Most hospitals lose 5 to 20% of pharmacy profit without knowing it. I find it and recover it.

It leaks in purchase price, expiry, stock and billing. On a ₹70 L a month pharmacy that is ₹4 to 8 L every month. I run 25+ hospital pharmacies myself (₹150 Cr of pharmacy revenue, ₹90 Cr of procurement a year), and I recover it in 90 days — without new sales or capex.

Independent Hospital Pharmacy P&L Consultant · Founder, MedRev Healthcare (since 2016) · Clinics to medical colleges · Pan-India

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".

5–20%of pharmacy profit leaks in a typical hospital: paying too much, writing off expiry, stock that walks, bills that never get raised
₹4–8 La month recovered on a ₹70 L pharmacy once purchase, stock and billing are run as one P&L. Larger pharmacies, larger number
90 daysaudit to margin improvement in your numbers. No new sales, no capex.

Where the money leaks: a closer look

Scroll through — five realities of a pharmacy without a P&L owner

The pharmacy runs 24/7. Nobody reads its P&L.Why the busiest department is the quietest leak

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.

You are paying 10–20% more than you shouldProcurement: the first leak

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
Fix: one rate list, signed with all vendors.
You cannot fix what you cannot seeThe MIS problem: flying blind

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.

Four people. Four ways of doing the same thing.Where 2–4% walks out unbilled

Ward issues by paper. Cash sales off the system. Free issues by habit. A stock audit once a year.

2–4%
of sale walks out unbilled
₹1–3 L
monthly on ₹70 L pharmacy

Fix: every issue through the ERP. Weekly variance visible same week.

We find it. We fix it. Usually within 90 days.One P&L audit, one owner, one number that moves

A pharmacy P&L audit covers every leak — procurement pricing, stock discipline, billing controls, working capital. Visible results within the first quarter.

Typical recovery on a ₹70 L pharmacy:
₹4–8 lakh / month — no new sales, no capex
Book a free 30-minute call →

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.

Purchase price

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
Expiry & dead stock

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
Leakage & billing

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
Working capital

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

System

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.

Process

Written SOPs from indent to stock audit, an approval matrix for who can order, receive, discount and write off, and a monthly control calendar.

People

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.

Pharmacy dashboard, October 2026100-bed multispecialty, IPD + OPD countersSample
Pharmacy sale₹70 L+6% vs Sep
Gross margin58%was 46% in May
Expiry write-off0.7%was 3.8% in May
Stock days27was 64
Stock variance0.4%physical vs book

Gross margin %, last 6 months

30%38%46%54%62%70%May: 46%May46%Jun: 48%JunJul: 51%JulAug: 54%AugSep: 56%SepOct: 58%Oct58%

Needs a decision this month

ItemValueAction
Near-expiry (90 days)₹1.1 LReturn / transfer
Non-moving > 90 days₹2.3 LStop reorder
Purchases off rate contract11 itemsVendor call
Ward issues not billed₹19,000Reconcile
Vendor dues beyond termsNilOn plan
Before and after, six monthsSame pharmacy, same hospital, same teamSample
MeasureMay (before)Oct (after)Change
Gross margin46%58%+12 pts
COGS per ₹1 L of sale₹54,000₹42,000−22%
Pharmacy running cost per month (staff, store, ops)₹2.0 L₹1.6 L−20%
Expiry write-off3.8%0.7%−3.1 pts
Stock days6427−37 days
Purchase on rate contract31%94%+63 pts
Vendor credit terms15–30 days45–60 daysImproved
Credit claim files (TPA / panel) complete and sent within 7 days40%100%+60 pts
Monthly gross profit on ₹70 L sale₹32 L₹40.6 L+₹8.4 L / month

Nothing here needed new sales. Every rupee came from buying better, stocking less, leaking less and giving the hospital clean claim files to collect on.

SaleBy counter and by monthSample
Total sale₹70 LOct 2026
IPD₹48 L69% of sale
OPD₹22 L31% of sale
Sale per bed-day₹2,330+9% vs May

Monthly sale, IPD and OPD (₹ L)

01632486480May IPD: 41May OPD: 19MayJun IPD: 42Jun OPD: 19JunJul IPD: 44Jul OPD: 20JulAug IPD: 45Aug OPD: 21AugSep IPD: 47Sep OPD: 21SepOct IPD: 48Oct OPD: 22Oct
IPDOPD

Sale by category (Oct)

InjectablesInjectables: ₹26 L₹26 LTablets / capsulesTablets / capsules: ₹19 L₹19 LIV fluidsIV fluids: ₹9 L₹9 LSurgicals / consumablesSurgicals / consumables: ₹11 L₹11 LOthersOthers: ₹5 L₹5 L
PurchaseRate-contract discipline and vendor spreadSample
Total purchase₹31 LOct 2026
On rate contract94%of purchase value
Vendors on contractAllrate list signed
Vendor credit terms45–60 dayswas 15–30

Purchase on rate contract, % of value

0%20%40%60%80%100%May: 31%May31%Jun: 52%JunJul: 71%JulAug: 84%AugSep: 90%SepOct: 94%Oct94%

Top vendors by value (Oct)

Vendor AVendor A: ₹9.2 L₹9.2 LVendor BVendor B: ₹6.8 L₹6.8 LVendor CVendor C: ₹5.3 L₹5.3 LVendor DVendor D: ₹3.4 L₹3.4 LOthers (5)Others (5): ₹3.3 L₹3.3 L
COGS and gross marginWhere the margin comes fromSample
COGS₹29.4 L42% of sale
Gross profit₹40.6 LOct 2026
Expiry write-off₹49,0000.7% of sale
Stock variance₹28,0000.4% of sale

COGS as % of sale, last 6 months

30%36%42%48%54%60%May: 54%May54%Jun: 52%JunJul: 49%JulAug: 46%AugSep: 44%SepOct: 42%Oct42%

Margin by category (Oct, index vs May = 100)

InjectablesInjectables: 124118Tablets / capsulesTablets / capsules: 121115IV fluidsIV fluids: 109107SurgicalsSurgicals: 116112OthersOthers: 104103
Panel mixWho pays for whatSample
Cash patients48%of pharmacy sale
TPA / insurance34%of pharmacy sale
Govt schemes14%PM-JAY, ECHS, CGHS
Corporate4%of pharmacy sale
Cash: 48%TPA / insurance: 34%Govt schemes: 14%Corporate: 4%
CashTPA / insuranceGovt schemesCorporate

Credit billed by panel, with claim-file status

PanelBilled (Oct)Files sentStatus
TPA / insurance₹24 L100%Complete
Govt schemes₹9.8 L96%2 files pending
Corporate₹2.8 L100%Complete
Cash vs creditWhat came in, what is billed on creditSample
Collected in month₹55 L79% of sale
Billed on credit₹36 L52% of sale
Claim files sent in 7 days100%was 40% in May
Vendor credit terms45–60 daysheld every month

Cash collected vs billed on credit (₹ L)

01632486480May Collected in month: 34May Billed on credit: 27MayJun Collected in month: 37Jun Billed on credit: 26JunJul Collected in month: 42Jul Billed on credit: 25JulAug Collected in month: 48Aug Billed on credit: 22AugSep Collected in month: 52Sep Billed on credit: 19SepOct Collected in month: 55Oct Billed on credit: 15Oct
Collected in monthBilled on credit

Credit claim files sent within 7 days, % of credit bills

0%20%40%60%80%100%May: 40%May40%Jun: 58%JunJul: 74%JulAug: 88%AugSep: 96%SepOct: 100%Oct100%

Pharmacy gives the hospital complete, on-time claim documents and data. Collection from TPAs and panels stays with the hospital.

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
Fixed fee Adjusted against the project fee if you continue Book the audit

Who this is for

Clinics & polyclinics

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.

Nursing homes · 20–100 beds

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.

Hospitals · 100–500 beds

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.

Medical colleges & groups

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.

Case 1 · 150-bed hospital

Expiry, margin and dead stock

Expiry loss4–5% / month
Injectable & surgical margin35% avg
Aged dead stock₹15L dumped
GST 2A mismatchup to 20%/month
↓ 3–4 months later
✓Expiry reduced to zero
✓Margin improved to 60% (+25 points)
✓₹15L dead stock returned to vendors
✓2A matched — input credit flowing clean
₹11.5 lakh/month improvement + ₹15 lakh one-time recovery
Case 2 · 50-bed hospital

Pricing, vendors and leakage control

Below-MRP sales461 items, no approval
Purchase vendors42 vendors, inconsistent rates
Negative stock batches515 batches
Unverified returns15% of sales
↓ After engagement
✓Standard rate list — all 42 vendors benchmarked
✓515 batches verified; zero negative stock
✓Minimum margin enforced on all 557 items
✓Returns now linked to original invoice + patient UHID
₹6.3 lakh/month recovered
Case 3 · Multi-specialty hospital

Unbilled implants and consumables

High-value implants & stentsUsed, not billed to patient
Expensive consumablesNo patient-wise tracking
OT consumption recordsMissing or incomplete
↓ After engagement
✓Patient-wise implant and consumable entry made mandatory
✓OT consumption linked to surgery and billing record
✓100% billing compliance on high-value items
Every implant and stent now billed — zero unbilled consumption

Results from running hospital pharmacies

25+hospital pharmacies, managed and consulted
15+years in healthcare and hospital pharmacy
8–15%pharmacy revenue recovered on average
Pan-Indiamedical colleges to 500-bed hospitals

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
Sandeep Tripathi, hospital pharmacy P&L consultant, New Delhi
Sandeep Tripathi
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.

No spam, no sharing. Your numbers stay with me.

New Delhi · Pan-India