Unit 6: the Business of Community Pharmacy

Non-Prescription Retail Sales

OTC Drugs

• increased rate of OTC sales due to:

  -rising cost of prescription medications

  -high deductibles

Role of the Pharmacist

• Counsel patients on OTC use

• Only pharmacists can legally address questions about OTC drugs

Role of the Pharmacy Technician

• help customers find the brands and types of medications

• help customers understand the OTC product labels

• cite FDA recommendations

  • No OTC cough and cold products < 6yo

  • Do not take for more than 7 days without consulting your doctor

No OTC cough and cold products < 6 yo

• Do not take for more than 7 days without the consent of your doctor

• No OTC drug is completely safe or without side effects

Restricted Sale of Certain OTC Products

• Pseudoephedrine 

  •  3.6g/day or 9g/month

  • Smurfing

  • logbook

• Schedule V drug sales must be documented (Robitussin with codeine)

  • 4 oz in 48 hours

• Purchaser must be 18 years old and have an ID 

Schedule V and Pseudoephedrine Logbook ( kept for 2 years )

• The name and address of the purchaser.

• Date of birth of the purchaser.

• Date of purchase.

• Name and quantity of the drug sold.

• And initials of the pharmacist handling or approving the sale.

• Purchaser must sign for product

Complementary and Alternative Medicine

• A nonconventional treatment that is used together with conventional medicine.

• A nonconventional treatment that is used in place of conventional medicine

Integrative Health

Practice of coordinating conventional and complementary approaches in a holistic manner that can include mental, emotional, spiritual, social and functional aspects of a patient’s life.

• Nonconventional treatments

  • Natural products (homeopathic remedies, vitamins, minerals, dietary supplements)

  • Specialized diets

  • Acupuncture

  • Meditation

  • Massage Therapy

  • Yoga and pilates

  • Chiropractic manipulations

Dietary Supplements

• Vitamin, Mineral or herb considered useful for healthy nutrition, prevention of illness or alleviation or reduction of the symptoms of an illness

• Not regulated by the FDA, however, The FDA can remove a dietary supplement from the market for false advertising and if the supplement is deemed dangerous

• DSHEA (Dietary Supplement Health and Education Act) states that supplements must be safe and accurately labeled.

• USP Verified means manufacturers have voluntarily submitted products to USP testing criteria for quality, purity and potency.

Vitamins and Minerals

• The portion of active substance is compared to the Daily Value (DV), which is the recommended level of intake of a certain vitamin or mineral.
  

• International Unit (IU) is used to measure the amount of a substance and can vary from substance to substance.

    ex) 1 mg of Vit E = 1.21 IU

Herbal and Medicinal Plants

• Herbal medications are metabolized by the liver and therefore can cause side effects, allergic reactions, drug interactions, affecting  the absorption, distribution, and elimination of drugs.

• Ginger, garlic and ginkgo can interfere with blood thinners. Should be discontinued a week prior to surgery.

• American Herbal Pharmacopoeia (AHP) is a non-profit organization dedicated to researching, collating and distributing information on herbals

• St. John’s Wort has many drug interactions; should not be used with antidepressants, birth control medications, anti-seizure meds, digoxin, warfarin, cyclosporine

• Echinacea: boosts immune system

• Ginger: relieves nausea, motion sickness

• Garlic: antibacterial and  antiviral effects;  

               healthy cholesterol

• Ginkgo: increases memory

Probiotics

• Work to build up the “Good” microorganisms in the body, especially the good bacteria  in the digestive system

• Can be used to help with diarrhea and vaginal yeast infections while on antibiotics; abdominal pain, cramping and bloating from IBS; may also help with skin conditions like eczema.

• ex) Culturelle, Align, Lactinex: strains of Lactobacillus and Bifidobacterium

Protein Shakes and Nutritional Supplements

• Who benefits?

• Ensure

• Thick-It: added to water, juices, tea, milk or protein shakes–assists in swallowing and digestion

Medical and Home Health Supplies and Equipment

• Durable Medical Equipment (DME)

  • Canes/wheelchairs/walkers 

  • Blood pressure monitors 

  • Glucose monitors

  • Nebulizers

  • Oxygen equipment

NOT DIABETIC TEST STRIPS

Test Kits

• Pregnancy

• Ovulation cycle

• Bladder infection

• High cholesterol

• Illegal Drug Use

• HIV (human immunodeficiency virus)

Blood Pressure Monitors

• Sphygmomanometer: blood pressure gauge and cuff similar to the ones used in the doctor’s office.

• Also have digital monitors available which are often more user friendly

Respiratory Management Supplies

• Spacer Device—delivers medication more effectively, esp. for elderly and young

• Peak Flow Meter—measures breathing expirations

• Nebulilzer—machine that turns medication into a fine mist that is inhaled deep into the lungs

Diabetic Supplies

• Glucometers—blood sugar measuring device, will determine the level of glucose in one’s body, & therefore,how much insulin is needed.

• Test strips, Lancets, alcohol wipes

• Insulin syringes and needles (higher the gauge the smaller the width of the needle)

• Pen needles—the least painful is the nano (4mm (1/6 inch),32-gauge needle)

• Original 12.7 mm ½ inch;  short 8mm 1/3 inch; mini 6mm ¼ inch and mini 

*Technicians can complete a special diabetes training, pass an examination and become certified in patient education for patients with diabetes.  This could lead to an increase in pay.

Cash Register Management

Payment Options

• Credit card – EMV chip (embedded computer chip)

• Debit card – EMV chip and pin #

• Flex/HSA card – medical debit card for out-of-pocket medical expenses, offers tax advantages

• Cash/check/gift cards

Accounting, Pricing, and Retail Math

• A community pharmacy must operate to make a profit in order to survive. They must have more income than expenses to continue to provide services.

Acquisition Costs and Pharmacy Reimbursements

• Acquisition Cost: the lower than retail price from a wholesaler or supplier.

• Average wholesale price (AWP): the average wholesale price that wholesalers charge pharmacys for a given drug, dose, and package size.

• Dispensing Fee: covers the pharmacy’s personal costs ($2.50 to $4.00 per prescription)

 Estimating Insurance Reimbursements

AWP × reimbursement percentage rate + dispensing fee = reimbursement amount

• The lower the acquisition cost for a pharmacy the better the profit.  Pharmacys need to purchase drugs at a price far below AWP as possible.
  

  Retail Math

• The drug Actos comes in a quantity of 90 tablets with an AWP of $150.  The pharmacy has an agreement with the supplier to purchase the drug at AWP minus 15% (converted to 0.15 discount rate).  The insurer is willing to pay the AWP less 5% plus a dispensing fee of $3.  A patient on this insurer’s plan purchases 30 tablets.  How much profit does the pharmacy make on this prescription?

Markups and Profits

Markup is the difference between  the store acquisition cost and the customer price.

Pharmacy acquisition cost + markup = retail selling price

Retail selling price – acquisition cost = markup

• Gross Profit: accumulation of sales markups.

• Net Profit: money left after all expenses are paid

• Markup percentage: the determined percentage of each sale that must go toward the operation costs and profit.

• Markup rate: markup percentage divided by 100

 markup % ➗ 100 = markup rate

• Markup rate X acquisition cost = markup price

• Acquisition cost + markup price = cash price

Profitability and Productivity Reports

End-of-the-Day Report: also known as the audit log provides an overview of the profitability of the pharmacy based on that day’s productivity. It documents the prescriptions filled, cost accrued, and payments made. List productivity of all staff, the AWPs,acquisition costs, selling prices and profit for each prescription sold. The report is signed and dated by the pharmacist to be kept on file for future audits and as proof that the billed drugs were dispensed to the patients.

Inventory Management

Inventory and Technicians

• Locate stock and label shelves

• Restock and rotate stock

• Document reorder levels

  • Periodic automatic replenishment (PAR)

• Check expiration dates

• Stocking prescription supplies

• Check for recalls

• The entire stock of pharmaceutical and retail products on hand.

• Inventory Value is the total cost of the entire stock on a given day.

• Periodic Automatic Replenishment Levels (PAR) is the minimum level when each stock item needs to be automatically reordered.

Purchasing

• Acquiring products for use or sale.

• Primary Wholesaler Purchasing

• Prime Vendor Purchasing

• Just in Time Purchasing

Ordering

• Daily Orders

• Special Orders

• “pattern” ordering

Processing an Order

• Receiving

• Posting-process of updating inventory in the pharmacy software database and reconciling any differences

• Stocking

• Out of Stock (OOS) and partial fills

  • Partial fill for non-controlled drugs

  • Call prescriber to prescribe a therapeutic alternative you have in stock

  • Find it for the patient at another pharmacy

  • Completion fill ASAP

Returns

• Recalls

• Return of declined medications

• Expired drugs 

• Wrongly filled prescriptions

• Return of declined medications: must be in original condition to return.

• Expired Medications: partial credit given if returned before expiration date.

• Wrongly filled prescriptions: pharmacy must discard any drug returned in error;  pharmacy cannot recover the financial loss.

Drug Recalls

• Class I 

  • Urgent, immediate danger

  • patient notification required

• Class II and III 

  • Moderate or no health risk

  • pharmacist/retailer discretion

• FDA posts weekly reports

Controlled Substances

• Invoices kept separate

• CII ordered with a DEA 222 Form by a pharmacist either online or on paper

• Pharmacist must check in all CII orders

• Perpetual inventory record

• Biennial inventory: occurs every 2 years

  • Must do an exact count on CIII, IV< V if the stock bottle is for a qty of 1000 or more

  • CII count must be within 4 days of the biennial date

  • A copy of the inventory count must be sent online to the DEA, or original hard copy sent by mail

• Discrepancies reported to DEA

Return to Stock Report

• Prescriptions may not be billed, without patient receiving, for greater than 14 days

• At 14 days, prescriptions are returned to stock

• Kept in bottle with RTS label covering PHI

• NEVER pour pills back into stock bottle

Declined Medications and Returns

• Return of declined medications: must be in original condition to return to the wholesaler for credit

• Expired Medications: partial credit given if returned before expiration date.

• Wrongly filled prescriptions: pharmacy must discard any drug returned in error;  pharmacy cannot recover the financial loss.

Pharmacy Informatics and Computer System Health: the use of computer systems and software, online processing, and technology for the integration of pharmacy-related data, information, expertise, and automation.

Productivity Reports

• Compare staff time to prescriptions filled and other income-generating activities.

  • Need to compare with safety reports

    • Do safety errors go up as productivity or swiftness of prescription filling goes up?

    • Does customer satisfaction go up as productivity increases?

Concerns of  Security and Stability of Information Systems:

• Data Security Issues: viruses, data corruption, and hacking

• Backups (copies) of all data should be made by the main pharmacy computer at regular intervals; prescription records are usually backed up daily 

  • ex) nightly backup on external hard drive that can be taken off site for safekeeping in an emergency

  • Electronic data storage and shared data information have offered great advantages in times of emergencies: fires,tornadoes and floods

All pharmacy computer programs and automated technology must undergo software updates and upgrades.

• Software Update: brings all the information and programming of a currently installed program in line with the highest-functioning version available and the most current resource data.

• Software Upgrade: new edition of the software product with improved and enhanced capabilities.

Power and Data Backups for Emergencies

Pharmacies may need backup generators for power outages to keep prescription processing and billing going, lights on, computers going, cash registers operating, and refrigerators/freezers running.

Drug stability also depends on temperature.