Pricing Rxs

Pricing Rxs

Pricing and Billing Responsibilities

  • Important responsibilities for pharmacy technicians include understanding and managing pricing and billing for prescriptions.
  • Total Rx price consists of three main elements:
    • COST
    • MARKUP
    • PROFESSIONAL FEE

COST

  • Determining the drug cost includes:
    • ODB Price: The price paid by the government as found in the Ontario Drug Benefit (ODB) and CDI formulary.
    • Cost: This refers to the price that a pharmacy pays when purchasing the drug from a wholesaler or manufacturer; it is the cost shown on the invoice.

Mark Up on Cost

  • The markup that can be added to the cost is defined by the Ministry of Health and Long-Term Care (MOHLTC):
    • Markup is 8% of the cost of the product.
  • Therefore, the total cost calculation can be expressed as:
    • Total Cost = Cost + Markup
    • Calculated as:
      ext{Total Cost} = ext{Cost} + 0.08 imes ext{Cost}
      ext{Total Cost} = 1.08 imes ext{Cost}

Finding the Drug Cost

  • Methods to find the drug cost include:
    • Consulting the ODB/CDI Formulary.
    • Referring to the MCKESSON or another wholesaler price book.
    • Checking the McKesson catalogue in Kroll (specific instructions provided in the lab).
    • Kroll’s drug file prices the prescription based on either the ODB formulary or the McKesson catalogue.

MARKUP

  • MARKUP: The markup consists of an 8% increase on the cost.
    • When calculating 8%, it's important to recognize:
    • 8% as a decimal is 0.08.
    • 8% as a fraction is 8/100.
  • This markup can be calculated using 1.08 as the multiplier. For example:
    • For a package of 30 tablets at $75:
      ext{New Price} = 75 imes 1.08 = 81.00

PROFESSIONAL FEE

  • The professional fee typically differs based on the insurance type:
    • The standard fee set by the government for ODB is $8.83.
    • For cash or third-party insurance plans, the fee can vary but typically has a maximum; in lab scenarios, a fee of $11.99 is used unless otherwise stated.

Drugs Not Found in the ODB/CDI

  • If a drug is NOT listed in the ODB/CDI:
    • ODB patients must pay for the drug out-of-pocket.
    • The professional fee shifts from $8.83 to the pharmacy's usual and customary fee of $11.99.
    • It's necessary to adjust the price code to 'cash' in Kroll to indicate the application of the $11.99 fee.

Total Price Example

  • For Mittes (25 tabs):
    • Price per ODB tab = 0.1221
    • Total for 25 tabs =
      25 imes 0.1221 = 3.0525
    • After marking up:
      3.0525 imes 1.08 = 3.2967 ext{ or } 3.30
  • Final calculation for pricing:
    • Rx price for an ODB patient =
      3.30 + 8.83 = 12.13/25 ext{tabs}
    • Rx price for all other patients =
      3.30 + 11.99 = 14.79/25 ext{tabs}
  • Breakdown:
    ext{COST} + ext{MARKUP} + ext{FEE} = ext{TOTAL PRICE}

Calculating Total Price

  • For the prescription of Keflex 250 mg tab taken 1 qid for 10 days:
    • Total Price Equation:
      ext{COST} + ext{MARKUP} + ext{PROFESSIONAL FEE} = ext{TOTAL PRICE}

Calculating Drug Costs

  • For Keflex 250 mg tab:
    • Quantity to dispense: 40
    • Cost lookup from e-search formulary for the lowest cost interchangeable product (e.g., TEVA):
    • Calculation:
      ext{Cost} = 40 imes 0.0866 = 3.464
  • Final pricing equation:
    ext{COST} + ext{MARKUP} + ext{PROFESSIONAL FEE} = ext{TOTAL PRICE}

Calculating Markup on Cost

  • Additional 8% markup is applied:
    • Calculation:
      ext{Total Cost} imes 1.08 = ext{New Total}
      3.464 imes 1.08 = 3.74
  • Final pricing equation for total price:
    • ext{COST} + ext{MARKUP} + ext{PROFESSIONAL FEE} = ext{TOTAL PRICE}

Calculating Total Price for Keflex

  • Pricing analysis for Keflex (OIDs):
    • Total prescription price for ODB patient:
      3.74 + 8.83 = 12.57
    • Total prescription price for Cash patient:
      3.74 + 11.99 = 15.73
  • Reinforces:
    ext{COST} + ext{MARKUP} + ext{PROFESSIONAL FEE} = ext{TOTAL PRICE}

Examples Not Covered in ODB

  • Baciquent Oint (25g):

    • Purchase price = $5.38
    • Total Including markup:
      5.38 imes 1.08 + 11.99 = 17.80

  • Auralgan Ear Drops (14 mL):

    • Purchase price = $5.91
    • Total Including markup:
      5.91 imes 1.08 + 11.99 = 18.37

Markup Exception & ODB Patients

  • Mark Up: Generally 8% on top of the COST.
  • Exception Criteria:
    1. The patient must be an ODB patient.
    2. The item must be listed in Section IX of the ODB Formulary, which includes Nutritional Products & Diabetic Testing Agents.
  • In these circumstances, no markup is added to the cost.