CASE STUDY
horizonpharmacyri.com
A LONG-TERM CARE PHARMACY DESIGNED TO GIVE BACK
Horizon Pharmacy is a closed-door long-term care (LTC) pharmacy serving individuals and
families in residential and behavioral health programs, as well as in assisted living facilities,
throughout Rhode Island. Accredited by the National Association of Boards of Pharmacy (NABP),
Horizon’s 31 full- and part-time staff, including eight pharmacists, serve 22 organizations and
deliver medication to 130 locations across the state.
What sets Horizon apart from other LTC pharmacies is that it’s owned by three nonprofit
community-based mental health centers, and all its profits go back into these organizations.
“On any given day, we are providing medication to approximately 1,600 patients,” says Jason Dana
Costa, MBA, PHR, president and chief executive officer for Horizon. “But because of our unique
structure, we’re able to provide free or subsidized wraparound services, particularly for substance
use and behavioral health, to an additional 1,000 uninsured or underinsured people through the
nonprofits that own the pharmacy.” Many of these individuals are unhoused or in recovery, making
access to these wraparound services that much more essential for them.
THE CHALLENGE: MANUAL, TIME-CONSUMING PROCESSES AND
LIMITED VISIBILITY
According to Costa, for pharmacies like Horizon, inventory typically accounts for 80% or more of
expenses. “When I joined the pharmacy in early 2023, we were in the ballpark of 86%. Compared
to industry benchmarks, I felt we were overpaying,” he says. His goal from the outset was to
cut costs by 2% to 3%, and he believed the best way to do that was to improve the efficiency of
purchasing and inventory management processes.
As a first step, Costa hired an inventory specialist, whom he shadowed when she started.
“I immediately saw what an arduous task it was to compare pricing between our primary vendor
and just the single secondary vendor we had at the time.” Finding the best drug prices — and
making sure they complied with contractual agreements —required jumping back and forth
between the two vendor platforms to gather all the necessary information before making a
purchasing decision, he says.
Costa’s original thought was that streamlining processes would allow the pharmacy to add
several secondary vendors for more purchasing options. However, with a full understanding of
how time-consuming the process was, he knew it would be difficult to add more than two or
three. Plus, despite the efficiencies the inventory specialist put in place, Costa says the cost of
goods wasn’t coming down. “No matter what she was able to do to streamline the process, it still
required constant switching between systems and manual comparisons. There’s only so much
the human mind can categorize.”
It was at an industry conference around this time that he began
exploring the idea of adding a purchasing platform. “The first
I was introduced to was interesting, but it still required a lot of
How Horizon Pharmacy Cut Costs,
Doubled Profits, and Freed Up
Capital to Give Back
Jason Dana Costa, MBA, PHR
President and Chief
Executive Officer
~ Horizon Pharmacy
26