Infusion, Distributor Cut-offs, Nexus Issues, Personal Guarantees, Financing | The Bottom Line Rewind

Welcome everyone to the Bottom Line Rewind, your monthly recap of the Bottom Line Pharmacy Podcast. This month, we feature interviews on topics about operating an Infusion pharmacy in 2026, distributor cutoffs, peptides, and personal guarantee insurance. Click below to check out the full episodes:Episode 1: Infusion Pharmacy Ownership in 2026: https://youtu.be/rdMKsMjN8Zs?si=jqZq-MXU7IVk3KmBEpisode 2: Distributor Injunctive Relief: https://youtu.be/hAAo6AY-Ai0?si=2nbb6GVyaN9qr44AEpisode 3: Peptides, Nexus Issues, and Tradeshow Takeaways: https://youtu.be/8_clXDyhVbM?si=2s-6je4YAG26889mEpisode 4: Personal Guarantee Insurance 101: https://youtu.be/4v3cRtMvfIM?si=k0h36O_CIc7-IaCCEpisode 5: Financing a Pharmacy Acquisition: https://youtu.be/CYxfBISoBco?si=kzEzUdmUh6YHXRvz

• 0:05Speaker 00

  You are listening to the global network of podcasters dedicated to the pharmacy profession. Welcome to the pharmacy podcast network.

• 0:33Speaker 01

  Welcome back to the bottom line rewind, the show that shares all the best moments from this past month on the bottom line pharmacy podcast. This month, we've got four great interviews lined up on infusion pharmacy distributor cutoffs, peptides and personal guarantee insurance. Plus we're bringing you an exclusive interview that talks about financing a pharmacy acquisition. If you want to check out the full conversation, you can find the links to each of these interviews in the description of this episode. Check it out.

• 1:04Speaker 01

  First up, a clip from infusion pharmacy ownership in 2026, featuring Patrick Carpenter and Chris Patillo of Boson and Snow Law. We talk about transaction and regulatory trends facing infusion pharmacies. Check it out. I guess kind of shifting gears here, you know, we could talk about some of the transactions that you guys are, some of the transaction trends you guys are seeing on the infusion side. Talk a little bit about maybe some of the, you know, I guess an overview as to what those, what kind of transactions you're seeing. What are some deal risks that owners are running into?

• 1:44Speaker 02

  Yeah, I mean, I think the regulatory diligence for a transaction involving an infusion pharmacy really is checking the underlying regulatory compliance. I mean, is the pharmacy operating with the licensure it needs? Is it operating according to the standards that govern its practice? Is everyone, are the, are the employees licensed? I mean, you could expand to if they're accepting government payers, are they on the list of excluded providers? But the scope of diligence in a transaction can also encompass the, the matters Chris was discussing, just contractual review and quality of earnings. You know, we tend to be more focused on the actual payer contracts, distribution contracts, drug supply contracts. And then again, the regulatory compliance diligence.

• 2:30Speaker 03

  Yeah. And you know, that's a good.

• 2:31Speaker 04

  In the quality of earnings?

• 2:33Speaker 03

  Yeah, I mean, sometimes, um, you know, when, when we do, I just, you know, the one thing I was going to expand a little bit on or just kind of,

• 2:42Speaker 03

  for, from what Patrick said is the due diligence process, especially in a compounding pharmacy is so important. Because fixes to the HVAC system, the error changes, right? Depending on what type of clean room it is, are, could be potentially multimillion dollar investments beyond what a purchaser is expecting. Right? So that's a very, you know, I do a lot of onsite evaluations and due diligence reviews at various pharmacies. And that's a very big focus right now in home infusion, if somebody's going through that. And then same thing with the quality of earnings that you mentioned, you know, having a lot of bad debt and having a lot of,

• 3:26Speaker 03

  you know, outstanding receivables should be a fairly big red flag to who's ever purchasing that pharmacy. Because that is most likely, there's a good chance it could turn into bad debt. So that is something that is part of our due diligence process.

• 3:41Speaker 05

  Yep. That's one thing we've learned in this infusion space for sure is the RCM process and how there can be lots of bad debt situations and receivable situations. And, um, that was brought up about every few minutes when we were at the last.

• 3:59Speaker 05

  But it is some diligence on that is huge.

• 4:03Speaker 03

  Oh, it's, it's quite scary. You know, I've looked, I've looked at some P and L's in my career where the, the amount of outstanding receivables is exceeding their, you know, monthly, every two, every three months revenue, right? You know, and not all of that's because of the pharmacy, even, you know, I know we've mentioned talking about like home infusion consolidations, but there's been a lot of insurance company consolidations too. And there's been a lot of very large IT hiccups when they consolidate, you know, the, the systems aren't a one for one. So you start submitting claims and it just gets in a backlog until somebody's able to fix it.

• 4:41Speaker 05

  And a lot of what we hear is, you know, because these are expensive drugs, these infusions and, you know, insurance of course is going to push back as much as they can. And so there's times someone was explaining to me that, you know, they've, this patient may have had that infusion three times before they get the final, final denial. Like we're not going to pay for this. And so that's, it could be 40, $60,000 that they're out.

• 5:05Speaker 03

  One more. Yeah.

• 5:07Speaker 05

  Or more. Oh, yeah. So that's, that AR, that no matter what kind of pharmacy that is, that inventory is where it's at. You got to make sure that stuff is right for sure.

• 5:20Speaker 01

  Second clip comes from inside a distributor injunctive relief 101 with Michael Alexander at Brown and Fortinato Law Firm. We talk about red flags to pay attention to before a distributor cutoff hits your pharmacy. Here's that clip.

• 5:36Speaker 04

  Some of those like a pharmacy, you know, operate normally, you know, doing nothing

• 5:46Speaker 04

  sketchy or anything like that in terms of opioids, you know, normal dispensing. Where does pharmacy maybe cross into the issues of having this potential issue arise? You know, what are those red flags? What are, what pharmacies need to do to monitor this on their own end to make sure they're not getting into any issues here? Because like you said, if they do get cut from the distributor, that has a detrimental impact to pharmacy. So.

• 6:17Speaker 06

  So, I mean, one, just know what the red flags are. And they're easy to know because they're stated in the injunction relief. So what I, my advice to clients all the time is just, just pull it up and read it. The distributors mandate is to know their customers and a pharmacy works within that by knowing itself before the distributor knows them in a sense. Things like your controlled substance to non-controlled substance ordering ratio and dispensing ratio. Your C2 versus your non-C2 controlled substances, your general categories of, you know, what are your ratios of opioids to non-opioids? So you're looking at a whole lot of ratio data, your stimulants versus your non-stimulants.

• 7:02Speaker 06

  Where are your prescribers? Are there a lot of, is there a great deal of distance between your prescribers and you? Is there a distance between your prescribers and their patients? Where are your patients? Are your patients driving past four of their pharmacies to get to you? And if so, why? So, uh, these are the types of things, you know, cash, how much of this is cash based versus non-cash based? You know, is this being sent up the chain through a payer who's also going to independently be verifying these things? Or is this coming in as a cash claim, which are always viewed as, you know, I think that, I don't think the DEA or the boards would admit to this, but I think cash claims are always viewed as suspicious until proven otherwise.

• 7:45Speaker 06

  And that's, you know, by nature of the fact that they've had to deal with them in the past, but these are the types of red flags. So they're not uncommon red flags that people are unaware of. But they are things that the distributor has immediate access to data on. And therefore is like, hey, we got an order from, you know, ABC pharmacy. And ABC pharmacy just put in an order for three times the amount of opioids they normally order. What's going on?

• 8:13Speaker 06

  Well, there might be a completely valid explanation for it. It might be, hey, we just expanded our pharmacy practice and we, you know, engage, we're in an agreement with a hospice care program now. And hospice has a high, high demand for pain medication, a lot of it being opioid based. And that's a valid prescription. But if, you know, that is not communicated to the distributor, then the distributor, all they see is an order that's three times outside normal ranges. And they're worried because they're like, hold on, why are you doing this? And so it's about knowing what their distributors are looking at.

• 8:53Speaker 06

  Before the distributors see it, and if something comes up, go into the distributors to talk to them about it. Because the other piece that is difficult in this process is pharmacies are under what are called ordering thresholds. But they're not told what the thresholds are. And that is stated explicitly within the injunction related. They're not, that's not communicated what the thresholds are. So there's just some thresholds sitting out there that a pharmacy has to know that they're under, but they can't know the amount of it. And so you could be coming up on it and not know. And so that's why for me, it's so important if a pharmacy sees a potential bump in numbers coming, that they flag it, they document it, they have to say, like, why is this

• 9:38Speaker 06

  going to happen? What are the valid reasons I'm going to see this jump? And then they take it to the distributor, not to the sales team, but the controlled substance monitoring program team and say, hey, guys, I know I have my threshold, I don't know where I'm at with relation to it, but I wanted to let you know, you know, we just, we just expanded into hospice, we're bringing on this new hospice hospital, and we're going to be likely ordering more opioid-based products. You know, we wanted to make you aware of that in the event that our threshold needs gets increased. And oh, by the way, we're not just telling you this, here's the documentation to show it. Because it is very much a show me process. It's not a tell me process. It's a, here's the issue

• 10:20Speaker 06

  coming up, and here's the documentation to show it. Because the distributors are required to not just take the pharmacy's word for it, they have to as part of their diligence, need the documentation supporting, supporting issue.

• 10:33Speaker 01

  Next up, a clip from the Bottom Line Catch Up, episode four, featuring Scotty Sykes, Bonnie Bonn, and Austin Murray at Sykes and Company. They're talking about navigating multi-state tax issues for compounded pharmacies. Here's that clip. The other thing, Scotty, I think, is interesting, that we've been getting a lot of calls about is out-of-state stuff for compounding. This kind of relates to the peptide and the GOP issue is, you know, the compounders that are, you know, doing out-of-state shipping and operating in multiple states. Bonnie, you've heard this as well. What's kind of the beat on, on that, that you guys are seeing from, from calls and stuff that we're taking?

• 11:16Speaker 05

  Well, you know, I just, we've got a lot of people that have called and reached out, trying to get these things set up, like you said, ready to go for when this gray area sort of kind of dissipates and, you know, you get the green light. But like you mentioned, nexus and issues with other states, shipping into other states can cause a, it's, it's not difficult, but it has to be handled. And we have a lot, a lot of people we talked to are aware of this, and they're on top of it. But then we have some that have no clue about it. Because there's a lot of people get into this space that haven't had, they may have a pharmacist that they're working with or part of their team, but they may not be a pharmacist themselves, or a compounder. And so this is all new. So that's one of the key areas that we all got to be really careful

• 12:00Speaker 05

  of. Anybody coming and jumping into the space, if you start delivering and selling into other states, there's a lot of issues there, because you got to make sure you're covered on.

• 12:11Speaker 01

  Well, and I'll tell you, you know, the, there, there are a lot of people entering the peptide space. So that leads me to believe that this is pretty much, it's pretty much inevitable that they're going to, you know, that they're, they're going to take it all, put it on to a, you know, allow it to, to all this to kind of go through. I don't think people would put this much upfront investment and this much kind of effort into something if they didn't think that it was going to happen. You know, so they, they must see something on a regulatory perspective that is positive in that regard.

• 12:53Speaker 04

  Well, going back to the next issue, this often gets overlooked, you know, you open a business, you're doing compounding, you're selling to patients, you're shipping over here, shipping over there, you're not, not really thinking about it. But these states, you got to watch out, you know, every state's a different jurisdiction, they have their own tax rules, and they want money, you know, they want, they want their share of filings and their regulations need to be addressed. And, you know, you can brush it on, I guess you can brush it, you know, just brush it under the rug, but A, you're, you may get a, a tax notice of some sort, if you're red, obviously, you're probably licensing the state you're shipping to, so that's kind

• 13:38Speaker 04

  of a state already is aware, you're out there. And then B, a lot of these compounders are building up, and they're building big facilities, and you know, there's going to, an exit ramp of some sort. And that exit ramp, the potential buyer, well, they're going to be asking, how are you compliant with all these things? And if you don't have answers, that's going to hurt you from a valuation standpoint.

• 14:04Speaker 05

  Yeah. And you got to look at it too, Scotty, in two different ways too. So we're talking about sales tax, and we're also just talking about general revenue, when it comes to filing a tax return. Do you, you know, do you need to file a tax return in that state? So it's really two different areas. And there's thresholds, and just like with everything else, every state is different. So it's not something you can just figure out one time, you got to figure it out 50 times if you're going in all these different states. So it's a lot to it. So that's why folks like us are here.

• 14:35Speaker 04

  Well, you have sales tax, you have the income tax, and there's rules between all those, every state's different. Then you may even have some local county issues. So, you know, like I said, tax.

• 14:50Speaker 05

  You know, like the state, just for, for instance, the state of Illinois is, is a state that charges a percentage regardless. Like, there's, there's not exclusions from that for certain, for prescriptions like there are for some states. So there, there's just, it's all different. So you just, just make sure as you're setting these things up, if you're moving in this direction, and this goes with retail or, you know, any.

• 15:13Speaker 01

  Any multi-state.

• 15:14Speaker 05

  Yeah. If you're doing things in other states, you got to think about it. Yeah.

• 15:19Speaker 01

  Yeah. So this could be somebody who owns pharmacies on like the border of Oklahoma and Texas, or something like that. And they've got like pharmacies on one side, and then a couple pharmacies on the other side. It could also be, you know, you're, you know, you're a pharmacy owner of a pharmacy out in, you know, let's say California, but you actually live in like Tennessee. You know, so you've got that to potentially consider.

• 15:46Speaker 04

  If you've got employees multi-state, you're definitely in a nexus.

• 15:49Speaker 01

  Oh, yes. Sales reps, I mean, that's a huge, that's a huge one, sales rep. The sales rep part is huge for compounders.

• 15:57Speaker 05

  And delivery, obviously. You could be here, and you deliver, if you're in South Carolina, you're delivering to North Carolina, you know, you're close to the border, it's all those things.

• 16:04Speaker 01

  Yeah. Next up, a clip from Personal Guarantee Insurance 101 with Ryan Connor, President at Braddock Road Insurance Group. We're talking about what personal guarantee insurance is and why it's important. Here's that clip.

• 16:18Speaker 04

  So just 101, our listeners on the, the personal guarantee, Ryan. So, you know, you're in a transaction, you're buying a pharmacy, you got an SBA, you have to personally guarantee that. The, the, the pharmacy, you know, something happens at the pharmacy level, maybe you have a distributor freeze in terms of controlled substances, your business is cut in half, you know, you're, you're struggling there. Where's the personal guarantee come in there, you know, should, should the business kind of go under there?

• 16:56Speaker 07

  Yeah, absolutely. It's, it's when you have used an acquisition loan to purchase a pharmacy, you're stepping in, or you have an existing pharmacy, and potentially you want to expand. Maybe you want to take on some debt, you want to hire some more people. And typically with small business loans, you have that personal guarantee requirement. And so it's essentially when your business starts to struggle, and you can't pay back those loans. So I'll give you an scenario, maybe you've got a really good lock on a, you know, a rural market, and you're the only one in town, but then a CVS comes in three blocks from you. And all of a sudden,

• 17:36Speaker 07

  the monopoly you had in your small town changes very quickly, and your revenue starts to drop very significantly. And there's not a whole lot of options you have on how to expand that revenue. And all of a sudden, you really can't make your loan payments. Another reason is loan payments with SBA and conventional loans have changed a lot over the past three years as the increase in interest rates. So perhaps you started with a loan that was maybe 3%, 4%, 5% business loan, and you could make that every month. But now the cost of that loan has gone up to 9%, and your cash flow just doesn't support that. And so the bank is going to give

• 18:18Speaker 07

  you a little window of opportunity, potentially one deferral. But after that, if the business is struggling, they are going to basically go in, take over your pharmacy, sell it to someone else. And then after that is when the personal guarantee kicks in, where they go after your home. A lot of times, individual spouses have to sign the personal guarantee, especially maybe you don't have a really high net worth, because you, you're a little younger, you've come out of pharmacy school, you've got some debt. So the little you have, you're going to lose. And that's what's really scary about it, is running a pharmacy, running a small business is hard enough. But then if you have the fear of losing your entire nest egg, especially if

• 19:03Speaker 07

  you got kids, a wife, a partner, whoever it is that's depending on you, maybe older parents, it's really stressful. So that, that's what our solution tries to do, is essentially reduce that risk at an affordable rate. So.

• 19:19Speaker 04

  Talk to me about, yeah, talk to us about that solution. You know, what, what, where do you come in on, on, in, in this case?

• 19:28Speaker 07

  Absolutely. So we generally get referrals from SBA lenders that work with pharmacists, brokers, accountants, lawyers, and they say, I have an individual that's about to take out a $3 million loan to purchase this pharmacy, or they're going to expand their practice. They want to buy a neighboring pharmacy. We look at that. We typically underwrite, look at that deal as it's actually transacting, going into closing. We provide a quote that generally is a certain percentage of the loan, typically not anything that's really going to cause a whole lot of issues and is affordable. And then we come in, if something were to happen, you take over that pharmacy, maybe the seller has disclosed books and

• 20:13Speaker 07

  records, or maybe there is a outgoing investigation that you didn't know about, and all of a sudden, the revenue tanks, the store goes under. We come in and typically provide about 50% downside to help mitigate that, that business disaster. So that, that's really our goal is we don't solve the entire pain point, but we essentially help turn down the volume from a 10 to a 5. And that's, that's really our goal is just to make it a little easier to be an entrepreneur, but still make it that you're really going to make, do everything you can to make those payments.

• 20:47Speaker 04

  Which could be where you keep your house, you know?

• 20:50Speaker 05

  Yeah.

• 20:51Speaker 07

  Yeah, absolutely.

• 20:52Speaker 05

  So it's not a full, it's not 100%. You said you do get, you guys do about 50, up to 50. And I'm assuming that depending on, there's other, you could do less than that, and then that affects the premium and the coverage, is that right?

• 21:04Speaker 07

  Absolutely. And, and a lot of times, you know, especially with, with practices like this, you may have three or four people on the loan. And so if it's helping reduce the amount for everyone, it can make it a little more practical if you've got three or four individuals that all want to buy a practice together, and they've, they've got this coverage in place, it helps, again, just, just turn down that risk.

• 21:29Speaker 01

  Our last clip comes from financing a pharmacy acquisition featuring Alan Sykes at Sykes and Company. He talks about how much you actually need to buy a pharmacy in today's pharmacy market. Check it out. One of the most common, I guess, questions that we get is how much money do I need? Some people look at the purchase price of the pharmacy, and they think, well, um, you know, this is the purchase price, um, you know, so I must just need, the purchase price is like 2 million, I must only need 2 million for the deal. Um, but what we often recommend is, um, you know, you're going to want more than that for a myriad of reasons. Alan, talk about like, how much financing do you

• 22:13Speaker 01

  actually need for a pharmacy that you're buying?

• 22:16Speaker 03

  Well, if you're going the SBA 7A route, let's say on an assumed $2 million deal, if you had $100,000 in cash availability, um,

• 22:30Speaker 03

  or 150,000, see, 10% of that would be 200,000. You might need 200,000 on a $2 million arrangement. Um, but we see many transactions that are smaller than that, maybe a million, million to a half, where 50 to 75 to $100,000 of, of the only, of the owner equity injection is needed. And many times, the SBA lending institutions will allow the accounting and legal costs that you're investing in, on services that you're purchasing, um, to help

• 23:09Speaker 03

  you get up and going to be part of that injection. Um, and then there's some situations that frankly, uh, again, I'm working on a deal right now where owner's financing the entire transaction, as long as he can go outside and purchase the real estate separately, at a very favorable interest rate. Um, but there are some certain terms and conditions on it that make it a little bit different. Um, but each situation is different. Um, the needs of the seller are different in many cases. Um, so it just depends.

• 23:53Speaker 01

  Yeah, absolutely. And I think another tip that, uh, another consideration we give people as well, um, is the type of lender that you use is very, very important. Um, you know, most often, you're going to want to use a pharmacy niche bank, something like a Live Oak Bank, or a First Financial Bank, uh, for these types of transactions. Um, you really don't want to use a local bank, and I understand a lot of owners might want to use that. It's very tempting to, especially if you've got a buddy that works at the bank, and, you know, you kind of want to help them out. You want to be supportive. Um, talk about why a pharmacy niche bank is going to be more advantageous than perhaps maybe

• 24:36Speaker 01

  a local bank for acquiring a pharmacy?

• 24:39Speaker 03

  The, the, the key, the key players in the pharmacy arena are typically directly pharmacy oriented. They have either pharmacist or prior pharmacist experience in the financing direct arena. They understand the terms, they understand the conditions, they understand third-party contracts, they understand compounding, they understand MFA, they understand the whole process. And they understand that a transaction needs to be typically a long-term term financing arrangement, not something on a five-year revolving credit line, which

• 25:22Speaker 03

  is what we see with a lot of local banks, uh, when they reach out and make an offer to someone in a local community. Um, that can be really problematic, is they may give you, say, 15 and 20-year terms with a five-year call. That doesn't do you a bit of good, because that means that in the five years, that can call the entire note. And when you enter into a purchase of a, of a, you know, million and a half, $2 million transaction, you best to have 10-year-plus type financing that's not callable. Uh, there may be varying situations there where rates can change, rates may be either fixed or variable, that's

• 26:03Speaker 03

  a whole other matter, but you've got, the terms are critical. If there's real estate involved, typically that can even help you get even better terms. Um, but while the community and local banks are very important, potentially for demand deposits and making local daily deposits, they typically do not understand this industry, and it's a very, very different industry than a regular retail business.