Figuring out what to charge cash customers.

Started by Sparda29
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Sparda29

Sparda29

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Working at an independent, there's quite a few cash customers. We don't have a set protocol on what prices to charge the cash customers, it's usually up to the pharmacist.

For example, I just had a patient come in with a prescription for #20 generic Tylenol #3 and #14 generic Augmentin 875. The website where we order our meds from says that we pay $10.00 for a 20 count bottle of generic Augmentin 875 and $5 for a 100 count bottle of generic Tylenol #3.

I ended up charging the patient $12 for the Augmentin 875 and $5 for the Tylenol #3. Think I overcharged/undercharged? In comparison to your independent or your chain?
 
There's a law that you can't bill medicare for a higher amount than how much you charge for cash prices, so just charge however much you bill medicare. If you charge less with cash, you are doing something illegal.
 
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Sparda29 said:
I ended up charging the patient $12 for the Augmentin 875 and $5 for the Tylenol #3. Think I overcharged/undercharged? In comparison to your independent or your chain?
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That's cheap.. I know some retails that charge at least 4 times that amount.
 
All4MyDaughter said:
What business doesn't have a set pricing method for their products? One that would leave Sparda in charge. Shots all around!

Sparda, you blew it with those prices. That's not even break even territory.
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I agree to the OP look up the term Usual and Customary Fees there's even a formula in which to base your rates- I find it very odd that a business doesn't have a system in place.
 
I probably would've charged around 22 dollars for the augmentin and probably 9 something for the tylenol. Thats typically what you're reimbursed from the insurance on that stuff. Btw 10 dollars cost for a 20 count bottle of augmentin is awesome.

Unless its a really cheap generic like lisinopril,metformin, lopressor you need to make at least 9 or 10 dollars.

What kind of system does your pharmacy use? There should be some kind of price table in there.
 
southpharmindy said:
I probably would've charged around 22 dollars for the augmentin and probably 9 something for the tylenol. Thats typically what you're reimbursed from the insurance on that stuff. Btw 10 dollars cost for a 20 count bottle of augmentin is awesome.

Unless its a really cheap generic like lisinopril,metformin, lopressor you need to make at least 9 or 10 dollars.

What kind of system does your pharmacy use? There should be some kind of price table in there.
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I am not at work and can't verify... But I think we would do around 40 for Augmentin and 15 for T3.
 
The rule of thumb I used when (a while ago) I had to price some things in the pharmacy... it's 1.5 times my cost plus another $5. Now I would charge 1.5 times my cost plus additional $10-12 processing fee, probably. But it's hard to say not knowing the overhead costs and typical prescription fill levels and profit or loss from third party scripts. Also, independents tend to get different prices for a generic week from week if it is multisource and they are not tied to a particular manufacturer contract - so to avoid customer confusion, there should be a set price for popular drugs, otherwise it's a huge can of worms when the same things costs different thing to different people on different days.

In any case, I am extremely surprised that a place of business would have no set pricing rules. No wonder they say so many small businesses fail, if business owners are that clueless... 🙄
 
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Augmentin Cost : 7$
Tylenol3 Cost : 1$
Total Cost: 8$

You Charged 17$. ~ 200% markup

Thats way low... no way a pharmacy can operate, pay bills, techs, and especially pharmacists.

Where I work (a grocery chain)

14 augmentin generic = ~45$
20 Tylenol3 generic = ~12$

Total 57$ and we have better buying power than you, so we most likely get it cheaper. about 700% markup

I would look up that law however, and then make a set algorithm to calculate prices.

For example Price=Dispensing fee+(Price per pill)x(markup)+(difficulty to counsel/process)

This would be different for each drug because if you had a x2 markup for each drug,and you dispensed Humira, that would be insane overcharge.

Set up teirs for generics and brands depending on cost.
 
You need to charge at minimum $10 per rx to just break even on dispensing costs. I would think even independents would have some kind of standardized pricing strategies so you won't have to figure it out. At Wags, the T#3 would probably be about $15 and Augmentin 875 about $50.
 
genesis09 said:
You need to charge at minimum $10 per rx to just break even on dispensing costs. I would think even independents would have some kind of standardized pricing strategies so you won't have to figure it out. At Wags, the T#3 would probably be about $15 and Augmentin 875 about $50.
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They should. It's ridiculous not to. We have different price codes that mean different thing. Like "F" is cash pricing for controlled substances. And there is a code for drugs on our "100 pills for $12" list (our version of the $4 list).
 
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npage148 said:
Nys also requires a drug price list by law, are you not using one?

Why is your owner leaving this up to a brand new staff pharmacist?!
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I'm sure he has it somewhere, didn't really tell me where it is.

crazybob said:
The computer software should show you right away.
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Yeah, the computer system said to charge like $80 for 14 generic amox/clav 875 and $20 for 20 generic aceta/cod 300/30. That's kinda too pricey for our customers who are pretty low income.

southpharmindy said:
I probably would've charged around 22 dollars for the augmentin and probably 9 something for the tylenol. Thats typically what you're reimbursed from the insurance on that stuff. Btw 10 dollars cost for a 20 count bottle of augmentin is awesome.

Unless its a really cheap generic like lisinopril,metformin, lopressor you need to make at least 9 or 10 dollars.

What kind of system does your pharmacy use? There should be some kind of price table in there.
Click to expand...

Both were generics. We have like 5 shelves for all the brand names we carry and like 40 shelves for the generics.

We use Micromerchant (Prime Rx).

amox said:
Augmentin Cost : 7$
Tylenol3 Cost : 1$
Total Cost: 8$

You Charged 17$. ~ 200% markup

Thats way low... no way a pharmacy can operate, pay bills, techs, and especially pharmacists.

Where I work (a grocery chain)

14 augmentin generic = ~45$
20 Tylenol3 generic = ~12$

Total 57$ and we have better buying power than you, so we most likely get it cheaper. about 700% markup

I would look up that law however, and then make a set algorithm to calculate prices.

For example Price=Dispensing fee+(Price per pill)x(markup)+(difficulty to counsel/process)

This would be different for each drug because if you had a x2 markup for each drug,and you dispensed Humira, that would be insane overcharge.

Set up teirs for generics and brands depending on cost.
Click to expand...

700% markup, wtf? Holy ****, ripping off the customers. I thought the idea is to give the cash customers a break while ripping off the insurance companies and PBMs.
 
Sparda29 said:
I thought the idea is to give the cash customers a break while ripping off the insurance companies and PBMs.
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Look into that U&C pricing thing. You can't do that.

That's the reason a lot of chains have those "savings club memberships" that people buy. That way they can have low cash prices for "members" but still maintain a higher U&C that they bill insurance with.
 
Those prices are dirt cheap.

Costco publishes prices on a lot of their drugs online, and the website where you get your drugs may suggest a price too. McKesson does, but you have to have it configured correctly.

If you want to charge cash patients less than Medicare without getting into trouble, you can sign them up for a discount card. Good in cases where patients probably can't afford it, bad for the pharmacy to do as a matter of course.
 
Ackj said:
Look into that U&C pricing thing. You can't do that.

That's the reason a lot of chains have those "savings club memberships" that people buy. That way they can have low cash prices for "members" but still maintain a higher U&C that they bill insurance with.
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I gotta figure out this U&C and AWP stuff. The way I was figuring it was, look up the invoice cost for the whole bottle, calculate how much that equals to for how much we are dispensing, and add on a couple of bucks to that. Hell, at CVS I remember if a customer was a cash customer and wanted 4 capsules of Amoxicillin to take prior to a dental procedure, the ******ed computer would charge them $9.99 automatically. Here, we probably charge them like $0.50.

I don't think this owner really tries to make much money off of his cash customers, for him, the majority of the business is Medicare/Medicaid.

Another thing I noticed different from working at CVS is, he doesn't keep every single available NDC# of the drug in the computer system. For example, for a lot of drugs we might be billing the insurance company the NDC# for the Teva generic brand, but the one have in stock at the time as Zygenerics or Mylan or some other generic company.

I'm guessing these business practices are probably one of the reasons why his little 10 feet X 7 feet pharmacy department is the dominant pharmacy in the area. One time a Duane Reade who is like 1 block over called to see if we have something in stock, I asked the pharmacist how many scripts/day they average, he said it was like only 100 scripts.

I even had an interview at an independent pharmacy 4 doors down from where I'm working now, and they only do 50 scripts/day while the one where I work averages 450 scripts/day.
 
Okay, first of all billing one NDC, and filling with another is ILLEGAL.

Secondly.....

I hate seeing cash customers get screwed on prices by a lot of the bigger chains. Chains who charge cash customers ~40-50 for augmentin, when the insurance company only reimburses ~18-19 INFURIATES me. All the insurance company does is negotiate a lower price....however, people without insurance are usually the ones who really need the help of a "negotiator", since they probably don't have a job or are underemployed.

Consumer Reports recently ran an article stating that independents are siginificantly cheaper than CVS, Walgreens, Rite Aid, etc. for cash paying customers. I'm glad to see this. I recently called for a price quote on generic Plavix at CVS. They quoted me around $170. Acquisition at my pharmacy is just over $3. This is lunacy
 
npage148 said:
This just from incompetent to fraud-tastic!
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You have no idea how much fraud/illegal activity goes on at some of these independents. Yet, they stay in business. I once was at an independent where they dispensed chloramphenicol tabs (imported from Russia) OTC if you were Russian and asked for some antibiotics. Also I've heard of places billing medicaid for very expensive drugs without ever dispensing them, while the patient gets a free gift (of course of lesser value than the amount billed for the medication) for the pharmacy being able to use the patient's insurance. Also, I've heard of optometrists billing for bifocal or trifocal lenses when only dispensing single-vision. The optometrist then lessens the copay that the patient has to pay so they keep coming back to the business.
 
bacillus1 said:
You have no idea how much fraud/illegal activity goes on at some of these independents. Yet, they stay in business. I once was at an independent where they dispensed chloramphenicol tabs (imported from Russia) OTC if you were Russian and asked for some antibiotics. Also I've heard of places billing medicaid for very expensive drugs without ever dispensing them, while the patient gets a free gift (of course of lesser value than the amount billed for the medication) for the pharmacy being able to use the patient's insurance. Also, I've heard of optometrists billing for bifocal or trifocal lenses when only dispensing single-vision. The optometrist then lessens the copay that the patient has to pay so they keep coming back to the business.
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That I've heard a lot of, especially in NY.

I'm guessing the way the NDC# switch works is, you're charging the insurance company for a more expensive generic, but when you order drugs from your source, you're only ordering the cheapest generics. 😕😕 I would have thought that insurance companies know this and reimburse the same price for a generic, regardless of manufacturer.

The system does not have a "scan bottle" or "pill image verification" check for the pharmacists. Verification here is 100% old fashioned. This is where I wish I had a computer at the verification station. A lot of times, the techs are the ones entering the refills, so when I verify, I don't get a chance to review the profile since, no computer at verification. I've caught quite a few duplications in therapy but I'd probably catch more if I had a computer at verification (stuff like patient is on metformin 1000 mg BID but they are also getting Janumet.

And, how would you find out how much Medicare pays for a certain drug?
 
bacillus1 said:
You have no idea how much fraud/illegal activity goes on at some of these independents. Yet, they stay in business. I once was at an independent where they dispensed chloramphenicol tabs (imported from Russia) OTC if you were Russian and asked for some antibiotics. Also I've heard of places billing medicaid for very expensive drugs without ever dispensing them, while the patient gets a free gift (of course of lesser value than the amount billed for the medication) for the pharmacy being able to use the patient's insurance. Also, I've heard of optometrists billing for bifocal or trifocal lenses when only dispensing single-vision. The optometrist then lessens the copay that the patient has to pay so they keep coming back to the business.
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And yet people will blame the majority of fraud on the 'welfare queens' because it plays to their underlying prejudices
 
bacillus1 said:
You have no idea how much fraud/illegal activity goes on at some of these independents. Yet, they stay in business. I once was at an independent where they dispensed chloramphenicol tabs (imported from Russia) OTC if you were Russian and asked for some antibiotics. Also I've heard of places billing medicaid for very expensive drugs without ever dispensing them, while the patient gets a free gift (of course of lesser value than the amount billed for the medication) for the pharmacy being able to use the patient's insurance. Also, I've heard of optometrists billing for bifocal or trifocal lenses when only dispensing single-vision. The optometrist then lessens the copay that the patient has to pay so they keep coming back to the business.
Click to expand...

Does anyone really wonder why independants get targeted for more audits and inspections?
 
Trust me, independents are not the ones ruining pharmacy though. It's the McDonald's of pharmacies so eloquently called CVS and Walgreens
 
Sparda, I wouldn't post these kind of things...you don't want to be the reason your boss gets in trouble.
 
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Doctor M said:
You move to managed care and you are already being sterotypical?? I wish someday someone would uncover the fraud that PBMs pull. 🙂🙂🙂🙂
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NO!!!!! I am just saying the type of things discussed above usually do not happen at a corportae retail chain.

No fraud to uncover at the PBM's! We want our piece of the pie too!😱
 
You can not undermine you U and C charges. According to all provider manuals, a pharmacy may not undermine that price. If you do, you are breaching your contract. Then again, PBMs breach their contracts everyday, difference is, we are tiny tiny pieces of poo poo in the grand scheme of things...so We breach a contract, we get sued or terminated, PBMs breach, we go about our lives. So sad...
 
MountainPharmD said:
NO!!!!! I am just saying the type of things discussed above usually do not happen at a corportae retail chain.

No fraud to uncover at the PBM's! We want our piece of the pie too!😱
Click to expand...

But you already got you piece from the spread, rebates, audits, contracts etc etc, why you coming after me man!!!!!!
 
KARM12 said:
Sparda, I wouldn't post these kind of things...you don't want to be the reason your boss gets in trouble.
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A PBM probably does not care over a few prices. In they ever ask, the pharmacy probably has a savings programs of some sort where he probably charged the pt 1 dollar for a lifetime membership...
 
I can honestly say, I never learned any of this business and pricing law **** in pharmacy school.

When someone above said that you cannot charge a cash patient a lower price than what you bill Medicare, that was honestly the first time I ever heard of that. When the owner is around, and a cash customer is complaining about a price, I usually hear him tell the cashier, "give him/her a discount".

Hell, he even gives employees a discount on Rx and OTC items. Employees only pay like $1 above invoice cost.
 
Sparda29 said:
I can honestly say, I never learned any of this business and pricing law **** in pharmacy school.

When someone above said that you cannot charge a cash patient a lower price than what you bill Medicare, that was honestly the first time I ever heard of that. When the owner is around, and a cash customer is complaining about a price, I usually hear him tell the cashier, "give him/her a discount".

Hell, he even gives employees a discount on Rx and OTC items. Employees only pay like $1 above invoice cost.
Click to expand...

You cannot give discounts on copays or cash prices. What you can do, is have a list of prices and have them join the "club" so that they pay a discounted price. You should also offer credit. Keep a record of all credit offered on copays and products.
 
Sparda29 said:
That I've heard a lot of, especially in NY.

I'm guessing the way the NDC# switch works is, you're charging the insurance company for a more expensive generic, but when you order drugs from your source, you're only ordering the cheapest generics. 😕😕 I would have thought that insurance companies know this and reimburse the same price for a generic, regardless of manufacturer.
Click to expand...
For the most part, that is true with MAC pricing. If you dispense $1/tab teva or $2/tab watson, you're still getting reimbursed $1.10/tab. One way you lose money, the other way you make a small amount, but in no case are you ripping them off.

But even if it's not insurance fraud, it's still probably misbranding.
 
Ackj said:
For the most part, that is true with MAC pricing. If you dispense $1/tab teva or $2/tab watson, you're still getting reimbursed $1.10/tab. One way you lose money, the other way you make a small amount, but in no case are you ripping them off.

But even if it's not insurance fraud, it's still probably misbranding.
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It is misbranding, and it complicates matters is there is a recall.

In terms of fraud, there are bigger issues like filling for brand but dispensing generic.
 
All4MyDaughter said:
It is misbranding, and it complicates matters is there is a recall.

In terms of fraud, there are bigger issues like filling for brand but dispensing generic.
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How about them companies that sell their branded product to generic companies and sell it as a generic product...How about that for fraud. prevacid, protonix, effexor XR..etc etc...what a rip off!
 
All4MyDaughter said:
I judt noticed this on Sat about generic Actos...it IS the brand.
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It is a scam. All of it. I am convinced. Call me crazy, call me cynical...but you are giving a branded product a new NDC, a generic NDC, so you can still sell it. While this whole time we have been selling brand Actos ad brand prices and here comes a generic company selling Brand actos at generic prices. All legal. Just messed up in my eyes.
 
Doctor M said:
It is a scam. All of it. I am convinced. Call me crazy, call me cynical...but you are giving a branded product a new NDC, a generic NDC, so you can still sell it. While this whole time we have been selling brand Actos ad brand prices and here comes a generic company selling Brand actos at generic prices. All legal. Just messed up in my eyes.
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I see nothing wrong with the brand manufacturer selling their product as a generic at a reduced cost, what I don't understand is why the first approved generic is given 180 days exclusivity.
 
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You can't think about the profit made on a per rx basis. Bringing customers into your store, and perhaps continued business is often worth the gamble/investment. You sold them their drugs very cheap. 25 minimum on Augmentin,15 on the Tylenol #3. A good point of reference I always use is Costco. Their website shows cash prices for card carrying members. I had been delivering amazing customer service and building long-lasting relationships by insinuating a customer paying cash (and some drugs aint cheap folks) call Costco and ask me to price match, but I think I might do a Costco+5-10 bux or +20% or something deal in the future instead of an outright match.

A lady paying ~80 bux cash for #90 clonazepam 0.5's with us was able to get the same deal from Costco for 30 bux, so I matched and kept a customer and pleased.
 
Doctor M said:
It is a scam. All of it. I am convinced. Call me crazy, call me cynical...but you are giving a branded product a new NDC, a generic NDC, so you can still sell it. While this whole time we have been selling brand Actos ad brand prices and here comes a generic company selling Brand actos at generic prices. All legal. Just messed up in my eyes.
Click to expand...

Let's not forget that single source generics are often the best profit maker for a pharmacy.
 
Dr Wario said:
I see nothing wrong with the brand manufacturer selling their product as a generic at a reduced cost, what I don't understand is why the first approved generic is given 180 days exclusivity.
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Because it says prevacid on it. Thats why i see it as wrong. A given NDC was given for prevacid. now the NDC has changed and it is marketed as a generic. To me, it is prevacid. Either way, it is legal and it is done all the time. id be shocked to see Roxicodone inside an oxycodone bottle one day 🙂
 
RickRossPharmD said:
Let's not forget that single source generics are often the best profit maker for a pharmacy.
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Huh?? No, not at all. If anything, a single source generic is still highly priced and many PBMs reimburse at AWP brand pricing. The best time to make money is when that single source generic loses exclusivity. When Zyprex and Geodon lost exclusivity, that is when pharmacies win. Single source generics are a pain in my ass.
 
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