Calculations. Pricing. Pharmacy Technician Training Systems Passassured, LLC

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1 Calculations Pricing Pharmacy Technician Training Systems Passassured, LLC

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3 Calculations, Pricing PassAssured's Pharmacy Technician Training Program Calculations Pricing Click Here for Glossary Index! Click Here to Print Topic Help File,.pdf (Internet Access is Required for this Feature) Educational Objectives Finding the Cost of an Item Alternate Pricing Methods Percentage Markup Fixed Markup on Cost Fixed Markup on Selling Price or Margin Pricing Graduated Markup on Selling Price Pass Assured, LLC, Pharmacy Technician Training Systems Copyright Pass Assured, LLC, Web Site - -o- p3

4 PassAssured's Pharmacy Technician Training Program Calculations Pricing Click Here for Glossary Index! Click Here to Print Topic Help File,.pdf (Internet Access is Required for this Feature) Educational Objectives To provide a brief review of various pricing methods used in retail pharmacy To acquaint you with some of the terms used when discussing pricing methods Finding the Cost of an Item Refer to the Red Book, Blue Book, microfiche, Medi-Span Guide, or your dispensing system database. Most dispensing software can be programmed to price prescriptions based on a standard system desired by the pharmacy. Alternate Pricing Methods Professional fees is adding a predetermined professional fee to the cost of the item being dispensed either fixed or graduated fee. Fixed fee is one markup regardless of cost, e.g. add $4.50 to the average wholesale price (AWP). Graduated fee is a sliding scale used to determine the fee to add to the AWP. Example of Graduated Fee: Fee Schedule ( ) Percentage Markup These methods consist of formulas utilizing the same factors: SP - Selling Price p4

5 C - Known Cost MU - The markup as a percentage of cost or selling price Fixed Markup on Cost This applies a predetermined percentage to the cost of the item you are pricing, as follows: SP = (MU% x C) +C Example You have a prescription for Lotrisone Cream 1oz. The cost to you is $ You wish to use a 40% markup on cost. The markup on this item would be: $12.00 x.04 = $4.80 mark up (40% expressed as a decimal is 0.4) The price to the patient would be: $ = $16.80 Fixed Markup on Selling Price or Margin Pricing This method utilizes the cost complement percentage applied to the cost of the item: SP = C/K Where K = the cost complement percentage, 100% - MU% A sample markup on selling price percentage is 33%. The cost complement percentage in this case is K=100% - 33% = 67%, or Example Lotrisone Cream, 1oz. We can obtain a selling price (SP): C=$12.00 and K =.67 SP=$12.00/0.67=$17.91 Graduated Markup on Selling Price This method is a combination of the graduated fee and percent markup on selling price. A sliding scale based on the price of the item is used to determine the percent markup used. p5

6 Percent Markup Fee Schedule ( ) Disadvantage for Markup Methods The dollar amount of the markup on some items does not reflect the amount of professional time spent preparing and dispensing the prescription. This is especially true in cases of very inexpensive and very expensive drugs, since for the former you are not fully reimbursed for your time and for the latter, the dollar amount of the markup can make the item prohibitively expensive for the patient, presenting an ethical problem. Pass Assured, LLC, Pharmacy Technician Training Systems Copyright Pass Assured, LLC, Web Site - -o- p6