The Bottom Line Pharmacy Podcast Tradeshow Series: AtriumX, Telehealth, Functional Medicine

Thinking of expanding into functional medicine, telehealth, or cash-based care models? We’ve got all of that and more in this episode!  

In this episode of the Bottom Line Pharmacy Podcast, we’re giving you the most impactful takeaways from our recent appearance at the inaugural AtriumX show in Orlando Florida!   

Scotty Sykes, CPA, CFP dives into: 

• The rise of telemedicine 

• Latest developments in 503B compounding 

• The growing relevance of functional medicine and cash-based models 

• And of course, the accounting and tax implications of these innovative areas  

Tune in to this episode packed with actionable insights to help you adapt and thrive in a rapidly changing landscape

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If you prefer to read this content, the video transcript is below:

Scotty Sykes, CPA, CFP®: So, today’s update we’re going to talk about, well we just got back from AtriumX and Nicolette Matthey’s AtriumX conference, which was in Orlando. And 60 attendees give or take and the attendees that were there were some of the brightest, sharpest minds in pharmacy. So, if you didn’t get to go or thinking about going, you might want to consider it next year because it was really good. And the format I think was really good, Austin, where all of the attendees got into the breakout sessions, they all voted on which sessions they wanted to talk about and learn about. And then they got in there and picked a leader of that session, so to speak, and just started talking about what they’re doing, how they do it, and then that just opened questions and conversation on making it better or you know issues and things they ran into so and the topics were cut a little more forward-thinking topics so we’re talking about you know 503B, Telemedicine, Functional Medicine, Cash-Based Revenue subscription type service cash scripts And a few others of course and… So it was really good. 

Austin Murray: Yeah. Well, give us, you mentioned 503Bs was the topic there. That’s always been a hot topic with the 503B and the 503A pharmacies and the GLPs, but apparently there’s been some updates there. So kind of give us, what were the updates that you heard? Because you sat in on that session. 

Scotty Sykes, CPA, CFP®: Yeah, so of course there’s been some litigation around GLP-1 compounding and Tirzepatide, Semaglutide, and when and how much longer that’s gonna go on for because they’ve been taken off of the shortage list by the FDA and then of course the lawsuits have arisen immediately thereafter saying well there’s no shortage, there’s actually still a shortage and that the FDA has got it wrong. The long  and short of it is you need to know what those cutoffs are and there’s a lot of content out there like AtriumX Nicolette she’s pushing out content on you know, what dates you need to be aware of and when those cutoffs are in terms of when you can’t compound and or dispense those products anymore. But one of the takeaways was that despite how long this GLP-1 thing continues for, which could drag on a long time because some say it’s going to go to the Supreme Court, and so despite how long that continues, 503b still needs to be an option in your pharmacy. You still need to have that bow in your quiver because there’s more than just GLP-1s that you can get out of 503b. There’s eye drops in 30, 40, 50 other products that 503Bs can compound. You can buy those products, sell them, cash to your patients. There’s still opportunity and will be opportunity in the 503B space post-GLP 1s. In addition to that, there is also another version of the GLP. You know, you had Semaglutide Phase 1, Generation 2 Tirzepatide, and there’s going to be so-called generation three, I believe in January of 2026, that’ll be hitting the market, I believe. Don’t quote me on that. But there’s a gen three coming and you wanna be in the position in your pharmacy with the 503B to immediately jump in that should that opportunity open up for community pharmacy. So, the 503B is something to definitely be adding if you don’t have it. 

Austin Murray: Yeah, and well, and one of the other big ones that was talked about there that I personally think is going to be, I think it’s going to be big or even bigger than it is now moving forward is the Telemedicine. Telemedicine is going to be huge. Kind of give your, what your thoughts were on the Telemedicine session. 

Scotty Sykes, CPA, CFP®: Yeah, the Telemedicine was definitely interesting because you’ve always kind of known it was there, COVID pushed it out, but it’s never really gotten a foothold. As the generations, younger generation gets more more involved, that’s only going to grow. And we’re seeing that here. This was a topic that was being discussed. And how pharmacies can piggyback on that growth and add this into their portfolio, into their business, the Telehealth option. And kind of the takeaway was that a pharmacy would have a Telehealth provider more or less available to any patients that need it. You scan a QR code, they go into the consultation room there, meet with the Telehealth provider, script gets pushed over to the pharmacy right there on site. And then of course that patient has the option to send that script anywhere and the default is that pharmacy. But and then also in that model somehow pharmacy may be able to get a payment for that Telehealth referral I guess it is. Now I know there’s some STARK laws and anti-kickback and all that stuff so I’m not sure all how that works but the takeaway here is that the Telehealth option is going to grow. It’s going to be more of a standard in the years to come. So, you might want to start looking at that in your own situation. I know that IPC for their members, GPO members have a Telehealth option that is being rolled out right now. 

Austin Murray: Yeah, and what is the, you know, being that this is an accounting podcast, what does the accounting for telemedicine look like? Like, is there some interesting tax advantages or accounting things there to kind of pay attention to? 

Scotty Sykes, CPA, CFP®: Well, there could always be R&D Tax Credits for any of this new type of stuff. So, if you’re in, learning about any new type of product or service, you’re putting in a lot of hours and going through the process of figuring out does it work, should I do it, how should I do it, and so forth. The R&D Tax Credit is available. And you need to be, the key thing there is if you’re not documenting, you don’t have an R&D tax credit. So you need to really document what you’re doing with that. We can help folks with that. Now you really need to get to $150,000 of R&D expenses. So, if you’re paying yourself $200,000, well you need to, and you’re the only one doing R&D in the pharmacy, you need to be able to allocate most of your time to R&D, at least $150,000 worth to really move the needle to make it a worthwhile credit. So that’s one thing is the research and development. The other thing is, it’s pretty standard on the accounting side. Telehealth, for example, you’re getting prescriptions, prescription revenue. How the other income may come into play with the referral situation, if that’s what we want to call it. I know that’s kind of a bad term in pharmacy with providers, but I’ll just call it that for discussion purposes here, would be just another income line item or however you want to capture that. 

Austin Murray: Interesting. Interesting. I think the other thing that was interesting to you. I sat in on the functional medicine part, which you know, if you’re not in functional medicine, that’s another big area to get into. You can we have you possibly charge $200 an hour for the functional medicine consultation and then you’ve got Supplements that are recommended on top of that on top of the plan that’s built for the patient. But the other big one was cash-based models and membership models. What’s that all about? That was an interesting session too. 

Scotty Sykes, CPA, CFP®: Yeah, well, let me touch on functional medicine. That’s interesting. So, If you do a functional medicine, if you only get 1% of your patients on functional medicine, 1% who are willing to pay cash, that could be a million dollars of revenue. And you’re talking $250, $200 an hour for the consultation. $200 – $300 of supplements every month and so it is a little higher barrier of entry because you got to train, there’s processes, there’s training, there’s additional staff, clinical type staff, pharmacy staff, but AI is going to be, can be a big player in functional medicine and there’s other vendors that support the functional medicine ecosystem along with that AI. So, it’s an area worth looking into and you’ll see you’ll hear pharmacies say well I don’t have a patient I don’t have patients that’s going to pay cash for that well like I said if only 1 % of your patients  you know are willing to invest the cash, which most pharmacies have about 1% of the patients you would think that are willing to spend $300 a month on supplements a lot of them are already doing that elsewhere. So, Functional Medicine is definitely a big area I would be looking at. And then the cash-based subscription models, that was a topic, Austin. And we got some pharmacies doing that, they’re doing it very successfully. It’s all generics type thing, cost-based, cost-plus model. My takeaway from that discussion was there’s a lot to figure out there. You had some of the sharpest minds in pharmacy, you know, really discussing how to make it work and make it work effectively. So that was interesting. And so, I think the jury’s still out on that really on how that can work and how to incorporate it with what you’re already doing in community pharmacy. You know, Austin, before we hang up, there’s a couple things that I wish we were given the opportunity to speak about. There’s a couple areas that pharmacies need to be aware of. One topic that came up was a separate LLC for your delivery vehicles. And that should definitely we’ve talked to some of you about that, but that’s something you should definitely consider especially if you’re doing heavy delivery multiple vehicles is to consider that from a liability, this is just purely a  liability issue. And so you definitely need to speak with your attorney and your insurance carrier on that and get advice from those professionals because this is a liability issue. 

Austin Murray: Yes, so elaborate a little bit more as to why you want to set that up as a separate LLC if you’re doing heavy delivery. 

Scotty Sykes, CPA, CFP®: So, you’re putting these vehicles in its own entity and then these vehicles are on the road and if you kill somebody, know, they can sue the business. And then, you know, the business is having to deal with it. The assets of the business are at risk. So, separating that into a separate LLC, there’s a contract between the pharmacy and the delivery, Rx LLC. And really the only thing on the delivery LLC is three cars and two staff employees. So it is, it’s a separate, perhaps a separate tax return, you know, another layer of payroll, things like that. So it is kind of another administrative thing you gotta deal with, but it does protect you perhaps from a legal liability perspective, but I’m not an attorney. So, you gotta speak with an attorney on that. You gotta speak with your insurance carrier on that. But we do absolutely think pharmacies, you know, we talked with many pharmacies about doing that. So you should be considering that if you’re heavy delivery or even just little delivery, you might want to consider that. Now, the other thing is, is state and local taxes because 503B was a topic. And of course we talked about adding 503b to your pharmacy even with GLPs perhaps going out in the near future so you can sell other products that they provide.  

Austin Murray: Mm-hmm. 

Scotty Sykes, CPA, CFP®: But one of the things that came up was in my mind was state and local taxes and so if you you know a lot of pharmacies ship out of state and  pharmacies really need to be paying attention to that if you’re shipping out of state we’re probably going to have another deep dive on this topic later Austin. If you are shipping out of state, you definitely need to be paying attention to the compliance issues with that. You got sales tax, you got income tax, because they were talking about in the class all the compliance and legal unknowns and things around GLPs right now. Well, there’s also these legal hurdles you got to address with shipping out of state and state and local taxes with sales tax and income tax. So that needs to be on your radar and of course to let us know if that’s happening. Even to a small degree, you may have some nexus issues that require filings. So, something to be on the lookout for. 

Austin Murray: And pay attention to your GLP marketing too. These big companies like Eli Lilly and Novo Nordisk, they’re watching your marketing. And if anybody who’s tried any sort of GLP paid ads on social media, if you have before, you know, they flag your ads pretty much immediately. That’s because they’re watching the advertising that you’re doing. There’s a couple of strategies that you can follow to kind of still sell your GLP-1s and still market it, but going the paid ads route you can get in a lot of trouble for that. So just be very careful. 

Scotty Sykes, CPA, CFP®: The Boesen & Snow attorneys went through that topic as definitely a red flag. 

Austin Murray: Yeah, and I’m glad they brought that up because kind of a little unknown fact about meta-ads that people, meta so Facebook ads that people don’t really know about is that those ads will get flagged. It’s the same thing in the CBD. If you sell CBD at your pharmacy, you can’t run ads on that. You’ll get in a lot of trouble. It’ll get flagged. 

Scotty Sykes, CPA, CFP®: Yeah, you gotta pay attention to that marketing piece for sure in your marketing strategy. 

Austin Murray: Yeah, nobody was talking about strategy. It was wild. I just heard a lot of like post on social media. 

Scotty Sykes, CPA, CFP®: What are we doing to get the word out? Oh we’re doing marketing. Okay. Well, what does, what does that mean? 

Austin Murray: Yeah. 

Scotty Sykes, CPA, CFP®: So it’s funny, we were laughing the whole time every time we heard marketing. 

Austin Murray: Yeah. Well, guess that’s it. Any other key takeaways from AtriumX? 

Scotty Sykes, CPA, CFP®: I don’t think so.