Strategies for Pharmacy Owners In Today's Challenging Pharmacy Landscape

Introduction

In today's challenging pharmacy landscape, many independent pharmacy owners are struggling with shrinking margins, predatory PBM contracts, and the constant pressure to do more with less. But what if there was a different way forward? What if you could turn these challenges into opportunities?

Today, we're joined by Dared Price, a pharmacist and entrepreneur who has done exactly that. Based in Winfield, Kansas, Dared owns eight pharmacy locations in partnership with NCPA Foundation Board of Trustees member Bill Osborn, and he's also the co-owner of Oread Rx, a transparent PBM that's saving clients up to 60% on their pharmacy costs. Whether you're a new graduate considering ownership, a seasoned pharmacist looking to pivot, or simply someone who wants to understand how to make healthcare work better for everyone, this conversation is packed with actionable insights you can implement right away. Let’s dive in.

Interview

Sonja: Hi, I'm Sonja Pagniano, the Executive Director of the NCPA Foundation, here with the Script Your Future podcast. I'm excited to introduce you all today to Dared Price. Dared, how are you? Where are you located? And what do you do in the pharmacy world?

Dared: Sure. What don't I do in the pharmacy world? My name is Dared Price, and I'm a pharmacist, and I'm located in Winfield, Kansas. I am a pharmacy Owner, of course, and I have 8 locations in South Central Kansas, south of Wichita. And I'm also a PBM owner, of Oread Rx. So those are the two main hats I wear in pharmacy.

Sonja: So, what led you to where you are today? I'm sure there's a lot of things that have happened along the way. But thinking back to when you were first starting out, what kind of inspired you on this pharmacy journey? Took you to where you are now.

Dared: Sure. Yeah, I so I've had many mentors throughout my life. You know, as a young kid, I was inspired to go to pharmacy school by the local pharmacy owners in my hometown, which is Elk City, Oklahoma. So, Gina Meador and Warren Meador, who were very influential on me early on and got me interested in pharmacy. And then when I was in college, I had a mentor, his name was Harvey Ahl. He had a huge compounding pharmacy in Blanchard, Oklahoma, and was kind enough to give me a job during college…And really inspired me to go on to pharmacy school. And to do some of the other things that I did. And then, you know, after pharmacy school, Bill and Willie Osborn. Really, you know, I've actually partnered with them and went to work for a pharmacy owner, Steve Pryor, in Enid, Oklahoma as my first pharmacy job, and then partnered with the Osborns to buy my first pharmacy-pharmacies, and then, you know, just kind of snowballed from there.

00:02:15 And then, you know, 5 or 6 years ago, just saw a huge need in the industry for PBM reform, obviously, like we all do. And, you know, instead of talking about it and complaining about it, and beating my head up against the wall at the legislative offices. We decided to actually do something about it. And that's when we created Oread Rx. It was a long road to create and many bumps along the way, but we're definitely in a good spot now and growing, and helping to solve a much-needed problem in the healthcare industry. So, I know that was a 30,000 foot quick assessment, but that's how I got to where I am today.

Sonja: Oh, that's wonderful. And, I mean, Bill Osborn, he's on our Board of Trustees at this time for the foundation. So it is really cool to talk to someone like you who has had that mentorship experience as well with one of our own board members.

Dared: Yeah, absolutely.

Sonja: So you said you own 8 pharmacies. Do you outright own all of those? Are you in some kind of a partnership model with those?

Dared: Sure, so we are partnered with the Osborns on those pharmacies. And so, yeah, we actually owned 9 pharmacies, but actually last weekend, I merged one of our pharmacies into another one. And consolidated those, so it went from 9 to 8, just here recently.

Sonja: So, for people who are maybe not sure what kind of an ownership model is right for them, can you kind of give them a bit more insights on the partnership model, how can you even get started with something like that? Is it, like, started through networking first, and then or is there a space where they can go and find those opportunities.

Dared: Yeah. I would say NCPA is a great place to find those opportunities, you know. I know all the pharmacy owners that I know. You know, love to find young pharmacists that want to be owners one day. And have them come work for them and see what it's like. And then, you know, I'd be happy to share anything that they want to know about ownership, really. I'm happy to do the same thing. I would love for the next generations of pharmacy owners to take over for us one day.

But there are all kinds of different models out there, you know, I mean, there's smaller junior partnership percentages…There's 50-50 deals, there's majority partnerships. And I don't know that one is better than the other. You know, the partnership that I've always had is a 50-50 deal. And, you know, both parties have to bring. You know, 50% equity to the partnership. And I just believe at that point it's a true partnership. You know, everything that you do is together. Both parties have to bring value to the partnership, obviously. You know, I was able to start at a really young age because of that. Whereas, if I would have tried to go on my own, or tried to buy stores by myself…You know, there's no way I could have started at 26. You know, I would have been 10 years past that before I had enough money to be able to go buy a pharmacy, so it provides a way to get into the game, the pharmacy ownership game at an early age.

Sonja: Sure, sure. No, for sure, and I know especially for people right out of school, like, it is a really good opportunity for them to get started…At that time, also with someone who's potentially much more seasoned, right? They know what's going on in the industry, they've been through the challenges. And they can kind of help guide them also through some of those business aspects that I know people don't really learn in school, right? It's kind of learning by doing.

Dared: Yeah, that's definitely not taught in school. I mean, you don't learn to read P&Ls and know what Goodwill is, and depreciation, and all the things in business, you know, and so you have to kind of learn on the fly, really. Unless you go to get your MBA as well, which I know a lot of people do that also.

00:06:20 But, you know, the first year we were in business, you know, we moved states, you know, so we moved far away from home. And I think, my first year on our P&L, it showed we lost $250,000 in our pharmacies, and so I would have ran for the hills if I didn't have, you know, a seasoned mentor to say, well, just chill out.

A lot of that's depreciation and other things, so just ride it out, it'll get better, and it did, obviously. And so having a partnership that knows those types of things was invaluable for me as a young owner.

Sonja: That's excellent. So when you were thinking about starting this transparent PBM. What were maybe some of the biggest challenges you faced taking on a different type of business and adding that to your business portfolio?

Dared: Yeah, so gosh, that's a good question, and I really didn't start the PBM. It was already kind of started with the three owners here in Kansas. I joined on a little bit later after they'd kind of built some of the framework. But there are a ton of challenges for small PBMs that are trying to do the right thing. You know, obviously the big three control 80-85% of the market. And, you know, that's what people are used to. And, you know, there's some medical network issues, and so if you've got employers across multiple states. You need some of these bigger third-party administrators, or TPAs. To administer the medical side of the plan, right?

And a lot of those are owned are the insurance companies that own the big three PBMs. And so, they're not really willing to work with smaller PBMs because, as we know. They want to push people to their own PBM so they can rip them off, basically, and make more money. And so, that's a challenge. To get in with an employer group, so really, you only have the ability to be the PBM for somebody that's self-insured. You know, so anybody that just has regular traditional insurance. You don't even have a shot, because those people are going to be steered to the big three PBM, which is wrong, which is what's wrong with our with the PBM industry.

Sonja: Yeah. Absolutely. So, thinking about. A transparent PBM, like, what does the transparent part of that actually mean? When it comes to, like, the operations of it.

Dared: Yeah. And I hate, and I hate those words, I hate transparent, I hate pass-through. Everybody just says it, you know? Like, it drives me insane, and yet you have to say it. But so transparent just means I'm gonna show you everything, right? But a lot of times, they will. And it'll be an 85-page contract, and they'll be transparently telling you how they're gonna rip you off.

Sonja: Oh, sure, yeah. Yeah, bury people in paperwork.

Dared: And so it's but nobody understands it. Yeah, exactly. Nobody understands it, nobody reads it. And they just rely, you know, on a consultant or they just trust that, you know, these big insurance companies are doing. You know, what's right, and that couldn't be further from the truth, obviously. And then pass-through, you know, is supposed to mean that you pass through all of the savings that you get onto the client. But That doesn't mean that you can't build in these special fees, or disqualify claims, or do all these other things that a lot of PBMs do, unfortunately.

00:10:06 And to be honest with you, Sonja, like, we never wanted to start a PBM. We wanted to partner with the transparent pass-through PBM. And every single one that I tried to partner with was doing something that the big three are doing. And so frustrating, like, just do what, it's just, it's…That's so frustrating…Infuriating to me, and so that's when we just said, okay, let's do this ourself.

00:10:33 I think our contract's 8 pages. And anybody can read it, anybody can understand it, and it's the way it's supposed to be. So that's that's how we got to where we're at.

Sonja: Well, that's definitely eye-opening for me, because, like you said, we're constantly bombarded with these words, and then it is, it's like, what does that even actually mean? And you're right, if they're still hiding things, if they're still adding additional hidden fees, like.

00:11:01 Is that truly helping the patient at the end of the day? Is it really, truly advancing anything for healthcare? Probably not.

Dared: Yeah. Yeah, and a word that probably is better used, that we try to use, is “honest” PBM. And we act as a fiduciary on behalf of our clients. You know, and so which means You are truly looking out for their financial well-being, not your own. You know, and so a lot of the a lot of the PBMs, unfortunately, but especially the ones that take private equity money. I mean, they are beholden to the shareholders of that private equity firm. You know, that's their number one goal, is to make a profit. Which any business's goal is to make a profit. You know, I'm not saying that you can't make money. But your number one goal becomes satisfying your own stakeholders instead of doing what's right on behalf of the clients that you serve. And so, there's a way to do both, you know, there's a way to run a solid business and save a ton of money for your client, and do what's right in the industry. It's just The way the regulations are, it's so easy to turn a blind eye and do what's wrong, and you can make a. Boatload of money doing that. And unfortunately, that's what most of these PBMs have gotten caught up in. And, it's just I don't know. I'm not gonna do that. And so, that's just the way that's just the way it is.

Sonja: Well, I really appreciate your work in this space, because I think there's a ton of value. And I think, honestly, a gap in business for businesses like that. Businesses that are honest, businesses that really care about people and are trying to do the right thing.

Dared: Yeah. I hope so.

Sonja: And I think when people hear about that, they value that, and they want to support it. You know, to me, it's a no-brainer.

Dared: It's an absolute no-brainer. Yeah, most of the time, these, you know, especially, like, municipalities and school districts. And people like that, they don't understand that their health insurance plan is killing their local pharmacy. You know, like, they are assisting in putting their local pharmacy out of business by the plan that they choose. And they don't realize that if they chose a different option- Not only would they be helping support their local businesses. But they would save a ton of money themselves. You know, and so it's, it's just unbelievable to me, and.

00:13:35 Once you see the numbers, like. I was just talking to a guy last night. Actually, he belongs to a school system close to Kansas City area…and, he, he went away from traditional insurance and was self-funded. And he said the past 3 months, they've spent half as much money on health insurance as they did when they were with the traditional insurer. And that's that's…Tens of thousands of dollars for a very small school district. That's huge cost savings. It's huge cost savings. Yeah, and another person I was with at lunch yesterday, who's one of our clients. None of their employees pay for health insurance in October, November, or December. They don't make anybody pay for it. Because of how much they save. Wow. Because of how much money they save, on on specifically on the PBM side. And what's funny about that is they switched to us. 3 years ago. From a transparent, pass-through PBM, right? And in year one, they saw a 60% reduction in their pharmacy spend! Without any change in coverage, without any difference in drug coverage. Just from switching to somebody that does what they're saying they're doing.

Sonja: Just from switching. That's so novel!

Dared: So, it's just. It's unbelievable. It's hard to sell, to be honest with you, which it should be easy to sell, right? But people just don't believe you. Like, they don’t at all.

Sonja: Yeah. Well, because they're so used to the scam that is...

Dared: Unbelievable. Yeah. It is a scam.

Sonja: The insurance industry. It's a massive scam.

Dared: It is an absolute, absolute scam. It really is.

Sonja: And to me, it's devastating how used to that kind of stuff we've gotten, that we're just complacent now. But you're right, the more. The more people talk about it, the more that they see these stories of people, like, actually having these savings, the more they hear about actual patients, right, with better outcomes because of it. I think eventually it'll catch fire.

Dared: Yeah. Well, a couple things, you know, like. So, I don't know if you've seen some of the lawsuits that are coming down, but, I can't remember if it's J&J, I think, is involved.

Sonja: Yeah, yeah, that was that was the one that triggered a lot of this for myself, because I'm like, oh, fiduciary duty, what does that even mean?

Dared: Yeah, but Yeah, yeah, they're their employees, the employees of J&J, actually sued J&J. For not doing their due diligence on their health insurance, right?

Sonja: Mm-hmm.

Dared: And so, that's kind of a scary thing. And the second thing is, you know, when you look at your P&L as a business. I mean, health insurance is usually number one or number two on. What is costing you to do business on the expense side, right? And so, as an employer, I mean, it's like - Definitely a top 5 thing that you should be looking at and considering, when you're evaluating your business. On how to how to save money, and not only save money, but provide a better product for your employees, you know, like.

Sonja: The value of what you're spending, like, does is that actually equaling out for your people or not.

Dared: It's it's all sick care, you know? Like, they want you to get sick and go to the most expensive hospitals, and be on the most expensive drugs, and because if that happens, then the insurance company makes more money in the end. You know, they can they can raise your premiums up and make more revenue off of that, so it's just a it's a broken system, and we're happy to be part of the solution, you know? Like, it's…

00:17:12 There's nothing more rewarding to me. Than, you know, going and telling the story. Somebody switches to us, and then, like, the lunch meeting that I had yesterday, 3 years later, saying. You guys told us you would probably save us around 30 or 40%. You actually saved us 60%, and none of our employees pay for health insurance in October, November, December. And to me, that's, like, the most rewarding thing that I've ever done in my career. And I'm excited to continue to grow and do it for more people.

Sonja: Absolutely. So what advice do you have for other pharmacy owners that are maybe really frustrated right now.

Dared: Yeah. Well, I mean.

Sonja: Because I feel like you've… you've kind of kept a certain level of optimism going, right? And so, like, how do you do that? How do you maintain that?

Dared: Yeah. Yeah, yeah, that's true. It's hard sometimes. Especially when you see some of these contracts that the big three roll down to you, but. I mean, you have to pivot, right? You if you're not making money dispensing prescriptions, then how can you make money? What can you do? You know, I mean, you don't have to… you know, do what I did, and try to, like, go, you know, change the market share in your communities. Now, I highly advise that, actually, and we would be happy to partner with anybody that wants to do that.

00:18:31 Because it's important to tell the story, right? It's important to make people understand. Because I know you and I talked to Nathan Reed the other day, who was the superintendent here of schools. And he came into my office very frustrated with me. Because their health insurance was going up 30 or 40% because of the cost of drugs. And so, he wanted to know, why the hell are you charging us so much for drugs? You know? And I had to quickly explain to him, no sir, actually, we make less money than we ever have, so it's not us charging you. Let's, let's, look at what your PBM is charging you for drugs. So it's important that local people know, like, the true story of what's going on. And that there are solutions. To fix that problem. You know, and so that's that's the way I went, but, you know, there are other things in pharmacy, all the wellness stuff, the -you know, the vitamin lines, the DME, the immunizations we have.

We have two pharmacists that are embedded in the clinic doing annual wellness visits and chronic care management. We now employ a nurse practitioner, and we have two wellness clinics.

Sonja: Oh, cool.

Dared: That she runs, that focuses on. Hormone replacement therapy and true wellness. So there's, you know, there's a lot of different things that you can do besides just dispense prescriptions to impact the health of your community. And so, you know, don't give up, just shift, just pivot.

Sonja: And so for some of these owners who are very overwhelmed, right, and they're just kind of, like, barely making margins…How do they start to integrate some of these new services into their pharmacy? Like, have there been steps that you've taken that you've found to be a bit…easier? Is it all dependent on your community and, like, who's in your community?

Dared: Yeah, I mean A lot of times, you want to go find holes for care in your community, you know? And so… If you're if your community that struggles with DME, for example, like, if there's not a local DME provider. Maybe look at, you know, providing some of the items in DME that are profitable. Like, CPAP machines, or diabetic shoes. Or nebulizers, you know, looking at your local. What does your local community look like? And so that's one example. But I mean, it's challenging, especially for smaller stores where you just have one pharmacist, you know, and they're.

Sonja: Exactly.

Dared: They're overwhelmed because we're filling more prescriptions today than we ever have been, right? Making less money doing it. And so, I would say, you know, number one --and this this is the one thing I completely despise about pharmacy today.

00:21:36 You have to say no sometimes. You know, you can't you can't afford to fill a prescription for a loss. You just can't do it. You won't be there for your community if you continue to do that. So, now I know you have to be careful with how you go about doing that, but..You can't. You have to find solutions to where you you can't fill prescriptions at a loss. And so, I'd say that's number one. Learning to say no, and. And when to say no. And then, you know, you're not going to leave the patient out to dry. You're going to find them a solution, whether it be a therapeutic substitution, or you know, finding them a new pharmacy, that would take their fill. But that's unfortunately a reality in the pharmacy world today. That you have to say no sometimes. And, you know, business doesn't have to be complicated.

00:22:32 Do more of the things that make you money and less of the things that don't, right?

And so, saying no to some of those losses. Well, you can see it pretty quickly in your dispensing data, you know, and then…Like, if you're overwhelmed. Find a couple of holes in your community of of needs in the medical field, and then go fill those needs.

Sonja: So, definitely pharmacy owners need to go look at their data. If they're not looking at it regularly, go look at it right now.

Dared: Absolutely. Figure out -Which, which plans pay you. And, you know, figure out which employers those are, go market to those employers too. For those patients to come to your pharmacy. Very targeted marketing, you know? Used to be 10 years ago, it didn't matter. You just marketed to the whole community. But if you've got a bad payer. A bad PBM contract, you don't want those people to come to your pharmacy, unfortunately. So find the ones that do pay well, and then go market to those businesses.

Sonja: Sure, sure. No, that's smart. So, you had mentioned NCPA earlier. How long have you been involved with NCPA?

Dared: Oh, ever since I was a student, Loved NCPA as a student, and. I think it's pretty sad, actually. A lot of people are involved as a student, just because it's-- you've got the organization there, and it's kind of easy, but then when you graduate. Life happens, right? And you've got all these bills to pay, and you've got all your student loans to pay back. And some of the association work just kind of falls off, right?

But I would say I've I've gotten more out of my relationships with NCPA and Oklahoma Pharmacists Association and the Kansas Pharmacists Association. Than I will ever be able to pay back. And so, I would highly encourage students and young pharmacists to get involved in…in your associations and organizations. That's where… That's where you find the people that are doing things well, that's where you find - you know, the friendships and the lifelong relationships that you'll have. That's where you'll find your mentors. And so, yeah, I've been involved in KPHA and NCPA ever since I graduated back in 2008.

So, and then, I've been a vice I got elected to be a vice president in 2019, for NCPA. Which I don't know if people that understand that, you…you get elected to be a vice president, and then that's kind of the bullpen of people that they pull up to be on the board when a board seat comes open every year.

And so, I think I spent 3 years as a vice president, and then got pulled up to the board, so I think this is my third year as a board member of NCPA.

Sonja: Very cool, and so what's your favorite program, though, that NCPA offers? I know there have been a lot of new ones that have come up.

Dared: You know, we have really benefited at my pharmacy from the NCPA Fellowship. I've had Two pharmacists now go through that as… as new grads, and they did the NCPA fellowship through our company. And that was really beneficial, because, what it did was it provided us a pharmacist, right. But then it also gave them some time. To go find a project, to bring to our store, you know? And so. The one that stands out, to me is Test and Treat, you know, which hasn't become as big as we thought it would be. But every one of our stores are able to do it now because of the NCPA fellowship that we did. And so yeah, so that person was able to do that, you know, part-time as a pharmacist for our company. And so, that was that was really great. I highly recommend. The, the NCPA fellowship, for sure.

Sonja: Oh, that's excellent. So I also know you're a lead luminary for CPESN Kansas. What does the luminary do? I see that word come up all the time, and I'm honestly not 100% on what it is.

Dared: Yeah, yeah…so CPESN, obviously, is the Community Pharmacy Enhanced Services Network. So, it’s those pharmacies that are going above and beyond doing things beyond just dispensing prescriptions. So almost every state has a local network. CPESN USA is the umbrella and every state has a smaller network. CPESN Kansas has a local leadership basically and we have five or six luminaries in Kansas – that’s kind of the leadership for the CPESN group. We do things like we try to get contracts for our members. We have 80 or 90 members in Kansas right now. Try to work with third parties to get paid on the medical side on a lot of things. We have one program right now that’s about to roll out with a state managed care organization with the state and they’re having trouble with the health risk assessments. The state requires them to get a certain percentage of their people to do their health risk assessments every year. And they’ve always struggled to get that done. What better place to partner than pharmacy, right? All of their members coming into our stores to get their prescriptions. At that time, we can help them complete their health risk assessments. Those kinds of things CPESN does, we look for those opportunities and partnerships and try to make pharmacies money doing the enhanced services they’re already doing a lot of times.

Sonja: I feel like that’s really elevating the profession, right, in the eyes of other professions out there like medical and things like that maybe didn’t maybe consider you know with all of the education you guys do and the rotations involved with that. I think there is so much value pharmacists bring to communities way beyond filling prescriptions. So I think it’s really cool what CPESN is doing in each of these states and the ways that you guys can then advocate for the profession is excellent.

Dared: Absolutely. Patients see their pharmacists 35 times a year on average and see their physician 3. So we have way more access to patients and patients have way more access to us. So how can we help in that whole medical pharmacy relationship with the patients? But we have to get paid for it. Pharmacy has done things for free for way too long. So we have to figure out how to get paid for a lot of the things we haven’t been in the past.

Sonja: And state need to recognize a lot of that work is being done and should be paid for. So I’m excited for that work to continue too. I’ve got one more question for you. I know you have also served on your local hospital foundation. How has serving on that maybe opened your eyes to the broader problems facing healthcare today?

Dared: Especially rural hospitals. Rural hospitals are facing some of the same problems that pharmacies in general are facing. Bad contracts. Under reimbursements. Things like that. They’re fighting and scraping for every dollar as well. Unfortunately the way our country is set up right now…patients are suffering because health insurance is as much as it ever has been. Providers are going out of business left and right. You hardly see a physicians office anymore owned by local physicians anymore. It’s all part of bigger health systems now, right? I think Optum/ United Healthcare is the leading employer of physicians in the country. They’re getting extinguished or extinct just like pharmacies are. Unfortunately.

So it’s been cool because we’ve found ways to work together – especially during COVID. We had great partnerships with our local health resources the hospital and local health departments as well. COVID showed us how important those local partnerships can be. Renee and I really try to stay as active as we can in the community to try and find partnerships. What’s really cool is the hospital uses our PBM also. We were able to cut their drug spend by 50-60% which helped them stay in business you know? It’s those types of things when you serve on a Foundation or any capacity for any of the nonprofits around town a lot of times you find partnerships that provide value to both the organizations and the people in the community. It’s been a great experience.

Sonja: Sounds like a very valuable thing for pharmacists to look into if they’re not already involved in their community in that way. Seeing if there’s places like that where they can serve.

Dared: Absolutely.

Sonja: I really appreciate your time today, I feel like a learned more about you. I felt like I already knew a lot, but I learned even more. Thanks for joining us on Script Your Future.

Contact Information

LinkedIn: Dared Price

Email: dared.price@gmail.com

Episode Summary

In this episode of Script Your Future, host Sonja Pagniano sits down with Dared Price, a Kansas-based pharmacist who owns eight pharmacy locations and co-owns Oread Rx, a transparent PBM that's disrupting the traditional pharmacy benefit management industry. This episode offers hope and practical solutions for pharmacy owners facing today's challenging landscape, proving that with the right strategies and partnerships, independent pharmacies can not only survive but thrive.