Alchemy recently partnered with the Arkansas Hospital Association to host a webinar on a question we get asked all the time: what are the most common mistakes covered entities make when launching an in-house pharmacy, and how can we avoid them?
The session was led by Peter Park, Co-Founder and Co-CEO, Will Hollingsworth, Head of Pharmacy Strategy and Operations, and Sarah Peaslee, Vice President of Growth. Together, we walked through the operational, financial, and strategic lessons that come up again and again, regardless of entity type, size, or geography.
Pitfall #1: Not being thoughtful about ramp
One of the most important early decisions is how you sequence your launch and ramp. Covered entities are often balancing several priorities: expanding patient access, bringing prescriptions in-house, and doing so without destabilizing local independent pharmacies. A common instinct is to move everything in-house as quickly as possible. In practice, that may create unnecessary strain, both operationally and in the community.
A phased ramp works better. It gives teams time to hire, train, and stabilize workflows, while being strategic about which prescriptions to transfer first. In hospital settings, this often means starting with employees, then out-of-state contract pharmacies, followed by closed door pharmacies, and only later expanding to higher volume or higher value specialties. This approach allows the organization to build capacity over time and preserve relationships with local pharmacies.
It's important to model the pharmacy’s ROI to reflect the actual ramp strategy, not a flat capture rate assumption. That gives leadership a more nuanced and realistic view of the financials they are planning around, and helps ensure decisions are grounded in how the pharmacy will actually launch and scale.
Pitfall #2: Not having mail order / delivery, or not setting yourself up to do so compliantly
In order to maximize capture rate, in-house pharmacies have to offer the same conveniences patients get from large retail chains. That means mail delivery, courier options, and the ability for patients to text with the pharmacy and receive order updates.
But getting medications into patients’ hands compliantly is much harder once prescriptions leave the four walls of the pharmacy. Pharmacies need reliable ways to document delivery, collect signatures, and handle copays. During PBM audits, missing signatures or incomplete delivery documentation are common places where programs get flagged. Workflows that feel manageable at low volume, like manual follow-up for signatures or loosely tracked deliveries, can create real issues as volume grows.
It's important to invest in systems - like Alchemy’s Digital Product - which help pharmacy teams manage delivery workflows, collect signatures, and keep documentation in one place.
Pitfall #3: Thinking you have to wait for a specialty license
Another mistake we see is waiting to launch the pharmacy until you receive speciality accreditation. In reality, a retail pharmacy license allows you to dispense the vast majority of medications patients need, including many drugs people casually refer to as “specialty.” This includes most HIV therapies, many oncology and immunology medications, and other high-touch treatments that are not restricted to limited distribution networks.
URAC (Utilization Review Accreditation Commission) specialty accreditation, is only required for a narrow subset of Limited Distribution Drugs (LDDs). Because of that, we recommend launching with a retail license and pursuing specialty accreditation in parallel only if and when it makes sense.
Pitfall #4: Not considering the inventory-related cash flow impacts
The trickiest part of launching a 340B pharmacy’s finances isn’t the P&L. It’s cash flow. The upfront cost to build a pharmacy is usually manageable. What catches teams off guard is inventory. Pharmacies have to buy drugs up front, dispense them, and then wait to get paid back.
And that gap can be meaningful. Wholesaler invoices may be due in 14 to 21 days, while PBM reimbursement can lag 30, 40, or even 45 days. If volume ramps quickly, cash can get tight fast, even when the pharmacy is performing well on paper. This dynamic is only getting more challenging with proposed rebate models, and as Medicare Maximum Fair Price comes into effect, further compressing margins. Programs that navigate this well plan for working capital from the start, whether through internal reserves, a line of credit, or a partner that can help manage the cash flow timing.
Pitfall #5: Going it alone
One pattern we see at hospitals is inpatient pharmacy leaders being asked to also stand up and manage a retail pharmacy. Retail pharmacy is a different business, with its own licensing, payer enrollment, compliance requirements, financial modeling, and operational complexity.
Things like ROI analysis, ramp planning, PBM applications, and licensing all have real consequences if they are delayed or done incorrectly. A missed detail can mean restarting an application, waiting months to get in network, or carrying staff costs longer than planned. Those are expensive mistakes, especially early on.
Programs that navigate this well recognize that retail pharmacy needs dedicated focus. That may mean building a standalone internal team, or working with a partner like Alchemy, who can handle the diligence, setup, and day-to-day complexity alongside the covered entity.
Pitfall #6: Waiting to get started
The last pitfall is simply waiting too long. Many covered entities hesitate because the environment feels uncertain, whether that is changing reimbursement or policy noise around 340B. But waiting is not neutral. There is a real cost to indecision.
What we hear most often from organizations that already have an in-house pharmacy is relief that they started when they did. In many cases, the pharmacy has become the stabilizing force during periods of financial strain. Having the pharmacy in place gave them control over patient access and a financial buffer they did not have before.
Thinking about launching an in-house pharmacy? If you want a trusted partner to guide you through the process, reach out to Alchemy at hello@alchemyhealth.com.
