How do you price your drugs?

I have a legit question. You may comment anonymously, use a fake email and name, however you wish. I’m not going to go running off taddling on you all for answering this question, I am legitly curious.
How do you price your medication? I’m just curious how the chains do it vs the independents. Do you take like “AWP + Dispensing Fee + %age?” Or “Direct Cost + Disp Fee + %age?”
It seems like the price of generics fluxuate between pharmacies to bargan basement (independants) and ass-rapeage (Walgreens/Rite-Aid). Do the chains just accept pricing from the corp office or do they have some say (such if a patient has like $10 for atenolol, and the price is like $11.50, can you lower the price?)

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50 Comments

  1. canadotornado says:

    I honestly don’t know how the company sets their prices. Nor do I really care. I think it’s whatever the company decides to make it, but they gave us some bullshit formula that I don’t understand. We can modufy the price in the reigster if need be. Normally i try a combintation of the few discount plans they allow use to drive the price down.

  2. tim says:

    Hi,
    i work for Target pharmacy (PRN) and we basically just use the prices that the computer tells us. if someone calls and wants to cash price for something, we just input the quantity and tell them the price that pops up. from my experience though, we are on the cheap end for most drugs. we also have the $4 generic program. if you have questions about that, feel free to ask. we specialize in fertility drugs (we have a clinic not far from us and they tell the patients to come to us becasuse we always have the items in stock) and have special pricing for those (that are different than what the computer says, eg: femera, bravelle, menopur, ovidrel, etc). but we have the power to change the price to whatever we want. I work in a hospital full-time and we get OTC items for the AWP (pharmacy workers only), other employees get AWP + 10%

  3. Pharmer Jane says:

    No idea how my place does it, but an old employer used to have a minimum fee of $8.99, no matter what. One tab of HCTZ was $8.99. So was 30. Last I heard from a friend who still works there, the minimum is up to $11.99, no matter how cheap the medication is.

  4. lee says:

    hey i am a tech (in pharmacy school ;))and i am just getting trained on the new software for rite-aid and although i don’t know that much about it – we can change the price of the drug (cash price) a certain degree and the computer will accept it but we must include a reason. We used to be eckerd and i didn’t mess with that in the old system b/c it was like ms-dos and impossible to do something unless you knew exactly how to do it – but my pharmacist would give a discount price if he knew the pt and the pt really could not afford it.

  5. mrhunnybun says:

    I know you are more US-centred but here are mine for a medium sized UK chain.
    Basic price is £6.85 per item (if patient pays anything and 90% don’t). So that’s £6.85 for 1xAspirin tablet or for a year’s supply of Glivec.
    For private rpescriptions our minimum is £4.50 and above that it cost+30%.

  6. Pharm Jason says:

    Pharmacy Intern here and I work for a big retail pharmacy that is a store first then pharmacy. We get our pricing from corporate but we have the power to alternate the price to add match other pharmacies, but we don’t call around and try to beat out the other pharmacies like a few independents do in our town. But we can set our own prices if we want to but usually don’t.

  7. Gary says:

    where i work the cheap stuff minimum is $7.99. For more expensive generics we have a pricing list. We also do +$25 on the acquisition unless the meds are really expensive liek hundreds of bucks then its higher and we work around the AWP. We also give seniors 10% off if they pay cash.

  8. tyler says:

    haha, at the wag, we can’t just change a price like that. You pay, You pay now or you die!!

  9. Erin says:

    I work for a health system and we price everything cost plus $15. We are able to make individualized changes. For example, if the patient can only afford $5, most of the time we will price it at that as long as we can cover our bottom line.

  10. Julie D. says:

    I work for CVS as a tech, part time, and like some other chains, I type in the drug and amount desired into the computer, and it gives me the price. That’s what I charge. I don’t figure out anything myself. Also, like some other big chains, we have a minimum charge of $10.99. 1 tab of HCTZ is $10.99, so if a person wants to buy only a few tablets, I will always figure out what the most amount of tablets you can buy for that minimum price is. I know lots of techs who don’t take that extra time and effort, though.

  11. anonymous says:

    Most brand items are AWP*1.18 + 5.75.
    Some oddball brand items may get a lower percentage markup if they ae exhorbitantly priced to begin with, or for competetive reasons. Others may get a higher percentage markup for hassle factor (e.g. accutane & tikosyn)
    Generics are on a sliding scale markup based on per unit awp. Very low cost items may be AWP*5 +5.75 with the markup gradually dropping to about 30% plus the 5.75.
    There are some exceptions, but overall this approach keeps us slightly lower than the nearby chains (not real hard to beat Walgreens…)
    Our stated minimum is $7.00 but all pharmacists have that ability to override any price – the owner does watch this but as long as you are doing it honestly he doesn’t fuss – he’d rather lose the money and keep the customer.
    The big problem now is albuterol inhalers, how do you price something when you know it’s going to cost alot more to replace it?

  12. BlueTech says:

    At Walgreens, our warehouse buys whatever generic brand is cheapest, and we always hope it’ll just stay that way for a while. However, a drug gets retail-priced the same, regardless of manufacturer. I think it’s direct-price of what our warehouse supplies, OR dispensing fee (whichever’s cheapest, meaning that one propranolol tablet will cost 11.99, same as 30 tabs), x 1.4…I think. Of course, we occasionally get crabby-ass people who say that Qualitest hydroxyzine gives them a rash (it’s that ironic?!), so we have to order the damn Pliva brand from Cardinal health.
    …I remember when we accidently ordered 30 boxes of copaxone, instead of 30 syringes (1 box)…the DM was not happy with the $42000 bill we got from Cardinal… Oh well. Not my fault.
    p.s. You can email me if you want inside info on walgreen stuff. ^_^

  13. Phamacy Dick says:

    When I worked for the Borg, I mean Walsmart, we got our prices downloaded to use from the home office. Then, we had to go print out our top one hundred selling drugs, by prescription, and call 2-3 competitors to comp shop,once a month. Of course I eliminated narcotics from the list, which I think was actually policy, strangely enough. Walsfart has a crack team of pricing gurus lockup up in a bomb shelter in BFE, that figure out what the prices should be for the demographics of the area.

  14. drugmanrx says:

    Well you can change the price of a drug at CVS for cash but it requires an override code. Really the only reason we ever do it is to match a price; some pharmacists will and some won’t. As far as our price, corporate decides that and sends it down to each CVS. There is a CVS about a mile or two away from the CVS I work at and our prices are higher on most cash drugs. This is probably because the price is determined by market area, but I could be wrong.

  15. pharmacy tech gone postal says:

    I work for a grocery chain and we use AWP+disp fee+ some ridiculously low %. We can “price match” any competitor and will to help our customers whenever possible. However, we really get raped by McKesson if we want to return anything, something like 25% restocking fee, and about 100 drugs they won’t take back no matter what. According to our bosses most of the chains pharmacies don’t make mush profit but they increase the grocery sales by 35%. I wonder what he profit margin is in the liquor department?

  16. PharmGirl says:

    We do whatever the computer tells us, awp +/- some formula, but we can change it in the computer and we do for pt’s getting the 1 Valium or 10 prednisone rx and such. We’re not going to charge them the 10 bucks for their copay, so we usually charge 3 bucks for 1 tablet or something like that. We modify in the computer.I work for a grocery store, but we treat it like an indep.

  17. AngryNatalie says:

    now that we’ve been incorporated into rite-aid, the minimum corporate pricing for drugs is $10.99. do i think that’s ridiculous? yes, of course i do. do i give people medication for less? hell yes. if i get an rx for #4 amox 500mg caps i’m sure as hell not making someone pay $10.99…rite-aid can go fuck themselves or take it out of my paycheck (wait, so thats why i make so little…). i frequently do this on the dentist amox scripts, ones for vitamins (like the vite-a-day shit), and rxs for 81mg ECASA or whathaveyou. im not charging anyone $10.99 for a drug thats 1/10 of a penny a pill (HCTZ anyone?). thats why they let us override the price in the computer…right? my basis of cost determination is usually “actual cost + what i feel like my dispensing fee for this should be = pharmacy magic”
    this mostly applies to people without copays, however if someone’s insurance is going to charge them $12 for 4 amox caps (i’ve seen it…) i’ll change the price and bill it as cash. we usually do 4 amox for $2.95.
    the secret is to not give a crap about what corporate says, since we won’t see a dime of it anyway…

  18. anon says:

    I work for Walgreens as an intern and we always charge what the computer says (if the pharmacist reduces the cost, I have no idea-pretty sure they don’t.) we also have a minimum dispensing fee which is similar to what Target charges (somewhere right under $12). I used to work for Winn Dixie/ Medistat Pharmacy and we would definitely change the price all the time. The computer would charge outrageous amount of money for cheap meds (like furosemide). I was only a tech when I worked there and usually the pharmacist would charge whatever for the med (I guess if the customer wasn’t a butthole he’d give them a better discount – fair or not) and then we would charge that person the same amount for each refill. It was a pain in the butt b/c our computers weren’t that up-to-date so if we didn’t pay attention to what was charged the time before, we would get bitched out at the register and would HAVE to give them what we sold it for before. I like just hitting the ‘cash’ button at my job now without trying to decide what to charge the customer. Don’t know what formula they use to calculate charges….

  19. hoov says:

    CVS has a min dispensing fee of $10.99. we have the option to price modify in our software, but it’s generated in a daily report and sent to corporate whenever that happens. so, if you price enbrel down to $1.00, someone is going to see it. we don’t price match the infamous $4 generic, and tons of ppl bitch about it. aside from that, it’s just whatever price the insurance is willing to pay.

  20. sara says:

    there is a copay of $8 per each 30 day supply @ the VA whether it’s hctz or Epo…

  21. Drug Czar says:

    Patient cost = our cost x 3
    We’re a hospital though.

  22. Martin S. says:

    I am involved with 3 independent pharmacies and network with the owners of half a dozen more. Most stores seem to use awp plus a dispensing fee. Most of us also have a minimum price also. Usually this is flexible-we may override for 4 amox 500mg etc. Generics are a bigger problem. Depending on the software system being used the pricing systems vary. MAC pricing is ofter used as a guideling. It makes no sense to price below what the PBMs will pay. However sometimes compitition dictates the price. Also on new generic its a disadvantage to drop the generic price before the PBM-same reason as above. In my state a little less than 9% of the customers pay cash so it doesn’t make sense to be over aggressive on pricing. That being said you don’t have to work hard to beat the hell out of Rite Aids prices. Also why give antibiotics away for free for 9% of your customer base and have to give it to the PBMs for free on the other 90% of your scripts? Just a question-if your working for one of the chains that are giving away free or $4 scripts what does that say about how your employer values your education? Is it a good thing for something that we work so hard at to be turned into a loss leader? Also-what does this tell the PBMs about what reimbursement levels should be? I know too many chain RPhs that are working their butts off with not enough help and they are now piled on with freebees. How is the lower margin going to affect their bonus?

  23. Onco Dude says:

    I work for the conglomeration of Kmart/Sears.
    We are matching the Target/Walmart $4generics, we also have $15 generics for 90 days supply (doesn’t matter the quantity).
    All other Rx’s get priced thru a website-based discount card found at http://www.yourrxcard.com. 97-98% of the time beats walmart/Sams Club cash price.

  24. techboy says:

    I don’t know how the computer does it… I’m just the tech.
    But I will override the price to match a chain as long as we still make a profit.
    I really dont care if we dont make a killing by charging $9.99 on 2 caps of doxycycline.
    If it’s a poor person I will just override the price to $4 to be on par with the wal-marts and targets that compete with our independant.
    After all, in my pharmacy..if everything is smooth with no conflicts or DUR warnings.. I do all the typing, pulling, counting, labeling, etc.. all our pharmacist does is check it and bag it… so why do we need to make a 100000% profit on it?

  25. Candace says:

    I worked for Walgreens for 7 years in four different districts and their pricing is set up to ensure maximum rape-age. Albuterol inhalers were priced at something like $27.99 per inhaler because they were banking on you being there at 3am fresh from the hospital and having no choice but to pay the exhorbitant price. This was way before HFA drove up the price and most pharmacies were charging something like $14/inh. FORGET about price matching…we were even given some speech about what we should say in response to that, something about convenience and whatever. Sometimes that was nice when people would come in and need their heart medication that they’ve been on for 10 years RIGHT NOW OR THEY’LL DIE on easter sunday when their pharmacy is closed(which is always closed Sunday no matter which Sunday) and they want to make you price match their closed pharmacy’s price. I don’t know how they figured the rest of their prices, just that they stayed competetive in markets they were just breaking into and had the highest prices in the markets they were dominating.

  26. rph3664 says:

    Off topic: It’s “fluctuate”, not “fluxuate.”
    BTW, a few years ago, “hydralazine” was a National Spelling Bee word. The youngster wanted to know, IIRC, part of speech (“Noun”) and “Can you use it in a sentence?” (“The doctor ordered hydralazine to lower the patient’s blood pressure”) and then the child made a half-hearted attempt to spell it and got it right.

  27. just plain angry says:

    I work for a small chain and we have a pricing list that’ll give us a general set of prices for pills. Unlike some of the big corporate chains out there, we don’t have a minimum so one tablet of HCTZ isn’t even a dollar. For the brand items we’ll punch it into the system and if its not in there, then we use the computers and the AWP. For some cash patients, we’ll give them a 10% discount but otherwise, competition is harsh where i work. Pretty much a pharmacy every other block, if not more.

  28. Liz says:

    We have no say in our pricing. And some of our stores have different prices for the same medications and qty.s I believe they base it on the cost of living in the area. But sometimes I just wonder where they pull these prices from. We go by what the computer tells us. We used to have a way to override the price like if the pt. was getting 1 tab of a generic and it was like 10.99 base price the RPh would be able to override the price but the computers won’t let us do that anymore… money hungry bastards! oh sorry!

  29. Drug Dealer in Training says:

    So, I work for a rather large company and all the prices are set for us using God-only-knows what kind of formula. Anyway, when it comes right down to it and I know a patient can’t afford their antibiotics, I’ll override the price to something I know they have enough for. Narcotics are a different story of course, but for some things, I could give a hairy rats butt about how much profit the chain is making.

  30. kathy duby says:

    You must mean fluctuate. Oh God, a pharmacist who cannot even spell!

    • JustthePOA says:

      You must be the spelling police. Oh God, another Dictionary Gestapo in our midst. Whatever would we do without you?! Keyboards have a serious need for an *eyeroll* and *sarcasm* key. You can insert both (here).

  31. JR says:

    I own a indy. There is not exact formula but its about cost + 8.00. More if its like prevacid or something over a 100 base cost .. then like cost +12 . Now narc’s you pay more always. More like cost +20 to 50. Just depends what it is how many and if I like you or not.

  32. scarlet says:

    The reason few of the chain-worker respondents can’t give you a straight answer is because that info is strictly guarded by corporate. Although Candace was correct when she said that WAG prices are set for max rapeage. The “formula” they use is flexible based on market and employees (at least at WAG, but I suspect at other large chains, too) are threatened with everything from write-ups to outright dismissal for tampering with the price either in the computer or at the register.
    The “speech” for justifying the prices includes citing hours, internet and phone service, and other myriad “convenience” programs (auto-fill, etc) that “cheaper” pharmacies do not provide.
    These are shady practices designed specifically to keep not only customers but employees from truly understanding the rx profit margin. It’s a “need-to-know” basis of info distribution, and none of the fat corpo-types thinks anybody below the district office “needs to know”.

  33. Ugh.. says:

    It has nothing to do with our awp. Kinda sucks actually and tends to bone the consumer. Flat rate at a certain point. We add the “dispensing” fee to all cash RX. Currently you could get 1 HCTZ and pay 11.90 for it. No, an RpH can get fired for changing pricing with out checking with Mgt if its “okay”… How do i know this?.. I have worked on both sides..

  34. Shalom (R.Ph.) says:

    Ten years ago when I worked at R*te A*d, there was an unofficial policy of adding “positive overrides” to RX prices. Basically this meant if there was no insurance, and it was a one-time thing like an antibiotic or a pain med, or not a regular customer, and you thought you could get away with it, you would tack a few dollars onto the price of a prescription. They pushed this practise in e-mails, telling us always to do it when we could, good for our P&L, bonu$, etc.
    Then they got called on it, and swore up and down that such was not and had never been their policy… until someone leaked the e-mails. Ooops. Suddenly we get a panicked e-mail from corporate telling us that corporate policy was to do negative overrides only, such as for price matching, and NEVER NEVER NEVER to do a positive override on pain of termination… and oh by the way, no talking to the press either. (There were no blogs then. I could presumably be fired for writing this except that I quit them long ago…) They paid $150K to the State of New Jersey to settle their lawsuit over this, and I think Florida likewise got them for a half million, Oregon wanted $25K, and so forth.
    (RA used to be the most expensive of the chains; they justified this by saying that they would open stores in the inner cities where the other chains were afraid to go, which was indeed true. What they didn’t mention was that the inner-city residents were more likely to shop closer to home, generally not having cars, and were thus trapped into the higher priced stores.)
    D**n* R**d* has five different price lists depending on which neighborhood the store is in. They only differ by a couple dollars, but I have no idea how they calculate this. We had to know because NYS law requires us to hand out a price sheet on request, and we needed to know which one to print.
    The Chain of Very-large Stores where I occasionally still work feeds us the prices, who knows where that comes from. Pulled out of someone’s fundament, no doubt. As others have remarked, we can override these prices downward if we need to match someone else’s, although obviously they don’t want us doing that very much or very often. (We’re not matching Wally World’s $4 generics, f’rex.) I know that at RA, there was a minimum below which you couldn’t price mod. I don’t think this Chain has such a limit, you could theoretically price mod right down to zero, but you better have a very good reason for doing so…
    At the independent where I now work mostly, the computer figures cash prices based on AWP * (85% for generic, 90% for brand) plus $5.00, with a minimum of $9.99. (U&C is another ball game.) Of course since we have no bean counters at coproate (typo deliberately left in!) riding herd on us, we can modify these if necessary, like if the AWP is ridiculous. One popular 5-HT3 antagonist, for example, costs us $30.25/30 tabs, but AWP is $1238.17. This means cash price comes out something over a grand. We can drop that by quite a bit and still make a nice profit.

  35. jaymz says:

    I work for Walgreens. Nothing is less than $11.99. You used to be able to change the prices in the computer and we’d change to like $3.99 for the one Alprazolam or 4 Amoxicillin to take before a procedure. Now we can’t do that, though some of the pharmacists price modify stuff at the register. Usually I hope that the patient has insurance and that their insurance has a reasonable copay.
    With the Walgreens system, you can prorate the cash price though. This only works if the original RX is for a higher quantity though. For example, if you have a cash patient that can’t afford a full month of their medication you can type in P10 in the quantity dispensed field and it will prorate the price so they won’t pay anymore overall.
    Other than that I have no idea how corporate comes up with the prices and I don’t really care. If your patient has insurance, it doesn’t make any difference unless the cash price is lower than the copay. The fact of the matter is that (around here anyway) Walgreens DOES offer more services. We’re the only 24 hour pharmacy for at least 90 miles in any direction. It does cost more to be open 24 hours, to man a drive thru, and to maintain a computer system that allows you to transfer prescriptions from store to store. If you want $4 drugs, you’re going to have to get of your ass and walk into the pharmacy, be there before 8pm, and not forget your medication at home when you go on vacation.

  36. smurfin-tech says:

    Like a few others here, I also work for Walgreens. We used to be able to override the prices of certain medicines in the computer, but the computer gods of Walgreens took that feature away from us.
    Now all we are able to do is price modify at the register and even then I’m sure we will have to give an explanation as to why we did such a thing. I have seen the stupid, idiotic ways people have stolen in the loss prevention papers they used to send out and let us read and I understand they have to watch everyone, but sometimes I just want to pull my hair out.
    I don’t have a clue how they price the medications in our computer system. If you do work at Wag, it is amazing to see the acutal cost of the medicine for a bottle of cephalexin or fluoxetine tabs and many others and then see the acutal regular price. Crazy stuff.

  37. Lily says:

    Direct cost + $8-10 dispensing fee + optional 49 cent markup. This is in a chain pharmacy.
    Yeah, thats how we do it in Canada.

  38. student at independent says:

    I work at an independent with crazy low prices. We price brand name acquisition cost plus $5 for the entire bottle of 100; generic we add $23/100. Our prices are lower than anywhere. I do jack up the price for jerks or druggies of course. I used to work at Walgreens, and all the horrible stuff you hear is true. Yes, one pill is $11.99. AND you will have to wait 45 minutes for it. I will never work for those jerks again, but not all chains are that bad. Walmart let us re-price within the pharmacist’s discretion, and let me tell you – that kept us many a loyal customer tempted to go elsewhere.

  39. T says:

    I work at a drug store chain native to Minnesota and this might sound unfair, but it depends on the patient. If someone doesn’t have insurance or a medication is covered under someones plan and they are rich – they pay through the nose. If the don’t have much money, we can lower the price dramatically, sometimes a little below cost.

  40. blonde intern says:

    I also work for a large chain…and well have NEVER EVER seen anyone change the price in the computer. It is set in stone like an edict from god himself.

  41. Joe says:

    I work for Hannaford. Base price for everything is $9.99 no matter what. So you ask for 2 HCTZ you pay the same as the full 30. We have no control over the margin, that’s at corporate level. We are allowed to Price Override, just so long is it’s not below cost.

  42. Dr Hobbes says:

    At Rite aid, we charge a minimum $10.99, and we do AWP plus some more. This results in gigantic prices (I sold someone 90 sertraline 50s for $239!!!). However, had that person said the magic words “PRICE MATCH WALMART”, I could have price modded to $12. Since she was driving a car that costs more than my house, I didn’t lose sleep over it, but I have, in the past, offered discounts without the patient even asking (Cipro generic for prostatitis = $150, cost $5)….so I say I can do it for $30 and they are so happy they could pee on themselves (if only their prostate was not swollen shot). At Rite Aid we can price mod anything, as long as we give a competitor’s price and we specify who the competitor is.

  43. pharmgrown says:

    From a former Targeteer: Yes, the computer determines your price. Yes, you can change it if necessary. Special order items are McKesson cost plus 40%. The $4 program is there to lure in customers who will then buy floor merchandise, which averages 40% markup (profit). Honestly, many of the Target execs think they will put Walgreens and CVS out of business if they don’t form their own $4 plan (I personally heard this during a conference call). These same execs also think that if Walgreens and CVS do go with a discount plan, they will lose too much money and go out of business as people don’t really go to chain pharmacies to buy merchandise. Luckily for Walg. and CVS most Target execs are also dumbasses!

  44. piefork says:

    It really depends on the customer.
    If they have 2 insurances, we push for most cost/markup/dispensing fee available, depending on whether or not they have a yearly limit.
    one insurance we’ll usually only get a few dollars over APSI, then tacked with a $6.99 dispensing fee.
    Cash paying customers we charge apsi with dispensing fee, no markup.

  45. Alisha says:

    I work at the ever hated Walgreens. All our pricing in done coperately by location, so it varies from store to store. We do have the ability to change the price if ok’d by the manager, so alot of it depends on who your manager is. I know I have done it a few times and got my ass chewed, but o-well, I didn’t really want anyone to die b/c they couldn’t come up with another dollar for their nitroquick.
    Love your blog!

  46. piefork says:

    I forgot to mention that we are an independant pharmacy, so we have more control over pricing then a corporate chain would.
    independant ftw.

  47. sorchagriannon says:

    We have a minimum of $5. Other than that, if a patient is paying cash, it’s AWP + $20, usually. We have a “special” on vico and soma of $20 for 100, along with a couple other meds. Also, the wally world list of $4 meds we do for $3.95 per 30 tabs.

  48. PhilthePharmacist says:

    are company uses some buttfucked formula that nobody understands.

  49. RCH says:

    – costco = acq + (5 to 20%) – Their price generally is used by PBM’s to set the MAC for MS Generics
    – most MAJOR chains = AWP * 1.25
    **the third party bumps the U&C (AWP * 1.25) down to the contract rate or U&C (IF FOR SOME REASON LOWER)

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