Estimating a reasonable reimbursement for community pharmacies in third-party programs

Area of Science:

• Health Economics
• Pharmacy Management
• Pharmaceutical Policy

Background:

• Third-party prescription programs significantly impact community pharmacy revenue.
• Current reimbursement levels may not adequately cover dispensing costs and ensure profitability.
• Understanding optimal reimbursement is crucial for pharmacy sustainability.

Purpose of the Study:

• To determine the necessary reimbursement level for community pharmacies to achieve a reasonable profit.
• To analyze the financial viability of dispensing prescriptions through third-party programs.

Main Methods:

• Conducted a comprehensive literature review on pharmacy reimbursement.
• Surveyed community pharmacies in Virginia to gather data on operational costs and profit margins.
• Analyzed dispensed prescription data to identify key cost drivers.

Main Results:

• The study identified an average reimbursement requirement of Average Wholesale Price (AWP) minus 15% plus a $6.95 dispensing fee.
• This calculated reimbursement rate is substantially higher than typical rates offered by most third-party prescription programs.
• Current reimbursement structures are likely insufficient to guarantee a reasonable profit for many pharmacies.

Conclusions:

• Community pharmacies require significantly increased reimbursement rates to ensure financial sustainability.
• Policy adjustments in third-party prescription programs are necessary to reflect the true cost of dispensing.
• Implementing adequate reimbursement models is essential for maintaining access to community pharmacy services.