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INDEPENDENT COMMUNITY PHARMACY Rx SALES IN 1985 INCREASED 6%

Executive Summary

INDEPENDENT COMMUNITY PHARMACY Rx SALES IN 1985 INCREASED 6% over 1984 sales, according to a preliminary (ITALICS)Lilly Digest(END ITALICS) report previewing data that will appear in the upcoming September publication. Based on a survey of 1,224 independent community pharmacies, Lilly found that pharmacies' Rx sales, on average, increased from $345,435 in 1984 to $366,903 in 1985. New Rxs as a percentage of all Rxs rose to 49.5% compared with 48.6% in 1984, while new Rxs dispensed fell slightly (0.4%) to 13,919. Renewed Rxs dispensed dropped 4.3% to 14,198. The gain in Rx revenue, however, was achieved by an 8.8% increase in the cost of the average Rx (from $12 in 1984 to $13.05 in 1985). While Rx sales increased, sales of other goods declined 1.6% -- from $225,879 in 1984 to $222,439 in 1985. Rx sales comprised 62.3% of total pharmacy sales in 1985, compared with 60.5% in the previous year, according to the Lilly data. The decline in non-Rx sales offset the Rx gain, lowering the total sales increase to 3.2% ($589,342 in 1985 compared with $571,313 in 1984). The (ITALICS)Digest(END ITALICS) report notes that the growth in overall sales "is lower than the average annual growth rate of 9% observed over the decade." The 3% increase in sales revenue also falls below the average growth rate of the last five years which "appears to have stabilized in the range of 5-to-6%," the report observes. The value of Rx inventory at cost increased 6.6%, from $36,343 to $38,753. However, it remained fairly constant as a percentage of Rx sales (10.6% in 1985 compared with 10.5% in 1984). The cost of other inventory declined 1% to $48,625, and also remained relatively stable as a percentage of sales (21.9% in 1985 v. 21.7% in 1984). Combined, the cost of all inventory as a percentage of total sales increased 2.3% to $87,378. Annual inventory turnover rate dropped from 4.6 times to 4.5 times.
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