Pharmacy Operational Management

The most common forms of business are sole proprietorship, partnership, corporation. A more recent development
to these forms of business is the limited liability company (LLC) and the limited liability partnership (LLP)

Sole Proprietorship

The simplest structure is the sole proprietorship, which usually involves just one individual who owns and
operates the enterprise.

Advantage:
• Limited regulation & reporting (financial statements)
• Single taxation: The tax aspects of a sole proprietorship are appealing because the expenses and your income
from the business are included on your personal income tax return.

Disadvantages:
• Unlimited liability: you are personally responsible for your company's liabilities. As a result, you are placing
your assets at risk, and they could be seized to satisfy a business debt or a legal claim filed against you.
• Financing difficulty; Raising money for a sole proprietorship can also be difficult. Banks and other financing
sources may be reluctant to make business loans to sole proprietorships.

Partnership
• Business will be owned and operated by several individuals.
• Partnerships come in two varieties: general partnerships and limited partnerships.
✓ General partnership: The partners manage the company and assume responsibility for the
partnership's debts and other obligations.
✓ Limited partnership: has both general and limited partners. The general partners own and operate the
business and assume liability for the partnership, while the limited partners serve as investors only;
they have no control over the company and are not subject to the same liabilities as the general
partners.
Advantages:
• Minimizing risks
• Sharing skills
• Single Taxation: A partnership does not pay tax on its income
• Comparatively less regulation & less expensive: Keep in mind that partnerships are also more expensive to
establish than sole proprietorships because they require more legal and accounting services.

Disadvantages:
• Consensus / Conflicts: Each general partner can act on behalf of the partnership, take out loans and make
decisions that will affect and be binding on all the partners (if the partnership agreement permits).
• Unlimited liability: Personal liability is a major concern if you use a general partnership to structure your
business. Like sole proprietors, general partners are personally liable for the partnership's obligations and
debts.

Corporation

The corporate structure is more complex and expensive than most other business structures. A corporation is an
independent legal entity, separate from its owners, and as such, it requires complying with more regulations and
tax requirements.

Advantages:
• Limited Liability: A corporation's debt is not considered that of its owners, so if you organize your business as
a corporation, you are not putting your personal assets at risk.
• Easy to raise money: A corporation can sell stock, either common or preferred, to raise funds.
• Corporations also continue indefinitely, even if one of the shareholders dies sells the shares or becomes
disabled.

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Disadvantages:
• Double taxation: A corporation also can retain some of its profits without the owner paying tax on them
(directors / stock holders). Owners of the corporation pay a double tax on the business's earnings. Not only are
corporations subject to corporate income tax at both the federal and state levels, but any earnings distributed
to shareholders in the form of dividends are taxed at individual tax rates on their personal income tax returns.
• Highest Cost involvement: A major one is higher costs.
• Corporations are formed under the laws of each state with its own set of regulations. You will probably need
the assistance of an attorney to guide you. In addition, because a corporation must follow more complex rules
and regulations than a partnership or sole proprietorship, it requires more accounting and tax preparation
services.

Independent
• An independent pharmacy is not affiliated with any corporately run banner, franchise or chain program. The
name of the store is unique to that store, and the owner has complete control over ordering, marketing
strategies, store image, etc.
• The owner may own more than one store; however, it is generally accepted that five or more stores under
single ownership constitutes a chain pharmacy (whether or not it is a member of the Canadian Association of
Chain Drug Stores).

Banner
• Independent pharmacies that are affiliated with a central office and pay fees for the right to use a recognized
name (e.g., I.D.A., Guardian, Uniprix, Price Watchers, Pharmasave) and to participate in centralized buying,
marketing, professional programs, etc., are known as banner pharmacies.
• While banner stores usually assume a required ‘look and feel,’ the stores themselves are independently owned
and the owners retain a high level of autonomy as far as local marketing, professional services, etc.
• However, if the owner of a banner pharmacy owns five or more stores, these stores are considered to comprise
a chain.

Franchise
• Franchise arrangements vary widely for retail pharmacies in Canada. The two largest franchises are Shoppers
Drug Mart and Jean Coutu. While the franchisees (or ‘associates’ in the case of Shoppers Drug Mart) do not
necessarily own the physical store or the fixtures, and master leases are usually held by the franchisor, they
enjoy some autonomy in local marketing, buying and in-store services, as well as access to programs
developed by head office.

Chain
Chain pharmacies, such as Pharma Plus and Lawtons, employ pharmacy managers who are salaried employees of
head office. Head office directs all marketing, merchandising, buying, professional programs, etc. An individual
or corporation must own five or more stores to be considered a chain. A chain is not necessarily a member of the
Canadian Association of Chain Drug Stores.

Foodstores & Mass Merchandisers ("Food/Mass")

As the name implies, food/mass pharmacies are departments within a supermarket or mass merchandise outlet,
such as Canada Safeway and Walmart. They employ salaried pharmacy managers (except in Québec, where
regulations require pharmacists to own the dispensary; this is usually achieved with a franchise agreement), who
follow the direction of head office for all marketing, merchandising, buying, professional activities, etc.

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 Pharmacy management & operation

Type of ownership: sole, partnership & corporation (legal body or entity)

Differences on the basis of: Definition, Easy to Form, Liabilities (even personal assets; unlimited
liabilities or limited liabilities) & Profit sharing, Taxation (single/double taxation, Individual tax,
cification Corporate tax), impose of government regulation & legal documentation, Resource 2015-06-06, 12:14to
sharing, Easy PM
finance,
Type of pharmacy business: independent, banner vs franchises (control, regulation of the provider, Standard
procedure, common distribution centre, employee training, uniformity of operations among other stores)

Business plan: Products or services; business area analysis: customer segments, client groups, demographic
study; Break even point, Source of financing, Time required to reach the Break even, business prospects
or future; SWOT analysis
anagement Job Analysis & Design Job Description and Job Specification

Human resource management

a. Job analysis:The process of describing and recording many aspects or elements of the job. The
Search
outcome of job analysis has two components

Job Analysis: Importance & Purpose:

Job
• LegalDescription and Job
validation of employment Specification
decisions
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• Basis for determining relative worth of jobs StumbleUpon
alysis • Identifies redundancy Job Analysis is a primary tool to collect job-related data. The process
Job description and job specification are two integral parts ofandjob
results in collecting analysis.
recording two data sets including job description
and job specification. Any job vacancy can not be filled until and unless
HR manager has these two sets of data. It is necessary to define them
Job Description: accurately in order to fit the right person at the right place and at the right
es
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bedescription
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specification are essentialmachines,
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tion
equipments to be used by a prospective worker and hazards involved in it.
organization and workers cope with many challenges while onboard.
Purpose of Job Description
• The main purpose of job description is to collect job-related data in order to advertise for a particular
job. It helps in attracting, targeting, recruiting and selecting the right candidate for the right job.
• It is done to determine what needs to be delivered in a particular job. It clarifies what employees are
supposed to do if selected for that particular job opening.
• It gives recruiting staff a clear view what kind of candidate is required by a particular department or
on division to perform a specific task or job.
• It also clarifies who will report to whom.

Though preparing job description and job specification are not legal requirements yet play a vital role in getting the desired outcome.
These data sets help in determining the necessity, worth and scope of a specific job.

Job Description
Job description includes basic job-related data that is useful to advertise a specific job and attract a pool of talent. It includes
information such as job title, job location, reporting to and of employees, job summary, nature and objectives of a job, tasks and duties
to be performed, working conditions, machines, tools and equipments to be used by a prospective worker and hazards involved in it.
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Purpose of Job Description
 Job Specification
Also known as employee specifications, a job specification is a written statement of educational
qualifications, specific qualities, level of experience, physical, emotional, technical and communication
skills required to perform a job, responsibilities involved in a job and other unusual sensory demands. It
also includes general health, mental health, intelligence, aptitude, memory, judgment, leadership skills,
emotional ability, adaptability, flexibility, values and ethics, manners and creativity, etc.
Purpose of Job Specification
• Described on the basis of job description, job specification helps candidates analyze whether are eligible
to apply for a particular job vacancy or not.
• It helps recruiting team of an organization understand what level of qualifications, qualities and set of
characteristics should be present in a candidate to make him or her eligible for the job opening.
• Job Specification gives detailed information about any job including job responsibilities, desired
technical and physical skills, conversational ability and much more.
• It helps in selecting the most appropriate candidate for a particular job.

b. Role of manager: staffing, scheduling, hiring, training, appraisal, firing

c. Sick leave Vs Human rights: According to the HR policy we can ask sick note, when it is possible to join

Sick Leave and Canada Labour Code

No employer shall dismiss, suspend, lay off, demote or discipline an employee because of absence due to illness
or injury if
(a) the employee has completed three consecutive months of continuous employment by the employer
prior to the absence;
(b) the period of absence does not exceed 17 weeks; and
(c) the employee, if requested in writing by the employer within fifteen days after his return to work,
provides the employer with a certificate of a qualified medical practitioner certifying that the employee
was incapable of working due to illness or injury for a specified period of time, and that that period of
time coincides with the absence of the employee from work.

Exception: An employer may assign to a different position, with different terms and conditions of employment,
any employee who, after an absence due to illness or injury, is unable to perform the work performed by the
employee prior to the absence.

Sick leave is a necessary benefit for all employees. However, sick leave may be abused or exploited by an
employee. Trends that signal sick leave abuse:
✓ after a vacation request was denied
✓ Mainly on Fridays/Mondays before/after a weekend
✓ The day before or after holidays
✓ when assigned difficult work tasks or specific challenging projects
✓ after a disciplinary action was initiated

How an employer can prevent sick leave abuse:

✓ Track and evaluate absences for trends
✓ develop a sick leave policy
✓ discuss sick leave policy (Human resources role)
✓ Medical verification of illness (Doctor’s note or certification)

In order to reduce sick leave abuse an organization should have a clearly written policy that specifies the
organization’s standards and employee requirements. Examples of attendance policy violations include:
• Number of absences, number of times coming in late, and number of early departures, all of which exceed the
attendance policy allotment;
• Failing to get permission for leaving early or coming in late;
• Failing to give advance notice of an absence when possible;
• Failing to report an absence properly; and
• Failing to submit medical certification upon request.

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How an employer can manage sick leave abuse?

✓ provide warnings and explain progressive disciplinary steps

✓ give a verbal warning (oral reprimand) or written warning (written notice)
✓ deduct wages for unpaid leave, in response to undocumented absences
✓ suspend or termination of employee
✓ paying for unused sick leave at given intervals and cash-out sick leave at retirement.

Methods for monitoring sick leave abuse vary from one organization to the next, but there are some common
guidelines all employers can follow. Listed below are some tips about how to manage sick leave abuse cases.
• Recognize the problem with sick leave abuse and intervene early before it escalates. Managers need to enforce
sick leave policies and take appropriate action.
• Find out why the employee is abusing leave. Talk to employees who are abusing leave and see if their behavior
stems from a personal problem. If you find that it does, recommend counseling or refer them to your
organization's employee assistance program.
• Learn to say "no." You shouldn’t let employees get away with abusing leave policies. When you hear a
ridiculous request to misuse leave, say “no."
• Use procedures, regulations, practices and knowledge to benefit management as well as the employee.
Supervisors and managers must work with employees. Their main job is to make certain that all employees are
aware of sick leave policies and how to use them.
• Document everything.

You don't just have to deal with sick leave abuse - you can encourage appropriate leave use, too.To encourage
employees to use sick leave programs properly, many organizations use cash incentives or other benefits. For
example:
• Cash-out sick leave at retirement;
• Offer cash/pay for unused sick leave;
• Offer sick leave sharing/leave banks;
• Convert sick leave to vacation time;
• Convert sick leave to insurance at retirement;
• Convert sick leave to disability insurance; and
• Convert sick leave to wellness expenses.

Note:
✓ Personal emergency leave in Unpaid, job-protected leave of up to 10 days each year
✓ It may be taken in the case of a personal illness, injury or medical emergency, or a death, illness, injury,
medical emergency of, or urgent matter relating to certain relatives
✓ These leaves are secured federal labour standards under the Canada Labor Code
✓ Private employers have their own sick leave policy that needs to be discussed during the orientation of new
employee

d. Role of technician: Can create receive Rx, create profile, ask patient about others medications, allergies; also
can ask whether he/she needs counselling) NOT to counsel, NOT to take Narcotic/Controlled Drugs’ Verbal
Rx. Verbal prescriptions may be accepted and recorded by a pharmacy technician for drugs of NAPRA
Schedule-1.
e. Workload Vs salary increase: increase employee number, some of the responsibilities can be delegated; NO
Salary Increment
f. Job delegation: responsibility (negotiation regarding time limit, resources), authority & accountability.
Barriers for job delegation: Federal & Provincial rules & regulation, intension of the delegator.
g. appraisal system: after a specific time period the systemic review of performance against expectations or
responsibility
h. Progressive discipline:

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 Progressive Discipline
A good employer uses every opportunity to clearly communicate to all employees the
The steps for applying expectations of the in
progressive discipline jobthe
and what
work willif happen
place, you haveifconcerns
these expectations are not
with an employee’s met.
work
performance:
Kind of problems with employees:
In the step-by
1. Incompetence: employee step method
lacks described
the skills here,
or ability negligence
needed maynegligence
for the job; be treatedmayas incompetence
be treated as (if the employee
is neglecting duties without realizing what is expected)
incompetence (if the employee is neglecting duties without realizing or as
Ratherwhat misconduct
than is expected)
straight (if the employee
dismissal, the goal ofis fully aware
progressive disci
that duties
2. Misconduct: are breaks
employee being neglected, but neglects
rules for keeping the workthem
place anyway).
efficientThe
and following
safe; andcharts
misconduct
iour and explanations
(if athe
creating better and morewalk
product
employeeyouis fully aware
through thethat duties are discipline
progressive being neglected, but neglects them anyway)
process.

Dealing with Incompetence Dealing with Misc

Decide if the misconduc
Does the employee lack the skills needed to do thesevere.
job? Take
If so,into
first
accou
speak with the person face to face and clarify the expectations
• Seriousness
of the job. Tell the employee what will happen if there isn’t
• Employee’s
improvement. This may include being dismissed. Act promptly. If
• Effect on the
you let it go for too long without taking action you are considered
to be condoning the poor work performance. You can’t then use it
If the misconduct is sev
as a reason for dismissal. the employee. You can
summary dismissal. H
Next, ask yourself if this person has the ability to let
learn the
the problem go on to
skills needed for the job. If so, give the employeebehaviour
a fair chance
and won’t be
to improve work performance by providing job trainingsummary dismissal.
and
supervision. Allow enough time for the employee to practise and
If the misconduct is min
use new skills. Or, if this is a long-time employeetowithface.aAllow
goodall sides
work record who has now changed positions, youall could consider
the facts, including t
giving the person different work duties. This might be fairer than wit
the job expectations
starting the disciplinary process. consequences if these e
time consuming, it is im
If the employee’s work performance improves, theofprocess
these activities. If yo
the behaviour will be co
worked! Congratulations! If not, you are now in a better position
However, if the behavio
to decide if dismissal is warranted. the employee a written

If the problem persists,

the employee. When thi
writing, the job expecta
DON’T FORGET!
Begin keeping recordsthey areyou
when notfirst
met.
Keep a written record
speak to the employee about the problem.
with dates of: Once the suspension is
THIS IS ESSENTIAL.that
If you have
there not
will be no fur
• Meetings
done so and the employee decides to
• Training sessions You arechances
now in of
a better
challenge the dismissal, your
• Warnings resort of dismissal is wa
successfully defending your actions at a
• Performance reviews
hearing are greatly reduced.

You should:
• act early... before poor work becomes a habit;
• be fair... by clarifying the job expectations with the employee;
• improve2the employee’s performance... by providing appropriate direction;
• try to solve the problem... before it gets to the dismissal stage by applying the “progressive discipline
process”.

DON’T FORGET!

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 Keep a written record with dates of:
• Meetings
• Training sessions
• Warnings
• Performance reviews

Most progressive discipline processes include the following stages:

Verbal Reprimand > Written Reprimand > Suspension > Termination

4. Financial management:
a. Type of financial statements & its content
1. Income statement 2. Balance sheet 3. Cash flow 4. Statement of retained
earnings
b. Items of income-statement (for a period): items related with sales (sales revenue), Costs/Expenses
& Profit or loss
Sales, COGS (cost of goods sold), salary, supplies, Depreciation, Interest income, Interest paid,
Gross profit (or gross income), Tax before Net income, Net income (net profit)

Income statement Calculation:

Gross profit: Sales revenue - COGS
Gross profit % = (Sales - COGS)/Sales * 100%

Net profit: All incomes - all expenses (including taxes)

Net Profit % = Net income *100 /Sales

c. Balance sheet: a snap shot of a companies assets, liabilities & equites at a certain point time (snap
shot)
Balance sheet equation: Assest = Liabilities + Equity
Items of Balance sheet:
1. Items of all assets (arranged according to the liquidity, short term assets then long term
assets): Cash, Stocks & shares, Inventory, raw materials, Accounts receivables, supplies,
Bond purchased, Promissory notes purchased, Land, Equipments, Building, copyright,
goodwill/Brand value
2. Items of all liabilities: Accounts payable, bond issued, Promissory notes issued
3. Owner(s)’ Equity

current & fixed asset, current & Long-term liabilities, Account payable/receivable

b. Calculations: net profit, profit margin, Inventory Turn over ratio & its interpretation (TOR =
COGS/average inventory for a certain period), OTC pricing at a given margin,

Average inventory = [opening (is the closing of previous period) + closing]/2

c. Computer software purchase Vs priority: Stakeholder’s demand > Quality > Cost

Stakeholders: Employers, Employees, Governments or other law enforcement, patients, doctors,

OCP,

d. Salary increase, work load & delegation of the work (law & rules are barriers)
e. Owner wants to keep all financing activities with him, what a manager can/cannot to do?
(manager can do all routine activities EXCEPT investment or finance related activities such as,
increase salary, purchase computers)

5. Marketing

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 a. 4 Ps: Product, price, place & promotion; [NOT people, process] [Now 7Ps include Packaging,
Positioning & People]
b. Price elasticity & its interpretation
c. Profitability increase: (decrease the fixed cost): what about advertisement, increase employee,
decrease price; Long-time store hour
d. Increase in sale, what to do (advertisement, also decrease price)
e. SWOT analysis: S = Strength, W = Weakness, O = Opportunity, T= Threat

6. Least or most concern regarding

a. Scheduling duties:
b. Manpower shortage, what to do & least concern:

8. Scope of pharmacist: in charge of whole pharmacy and accountable for all activities of the pharmacy
staffs
9. Extended scope of pharmacist: vaccination, diabetes education, methadone dispensing, Medcheck;
smoking cessation, Prescription writing; ordering lab test and interpreting orders;

Sample of Income statement and Balance Sheet

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 Acid test ratio:

Scope of Practice of Pharmacy

Pharmacy technicians apply their expertise in drug distribution while performing their daily
activities.

Pharmacy technicians, when collaborating to provide patient care,

1. gather, review, enter and/or update the information required to create and/or maintain a
patient record including patient demographics; health history; allergies; drug and medical
device use, and; payment information.
2. assist pharmacists in compiling best possible medication histories for patients, referring to
the pharmacist patients who require assessment, clinical analysis or application of
therapeutic knowledge
3. identify and refer to the pharmacist patients who have discrepancies between their current
drug therapy and their recent or intended drug therapy.
4. provide information that does not require application of therapeutic knowledge to patients
requiring assistance in selecting non-prescription drugs and medical devices
5. instruct patients about the operation and maintenance of medical devices
6. transfer prescriptions to other pharmacies for authorized recipients (3.3)

Pharmacy technicians, when distributing drugs,

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7. receive prescriptions in person, electronically, verbally and by fax, including transferred
prescriptions. [Pharmacy Technician can take verbal order with the EXCEPTION of the
medications under the Controlled Drug Substance Act i.e., narcotics, controlled
substances and benzodiazepines]
8. review prescriptions to confirm that they are complete ,authentic and meet 

all current laws, regulations and policies including determining whether the prescription
meets all legal requirements, and non-authentic or fraudulent prescriptions; check the
prescription information for accuracy and completeness; perform calculations as required
9. process prescriptions: (a) record prescription information in the patient profile or health
record (b). verify entered prescription information against the original prescription (c)
identify and refer to the pharmacist any questions requiring patient assessment, clinical
analysis or application of therapeutic knowledge including but not limited to:
i. changes in the drug, dosage, directions for use, refills, patient profile or
health status of the patient;
ii. alerts generated;
iii. potential duplications in therapy, and;
iv. potential adherence problems.
10. prepare prescription products according to prescriptions
a. select drugs including interchangeability
b. retrieve, count, pour, weigh or measure quantities of drugs (4.1.2)
c. compound in accordance with established formulae: calculate and confirm
calculations and use proper techniques to prepare / compound sterile, non-
sterile, pre-packaged or reconstituted drug products, and document calculations
and procedures
11. verify prescription products
a. ensure that the prescription product is verified via a final check prior to release
b. complete final checks of prescription products prior to release, including
ensuring that:
i. the prescription product is correct and in accordance with the prescription
and applicable policies;
ii. the dosage form, strength, manufacturer and quantity dispensed are
correct and in accordance with the prescription and applicable policies;
iii. the calculations have been performed correctly;
iv. the proper amount of the drug is provided;
v. the drug is not expired and will not expire within the duration of 

use, and;
vi. the labelling is accurate including the patient, prescriber and drug 

name, quantity, directions for use, number of refills.
12. release right prescription products to the right patient or authorized agent after confirming
that a pharmacist has:
i. reviewed the therapeutic appropriateness of the prescription including
new or refill prescriptions;

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 ii. evaluated the prescription (both for new and refill prescriptions), the
patient, the patient’s health history, the patient’s allergies and the patient’s
drug-use record, and;
iii. provided consultation and education to the patient
13. complete required audits and reconciliations for controlled substances according to
current laws, regulations and policies, identifying and reporting any discrepancies or
potential issues to the pharmacist
14. support safe and effective drug distribution through workflow management, organizing
their roles and responsibilities to allow the priority to be on patient care and to minimize
diversion and dispensing errors
15. schedule and perform routine equipment maintenance
16. maintain the cleanliness, functionality and integrity ofc ompounding, packaging,
dispensing and storage equipment
17. organize, file and store documents according to legal requirements and in a 

manner in which they can be retrieved readily


18. maintain current records of and abide by policies governing provincial/territorial

pharmacy procedures
19. obtain from and share information with patient’s careproviders or other health care professionals as
required in accordance with applicable laws, regulations and policies, and; to support safe and
effective therapy.

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