$4 prescriptions
Pharmacy Chick was internet surfing the other day when she came upon a little news item that yet another major pharmacy and grocery chain was joining the ranks of the apostates and offering the $4 prescriptions on “over 300 drugs”. (bear in mind that warfarin 1,2, 2.5,3,4,5,7.5,and 10mg counts as 8 drugs). I wish I could ask WHY?
Pharmacies have never been known for their intelligent decision making. But this one takes the cake. When Walmart ( I can use their name because its widely known) came out with their $4 offering, I bravely hoped that it would be a passing fad. After all, pharmacy amounts to what? 2% of their business? Who cares if they lose money if they can get Mr Joe Six pack to fill his cart while waiting for his $4 loss leader. Target followed later with their own list. Target is a relatively new player in pharmacy. Now its Kroger. I don’t know much about these guys, they aren’t around my neck of the woods. But Pharmacy Chick is hopping on her soap box for a few observations:
95% of my business is already managed by health insurance. These are people whose prices are already fixed and the rate of reimbursement can be called sucky at best. There are a few precious plans that have a fixed generic copay, $10 for example whether its 100 metformin or 2 lorazepam, its 10 bucks. Why are we giving a PBM incentive to cut our reimbursements even more? Ya’ll think they are blind and won’t notice?
The few cash payers that I have left are snatched up by “discount cards”. What the hell is this? Since when can Quickie Lube and Tire offer a card that decides how much I can or cannot charge for my services? Why did we ever accept this from the start? When I used to work for Joe Independent, he refused the cards. “If its not insurance, I’m not takin’ it!” And he didn’t.
Generic medications were the last bastions of profitibility in the pharmacy. If we bought it for $2 and sold it for $22, we made a tidy $20 gross profit, which was still a great deal over the $99 it would have cost the patient for the brand name. I dont care what you say, there isn’t going to be great profit in some of these auxilliary services like vaccines and MTM, they are too labor intensive. It costs a lot of labor to run those services, and in no time, PBM’s will be cutting reimbursements to is for them too. Just wait, you will see. Why are we buying the rope they are hanging us with?
One of my buddies works in a pharmacy that will price match the $4 when asked. He doesn’t get asked very much cuz he works for a discounter that sells stuff pretty cheaply already. The “when asked” part bugs me. If you are gonna do the $4 deal, either do it or don’t, this sliding scale thing bothers me. That means you have to keep track of Ms C who gets her Lisinopril for $4 and Mrs D who gets hers for $12.99. In fact the whole price matching thing gets me going, but that is a blog on its own, suffice to say that Pharmacy Chick thinks that if you are gonna do this $4 nonsense, either jump in or stay out, sticking your toe in only is gonna cause trouble with customers.
Imagine this, cuz I already have: Its a big conference room, BPOP (Biggest PBM On Planet) is having a meeting with all their decision makers. They have, in front of them, the lists of all the $4 prescriptions that all these players are offering. Mr Big in his bigger suit stands up and addresses the group: “Gentlemen, we have a golden opportunity here, these jokers have cut their own throats, and we dont have to do it for them. All we have to do is rake in the profits, because effective at next renewal period, all these meds will be contracted at $3.50. If they can accept $4, they will accept $3.50″ HAHAHA, ” Lets go have lunch, and take the rest of the day off, we didnt’ have to earn it, they just gave it to us.”
Its the beginning of the death of pharmacy, and unfortunately for us, this one can only be classified as “suicide”.
Tags: competitors, national news, pharmacy life, prices, ranting | |