Key Takeaways from the APC Owners Summit
AI and Automation, Tax Insights, and Compounding Opportunities
The 2025 APC Owners Summit in Destin, Florida brought together compounders from across the country for a packed weekend of insights, innovations, and discussions.
As first-time attendees, we were impressed by the quality of conversations, the diversity of topics covered, and the incredible energy in the room.
From cutting-edge tech to crucial tax updates, in this article, we share our biggest takeaways including:
The growing role of wellness in patient care
Navigating multi-state tax complexities and IRS modernization
What the expiration of the Tax Cuts and Jobs Act could mean for you
Happy reading!
AI & Automation: Too Much of a Good Thing?
One of the hottest topics at the summit was the role of artificial intelligence in compounding pharmacies.
While the buzz was undeniable, one speaker even showcased over 30 different AI tools. Many attendees, ourselves included, agreed that less is more.
Tip: Instead of adopting a dozen platforms, start small. Pick one or two tools that directly address your pharmacy’s pain points, and expand from there.
Whether it’s automating documentation, navigating USP-800 compliance, or streamlining operations, there’s an AI solution, but don’t overwhelm yourself trying to implement everything at once.
Spotlight on Methylene Blue
As the GLP-1 wave stabilizes, many compounders are asking, “What’s next?” A potential opportunity generating buzz is methylene blue.
While it's not a GLP replacement, it offers promising margins (reportedly 50%+), requires a prescription, and aligns well with the growing consumer focus on wellness.
Think of methylene blue as a supplement to your offerings, not just a revenue stream but a gateway to engaging younger, wellness-minded patients who prioritize proactive health and are willing to pay for it.
Tax Talk: What Compounders Need to Know
While the APC Owners Summit buzzed with talk of AI, wellness trends, and emerging compounds like methylene blue, one of the most critical areas that pharmacy owners can’t afford to overlook is tax compliance and legislative change.
More specifically, the hottest tax issues for compounders is:
IRS Modernization
Tax Cuts and Jobs Act
R&D Tax Credits and Expenses
Multi-State Tax Compliance Issues
1. IRS Modernization
While there’s chatter about abolishing the IRS, don’t hold your breath.
However, the IRS is undergoing changes, particularly in cleaning up its outdated tech infrastructure.
This is a positive move toward modernization and efficiency.
2. Tax Cuts and Jobs Act (TCJA)
Set to expire this year, the TCJA contains key benefits for pharmacies:
Qualified Business Income (QBI) Deduction:
Many pharmacies still miss out on this deduction due to incorrect classification as “specified Service Trade or Business” (SSTB). Most should qualify.
Section 174 (R&D Expenses):
Even if you don’t claim the R&D credit, R&D-related costs must be capitalized under current law.
This increases taxable income unless reversed.
Expect potential changes here, with bipartisan support for reform.
We expand on this section below
Cash Method of Accounting:
The TCJA expanded access to this method, which lets pharmacies manage taxable income more flexibly.
Losing this would mean a forced return to the accrual method, essentially a tax hike for many pharmacies.
3. R&D Tax Credits vs. R&D Expenses
Pharmacies dabbling in research, like developing new formulations, may be eligible for the R&D tax credit, but hurdles remain:
Must have contemporaneous documentation
Typically need $150K–$200K in qualified expenses
Separate from Section 174 requirements
As mentioned above, even if you don’t claim the R&D credit, R&D-related costs must be capitalized under current law.
Our recommendation: Engage an R&D tax specialist to help assess eligibility and ensure compliance with both credit and expense treatment.
4. Multi-State Tax Issues
If you’re shipping out-of-state, you may have nexus issues.
What do we mean by Nexus issues?
Simply put, Nexus is a term used to describe the connection between a business and state or local government that triggers the requirement to collect and remit sales tax.
It is the minimum threshold of activity that a business must have in a state before it is obligated to collect and remit sales tax in that state.
As compounding pharmacies grow and begin shipping across state lines (whether it’s GLP-1s, pet medications, or wellness supplements) their tax exposure becomes significantly more complex.
It’s a common but dangerous misconception that if you’re not charging sales tax on prescriptions, you’re in the clear, but the truth is more nuanced.
In most states, prescriptions are indeed exempt from sales tax.
However, that does not exempt the pharmacy from filing a sales tax return.
In many jurisdictions, you are still required to report sales, even if the tax due is zero. Failing to do so can result in compliance issues, penalties, and audit risk.
At Sykes & Company, P.A., we use a detailed questionnaire to help pharmacies evaluate these risks.
Remember: states vary widely, and gray areas abound, especially for income taxes.
We actually did a webinar recently with Dotti that explores this topic further.
Final Thoughts: Stay Educated, Stay Compliant
The APC Owners Summit was a valuable reminder that success in compounding isn’t just about great formulas, it’s about operational efficiency and tax compliance.
Whether you’re focused on growth, innovation, or just staying out of trouble with regulators, staying informed is your greatest asset.
And lastly, kudos to our team for making it possible to attend the summit during tax season!
With strong processes and an amazing staff, we’re able to stay agile, even in the busiest times.
Are you ready for the changes ahead?
If you have questions about any of the topics above (AI, methylene blue, tax law updates, or multistate compliance) reach out to us at Sykes & Company.
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