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As government reimbursements for drugs continue to fall, many independent pharmacies turned to making custom medications for patients in a process called compounding.
That's what John Dobbs did when he and business partner Denny Bauman opened Apothicare360 in Fort Myers in early 2014.
But little did Dobbs and Bauman know that new regulations announced later that year would impact their new business in a significant way. The new regulations that go into effect in July 2017 require pharmacies that make custom medications to build sophisticated laboratories with their own air systems that can cost tens of thousands of dollars.
That's going to force independent pharmacies to decide whether to invest in costly equipment. “A lot of independent pharmacies will sell or close,” Dobbs predicts.
But Dobbs isn't planning to be one of those. He has invested $250,000 in building a lab with two separate rooms, each with its own air-conditioning system. “We took it as an opportunity to expand,” Dobbs says.
Fact is, insurance reimbursements for drugs have declined steeply, aggravated by the federal government's cuts. “You're not making any money,” Dobbs says.
Dobbs says independent pharmacies have to find other sources of revenues such as compounding to make money. He's funded the company's expansion without debt or outside investors. “It's all self-funded,” he says.
Thanks to a boost in compounding business, revenues surged from $1.2 million in the startup year in 2014 to $20 million in 2015. “That's how we were able to self-fund our expansion,” Dobbs says.
In addition to compounding, Apothicare360 launched a line of supplements called Renew 360 for people who suffer from a variety of ailments such as diabetes. Dobbs and his colleagues developed the formula and contracted with Boscogen of Irvine, Calif., to manufacture it. With limited advertising, they have already sold 1,000 bottles at $60 each in just four months.
Another product Dobbs recently launched was Dry Eye 360, a pill you can take for relief from dry eyes. The tablets, which cost $40 a bottle, are an alternative to eye drops, which some patients have trouble using. Apothicare360 has teamed up with Snead Eye Group in Fort Myers to clinically validate the product's results.
Dobbs says Apothicare 360 is in the process of applying with the National Association of Boards of Pharmacies to sell its products online, estimating it could cost as much as $20,000 to build the virtual store. “We're going through that right now,” he says.
Apothicare expanded its space in Fort Myers to accommodate the compounding lab, but there's also room to give patients intravenous vitamin infusions. Some patients, such as those who have cancer, have trouble digesting vitamins, so Apothicare 360 can deliver them to patients via infusions inside private cubicles in the store. “No pharmacies offer this,” Dobbs says.
Follow Jean Gruss on Twitter @JeanGruss
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