Dispensing F.A.Q.
By now, you must have many additional questions you want answers to. Let’s try to answer some of the most common questions.
Dispensing
- Is This Legal?
- How much time will it take to dispense?
- Will dispensing cause the physician's malpractice insurance to rise?
- Many physicians have never heard of this before. Why aren't more physicians doing this?
- Will dispensing upset local pharmacists?
- How does the physician determine what price to charge a cash payer?
- Can the physician really earn $50,000 or more each year by dispensing?
- What will it cost to get the physician starting to dispense?
- Is dispensing the same as being a pharmacy?
- Is dispensing time consuming?
- Can someone else besides the physician assist with dispensing?
- Which types of practices are right for dispensing?
- If a patient has a prescription card, doesn't it make financial sense to be reimbursed by the insurance company?
- Can the physician choose any drug he wishes to sell including a name brand drug?
- Why are antibiotics repackaged in a separate building?
- How will dispensing help the doctor's patients?
- Will in-office dispensing help Medicare and Medicaid patients?
- How will dispensing help the physician comply with the formularies from top insurance companies?
- What if a physician wants to carry and sell maintenance drugs?
- Where are the medications stored?
- How do you determine the initial inventory?
In 44 out of 50 states, it is absolutely legal for physicians to do point-of-care dispensing. The other states restrict what physicians can do but even those states still can dispense. The states that are restricted are:
- New Jersey
- New York
- Massachusetts
- Montana
- Texas
- Utah (only state where it is illegal)
back to topHow much time will it take to dispense?
Adding point-of-care dispensing actually can save time. Hours each week are wasted by calling pharmacies as well as taking pharmacy calls. It takes less than one (1) minute to dispense medication to a patient whether the physician uses the manual or computerized tracking systems.
It may take some coaching from you initially to get the entire staff onboard but they'll soon find out how simple, fast and easy it is. You may want to suggest to the physician to offer some sort of incentive for the office staff to put the system in place.
Will dispensing cause the physician's malpractice insurance to rise?
It shouldn't. A physician's medical license mandates that they are allowed to dispense medication and frequently pass out drug samples already. It should make no difference whether or not they get paid to do so as far as malpractice insurance is concerned. If the physician is concerned, suggest contacting their medical malpractice insurance company.
Many physicians have never heard of this before. Why aren't more physicians doing this?
20 years ago, how many people heard of cell phones? Not too many. Ironically, almost every physician years ago dispensed medication to their patients. Whether the physician decides or decides not to dispense at this time, we think all physicians will be dispensing one day. It is a sign of the times. Change occurs in every industry and the reduction of insurance reimbursements and increasing costs are forcing physicians to find alternative sources of revenue to enhance their practice. Dispensing medication is a simple and easy income solution.
Many physicians will decide to wait to dispense but many will not wait once they see and hear all of the benefits point-of-care dispensing offers the patient and the practice. You have an incredible opportunity to be a first mover and give physicians the opportunity to be one of the first adopters.
Will dispensing upset local pharmacists?
It shouldn't. Many of the drugs that will be prescribed by the physician will still be filled by a pharmacist. A successful formulary typically consists of 20 to 25 drugs and they are mostly generic. When the need arises for something other than what is in stock, the physician will send the patient to the pharmacy. Physicians will dispense for primary or acute care and typically although some family practice and internal medicine physicians do provide maintenance drugs for their patients.
How does the physician determine what price to charge a cash payer?
Simple. Do what any price shopper would do. Shop. Call the local pharmacies and find out what the cost of the medicine is. Very often, you can go onto their website and find out. Physicians are very busy and you should know your local markets. Contact your local pharmacies yourself and find out. You'll only have to do this a couple of times and thereafter from time to time.
For patients that have prescription cards, we advise the physician to charge whatever the co-payment is for a generic drug. Often, the physician can charge an extra dollar or two simply because of the ease and convenience of obtaining the prescription at the point of care. What patient wouldn't want that?
Ultimately, it is the physician who decides what to charge to their patients.
Can the physician really earn $50,000 or more each year by dispensing?
Yes, but that all depends on the size and type of practice as well as the number of patients seen each day. Based upon averages, the average physician will see 100 patients and write 100 prescriptions or more each week. Asking the physician simple questions such as how many patients they see per day or per week will quickly give you an idea how much money they could be earning by dispensing. Wholesale cost per drug and what the physician charges the patient is the final determining factor on calculating potential earnings. Most of the drugs will cost the physician less than $8.00.
What will it cost to get the physician starting to dispense?
With a minimum order, other than the cost of that initial supply of drugs, nothing. In fact, in most cases, the physician will pay their invoices net 15 days or by credit card so there really shouldn't be any out of pocket cost at all. Shipping is also free if the order contains just $250 in medicines.
Is dispensing the same as being a pharmacy?
No. Physicians may only distribute pre-packaged medicine. We recommend the physician typically stock only 20 to 30 of the most commonly prescribed generic medication. In reviewing the prescribing patterns the norm is usually 80% of all prescriptions come from about 20% of the total number of drugs that the physician prescribes. Remember, the formulary is the key to a successful dispensing system.
Not at all. Whether the physician uses the manual or computerized dispensing tracking systems, the entire process takes less than one minute. The medication is already pre-packaged, labeled and ready to dispense. It's simple, easy and very profitable.
Can someone else besides the physician assist with dispensing?
That all depends. State by state rules may vary but the office staff generally can help in preparing and dispensing prescriptions. Very large practices and clinics may want to hire a pharm-tech to streamline the process.
The involvement of the staff is completely up to the physician as long as there are no state restrictions. Many offices delegate dispensing to the nursing staff.
Which types of practices are right for dispensing?
Offices that prescribe acute-care medications which treat conditions that are cured by a single course of therapy. Patients are usually sick or uncomfortable and appreciate the convenience of not having to make a trip to the pharmacy. There's also the confidentiality aspect of in-office dispensing. Medications include antibiotics, pain, discomfort and anti-inflammatory drugs.
Some of the types of practices include:
- Family Practice
- Occupational Medicine / Workman's Comp
- Pediatrics
- Urgent Care
- Minor Emergency
- Walk-In Medical Centers
- Dermatology
- Dentists Such As Oral And Maxillofacial Surgery
- Plastic Surgery
Physicians dispensing medicines to Workman's Comp patients offer the best income potential to both the practice and to you, the consultant.
No. Most if not all of the drugs in a dispensing program are generic drugs and the physician is always better off taking the cash from the patient. We suggest taking whatever the generic copay is on the card which today is around $15.00. If the physician were to turn in the drug for reimbursement, he could be paid significantly less. Prescription drug card programs limits the profit to around a $2 - $3 dispensing fee just like a retail pharmacy.
For practices that have a significant number of patients which they feel will only use their drug cards, to do offer an adjudication program called Billing Scripts. Also, some states, like Florida, require dispensing physicians to adjudicate all dispensed medications.
Can the physician choose any drug he wishes to sell including a name brand drug?
Sure but statistically, 93% of all drugs are included in a formulary of less than 250 drugs. With thousands of drugs to choose from in different strengths and quantities, the key to a successful formulary is picking out which drugs move fast and make the most profit. The reality is the physician over time will fine-tune the formulary to what makes the most sense for the practice. The physician may purchase some name brand drugs that cannot be obtained generic but in most cases, the dispensing program will be mostly generic medications. Minimum order requirements would apply to items/sizes not ordinarily stocked by the re-packager.
The computerized dispensing system provides detailed reports to help the physician choose the drugs that are the best choice for the practice.
Why are antibiotics repackaged in a separate building?
Penicillin and cephlasporin contamination of non antibiotic drugs cause up to 50% of all drug reactions in the US according to the FDA. One unit of penicillin is invisible to the eye and can cause anaphylactic shock to a sensitive patient. It is virtually impossible not to get a drug that is not contaminated with penicillin/cephlasporin pore particles. Not only are antibiotics repackaged in another building but the rooms have negative airflow preventing antibiotic particles from escaping.
How will dispensing help the doctor's patients?
Patient convenience is one big reason. Patients appreciate receiving medications in-office and avoid traveling to the pharmacy and waiting for their prescription to be filled. Some pharmaceutical chains build in up to a 45 minute wait to fill a script, encouraging the patient to make impulse buys while they wait. Increased compliance is another reason. 30% of all prescriptions in the US never get filled, for whatever reason. Why? Maybe the patient hates going to the pharmacy! Every patient loves in-office dispensing. Patients will often save money by obtaining their prescription at the doctor's office verses the pharmacy. Then there is the confidentiality of receiving their medication at the medical office.
Will in-office dispensing help Medicare and Medicaid patients?
New enhancements with Medicare may diminish the value of in-office dispensing to those patients depending upon the prescription plan they choose. Since most of the drugs the physician would be dispensing are low-cost generic drugs, selling generic medications for just a few dollars above cost could still create benefit for the patient and the practice. Most elderly patients have a hard time getting around. Some use public transportation and may have to take a bus or walk to the nearest pharmacy to fill a prescription. In-office dispensing would eliminate that extra trip. Furthermore, up to 30% of prescriptions nationwide go unfilled. Filling the prescription in the office will positively affect the physician's control over outcome management.
If a practice has a significant percentage of these kinds of patients, we do offer an adjudication program called Billing Scripts to adjudicate claims.
How will dispensing help the physician comply with the formularies from top insurance companies?
Formulary compliance is a very important issue. Most doctors dispense "free samples" of brand name drugs given to them by their local pharmaceutical rep and then write a prescription for that expensive drug. This sample mentality has caused the total cost of healthcare to increase considerably.
By implementing a successful in-office dispensary, the medical office will significantly reduce the at-risk formulary compliance amount considerably. If the physician had to dispense an expensive name brand drug, he would want to purchase that drug from us and sell it to the patient verses writing the prescription. We have been told that there is at least a $20 differential in cost between a formulary and a non-formulary drug, per script. E.g., if the physician were to dispense a formulary drug purchased from us for $30.00 and sold to the patient for $40.00, he not only would make a $10.00 profit on the differential between wholesale and retail but would also save $40.00 because that script would never be charged to his risk-pool! If the physician was at a 100% risk for formulary compliance, he would realize a $50.00 profit per script.
What if a physician wants to carry and sell maintenance drugs?
Generally, in-office dispensing works best for an initial prescription. There are some physicians who are quite successful with maintenance drugs too such as internal medicine and family practice.
Where are the medications stored?
About half of the physicians put the medications in the same place as they now keep their samples. To be compliant with FDA and DEA regulations, the physician needs a locked cabinet or drawer. If the physician is planning on carrying controlled medication (narcotics), they must be stored behind a double lock.
A simple solution is purchasing an inexpensive cabinet from either an office supply or hardware store.
How do you determine the initial inventory?
The initial drug-dispensing inventory is determined in cooperation with the physician and the medXsales representative. A drug formulary information list is available with the top prescribed drugs as well as specific formularies used by specialized practices to help determine the best fit. Once the physician has made his initial choice of drugs, our proposal department will generate a quote for review and execution. As time goes by, the physician's ordering pattern will change based upon profitability and prescribing practices.