Dispensing fees

A wholesaler margin is then set on the supplier s price, a pharmacist margin is applied to the wholesaler s price, and a pharmacist dispensing fee is also added, determined by the Pharmaceutical Benefits Remuneration Tribunal. Patients pay the co-payment (and any premiums) to the pharmacist when the PBS-listed medicine is dispensed, with the balance of the cost of the product being paid to the pharmacist by the government. 

Dispensing fees, calculated as a percentage of the cost of the medicines, encourage the sale of... 

The reimbursement rate, or price, for a third-party prescription is based on a reimbursement-rate formula that is specified in the contract between the pharmacy and the third-party payer. The reimbursement-rate formula almost universally consists of two parts the product cost portion and the dispensing fee. The product cost portion is intended to pay the pharmacy for the cost... 

As mentioned previously, the dispensing fee is intended to cover the cost of dispensing a prescription. In actuality, determination of the dispensing fee is rather arbitrary, and the amount of the fee usually is lower than the actual cost of dispensing. For example, a 2007 study reported that the average cost of dispensing per prescription was 10.50 (Thornton, 2007), but... 

Anecdotally, there have been reports of pharmacy closings, late payments, increased administrative burden, and loss of patients. One survey of 22 rural pharmacy owners recently summarized their experiences. Among these pharmacy owners, four had accepted all PDP contracts, but others were more selective in which contracts they signed. The pharmacy owners expressed concern about the low reimbursements by some plans and that signing such contracts would risk financial viability. For example, the best reimbursement rate reported by these pharmacy owners was average wholesale price (AWP) less 10 percent to a low of AWP less 30 percent. Dispensing fees ranged from 1.00 to 4.00 with a median of 1.75 (Radford et al., 2007). 

Comprehensive audits measure overall PBM performance over a 1-year period. Retrospective in nature, all prescription claims are audited to determine whether the product dispensed was covered under the plan design, the person was eligible to receive services at the time of sale, the discounts were applied according to contract, dispensing fees were accurate, copays were applied correctly, and so on. PBM clinical services and rebates may also be included in the scope of a comprehensive audit. 

Repricing audits measure adherence to the contract s financial terms. They require limited data and use an independent source to confirm average wholesale price on the date of service. Discounts are recalculated and compared with the contracted rates, and dispensing fees and copayments are verified on a sample set of claims. Compliance with plan design may also be included in the scope of the audit. 

A dispensing fee (a set amount paid to a pharmacist by the plan administrator per prescription order filled) that is added to the ingredient cost of the medication. This fee covers preparation and labor costs. 

Unlike NHS prescription supply (see Section 3.3.8), the patient or the patient s representative will pay you for the entire cost of the medication (plus a mark-up cost and dispensing fee charged by the pharmacy to cover their costs). Therefore, non-NHS (private) prescription forms do not need to be sent off to the NHS Business Services Prescription Pricing Division (or equivalent) for reimbursement at the end of each month (except with the private prescribing of Schedule 2 and Schedule 3 controlled drugs see Section 6.3.3). 

It is usual to charge patients for the emergency supply. This will comprise the cost of the medication (possibly with a mark-up), plus a dispensing fee and VAT. The charge is there to cover the cost of the medication because, unlike emergency supply at the request of a practitioner, emergency supply at the request of a patient will not involve the subsequent supply of a prescription form. 

For an example, let us consider a drug where the AWP is 60.00. The patient paid 3.00, and the pharmacy will be reimbursed 60.00 less 12%, which equals 52.80 less the 3.00 patient copayment or 49.80 by that state Medicaid agency. In addition, the pharmacy will receive 4.00 as a dispensing fee. 

The federal government has used its position of dominant funder in the prescription market to negotiate prices for medication that historically have been 30-40% lower than in the United States and Western Europe. Wholesale distributors and pharmacists are allowed to add specified mark-ups, and pharmacists also receive a professional dispensing fee resulting in the PBS dispensed price. In 1999, the average PBS dispensed price was 26.35, which equated to 3.65% of average weekly earnings. 

State Medicaid programs reimburse the pharmacist after a drug is dispensed to a Medicaid enrollee (235). States pay a freed dispensing fee and an amount to cover the cost to the pharmacy of the prescribed drug. The median dispensing fee in 1990 was 4.10 (287). 

Where a tariff system based on capitation with dispensing fees is introduced for pharmacists, one should be alert to any subsequent increase in the number of prescriptions dispensed, as pharmacists may find it more profitable to break down a single prescription into two or more dispensing acts, each of which will earn a fee. 

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