When covered entities explore building their own pharmacy, one of the earliest decisions is whether to operate an open-door pharmacy or a closed-door pharmacy. While both models play an important role in patient care and financial strategy, the choice can significantly impact compliance, revenue, and the patient experience.

Here’s what you need to know about each, and how to decide which approach best fits your health center.

1. What Is an Open-Door Pharmacy?

An open-door pharmacy operates like a traditional retail pharmacy. It’s accessible to both your patients and the broader community, meaning anyone with a prescription can fill it there.

• Benefits:
  
  • Drives higher script volume, including from non-patients
  • Creates an additional revenue stream outside of your health center’s own patients
  • Increases visibility and community presence
• Considerations:
  
  • Requires additional staff and infrastructure for higher volume
  • Compliance must be carefully managed since not all prescriptions will qualify for 340B

2. What Is a Closed-Door Pharmacy?

A closed-door pharmacy is not open to the general public. Instead, it serves only your covered entity’s patients, often operating in a space that looks more like a clinical extension than a retail shop.

• Benefits:
  
  • Easier to manage 340B compliance (since all scripts are tied to your CE’s patients)
  • Lower overhead than a retail model
  • Stronger integration with your clinic’s care teams
• Considerations:
  
  • Limited to your own patient base, which means lower script volume
  • May generate less revenue than an open-door pharmacy

3. Which Model Is Right for Your CE?

The right choice depends on your priorities:

• Revenue Maximization: Open-door models tend to generate more income, but require more oversight and resources.
• Compliance & Simplicity: Closed-door models reduce complexity and risk but limit revenue potential.
• Community Impact: Open-door pharmacies extend your reach into the broader community, while closed-door models focus on deepening services for your existing patients.

At RxTrail, we help covered entities evaluate the options, model the financial impact, and build a pharmacy strategy that balances compliance with long-term sustainability. Whether you’re considering open-door, closed-door, or a mix of both, our team can guide you through the decision-making process.

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