Impact of generic and therapeutic interchange incentives on community pharmacy

The purpose of this project was to estimate the increase in revenues that the average community pharmacy could expect from generic and therapeutic interchange bonuses provided by PAID Prescriptions, Inc.'s Coordinated Care Network. Data from the published literature and conversations with managed care experts and PAID employees were used to develop estimates for best-guess, worst-case, and best-case scenarios. Estimates were based on data from early 1994. It was estimated that the interchange bonuses would increase the average community pharmacy's revenues by an average $105 per year, a $0.55 increase in the dispensing fee. Best-case and worse-case estimates were $227 and $44 for increases in revenues. These were equivalent to $1.19 and $0.23 increases in the dispensing fee. Even with the most optimistic estimates, the total fee paid by the Coordinated Care Network (the sum of the dispensing fee plus interchange bonuses) is much less than the average pharmacy's cost of dispensing a third party prescription.