A pharmaceutical reverse distributor should be more than just a processor of drug returns. A good reverse distributor should be a partner to your pharmacy. They should provide data and insights about your pharmaceutical returns and inventory processes that help improve your bottom line.
Three key performance indicators (KPIs) of a pharmaceutical reverse distributor include:
- Turn Time (# of days)
- Reconciliation Rate (%)
- Collection Rate
Turn time is the number of days it takes your reverse distributor to process a return shipment (once it arrives at their facility) and calculate expected return value (ERV).
Turn time is important because the shorter the turn time, the faster the pharmaceutical reverse distributor finishes up-front value estimation and begins the actual credit returns process. A faster turn time means that your pharmaceutical reverse distributor can return your credits more quickly.
What kind of turn time are you getting with your current vendor?
Reconciliation rate is the percentage (%) of the returnable value ($) of your product that a pharmaceutical reverse distributor can reconcile, or “answer for.”
The higher your pharmaceutical reverse distributor’s Reconciliation Rate, the more visibility you get into “what happened” with your return.
Greater visibility means you can see how much of your money (ERV) is coming back. Was it collected in full, underpaid, or denied?
Armed with this insight, you can track where improvements need to be made with your pharmacy’s revenue and inventory management processes.
Collection rate is the percentage of credits collected compared to the Expected Return Value (ERV) of your return.
A higher average collection rate means your reverse distributor can collect on a larger percentage of your pharmaceutical return—which means more cash for your pharmacy.
To learn more about How to Use a Reverse Distributor to Skyrocket Your Pharmacy Business, download our handbook today!