Editorial
Welcome to the first homepage edition of i2P for 2012.
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Volume 2012 Number 1
Health Politics
Neil Johnston: Friends of Science in Medicine
Peter Sayers: Confessions of a Frustrated Pharmacist
James Ellerson: $75.5 million in 5CPA lying idle. Why is it so?EPublications
Cost Price Prescriptions - The Next Step?
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Editing and Researching news and stories about global and local Pharmacy Issues | |
The UK has started a new phase in private prescription discounting – no mark up on the drug and 50% off the dispensing fee.
“Millions could be saved every year if private prescription mark ups are abandoned, according to the Superdrug superintendent pharmacist.
Superdrug will dispense all private prescriptions with no mark up on the cost of the medicine, the company announced this week (3 August 2010).
It is also halving its minimum charge for dispensing medicines to £2.25.”
This type of system was promoted in Australia about 25 years ago as a means of transparently separating the professional labour cost from the actual drug cost.
The thinking was that once patients began to accept the idea of a professional fee, other services could be offered under a similar pricing umbrella.
“Superdrug superintendent pharmacist Martin Crisp said: “In the past privately prescribed medicines have been priced as though any other product. However, we believe that medicines prescribed by a doctor, whether private or on the NHS, should be treated in the same way.
“We are changing our system to be more transparent. There are hundreds of thousands of private prescriptions issued every year and if everyone joined us and changed the way private prescriptions are priced this could save Britons tens of millions every year.”
He added that a prescription shows a real need regardless of how or where it was prescribed.”
In practice, pricing is always elastic and while competing pharmacies may temporarily agree to a cost price system, the race would be immediately on to see what type of rebate could be gouged from a manufacturer.
Another benefit to create value may be the option for manufacturers to compete for depot space i.e. drugs would be left on consignment so that the cost of holding drugs becomes a total manufacturer cost.
This would also put pressure on traditional wholesalers (see article at this link for an expanded overview).
The new Superdrug pricing structure becomes effective immediately and will see reductions of around 16 per cent on products such as Viagra, Malarone and Propecia.
Superdrug is calling on other pharmacies to follow its lead. A spokesman for Sainsbury's said: "We always aim to be competitive on price so will look to at least match Superdrug on the price of these prescriptions."
Earlier this year, Asda announced that it would sell all privately prescribed cancer medicines on a “not for profit” basis, prompting pledges from Superdrug, Sainsbury’s and Tesco to do the same. Asda has previously pledged to dispense private prescriptions for in vitro fertilisation drugs on a not for profit basis.
The cost price dispensing system obviously is more suited to the high volume discount pharmacy with a high private prescription component. Manufacturers would also tend to discriminate against the smaller pharmacy, particularly in the provision of depot services and additional rebates.
Will we see an Australian version of the UK pricing system?
It looks like it could be the next step for market leaders to embrace.
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Information Technology
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Preventive Medicine
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