Three Small Changes to Help Make a Big Impact on Your Pharmacy’s Bottom Line
Independent and small chain retail pharmacies are being squeezed on all sides, facing stiff competition, increasing costs, and diminishing reimbursement. According to the National Community Pharmacists Association, over 80% of independent pharmacies reported a decline in the financial health of their business last year.1
When faced with limited resources, small and mid-sized pharmacies often prioritize behind-the-counter operations over the front end. However, with the right strategy, your front-of-store space can drive revenue, build customer loyalty, and set your business apart—all without adding significant investment. By rethinking how you source products, better aligning product selections to consumer trends, and optimizing product placement, you can transform your pharmacy’s front end from an afterthought to a growth engine that helps improve your profits and better supports your customers’ needs.
Choose cost-effective and reimbursable private-label OTC medicines
Private-label over-the-counter (OTC) medicines offer the same active ingredients and therapeutic benefits as their name-brand counterparts at a more affordable price. Confidence in private-label brands has also come a long way, with 89% of consumers stating that they trust these brands just as much as their name-brand counterparts.2 That makes them a smart choice for budget-conscious customers and an even smarter one for pharmacies, with private-label OTC products sometimes offering twice the gross margin of national brands.3
However, it’s important to be strategic in your private-label selections. Not all private-label OTC brands are created equally, especially when it comes to reimbursement. Only a few private-label OTC brands are covered under the Medicaid Drug Rebate Program. With about 55% of independent pharmacy customers using government-sponsored healthcare plans, selecting covered private-label products is essential.4 This ensures you’re not only delivering value to your customers, but also provides the opportunity to potentially secure vital reimbursement to support your business.
Align product selections with consumer trends to attract business
Staying on top of consumer trends when selecting which OTC products to carry can help to drive sales. For example, consumers are increasingly looking for more sustainable products at an affordable price, with 85% reporting they are prioritizing sustainability-focused consumption.5 By offering environmentally conscious OTC products, you can attract new customers and foster loyalty among existing ones.
For example, Foster & Thrive offers private-label OTC medicines in recyclable aluminum packaging to help reduce plastic waste.6 Unlike most plastic containers, which are often single-use, aluminum can be recycled repeatedly7, making it a more sustainable choice. Clear labeling and in-store signage can amplify the appeal of these products. Letting customers know that they can make greener choices at competitive prices gives them peace of mind and can enhance your pharmacy’s reputation as a sustainability-oriented business.
Optimize product placement to entice and educate consumers
Strategic product placement does more than just improve aesthetics—it can drive sales. A well-organized storefront with timely product placement and educational displays helps customers find what they need quickly and encourages them to look beyond what they initially intended to buy.
One of the most powerful strategies in your merchandising toolkit is the seasonal or condition-specific display. For example, highlighting allergy relief products in the spring or sunscreen in early summer anticipates customer needs, drawing attention to timely products that can boost basket size.
Educational signage is another way to drive impact. Many consumers—especially those managing chronic, complex conditions—need personalized care and increasingly look to their pharmacists for guidance. Informative displays can help bridge the gap between a pharmacist’s clinical expertise and your customer’s questions. Some private-label OTC brands offer in-store educational displays, meaning pharmacies can implement this strategy at no additional cost.
Finally, don’t underestimate the importance of inventory management. Keeping popular products in stock and refreshing your offerings regularly is key to sustaining momentum. By partnering with a private-label supplier like McKesson, you’ll gain a trusted advisor with nearly 200 years of supply chain expertise and thoughtful consideration to every aspect of your customers’ journey, giving you the front-end operations support you need to prosper.
Small changes can lead to big results
Running an independent or small chain pharmacy comes with its own set of challenges, but you also have unique strengths: deep community ties, trusted customer relationships, and the ability to adapt quickly. Although you may not have the scale of a national chain, you do have the power to make smart, strategic choices that directly impact your bottom line.
Your front-of-store space is a business opportunity hiding in plain sight. By choosing private-label OTC products with competitive prices and reimbursement potential, aligning your inventory with evolving customer values, and optimizing how products are placed and presented, your pharmacy can increase revenue and encourage long-term customer loyalty.
1 National Community Pharmacists Association. NCPA to CMS: A Third of Independent Pharmacies Won’t Carry Drugs in the Negotiated Price Program, and 60 Percent More are Considering Dropping Out. https://ncpa.org/newsroom/news-releases/2025/01/27/ncpa-cms-third-independent-pharmacies-wont-carry-drugs-negotiated
2 Daymon, 2022 Private Brand Intelligence Report,
https://daymon.com/2022-private-brand-intelligence-report/.
3 McKinsey & Co, The power of private-label brands in distribution, https://www.mckinsey.com/industries/industrials-and-electronics/our-insights/the-power-of-private-label-brands-in-distribution.
4 PBA Health, The State of Independent Pharmacy 2020, https://www.pbahealth.com/elements/the-state-of-independent-pharmacy-2020/.
5 PwC. Consumers willing to pay 9.7% sustainability premium, even as cost-of-living and inflationary concerns weigh: PwC 2024 Voice of the Consumer Survey.
https://www.pwc.com/gx/en/news-room/press-releases/2024/pwc-2024-voice-of-consumer-survey.html
6 Aluminum recycling is subject to local availability and regulations.
7 Aluminum recycling is subject to local availability and regulations.
