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The cost of pharmaceutical compounding…

“Ya’ll charged me $45, and the pharmacy up the street said they were gonna charge me $400!”

When searching for a pharmacy that compounds; ask the pharmacist if they’re able to file a claim for the prescription under the patient’s pharmacy benefits policy.

If a member of the staff states that the pharmacy can not file the claim under the pharmacy benefits ask the following questions:

  1. Did you attempt to file the claim under the benefits policy?
  2. If an attempt was made to file the claim on the policy; why was the claim rejected? What were the rejection codes?
  3. When the claim was filed under the benefits plan did the rejection message include a phone number?

A typical rejection for a compound claim is ingredient(s) non covered/ product service non covered. The phone number listed on the rejected claim can be used by the prescriber or pharmacist to call on your behalf and gain additional information as to why the claim rejected and if additional paperwork can be submitted on the patient’s behalf to get the compound covered under the patient’s benefits policy.

In regards to pricing — the things that a pharmacy takes into consideration when setting a price are as follows:

  1. Cost of Drug
  2. Cost of Suspending Agents/Flavorings/Preservatives
  3. Compounding Dispensing Fees — this factors in the overhead of producing the final product (labels, tech time, gloves, equipment, etc.)

From there, the pharmacy calculates pricing based on the following principles:

  1. The “Breakeven Price”— this is the price that can be set where the business loses no money.
  2. The price markup factors — Imagine if the cost of producing the product is $5. The business can then say their markup factor is 2. A markup factor of 2 means the selling price is $10. Gross profit margin can then be calculated as (Revenue-Cost)/Revenue. Thus, profit margin in the above scenario is 50%.
  3. Supply and demand — The greater the supply the less the demand and the less supply garners greater demand. Price therefore can shift up and down based on conditions in the market.
  4. Drug shortages in the market can induce price increases.

Be an informed customer at your community pharmacy. Asking questions about compounding can lead some of your pharmacist friends to talk your ear off.

Questioning your pharmacist on this topic will provide that pharmacist with an opportunity to teach, learn, and build trust with a member of their community.

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Sam Blakemore is the Pharmacy Manager of Peds Rx Pharmacy Solutions. Connect with him via: LinkedIn

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