Dispensing FAQ’s

Is this legal?

In 44 out of 50 states, it is absolutely legal for physicians to do point-of-care dispensing. The other states restrict what physicians can do but even those states still can dispense. The states that are restricted are:

New Jersey
New York
Utah (only state where it is illegal)

Every Physician has the right to dispense medicine to their patients. State and Federal law requires physicians to dispense only properly labeled and packaged drugs. We will assist you on what licensing, if any is required by your state regulatory board. Typically it is a matter of completing a short form and paying a small fee.

How much time will it take to dispense?

Adding point-of-care dispensing actually can save time. Hours each week are wasted by calling pharmacies as well as taking pharmacy calls. It takes less than one (1) minute to dispense medication to a patient whether your staff uses the manual or computerized tracking system. It takes less than half an hour to learn the manual system and anyone can master the dispensing software within a couple of hours.

Will dispensing cause my malpractice insurance premium to rise?

It shouldn’t. A physician’s medical license mandates that they are allowed to dispense medication and frequently pass out drug samples already. It shouldn’t make a difference whether or not you get paid to do so as far as malpractice insurance is concerned. If this is an issue for you, contact your insurance agent. I have never heard of this before.

Why aren’t more physicians doing this?

20 years ago, how many people had heard of cell phones? Not too many. Ironically, almost every physician years ago dispensed medication to their patients. Whether you decide or decide not to dispense at this time, we think all physicians will be dispensing one day. It is a sign of the times. Change occurs in every industry and the reduction of insurance reimbursements and increasing costs are forcing physicians to find alternative sources of revenue to enhance their practice. Dispensing medication is a simple and easy income solution.

Will dispensing upset local pharmacists?

It shouldn’t. Many of the drugs that will be prescribed by you will still be filled by a pharmacist. A successful formulary typically consists of 20 to 25 drugs and they are mostly generic. When the need arises for something other than what is in stock, you will send the patient to the pharmacy. You will dispense for primary or acute care conditions and use mostly generic drugs.

How do I determine what price to charge my patient?

Simple. Do what any price shopper would do. Shop. Call the local pharmacies and find out what the cost of the medicine is. Very often, you can go onto their website and find out. Or better yet, ask your dispensing consultant for advice. For patients that have prescription cards, we advise you to charge whatever the co-payment is for a generic drug. Often, you can charge an extra dollar or two simply because of the ease and convenience of obtaining the prescription at the point of care. What patient wouldn’t want that?

Can I really earn $50,000 or more each year by dispensing?

Yes but that all depends on the size and type of practice as well as the number of patients seen each day. Based upon averages, the average physician will see 100 patients and write 100 prescriptions or more each week. Asking yourself simple questions such as how many patients you see per day or per week will quickly give you an idea how much money you could be earning by dispensing. Wholesale cost per drug and what you charge the patient is the final determining factor on calculating potential earnings. Most of the generic drugs will cost you about $5.00.

What are the start-up costs to begin dispensing?

Other than the cost of the drugs, nothing. In fact, in most cases, you will pay your invoices either by credit card or on terms so there really shouldn’t be any out of pocket cost at all. You will start off on the manual dispensing system and we’ll custom print all of the labels. Shipping is also free on minimum orders. Once you begin to re-order, we will suggest going on the computerized dispensing system, also at no additional cost to you. Some of the competition charges for the software and a monthly maintenance fee.

Is dispensing the same as being a pharmacy?

No. Physicians may only distribute pre-packaged medicine. We recommend to physicians to typically stock only 15 to 30 of the most commonly prescribed generic medication. In reviewing the prescribing patterns the norm is usually 80% of all prescriptions come from about 20% of the total number of drugs that the physician prescribes. Remember, the formulary is the key to a successful dispensing system.

Is dispensing time consuming?

No. Whether your office uses the manual or computerized dispensing tracking system, the entire process takes less than one minute. The medication is already pre-packaged, labeled and ready to dispense. It’s simple, easy and very profitable. In fact, many clinics report that they actually save time. Inbound calls from pharmacies with questions about or confirmations of prescriptions consume office staff time. Significantly reducing these calls can save your practice time over not dispensing.

Can someone else assist with dispensing?

Yes. State by state rules may vary but the office staff generally can help in preparing and dispensing prescriptions. Very large practices and clinics may hire a pharm-tech to streamline the process. The involvement of the staff is completely up to you. Many offices delegate dispensing to the nursing staff. They love the added responsibility.

Which type of practices are a good fit for dispensing?

Offices that prescribe acute-care medications which treat conditions that are cured by a single course of therapy. Patients are usually sick or uncomfortable and appreciate the convenience of not having to make a trip to the pharmacy. There’s also the confidentiality aspect of in-office dispensing. Medications include antibiotics, pain, discomfort and anti-inflammatory drugs. Some of the types of practices include:

Family Practice
Occupational Medicine / Workman’s Comp
Urgent Care
Minor Emergency
Walk-In Medical Centers
Dentists Such As Oral And Maxillofacial Surgery
Plastic Surgery

If a patient has a prescription card, doesn’t it make financial sense to be reimbursed by the insurance company?

No. Most if not all of the drugs in a dispensing program are generic drugs and you will be better off taking the cash from the patient. We suggest taking whatever the generic co-pay is on the card which today is around $15.00. If you were to turn in the drug for reimbursement, you would be paid significantly less. Prescription drug card programs limit the profit to around a $2 – $3 dispensing fee just like a retail pharmacy. Prescription drug card programs often maintain a database of the physician’s prescribing habits which can be sold to insurers and drug manufacturers. There is also extra effort to adjudicate a claim in order to get paid. It could take weeks or even months to see a dime.

Can I choose any drug I wish to sell including a name brand drug?

Sure but statistically, 93% of all drugs are included in a formulary of less than 250 drugs. With thousands of drugs to choose from in different strengths and quantities, the key to a successful formulary is picking out which drugs move fast and make the most profit. The reality is over time you will fine-tune the formulary to what makes the most sense for your practice. You may purchase some name brand drugs that cannot be obtained generic but in most cases, the dispensing program will consist mostly of generic medications. The computerized dispensing system provides detailed reports to help you choose the drugs that are the best choice for the practice. We’ll provide you with time-tested formularies that are financially successful for other physicians making it easy to choose what is right for your practice.

Why are antibiotics re-packaged in a separate building?

Penicillin and cephlasporin contamination of non antibiotic drugs cause up to 50% of all drug reactions in the US according to the FDA. One unit of penicillin is invisible to the eye and can cause anaphylactic shock to a sensitive patient. It is virtually impossible not to get a drug that is not contaminated with penicillin/cephlasporin pore particles. Not only are antibiotics repackaged in another building but the rooms have negative air flow too.

How will dispensing help my patients?

Patient convenience is one big reason. Patients appreciate receiving medications in the physician’s office and avoid traveling to the pharmacy and waiting for their prescription to be filled. Some pharmaceutical chains require up to a 45 minute wait to fill a script, so that the patient will make impulse buys. Increased compliance is another reason. 30% of all prescriptions in the US never get filled, for whatever reason. Why? Maybe your patients hate to go to the pharmacy! Every patient loves in-office dispensing. Patients will often save money by obtaining their prescription at the doctor’s office verses the pharmacy. Then there is also the confidentiality of receiving their medication at the medical office.

Will dispensing help Medicare and Medicaid patients?

New enhancements with Medicare may diminish the value of in-office dispensing to those patients depending upon the prescription plan they choose. Since most of the drugs you would be dispensing are low-cost generic drugs, selling generic medications for just a few dollars above cost could still create benefit for the patient and the practice. Most elderly patients have a hard time getting around. Some use public transportation and may have to take a bus or walk to the nearest pharmacy to fill a prescription. In-office dispensing would eliminate that extra trip. Furthermore, up to 30% of prescriptions nationwide go unfilled. Filling the prescription in the office will positively affect your control over outcome management.

How will dispensing help you comply with the formulary compliance from top insurance companies?

Formulary compliance is a very important issue. Most doctors dispense “free samples” of brand name drugs given to them by their local pharmaceutical rep and then write a prescription for that expensive drug. This sample mentality has caused the total cost of healthcare to increase considerably.

By implementing a successful in-office dispensary, the medical office will significantly reduce the at-risk formulary compliance amount considerably. If the physician had to dispense an expensive name brand drug, he would want to purchase that drug from us and sell it to the patient verses writing the prescription. We have been told that there is at least a $20 differential in cost between a formulary and a non-formulary drug, per script. E.g., if the physician were to dispense a formulary drug purchased from us for $30.00 and sold to the patient for $40.00, he not only would make a $10.00 profit on the differential between wholesale and retail but would also save $40.00 because that script would never be charged to their risk-pool! If the physician was at a 100% risk for formulary compliance, he would realize a $50.00 profit per script.

What if I want to carry and sell maintenance drugs?

Generally, in-office dispensing works best for an initial prescription. There are some physicians who are quite successful with maintenance drugs too. We have an open formulary so you can order any drug other than type 1 and type 2 drugs.

Where will I store the drugs?

About half of the physicians put the medications in the same place as they now keep their samples. To be compliant with FDA and DEA regulations, you’ll need a locked cabinet or drawer. If you plan on carrying controlled medication (narcotics), they must be stored behind a double lock.

A simple solution is purchasing one of our cabinets. There are many different kinds to choose from. One of our locked cabinets behind a locked door will satisfy the double lock requirement for controlled medications.

How do I determine the initial inventory?

The initial drug-dispensing inventory is determined in cooperation with you and a MedX Sales Dispensing Consultant. A drug formulary information list is available with the top prescribed drugs as well as specific formularies used by specialized practices to help determine the best fit. Once a decision is made for the initial choice of drugs, our proposal department will generate a quote for review and execution. As time goes by, your ordering pattern will change based upon profitability and prescribing practices.

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