Saturday, August 9, 2014

Business Basics 101

Here's a gem of wisdom for you if you want to start your own business.

You have to make a profit

to stay in business.

Pretty simple concept, right?

Well, guess what? When the government gets involved, they apparently expect you to overlook this simple concept.

Here's the reimbursement information for a recent prescription at my pharmacy. 

What this shows is that this tube of ointment cost our pharmacy $378.94. I have no doubt that this involves some sort of mistake with The Authorities at Goofmart management. That's way too expensive and a story for another day. Let's say it should only cost us $15. Even at that, our reimbursement was so low that we'd be losing money.

Here's the best part. Honey Badger (MEDICAID) don't care! It doesn't matter what your profit or loss is on a medication, BY LAW you're supposed to fill it. So there's one of two things going on here.

1. You are supposed to eat the loss and live with it, compromising basic business principles and putting your pharmacy business at risk.


2. You're supposed to make it up by charging your other patients NOT ON MEDICAID more to make up for it. In that case it is a "hidden" tax.

Either way, that's pretty damn creepy. 

Another recent post about Medicaid is found here: LINK


Anonymous said...

Don't forget that that negative profit is also paying you to counsel that patient on the medication. That counseling is required by law so not only are you losing money on the actual item you are paying them to perform a professional duty. Sweet deal for the government. Not so much for pharmacists everywhere.

Anonymous said...

I don't think it's a mistake on Goofmart's part. Last week a local independent pharmacy called us and asked if they could sub something else for a patient's clobetasol and said something about either $278 or $378 cost issue, I don't remember exactly because it wasn't something I was trying to retain in my memory but the pharmacist was very specific about the number, she had it down to the penny just like you did here. I think we subbed it with betamethasone, but whatever we did must have been satisfactory because we never heard anything further. Of course I'm sure that wouldn't work with every patient.

Anonymous said...

A check of GoodRX in my area shows prices running anywhere between about $160 and almost $400. If it should only cost the pharmacy about $15, then there seems to be some price gouging going on, and I understand why Medicaid would cap it, although I agree you still should make some kind of profit.

Pharmacist Steve said...

Be interesting to know if the PBM charged the state based on the $378 cost. I would bet that the cost of the meds that are charged to the final payor is based on TODAY'S cost of the med not was it was 30-60 days ago.

Anonymous said...

New practice for big pharma. If it is a generic and you are the only ones that make it you can charge brand name prices for it. See also allopurinol, doxycycline, etc. The PBM's look the other way like they do not know it is happening and do no update the MAC to pay pharmacies correctly. Wish we could run our business that way.