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

N V Carroll1

  • 1School of Pharmacy, Medical College of Virginia, Virginia Commonwealth University, Richmond, USA.

Managed Care Interface
|May 27, 1999
PubMed
Summary

Community pharmacies need higher reimbursement rates to achieve reasonable profits on prescriptions. An average reimbursement of average wholesale price less 15% plus a $6.95 dispensing fee is recommended for third-party prescription programs.

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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.

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  • 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.