A COMPARISON OF DISPENSING FEES BASED ON INDIANA COMMUNITY PHARMACY'S ACTUAL MARKUPS ON PRESCRIPTIONS WITH FEES BASED ON THEIR PRESCRIPTION DEPARTMENT OPERATIONAL COSTS PLUS AN EQUITABLE RETURN ON INVESTMENT
Abstract
The goals of this study were to: (a) develop a methodology to convert financial information and pharmacy operational data into a calculated fee; (b) determine from a stratified sample of pharmacies each pharmacy's calculated fee and the average markup charged self-pay consumers, and identify those demographic variables that account for any differences, if any, between pharmacies; and (c) evaluate the financial implications of the calculated fees and average markups. The inference population was 1,221 Indiana community pharmacies and it was stratified based on three variables: (1) Medicaid prescription volume; (2) pharmacy ownership; and (3) urban/rural area. A stratified random sampling procedure was used to select a sample of 80 pharmacies. Each pharmacy's average markup was determined by analyzing recorded information from 200 prescriptions. Each pharmacy's calculated fee was determined by first analyzing the pharmacy's reported expenses and then calculating an equitable return on investment. The unweighted average markup and unweighted calculated fee were $2.96 and $3.06, respectively. The weighted average markup and weighted calculated fee when Medicaid prescription volume was the weighting factor were $3.29 and $2.89, respectively. The weighted average markup and weighted calculated fee when total prescription volume was the weighting factor were $2.95 and $2.79, respectively. The findings of this study showed a pharmacy's average markup and calculated fee were not related. Pharmacy ownership was found to be the underlying variable affecting average markup which was $0.52 higher for independent pharmacies than it was for chain pharmacies. Total prescription volume was found to be the underlying variable affecting calculated fee. A quadratic regression equation showed a negative relationship between the calculated fee and total prescription volume variables.
Degree
Ph.D.
Subject Area
Pharmaceuticals
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