Physician Dispensing – a Primer

Call it what you will: physician dispensing, clinic dispensing, point of care dispensing etc.  A clinic that inventories medications and provides them to patients as part of their care is engaging in dispensing.  This activity is legal in most states and has long been considered a part of the physicians tool bag in the quest to care for patients.  Now, you can find it in nurse practitioner and physician assistant tool kits as well.

Practices of all flavors dispense to their patients:

  1. Urgent Care
  2. General Practice
  3. Weight Management
  4. Occupational Health
  5. Employer Clinics
  6. Dermatology
  7. Pediatrics
  8. Dental
  9. Student Health
  10. Internal Medicine
  11. Podiatry

Clinics often purchase prepackaged medications from companies like Northwind Pharmaceuticals.  Prepackaged medications are also known as repackaged medications because the repackager purchases them in bulk, counts out the pills into smaller groupings and then repackages them into unit-of-use sizes.  In other words, that bottle of amoxicillin with 1000 pills is broken down into a bottle with 30 pills so the clinic can put it on the shelf and provide it to their patient without breaking the seal or counting pills.  Repackagers are regulated by the FDA and are required to maintain the same quality procedures as original pharmaceutical manufacturers.  Packaging, labeling and quality are all critical to this process.

After prepackaged medications are put on the shelf, the clinic must have a tracking and labeling system.  Most suppliers offer their clinic customers a manual logbook or dispensing software.  A few, like Northwind, do not charge for these systems.  The logbook system is a handwritten system with peel-off labels to place on the bottles.  Dispensing software systems typically track inventory and dispenses plus add a label printing function.  RxTracker, the Northwind system, prints a label and drug information sheet that mirrors what a patient would receive from the pharmacy.

The medication formulary will vary from clinic to clinic and really depends on your patient base.  More generalized practices will have a broader number of medications on the shelf while specialists typically narrow their formularies.  In addition to bottles of pills, clinics also offer lotions, creams, ointments, OTC products, liquids and medical supply items.  Your supplier will be happy to help you figure out the best mix for your practice.

Medication dispensing is not complete without the financial element.  Dispensing clinics typically focus on generic medications  and cash-paying customers.  A few offer branded medications and tread in the insurance reimbursement world but this is only a fit for certain, higher volume clinics.  A cash-focused clinic typically charges about $15 per dispense depending on the product, practice and location.  With the average of 40 scripts per day, this approach will typically yield 25-30 dispenses per practitioner.

Some things to consider when looking for a supplier:

  1. Do they offer the medications you need in the size you require?
  2. Are they licensed in your state?
  3. Does their medication tracking system work for your practice?  Make sure it fits your process and doesn’t limit your flexibility in your care flow.  Also make sure it doesn’t require much duplication of effort – some labeling systems can be cumbersome.
  4. How are their prices?  Some organizations maintain sizeable overhead.  Make sure you’re not carrying too much of that in your prices.
  5. Do they require a contract?  This may work in some instances but normally limits your flexibility.  For example, Northwind does not require a contract or minimum order.
  6. What other terms or deals do they offer?  It never hurts to ask, they might say yes!
  7. How is the cultural fit?  In other words, do you like the people you’ve met/spoken with?  Often, the soft-side becomes the most critical element.
  8. Do they warehouse products or are they a marketing company?  There are numerous marketing companies now offering office medication dispensing solutions that are shipped from another company’s warehouse.  Typically, layers of people add cost to the product.  Service may also come from different places.  This may work for your clinic but you should be aware of it upfront.

Ok, that is a good start.  Good luck!

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