Lingybells
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I've been at a pharmacy for a few days doing a bit of work .. I notice they stock medicines, which I believe the pharmacy itself pays for. Does the pharmacy get reimbursed by the government? Or does the government pay for these medicines?

Also, are prescription charges paid to the government, or does the pharmacy get to keep it? Because I believe the one I'm working at pays it to the government.

In this way, how does the pharmacy earn money?

By buying in meds at wholesale, and selling them on for more? Hence, getting money off of the profit margin? Or is it to do with prescription charges?

Thanks if you could clarify.. Cookies for you! :P
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amongsttheweeds
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I would have thought it gets funding... I believe thats what happens with private dentists, orthodontists, etc.
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unholyteddy
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(Original post by Lingybells)
I've been at a pharmacy for a few days doing a bit of work .. I notice they stock medicines, which I believe the pharmacy itself pays for. Does the pharmacy get reimbursed by the government? Or does the government pay for these medicines?

Also, are prescription charges paid to the government, or does the pharmacy get to keep it? Because I believe the one I'm working at pays it to the government.

In this way, how does the pharmacy earn money?

By buying in meds at wholesale, and selling them on for more? Hence, getting money off of the profit margin? Or is it to do with prescription charges?

Thanks if you could clarify.. Cookies for you! :P
The pharmacy gets reimbursed from the Government for the prescription medicines. There is a book called the 'Drug Tariff' which shows how much the pharmacy will be imbursed. Usually the pharmacy buys the medicines from the wholesaler (for example Sigma, AAH, Colorama) at a cheaper cost than they are reimbursed, so they make a profit there. Usually buying in bulk is cheaper, however if the doctors are not going to prescibe the medicine very often, it is a waste of money to buy more than is needed. From this, you have to have a good business acumen to make sure you are getting the right price. However the pharmacy has to carry the costs of the medicines which have not been prescibed for - ie the boxes sitting on the shelves.

Every month the presciptions are sent to the NHS and are sorted through. However it can takes months to receive the money back- for example if the presciption has not been endorsed properly and made it clear what has been given. This happens because items have been prescibed which are not identical to the 'Drug Tariff'.

The prescription charges (£7.10 going up to £7.20 next month) get paid back to the Government. For each item dispensed, the pharmacy gets about 70p (not sure if it has changed.) They also get 70p for the exempt patients (those who do not pay for the presciptions).

A pharmacy also makes money from over the counter medicines and shop floor. There is also a profit margin there.

Hope that clarifies things for you! Now, where are my cookies!
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Hippysnake
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I also work in a Pharmacy, and the Pharmacist literally told said it's a case of the NHS reimbursing pharmacies a fixed amount from a book known as a drug tariff, which shows how much they're to be reimbursed.

So it's a case of going to the wholesaler who's willing to supply the drugs for the least amount of money. It could be AAH, which is the one my Pharmacy uses for the most part....

A classic example would be amoxcillin. It costs, literally pennies, I think a box of 250mg, 21 tablets costs about 8p-ish. They dispense this, and get reimbursed say, £2 from the NHS. More expensive drugs, say Risperidone or Olanapine cost more, so are kept in smaller amounts, but they are reimbursed in proportionately large amounts.
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Tesh
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OK in real simple terms. £7.10 prescription charge goes to the government. Pharmacies will try to buy drugs for cheaper than what the NHS will pay them back. The drug tarrif lists what pharmacies will get paid back for the drugs they issue (reimbursement).

Second thing is remuneration. Everytime a drug is dispensed a proffessional fee will be received (90p i think). There is a container allowance too which is 3.24 pence (accounts for boxes/spoons/labels). Also there are additional fees for extemporaneously dispensed products liked special formula preps and creams/ointments/pastes.

You get money for measuring stockings dunno how much

For CD scripts you get 128p for a Sch 2 and 43p for Sch 3. Exta money for supervised methadone and subutex too.

Depending on how much the pharmacy spends on drugs per month, a deduction scale occurs so say they spent £20000 a month on drugs, NHS would give themselves a discount of 8.43% off.

Pharmacies get wehat are called Establishment Payments and Practice Payments for the essential services they offer.

Pharmacies get extra money for doing medicine use reviews (£27 per review) but they can only do 400 a year so that makes them around £10,000.

They get around £18,000 to take on a pre-reg though most of this pays their salary.

If a pharmacy spent £3,000 a day on drugs from the wholesaler, that would be £270,000 over 3 months. It takes 3 months (I think) for the PPD to pay the pharmacy so the business needs a really healthy bank balance to begin with.

(All figures quoted from June 2008 Drug Tarrif so out of date)
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Lingybells
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Thanks guys, you were all great! It's much clearer now.

On the whole, would a pharmacy expect to turnover a lot over the year? What kind of gross/net profit would be expected?

I notice that there are loads and loads of deliveries.. but I haven't been able to conclude what kind of profit margin/what kind of income the pharmacy would have!
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unholyteddy
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(Original post by Lingybells)
Thanks guys, you were all great! It's much clearer now.

On the whole, would a pharmacy expect to turnover a lot over the year? What kind of gross/net profit would be expected?

I notice that there are loads and loads of deliveries.. but I haven't been able to conclude what kind of profit margin/what kind of income the pharmacy would have!

It really depends on the individual pharmacy and location. But generally, the gross profit is 30% of the turnover.

For example a pharmacy near a GPs' surgery on a busy shopping road could turnover a million, but a pharmacy in a village location sparsely populated could turnover £350k.
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Miss_Alice
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Not every drug dispensed is listed in part VIII of the drug tariff (basic prices).
Anything not listed must be priced on the endorsement, otherwise it will be rejected by the PPD and so delay payment even further.

Items not listed in part VIII may be specialist preparations or very unusual items that can only be sourced outside the pharmacy’s usual supplier route. More often than not this is very expensive! But where out-of-pocket costs have been attracted (shipping, handling etc), these too can also be claimed back and should be included in the endorsement. The PPD don’t normally check up on the paperwork that supports these claims, but if they do the pharmacy must produce them.
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James Johno
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Do pharmacys in the uk get paid by the government to deliver medication
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marinade
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(Original post by James Johno)
Do pharmacys in the uk get paid by the government to deliver medication
Nope. Not a penny. A massive loss maker in some cases. It's just factored in and shouldered by pharmacies who are 'used to doing it'. The NHS are extremely happy with this rolls royce service patients get completely for free and very happy for this to continue.

It's totally insane and not that many pharmacies charge money. It's generally believed if you don't order medicines for 'free' (cost to pharmacy) for patients which is time consuming and loses money and deliver for 'free' (massive cost to pharmacy) then you will 'lose business'. Everyone does it so the titanic goes down.

If you simplify most prescriptions as 90p per 'item' (which could be several boxes of the same medication as one) plus a small amount made on the difference of the drug (it used to be bigger in the past), then you see how completely wacky it is when pharmacies offer 'free' delivery to the patients. The going rate in the gig economy is 40-50p per a drop. You're getting paid 90p + a bit more.
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marinade
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(Original post by Lingybells)
On the whole, would a pharmacy expect to turnover a lot over the year? What kind of gross/net profit would be expected?

I notice that there are loads and loads of deliveries.. but I haven't been able to conclude what kind of profit margin/what kind of income the pharmacy would have!
Quite a number of pharmacies make a loss. Those that do make a profit it can be a paltry (the figure quoted above of 30% is highly fanciful). The main pharmacy I worked in was 2% which I don't believe it particularly rare because the average number of items per month is somewhere in the ball park of 5000 items per month. Over the counter sales might make 10-20% of turnover depending on sales and whether somewhere has a very low number of items. Over the coming years you will see a lot of pharmacies close.

Pharmacies vary from those that have 1000 items a month to those with 20,000 a month. The 1000 item a month pharmacy is very cushy and will close, the 20,000 item pharmacy is hell on earth if there aren't decent staff.

Forget about the costs of the medications, pharmacy is basically like a pound shop. You have to dispense a vast number of things per month to make a good profit. Low monetary margins on most transactions. Over the counter sales generally the same, very poor per transaction with a few good 'lines'.
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Claremont4ever
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So nice to see you here again spouting your usual negativity. Good man!
(Original post by marinade)
Quite a number of pharmacies make a loss. Those that do make a profit it can be a paltry (the figure quoted above of 30% is highly fanciful). The main pharmacy I worked in was 2% which I don't believe it particularly rare because the average number of items per month is somewhere in the ball park of 5000 items per month. Over the counter sales might make 10-20% of turnover depending on sales and whether somewhere has a very low number of items. Over the coming years you will see a lot of pharmacies close.

Pharmacies vary from those that have 1000 items a month to those with 20,000 a month. The 1000 item a month pharmacy is very cushy and will close, the 20,000 item pharmacy is hell on earth if there aren't decent staff.

Forget about the costs of the medications, pharmacy is basically like a pound shop. You have to dispense a vast number of things per month to make a good profit. Low monetary margins on most transactions. Over the counter sales generally the same, very poor per transaction with a few good 'lines'.
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0895
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Absolutely correct, ignore the izzy person who lives in cloud cuckoo land where no else else wants to work and gets 'good' rates...Let's all move there and drive her rate down. See how much she/he/it loves pharmacy then on £19 AN HOUR!!
(Original post by marinade)
Quite a number of pharmacies make a loss. Those that do make a profit it can be a paltry (the figure quoted above of 30% is highly fanciful). The main pharmacy I worked in was 2% which I don't believe it particularly rare because the average number of items per month is somewhere in the ball park of 5000 items per month. Over the counter sales might make 10-20% of turnover depending on sales and whether somewhere has a very low number of items. Over the coming years you will see a lot of pharmacies close.

Pharmacies vary from those that have 1000 items a month to those with 20,000 a month. The 1000 item a month pharmacy is very cushy and will close, the 20,000 item pharmacy is hell on earth if there aren't decent staff.

Forget about the costs of the medications, pharmacy is basically like a pound shop. You have to dispense a vast number of things per month to make a good profit. Low monetary margins on most transactions. Over the counter sales generally the same, very poor per transaction with a few good 'lines'.
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