I’ve been ruminating a bit more on the whole notion of physician dispensing. Recently, Audra Dudenhoeffer, Marketing Manager for Physicians Total Care (
Now here’s the real kicker. The net profit margin on prescription drugs in a retail pharmacy is less than 3 percent. I spoke with Chrissy Shott of the National Association of Chain Drug Stores (NACDS). In their soon to be released annual survey, they will report that the average prescription cost $64.86 and the average net profit was $1.86. Over at
In Dudenhoeffer’s comments, she addressed the negatives that I identified in my original post:
1. One of her arguments is the amount of staff time – nurse’s time, specifically – taken up by calls from pharmacies because of poorly written scrips, to try to switch to another drug that the pharmacy is getting a bonus paid, and so on. If staff time is being taken up by so many pharmacy phone calls, the problem is with the practice. Fix the problem – electronic print outs scrips, check formularies first. The “costs” cited are interesting, but I question whether these are, in fact, additional costs to the practice or opportunity cost. Big difference.
Adding another service to the staff is a distraction and inefficient. There is a “start and stop” syndrome of stopping one task to go to another and then back. While handling a scrip fulfillment, the staffer can’t be getting the next patients into exam rooms and assisting the physician with the patients they are working with.
Some practices, apparently, will hire a pharm tech to dispense drugs. Now you?re really in the pharmacy business.
2. The vast majority of physicians possess the potential to add over $50,000 annual income through point-of-care dispensing.
Ok – but I come back to whether a serious dispensing program is a poor strategic fit and a distraction to the practice;
3. You can be reimbursed through the prescription drug programs: but you just have to go through the process of approval and contracting.
4. Four very big states – TX, NY, MA, and NJ – apparently prohibit dispensing. All I was suggesting was that state laws have to be considered. Here are a lot of physicians who can’t do it. Next.
5. The AMA supports the right of physicians to dispense. I’d be more concerned about what patients will think.
6. This argument sidesteps my point. I’m sure that the software from
7, Physicians who dispense make instantaneous therapeutic substitutions that cannot be done in a retail environment (a pharmacist has to call the doctor and get the script changed). This cuts the overall cost of medications by almost 50%.
My question: Actually, they claim that greater use of generics saves the health care system lots of money. This does not reduce costs to the practice nor, necessarily to the patient. If there are generics and they are appropriate for the patient, write a generic in the first place.
Lastly: if the patient is on a chronic medication, they’re a fool to buy through a retail pharmacy. Mail order is the only way to go, and in some place, it really is the only way it will be paid for. Mail order is easy – at least Medco is.
The take away: just because you can do something doesn’t mean you should. Many of the arguments advanced by some of the dispensing service companies are based on very shaky suppositions and assumptions. Sometimes the problems a dispensing program seeks to avoid are really problems in the practice operations that still need to be fixed, e.g. poorly written prescriptions.
OK, look at it. But look at it with eyes wide open. Realize that you really are entering a new service – this isn’t something that you slip in between down times. You need to address staffing, patient flow, space, strategy, and do a careful financial analysis and projections. Get help if you need it.