

will
be oversee all aspects of
pharmacy operations and will play a key role in business expansion
.

Operations

EQUIPMENT AND TECHNO
LOGY

The INSTITUTION A Mail Order Pharmacy will use the same prescription software as is currently
used at the other INSTITUTION A
outpatient pharmacies.

Eight INSTITUTION A network computer terminals and towers would be required. Six
p
rinters
could meet all printing needs.

Specialized phone system

will increase pharmacy workflow by allowing our pharmacy staff to
prioritize their work

queue.

STAFF AND TRAINING R
EQUIREMENTS

Our staff will be trained in
current
dispensing systems,
phone system,

customer service,
workflow efficiency, and mailing services.




1
0


Developed collaboratively by the ASHP Research and

Education Foundation,
the ASHP Section of Pharmacy Practice Managers, and ASHP Advantage.

Visit www.pharmacycsuitetoolkit.org



Evaluation

DATA MANAGEMENT/CONT
INUOUS QUALITY
IMPROVEMENT

(e.g. Inventory Control,
Quality Assurance, Customer Satisfaction Index, Continuous Profit
Driven Operations)



Inventory Control


Utilization 80/20 inventory utilization report on a monthly basis to
track and monitor drug purchase history for inventory turns, generic usage,
overstock,
and outdate/recall returns for proper credits, and updating/creating pharmacy
formulary system.



Quality Assurance (QA)


Patient and medication safety will be our primary focus to
positively impact patient outcome and quality of life. Measures
to be determined.



Customer Satisfaction Index (CSI)


Evaluation of pharmacy monthly CSI survey will
positively impact workflow efficiency,
turnaround

time (TAT), and medication delivery.



Continuous Profit Driven Operations


Evaluation and interpretation

pharmacy monthly
financial summary and data collected from our PBM will drive pharmacy daily
operations in regards to inventory control, quality assurance, and patient/employee
satisfaction.