PassAssured's Pharmacy Technician Training Systems
Calculations
Pricing
Pharmacy Technician Training Systems
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PassAssured's Pharmacy Technician Training Systems
Calculations, Pricing
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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
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PassAssured's Pharmacy Technician Training Systems
Calculations, Pricing
Click Here to Print Topic Help File , .pdf
(Internet Access is Required for this Feature)
Click Here for Glossary Index!
Educational Objectives
To provide a brief review of various pricing methods used in retail pharmacy
To aquatint 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 o 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 ( 02110010 )
Percentage Markup
These methods consist of formulas utilizing the same factors:
SP - Selling Price
C - Known Cost
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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 $12.00. 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 a decimal is 0.4)
and the price to the patient would be: $12.00 + 4.80 = $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 0.67
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
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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
Percent Markup Fee Schedule ( 02110020 )
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 cam make the item prohibitively expensive for the patient, presenting an ethical
problem.
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