How pharmacies are building practices around both models.

Prescription volume has traditionally been a key metric for assessing a pharmacy’s size and success. Pharmacies used to be able to focus on ways to handle volume more efficiently to create more margin or ramp up volume with the goal of driving revenue.

Of course, it goes without saying these days that chasing volume on its own won’t necessarily get your pharmacy where you want it to be. From ongoing pressure on reimbursements to limited networks that potentially take high-value prescriptions out of a pharmacy’s dispensing purview, you’ve got to have a game plan that makes your dispensing meaningful, both to your business and to your patients. Here we’ll take a look at two pharmacies that approach this critical situation differently. We’ll find out how Shawn Nairn, R.Ph., is building dispensing volume at ACORx with a model that meets his market’s need for adherence solutions outside of the traditional long-term care (LTC) settings, and how Tim and Hilarie Redline have built Redline Specialty Pharmacy from their passion for compounding and infusion therapy to serve patients whose needs fall outside of the standard medication regimens.

Seeing a Need

Shawn Nairn, R.Ph. Owner, ACORx and Hometown Pharmacy
Shawn Nairn, R.Ph.
Owner, ACORx and Hometown Pharmacy, Pittsburgh, Pa., Area
ACORx (Adherence and Compliance Optimized) offers patients weekly adherence packaging and services designed to assist the medical home/accountable care organization (ACO) models, as well as home-based patients who can benefit from a more hands-on medication management program. Hometown Pharmacy operates two retail pharmacies located within grocery stores in the Pittsburgh market.

Shawn Nairn has seen a lot in his 20 years in the profession. At one point, he and partners owned up to seven retail stores and a long-term-care pharmacy. Recently he’s been on a course to pare back that footprint, but ramp up his volume by pursuing a new model he identified a couple of years ago and that he’s begun rolling out in his new ACORx pharmacy. “I like to say that I had the foresight to realize the opportunities around adherence packaging and improving adherence,” says Nairn. “It’s a concept that’s been around awhile. Essentially, what I did was take the LTC adherence packaging model and started marketing it to people at home because I saw two things in my market in western Pennsylvania. First, nursing homes are extremely expensive. And when I say nursing homes, I’m talking about everything from assisted living to personal care to nursing homes. Second, we have one of the fastest-aging populations, and we have some of the oldest population in western Pennsylvania in the entire country. And this is a population that takes multiple medications and for whom adherence can be especially challenging.”

Tim and Hilarie Redline have found their niche in seeing patients in need and finding the means to serve them as well. The Redlines opened Redline Specialty Pharmacy as a compounding pharmacy in 2003. Things started small, with just Tim Redline as the pharmacist running the show. “We did sterile and nonsterile compounding at that time, as well as injectables,” says Tim Redline. “Two years later, we added home infusion and became part of the Vital Care network of home infusion pharmacies.” Fast forward to today, and Redline Specialty Pharmacy has maintained this focus on serving patients in need of medications and formulations that aren’t available commercially, and in that way stepping outside of the model that looks to prescription volume as a primary measure. “It might be a dosage form issue,” says Tim Redline. “Or the patient may need a liquid, and the medication only comes in a tablet or a capsule. Patients may have problems swallowing and need a suppository, a transdermal cream, or a gel to get the medication. Our patients have also often tried and failed other treatments, and their healthcare provider is looking for options or different avenues to help treat that patient.”

Tim Redline, Pharm.D., and Hilarie Redline, Pharm.D.
Owners, Redline Specialty Pharmacy, Hastings, Neb.
Focus on compounding, home-based infusion, and functional medicine serving Nebraska and surrounding states. Part of the Vital Care network of infusion pharmacies.

Infusion therapy was a natural extension of what the Redlines were already doing as a compounding pharmacy. “We already had the sterile compounding facility and infrastructure in place,” explains Tim Redline. “And a typical infusion patient is in many ways similar to a compounding patient, in that he or she has a need for medicine delivered through an alternative mechanism.” As an example, Tim Redline points to a patient who may need IV antibiotics for a severe acute infection. The Redlines have developed close working relationships with healthcare providers such as physicians, physician assistants, and nurse practitioners, as well as with patients, to come up with solutions and solve the problem that they have on the compounding side. The Redlines have found opportunities to expand into other therapy areas too, such as immunoglobulin treatments for people with neurological indications or primary immune deficiency, total parenteral nutrition, and enteral nutrition or tube feeding for patients who have disorders of the GI tract or malabsorption issues.

Building the Practice

Both the Redlines and Shawn Nairn have had to find the right tools to fit their models, with the Redlines focusing on technology and equipment that address the specific needs of their practice, and Nairn finding solutions to handle the prescription volumes and LTC-style workflow needs his adherence-at-home model requires. 

Redline Specialty Pharmacy has maintained a focus on serving patients in need of medications and formulations that aren’t available commercially. Shown here is a compounding area.

Redline Specialty Pharmacy’s compounding and infusion-based practice requires building a pharmacy that’s very different from one focusing on dispensing oral solids and other standard formulations to a broad population of patients. For example, the Redlines use a compounding-specific software platform from PCCA (Professional Compounding Centers of America). “This does a tremendous job helping us track everything we do, from each ingredient down to the lot number,” says Tim Redline. “Everything is tracked and connected to the patient, so we can run reports showing exactly which patients have received a medication with a specific ingredient and lot number in it.” This is critical for quality control and patient safety.

Then there’s the equipment that’s needed to run a compounding lab and address Pharmacy Compounding Accreditation Board (PCAB) requirements and USP (United States Pharmacopeia) general chapter rules. “We need to comply with USP <GC> 795 on the nonsterile side and 797 on the sterile side,” says Tim Redline. For example, Redline Specialty Pharmacy has environmental monitoring equipment that tracks temperature and humidity. “Any areas where medications are received have to be continuously monitored,” explains Tim Redline, “as well as any refrigerators or freezers that we use to store medications. We have various sensors throughout the pharmacy monitoring different areas, and it’s all connected via a cellular hub with cloud access via a web browser to reports and dashboards.”

The requirements for environmental control for sterile compounding are even more stringent, Tim Redline notes. “We need to account for air quality in the clean room, for example, with fan filter units in the ceiling that have HEPA filters. We have pressure differential monitors to ensure the rooms are positive pressure. We have a glove box, or laminar flow hood, which is where the sterile compounding occurs and is called the direct compounding area. There’s also a powder containment hood in the room with a HEPA filter, which is for protecting the compounding personnel from exposure to any of those pure powder ingredients.”

Pharmacy can be at the forefront of the healthcare revolution or evolution, depending on how you want to look at it.
– Shawn Nairn

Redline Specialty Pharmacy is also now taking into account the impact of USP <GC> 800, which will become enforceable July 1, 2018, and provides standards for safe handling of hazardous drugs to minimize the risk of exposure to healthcare personnel, patients, and the environment. Tim Redline foresees these rules increasing operational costs, starting with the cost of disposables such as gowns, shoe covers, and special gloves. Redline Specialty Pharmacy has also created a negative-pressure, externally vented buffer room to prevent the spread of any contamination outside the compounding room. “We have a minimum of 12 air exchanges per hour, every hour,” he says. “So basically what we’re doing is we’re taking all of the air in that room and blowing it outside through HEPA filters 12 times an hour, 24 hours a day. And, of course, we have to replace that air with either heated or cooled air from somewhere else.”

There’s a lot to consider here. And when you are making this investment, it’s important to realize that, as Tim Redline puts it, this type of pharmacy is not an “if you build it they will come” kind of thing. “We go out and educate prescribers about what we do,” he says. “We have key members of the sales and marketing side who go out and call on physicians, nurse practitioners, and physician assistants. We send out a newsletter every month to providers highlighting different areas in which we help patients. And we educate patients, too. Some of that is in the form of patient follow-up, which is important.” And while the pharmacy does offer an app that can be used by patients for requesting refills and by the pharmacy for sending out messages, there’s a back-to-basics approach to much of patient engagement at Redline Specialty Pharmacy that sees staff much more likely just to get on the telephone to call patients and follow up with them about their therapy.

Shawn Nairn has the need to look to specific tools to address his pharmacy’s processes as well, in particular to process batches of prescriptions for packaging by patient and at high volumes. He’s also had to add space as ACORx’s business has grown. He was able to build a business of around 600 patients for the packaging model while still operating out of his existing retail pharmacies, and this was proof that the concept worked. “But we pretty quickly ran out of space as we continued growing, and that’s when I decided that what I was going to do was create a pharmacy exclusively dedicated to adherence packaging — and that’s what became ACORx. By class of trade, it’s still a retail store, but it’s a space and a staff dedicated to really implementing the packaging model.” ACORx has been open for over six months, and now serves around 1,000 patients and dispenses around 10,000 prescriptions a month.

Building Blocks for Success

Interestingly, Nairn is not currently using any packaging automation, but is reviewing Omnicell’s VBM. Instead, his staff packs Omnicell’s SureMed multidose bingo cards using its Guided Packaging software, which Nairn actually worked on developing. “It’s an easy way for a technician to be able to look at a screen and identify what pills go in what packaging and where,” says Nairn.

Nairn has found that he’s able to use QS/1’s NRx pharmacy management system to operate as a hybrid between long-term care and retail. “NRx offers workflow modules that allow us to manage patients in ways that you might not realize you can, coming from the retail world,” says Nairn. For example, there’s the patient fill list, which lets you batch all of a patient’s prescriptions into the filling queue. This is a key when you are in a multidose adherence packaging workflow, but one that isn’t necessary when filling the typical retail prescription. “QS/1 has done a good job of working with me to show me how to get some long-term-care functions like this from NRx,” says Nairn. NRx also supports an interface to the Guided Packaging process, he notes.

For inventory management, Nairn uses TCGRx’s Beacon system. This is a high-density, pick-to-light shelving system. “We’re able to store our inventory in just half or even a third of the space we’d need using typical shelving,” says Nairn. Beacon also provides the highest level of accuracy in getting the right meds off the shelf, according to Nairn. The way it works, the staff scans the prescription label and a light goes on that tells them exactly where that drug is in Beacon. Then they scan that stock bottle to confirm the pick. “If you grab the wrong drug,” says Nairn, “Beacon shuts you down right away.” From there the process moves over to Guided Packaging.

The Prescription Is Just the Start

While we’ve talked about how both Redline Specialty Pharmacy and ACORx focus on collaboration with prescribers and care providers, there’s a great need for patient engagement within these practice models as well.

This engagement is critical in Tim Redline’s view, because Redline Specialty Pharmacy focuses on medications that often take additional patient training. “We have nurses on staff who are trained to educate patients in self-infused medications, for example,” says Tim Redline. “We have developed the capabilities not just to dispense these medications, but to address patient care, patient education, patient training, and follow up.” This engagement is also important in cases where Redline Specialty Pharmacy has data reporting requirements. “There’s not a lot of this at this point,” says Tim Redline. “But you have to be aware of the need to meet reporting requirements so that they don’t turn into challenges or barriers to entry for getting contracts and participating in restricted distribution networks.” You can look to support from organizations outside of the traditional technology providers here too, notes Tim Redline. “Being a part of the Vital Care network of home infusion pharmacies has helped open some of these doors for us,” he says. “It’s certainly difficult just to be a stand-alone, all on your own, trying to talk to the right people at the manufacturer level. Being part of the Vital Care network of home infusion pharmacies has been a big part of our home infusion success.”

Shawn Nairn feels very strongly about the significance of patient engagement as well. “You need a high level of patient engagement, because pharmacy is growing beyond how fast you can fill prescriptions,” he says. “We’re moving toward a more clinical aspect, finally, and I really hope this works out for pharmacy because the pendulum has swung so far back in the last couple years to driving prescription dispensing to a commodity. The only thing consumers were concerned about was where’s the cheapest price. And frankly, that’s still what the payers are worried about. We are looking to see that pendulum swing to where everybody’s eyes are kind of open to the advantages of using pharmacy.” 


ACORx (Adherence and Compliance Optimized) guided packaging room. Shawn Nairn is melding technology with workflow to handle the prescription volume and the adherence-at-home model requirements.

A great deal of momentum for this change is coming from the data pharmacies are using to prove value. And this, in Nairn’s view, means that pharmacies have a real need not only to harness their own data, but also to find ways to aggregate data and benchmark performance. For Nairn, this leads directly to the need for a strong partner in the form of a pharmacy administrative services organization (PSAO). “This is where you need to look for support to build a case for the value your pharmacy brings and to present it effectively to payers, patients, and potential partners in the healthcare world,” he says. “We see our PSAO, Pharmacy First, playing a big role here. We’ve been talking about different pieces of technology that we’re using to build ACORx, and your PSAO isn’t necessarily an obvious piece of that, but they’re going to end up being the biggest driving factor for our success.” Nairn notes that his PSAO also brings the power of data aggregation, which means that it’s not just ACORx data in a silo. “Pharmacy First brings data together from across its member pharmacies that can establish benchmarks for performance,” he explains. “And that’s the data that they’re able to take to the payers and say, ‘Look, our members are moving the needle. They are increasing adherence by this much and saving you this many dollars. We need better reimbursement because here’s what our members are doing.’” The more pharmacies and their PSAOs can do to keep demonstrating that, for example, improved adherence via packaging adds real value to patient care and takes real costs out of the system, the more pharmacy will come to be recognized for its central role in healthcare by payers. “From what I see,” says Nairn, “payers are finally starting to recognize that there’s an opportunity in adherence and that they are going to need to leverage pharmacists. But those payers want to know what’s going on. They want to see the proof. They want portals that allow them to log in to see how you’re managing their patients.”

Branching Out, Finding Growth

So whether you are inspired to find ways to drive volume, deliver innovative service to meet a market opportunity, or tackle a special practice model such as compounding and home infusion therapy, there are ways to branch out and grow your pharmacy. Just proceed thoughtfully, and make sure you really understand your goals and the steps involved. “Setting up a compounding operation is really setting up a whole new pharmacy,” Tim Redline notes. “You have got to have the space to properly set up your lab and your quality control processes. You’ve got to have the personnel to dedicate to it. If you are just looking to diversify your revenue and add on another service, it is not something that you can dabble in. Certainly not these days, with the increased compliance requirements and all of the USP guidelines. And really, you’ve got to love
to do it. It’s something that you want to do, and it excites you to do it every day.”

The innovative approach at ACORx has proved to be a good one for Nairn. “I realized this is a road that the chains probably are not going to go down,” he says. “It’s labor-intensive and requires home delivery. So we see a good way to separate ourselves in the market here. We’re really just ramping it up, but I expect to be able to keep growing.” Nairn isn’t expecting to grow to 2,000 patients in the same time frame as he reached 1,000, but he’s making a focused effort to establish ACORx in the market. “We’re just constantly trying to stay out there to increase volume,” he says. “Because the opportunity is now for pharmacy to take advantage of the pendulum swinging toward recognition of what we can do. We have to be out there because every time a couple more pharmacies push the envelope and create new models, we move ourselves more to the center where we become a critical player in the healthcare system. The goal then is ultimately to prove the need for better reimbursements, which will help pharmacies operate better because they have more revenue. Pharmacy can be at the forefront of the healthcare revolution or evolution, depending on how you want to look at it.” CT


Will can be reached at will@computertalk.com

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