In August ’16, a new medicines margins formula was introduced into pharmacy payment processing. If you know certain fully subsidised medicines cost you more than 3% at the wholesaler (with discount) you may wish to analyse your payments.

Identify the medicines

Do analysis for medicines that attract the same margin e.g. medicines with Pharmac manufacturer price of less than $150 (margin paid is 3%) and are not Section 29. For the purposes of these notes, lets assume that 8% is being paid to a wholesaler on a number of meds that only attract 3% (plus pack fee) from the payment authority.

  1.  Setup a medicine group, Stock Control, 9 Maintain Medicine Groups, F3 Add, Name the group clearly e.g ‘Cost 8% paid 3%’ F12 
  2. Edit the medicines that cost 8% and set the medicine group. Stock Control, 4. Maintain medicine, select relevant medicine, F11 to 3rd page and space bar select the ‘Cost 8% paid 3%’ group. F12. Repeat this for each of the relevant medicines. (Hint: Use Bulk edit Medicine if more than a few medicines and there is a clear identifier (e.g special foods, cost between $ and $, etc).  

Financial Modelling.

Go to Reports, Business Analysis Reports, Dispensary Summary. Select date range, select medicine group (eg. Cost 8% paid 3%), and set markups to 8%. 

The reported ‘Medicine Cost’ column reflects the ‘8%’ paid to wholesaler while the Rx dispensing analysis (bottom of report) shows the cost pharmacy will be paid. 

The difference is the $loss/gain to pharmacy. The example below analyses an X4 Rx for a medicine with manuf pack price of $130. The loss is $21.85.