The pharmacy is usually the biggest profit leak in the hospital
Pharmacy is 25–35% of a private hospital's revenue and its highest-margin department. It is also the one nobody owns end to end: purchase, stock and billing sit with different people, so the loss never shows up as one number. It shows up as a pharmacy that "does okay".
Where the money leaks: a closer look
Scroll through — five realities of a pharmacy without a P&L owner
A hospital pharmacy handles ₹40–80 lakh in goods every month. But most owners see just two numbers: the pharmacy sale total and the purchase bill.
Between those two numbers, 5–20% of pharmacy profit silently disappears across procurement, stock, billing, and working capital.
This is where your money is going.
No rate contracts. Brand-heavy mix. Three counters ordering independently. Vendor schemes never reaching your books.
- ₹70 L pharmacy: ₹7–14 L a month avoidable cost
- Rate contracts alone recover 8–12%
- Generic substitution adds another 4–6 margin points
Most pharmacy managers can tell you last month's sale. Almost none can tell you:
- Gross margin % by counter
- Near-expiry stock value, today
- Which vendor is off rate contract
- Ward issues not reaching the bill
A monthly MIS makes all of this visible.
Ward issues by paper. Cash sales off the system. Free issues by habit. A stock audit once a year.
Fix: every issue through the ERP. Weekly variance visible same week.
A pharmacy P&L audit covers every leak — procurement pricing, stock discipline, billing controls, working capital. Visible results within the first quarter.
Where the money leaks, and what I recover
Pharmacy P&L Audit Services — identifying profit leakage and margin improvement opportunities across purchase, stock and billing.
You pay 10 to 20% more than you should
No rate contracts, brand-heavy mix, every counter ordering on its own, schemes and free goods never reaching your books.
- Rate contracts and aggregated buying power
- Generics and brand mix by category
- Vendor terms: 45 to 60 days credit, schemes in the ledger
3 to 5% of sale written off every year
Stock bought on hope, no FEFO at the counter, nobody looking at the near-expiry list until it is too late to return.
- Par levels and indent discipline per counter
- FEFO enforced in the system, not on paper
- Monthly near-expiry and non-moving review with vendor returns
2 to 4% walks out unbilled
Ward issues that never reach the bill, free-issue by habit, cash sales off the system, a stock audit once a year.
- Every issue through the ERP, role-based access
- Ward-to-bill reconciliation, cycle counts
- Audit trail that makes variance visible the same week
60 days of stock, 15 days of credit
Your cash sits on the shelf while vendors get paid early. Fixing both sides frees money without touching sales.
- Stock days from 60+ to 30 or less
- Vendor terms renegotiated and held
- Complete, on-time claim files so the hospital can collect
How the recovery sticks after I leave
One ERP / SaaS, one ledger: purchase, stock, billing and accounts in a single system. Dashboards on the owner's phone. Audit trails that make leakage visible.
Written SOPs from indent to stock audit, an approval matrix for who can order, receive, discount and write off, and a monthly control calendar.
JD / KRA / KPI for pharmacists, store and billing staff. Hiring, training, shift structure. Compliance: drug licence, Schedule H/H1, narcotics, GST.
The reports you should be getting every month
Most owners see a pharmacy sales figure and a purchase bill total. This is what pharmacy MIS looks like when the system is set up right: one dashboard, then sale, purchase, COGS, panel mix and cash vs credit. Sample, not a client.
How the pharmacy P&L audit works
Discovery call (free)
We start with a conversation to understand your hospital's setup — OPD and IPD volumes, current pharmacy operations, and where you feel the problem lies. No obligation, no fee.
Pharmacy P&L audit — on-site
I visit and conduct a structured review: purchase bills, stock, vendor rates, billing processes for OT, IPD and OPD, software setup and reporting gaps. Takes 2 to 3 days on-site.
Gap analysis report
You receive a written Pharmacy Gap Analysis — what is leaking, by how much, and what needs to change. Includes a pharmacy MIS template set up for your data.
Implementation and follow-up
Weekly working reviews with your team, and a monthly reporting call with hospital management covering pharmacy P&L and progress.
Engagement duration: typically 3 to 6 months. Fees: monthly retainer during implementation, with an optional performance-based profit-share component depending on the engagement. The initial visit and gap analysis are free — no fee until you decide to move forward.
Start here: the Pharmacy Profit Leakage Audit
Two to three weeks, on-site. I go through your purchase bills, stock registers, billing data and vendor terms, and sit with your pharmacy and accounts team.
- One number: how much is leaking every month, in rupees
- A one-page pharmacy P&L showing where it leaks
- The 5 to 7 fixes that matter, ranked by rupees recovered
- Written findings you can act on with or without me
- A clear recommendation: run it in-house with my help, or let MedRev take it over
Who this is for
Setting up or fixing a small pharmacy
OPD-led practices with a counter pharmacy that should be a profit centre but runs on trust and guesswork. Right ERP, right stock depth, right margins from day one.
Owner-run, no finance team
You know the pharmacy is leaking but have no one to put numbers on it. The audit gives you the numbers; the fixes are built for a small team to run.
In-house pharmacy, under-managed
Multiple counters, IPD and OPD, dozens of vendors. Procurement discipline, FEFO, leakage controls and a monthly MIS the management can actually read.
Scale without losing control
High volume, central store plus sub-stores, teaching-hospital formularies. Rate contracts, aggregated buying, store-to-counter stock discipline and governance.
Hospital owners don't have a pharmacy problem. They have a few lakh a month leaving quietly, and nobody whose job it is to notice.Sandeep Tripathi, Founder, MedRev Healthcare
What the recovery looks like in practice
Three real engagements. Names withheld.
Expiry, margin and dead stock
Pricing, vendors and leakage control
Unbilled implants and consumables
Results from running hospital pharmacies
About Sandeep Tripathi
I don't advise on hospital pharmacies. I run them.
In 2016 I left a software career to start MedRev Healthcare. We take over hospital pharmacies and run them on a shared P&L — our money, our systems, our risk. Today 25+ pharmacies run on what we built.
Every fix I bring to a client, I have already paid for myself. Rate contracts I negotiated. Leakage I caught at my own counters. Expiry I wrote off from my own books. I have sat across owners and told them the real number. That is where the method comes from — not a framework, not a course.
Consulting is for hospitals that want to keep the pharmacy in-house and run it properly. I fix the P&L, the systems and the team, then hand it back. If you would rather not manage it at all, MedRev takes it over — same discipline, shared upside.
I started as a software engineer and built healthcare systems before I ran pharmacies. I don't fix the numbers and leave the ERP broken. The two have to hold together.
- 2016 – nowFounder & Director, MedRev Healthcare Pvt. Ltd., New Delhi
- 2011 – 2016Lead, IT Operations, Nexus Clinical (US healthcare); HCL Technologies; Cyberlink Technologies
Founder, MedRev Healthcare · New Delhi
Quick answers
Should I keep the pharmacy in-house or outsource it?
Depends on your volume, your team and how much management attention you can give it. Above a certain scale an in-house pharmacy run properly earns more; below it, outsourcing is usually cleaner. The audit answers this with your numbers, not a rule of thumb.
What size of facility do you work with?
Clinics and polyclinics with a counter pharmacy, nursing homes, 100–500 bed hospitals, and medical colleges or hospital groups with central stores. The approach scales; the fixes are sized to your team.
How do fees work?
The initial visit and gap analysis are free. Once you decide to move forward, the engagement runs on a monthly retainer, with an optional performance-based profit-share component depending on the scope. No long lock-ins — the engagement typically runs 3 to 6 months.
How soon do results show?
Procurement and leakage fixes show in the next month's numbers. Inventory and expiry improvements take two to three months. The monthly MIS makes the change visible — you can see it in your own numbers.
Can MedRev run the pharmacy for me instead?
Yes. If after the audit you would rather not run the pharmacy yourself, MedRev Healthcare takes over end-to-end on a shared-P&L model — same procurement, same systems, same discipline. One audit, two paths.
Which cities do you work in?
Available for on-site visits across North, Central and West India. Remote engagements pan-India. The audit needs me on-site for 2 to 3 days; the rest runs on data, your ERP and weekly calls. Travel is billed at actuals.
What are hospital pharmacy consultant fees?
Depends on hospital size, number of beds, scope of work and engagement duration. The initial visit and gap analysis are free — no fee until you decide to move forward. After that, the engagement runs on a monthly retainer. Call or WhatsApp and I will give you a straight answer after a 15-minute conversation.
Get your hospital pharmacy P&L reviewed
A 30-minute call, free, no obligation. Bring your last 3 months of pharmacy purchase and sales totals. I will tell you where margin, stock or process gaps are likely costing you, and whether an audit is worth it. What you share stays confidential.
Not ready to call? Get a free pharmacy profit check.
Fill in your details. I will WhatsApp you within 24 hours.