Pharmacy Business Continuity: How to Prepare
Independent pharmacies can face unexpected disruptions that affect employees, inventory, technology, facilities, and patient services. Creating a business continuity plan can help pharmacy owners prepare for these situations and establish procedures for keeping critical operations running. For owners considering pharmacy practice financing, business continuity should also be considered as part of long-term business planning.
What Is Pharmacy Business Continuity?
Pharmacy business continuity is the process of preparing for events that could interrupt normal operations.
The objective is not necessarily to prevent every disruption. Instead, it is to determine how the pharmacy will respond when something goes wrong and how it can return to normal operations as quickly as practical.
Business continuity planning can address events such as:
- Power outages
- Severe weather
- Flooding or fire
- Technology failures
- Cybersecurity incidents
- Staff shortages
- Supply disruptions
- Building damage
- Telecommunications failures
NCPA recommends that independent community pharmacies develop contingency plans in advance and periodically assess the risks that could affect their operations.
Start With a Risk Assessment
The first step is identifying what could interrupt the pharmacy.
Every pharmacy has a different risk profile based on its location, building, staffing, technology, suppliers, and services.
Owners can create a simple list of potential disruptions and evaluate each one based on its likelihood and potential impact.
For example, a pharmacy in an area vulnerable to wildfires may need to place greater emphasis on evacuation and relocation planning, while another pharmacy may be more concerned about hurricanes, flooding, extreme winter weather, or power outages.
Identify Critical Pharmacy Operations
Not every business function has the same level of urgency.
Owners should identify which operations need to continue during a disruption.
These may include:
- Prescription dispensing
- Patient communication
- Medication storage
- Access to pharmacy records
- Payment processing
- Communication with prescribers
- Communication with suppliers
Determining these priorities allows the pharmacy to focus its resources on the most important functions during an emergency.
Create a Communication Plan
Communication can become difficult during a disruption.
A business continuity plan should include current contact information for employees, owners, vendors, technology providers, insurance representatives, landlords, and other important contacts.
Pharmacy owners should also determine how patients will receive updates if normal communication channels are unavailable.
Possible communication methods could include telephone messages, website updates, email, text messaging, social media, or physical signage.
Plan for Technology Failures
Modern pharmacies depend heavily on technology.
A system outage can affect prescription processing, patient records, communication, payment processing, and other important functions.
The continuity plan should explain what employees should do when essential systems become unavailable.
The plan may include backup procedures, alternate communication methods, contact information for technology providers, and instructions for restoring normal systems.
Cybersecurity incidents should also be considered because technology disruptions can affect pharmacy operations and financial processes. The 2024 Change Healthcare cyberattack, for example, caused significant operational and financial disruptions for many independent pharmacies.
Protect Medication and Temperature-Sensitive Inventory
Inventory can represent a significant financial investment for an independent pharmacy.
A continuity plan should address how medications and other sensitive products will be protected during events such as power failures, equipment failures, or building problems.
Owners should know:
- Which products require special storage
- How temperature-sensitive products will be monitored
- Who is responsible for responding to equipment failures
- Where backup supplies are located
- Who should be contacted if inventory is damaged
The plan should be practical enough that employees can follow it during an actual emergency.
Prepare for Staffing Disruptions
A pharmacy may experience an emergency while employees are unable to reach the location.
Owners should consider how operations will continue if key employees are unavailable.
A continuity plan can identify backup personnel, important responsibilities, emergency contact information, and procedures for determining which services can continue with reduced staffing.
Consider Supplier Disruptions
A pharmacy’s ability to serve patients can also be affected by problems outside the pharmacy.
Supplier disruptions may affect inventory availability and make it more difficult to obtain certain medications or products.
Owners should understand their supplier relationships and know what alternatives may be available if a primary supplier experiences a significant disruption.
Have a Backup Location Strategy
Some emergencies may make the pharmacy’s physical location temporarily unusable.
In that situation, owners may need to determine whether operations could be relocated or whether patients could be directed to another pharmacy.
A continuity plan should identify potential options and the steps that would need to be taken to communicate a temporary change in operations.
Keep Important Information Accessible
A continuity plan does little good if employees cannot access it during an emergency.
Owners should maintain important information in a format that can be accessed when normal systems are unavailable.
The plan can include:
- Emergency contacts
- Vendor information
- Insurance information
- Technology support contacts
- Building information
- Utility contacts
- Employee contact information
- Emergency procedures
The NCPA Foundation recommends that pharmacy owners maintain emergency contact information and practice their emergency procedures so employees understand their roles.
Review Insurance and Financial Protection
Business continuity also has a financial component.
Owners should understand what insurance coverage they have and how a major disruption could affect revenue, inventory, equipment, property, and operating expenses.
It can also be useful to understand how long the pharmacy could continue meeting expenses if operations were temporarily reduced or interrupted.
Build an Emergency Reserve
Unexpected disruptions can create expenses at the same time that revenue declines.
Emergency reserves can provide additional flexibility when a pharmacy faces temporary operational problems.
The appropriate amount depends on the pharmacy’s expenses, business model, available credit, insurance coverage, and other financial resources.
Owners should evaluate their ability to cover payroll, rent, utilities, supplier obligations, and other essential expenses during a disruption.
Train Employees on the Plan
A continuity plan should not exist only on paper.
Employees should understand their responsibilities and know where to find the plan.
Training can help employees respond more confidently when an unexpected event occurs.
NCPA recommends that pharmacy staff understand their roles during emergencies and that preparedness procedures be practiced regularly.
Test the Plan
Testing can reveal weaknesses before an actual emergency occurs.
A pharmacy might conduct a simple exercise based on scenarios such as:
- A multi-hour power outage
- A pharmacy management system outage
- A severe weather event
- A temporary building closure
- A major supplier disruption
- A significant staffing shortage
After the exercise, owners can identify what worked, what did not, and what needs to be changed.
Update the Plan Regularly
A business continuity plan should evolve as the pharmacy changes.
New employees, technology systems, vendors, services, equipment, locations, and operating procedures can all affect the plan.
Owners should periodically review the document and update information that is no longer accurate.
Business Continuity Is Part of Long-Term Planning
Business continuity is not simply about responding to disasters.
It is about building a pharmacy that can withstand unexpected disruptions and continue serving its patients.
Planning ahead can help owners make better decisions when circumstances are changing quickly and can reduce the amount of improvisation required during an emergency.
Final Thought
Every independent pharmacy faces different risks, but every pharmacy can benefit from preparing for unexpected disruptions.
A strong pharmacy business continuity plan should identify major risks, establish priorities, protect critical resources, define employee responsibilities, maintain communication procedures, and provide a path for returning to normal operations.
Taking the time to prepare before a disruption occurs can help protect the pharmacy, its employees, its financial position, and the patients who depend on its services.
