Pharmacy owners are finding that by improving adherence on even a few “outlier” nonadherent patients, they can enjoy a huge savings to their bottom line. A certified public accountant (CPA) explains how.

“What we’ve noticed, over the last year in particular, is DIR [direct and indirect remuneration] fees have really become an issue, and especially with the CVS Caremark, on a trimester clawback basis,” says Ollin Sykes, CPA and president of Sykes & Company, P.A., based in Edenton, N.C. “Most others are doing it monthly. But, those that have star ratings at five, on an average basis, versus those that have star ratings at four average, for those five star pharmacies, we’re seeing DIR fees under 2%. For those pharmacies with star ratings of four or four and a half, DIR fees can be anywhere up to 4% or 4.5%.”

Check Out RxSafe’s Latest Section 179 Podcast with Ollin Sykes and Ben McNabb >

Sykes says there’s a clear correlation, measurable in dollars, between what’s happening on the adherence side and on the med sync side.

“When you take one percentage point of the average pharmacy in this country, which has about $3.6 million in retail sales, that’s $36,000,” Sykes continues. “So if you can reduce the one or two percentage points by increasing your star ratings by having the technology in place like we’re talking about here, that’s a game changer.”

The Technology Pharmacies Can Use

Pharmacy owners are using the RapidPakRx adherence strip packager to improve medication adherence, and seeing a return on investment from DIR fees alone.

“RapidPakRx has changed the way we do pharmacy,” says Brett Moore, Pharm.D., owner of Moore’s Pharmacy in Sebastopol, Miss. “We’ve seen our sync program triple in size since installing the RapidPakRx in December 2018. Our CVS Caremark performance scores are through the roof! This machine will pay for itself in two years just from saved DIR fees.”

Brady Chatfield RxSafe Director of MarketingBrady Chatfield
Director of Marketing
Years with Company: 3
Expertise/Interests: Marketing and adherence packaging
Favorite Aspect of Working in Pharmacy: Directly marketing to patients.

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Call: 760-593-7161

Moore isn’t alone. Benjamin McNabb, Pharm.D., owner of Love Oak Pharmacy in Eastland, Texas, shares his experience.

“We all know pharmacies of a pretty good size, they could be seeing $100,000 to $200,000 a year in DIR,” says McNabb. “So we need to minimize that the best we can, and I think adherence packaging just makes it a more seamless process to try to maximize a reimbursement.”

McNabb also noticed a big boost to patient adherence — and his star ratings — after he implemented adherence packaging automation.

“You’ve got to make sure you’re getting a five star rating on every single plan, so that does make a big difference,” says McNabb. “You have to ask, who are these patients that we can get into adherence packaging to take them from 75% adherence up to basically 99% adherence, so that we can improve our DIR dramatically. Sometimes it’s just a matter of one to two patients on these different health plans and the different scores. And I would say that reducing DIR alone, if you can have a program to improve that, you’re getting your money back [on the automation investment]. DIR savings alone can pay off a unit pretty dang quick if we can just maximize our adherence on our patients. So for us, we found adherence packaging to be a big advantage. ”

Plus, if you act now, you can also take advantage of the IRS Section 179 tax deduction, and reap even more savings off your 2019 taxes.

IRS Section 179 Provides Major Benefits to Businesses and Individuals Acquiring Capital Equipment

The Section 179 tax deduction has helped small businesses offset the cost of capital equipment for years. In 2015, Congress made Section 179 permanent law with the passage of the PATH act. In 2017, the deduction limit for Section 179 increased to $1 million for 2019 and beyond. The limit on equipment purchases increased to $2.5 million.

“My CPA brought Section 179 to my attention about three years ago. I was seeing adherence packaging becoming a greater and greater force in the marketplace. I was seeing PillPack develop and seeing how they use adherence packaging as a growth tool for their business was very intriguing,” says McNabb. “Seeing that, the strip packager was one of the first pieces of equipment that we bought from RxSafe.”

Other pharmacists have seen similar benefits.

“So when we researched it, absolutely, the price of the RapidPakRx, as well as the Section 179 made a difference.  We were able to take advantage of Section 179, and that was a big key decision maker,” says Clayton Gilde, R.Ph., owner of McBain Family Pharmacy in McBain, Mich.

Pharmacist Kyle Lomax, who owns Southern Pharmacy, a chain of six drugstores in Arkansas, also took advantage of Section 179.

“We were able to take advantage of Section 179, which saved us a tremendous amount of money,” Lomax says. “We have seen that patient adherence has definitely increased since adding strip packaging.”

If you’re interested in learning more, or listening to our latest Section 179 podcast with Ollin Sykes and Ben McNabb, listen below or visit, or call 877-797-2332.

This blog and podcast are not tax advice. The indicated tax treatment applies only to transactions deemed to reflect a purchase of the equipment or a capitalized lease purchase transaction. Please consult your accountant or tax advisor to determine the tax ramifications of acquiring equipment for your business.