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Delivery – Third Largest P+L Expense

Are you overlooking your third-largest expense? For Long-Term Care (LTC) pharmacies, delivery costs represent a substantial drain on profitability, often trailing only drugs and labor. Yet, this critical spend often remains a “black box,” unexamined and under-managed.

Why the blind spot? The primary issue is a reliance on opaque, aggregated data from third-party courier invoices. These documents often lack the granular detail needed for true analysis, making it impossible to verify miles driven, account for wait times, or track the true cost of redeliveries. Pharmacies, whose core expertise is healthcare, simply lack the specialized tools and logistics knowledge to effectively manage this complex aspect of their business.

This reactive approach leads to significant missed opportunities. Without the right data and systems, pharmacies cannot proactively optimize routes, consolidate deliveries, or negotiate better rates based on actual performance. This leaves them vulnerable to inflated costs and operational inefficiencies, directly impacting their P&L.

Managing delivery spend is no longer just about getting a package from point A to point B. It’s about data-driven decision-making, cost savings, and strategic growth. By adopting specialized logistics tools or re-evaluating their delivery model, LTC pharmacies can move beyond the limitations of manual tracking and transform a major expense into a source of competitive advantage. It’s time to shine a light on this significant blind spot and unlock the full potential of your delivery operations.

Excessive Mileage Charges

Is your pharmacy overpaying for delivery? It’s a question many ask, but few can answer with certainty. A pervasive and costly issue in the last-mile logistics space is mileage billing “gaming,” where a driver intentionally takes a longer, less efficient route to inflate their mileage and their pay. This fraudulent practice isn’t just an occasional error—it’s a learned behavior that spreads among drivers, costing pharmacies thousands, or even millions, of dollars each year.

The problem lies in a fundamental lack of oversight. Most courier companies bill based on the route a driver actually takes, not the most efficient one. Without a robust auditing system, pharmacies unknowingly pay for these “fabricated” miles. The cost is passed directly to the customer, eroding profitability and creating a blind spot in the P&L.

The solution is to move beyond simply paying invoices at face value. A proactive auditing process can compare the executed route mileage against an optimal, most-efficient route. When a significant discrepancy is found, you have the data to challenge the overcharge and reclaim what you’ve been unfairly billed. This not only protects your bottom line but also holds courier companies accountable and incentivizes their drivers to operate more efficiently. It’s about creating a fair and honest ecosystem where you only pay for the service you actually need.