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Study finds LTC pharmacies face higher dispensing costs

February 22, 2013
by Patricia Sheehan, Editor-in-Chief
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Long-term care pharmacies incur dispensing costs that are 25 percent higher than those of traditional retail pharmacies while providing additional services to meet the unique health needs of LTC residents, according to the findings of a new survey by the National Community Pharmacists Association (NCPA) Long-Term Care Division.

Researchers looked at the cost-to-dispense (CTD) for pharmacies that exclusively serve LTC residents—also known in the industry as “closed door” pharmacies.

Among the survey’s findings:

  • A typical independently owned, closed-door LTC pharmacy incurs dispensing costs of $13.54 per prescription for a 30-day supply. That’s about 25 percent higher than those of retail pharmacies, estimated at $10.64 by the State of Alabama and $10.72 by Oregon in their respective analyses. Compared to their retail counterparts, closed-door LTC pharmacies incur additional dispensing-related costs to serve residents’ needs. These include services such as specialized packaging, 24-hour on-call pharmacy services and providing deliveries to LTC facilities several times a day on most (if not all) days of the week.
  • Shorter-cycle medication supplies result in LTC dispensing costs that may be lower per-prescription but higher overall for a 30-day supply. A 14-day supply of medication resulted in an average dispensing cost of $11.63 per prescription. However, dispensing two 14-day cycles incurs nearly twice the costs of dispensing a one-month supply causing costs rise to $23.26.

“This important survey documents the higher dispensing costs incurred by long-term care pharmacies meeting patient needs and highlights the need for Medicare and other payers to ensure their reimbursement models account for the unique challenges faced by LTC pharmacies,” said NCPA CEO B. Douglas Hoey, in a statement.

“As payers consider new payment models such as average acquisition cost or AAC, it becomes even more vital that they account for the escalated costs of serving LTC patients,” Hoey added. “In addition, while short-cycle dispensing is considered as a means to reduce wastage of expensive medications, this survey is a reminder that consecutive 14-day prescriptions may result in higher dispensing costs that must be factored into pharmacy reimbursement models.”


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