How to set cash prices for prescriptions
Cash-paying patients compare. A pharmacy that prices cash prescriptions from its own costs, rather than from a list price or a discount card’s rate, can win them and still earn a fair margin. Here is a method, and the contract trap to check first.
Start from acquisition cost, not list price
A cash price built from average wholesale price or list price is easy to set and easy to beat, because for most generics it bears little relation to what you paid. Build it from your actual acquisition cost per unit from your wholesaler invoices. For a sense of where you stand, CMS publishes NADAC, the national average drug acquisition cost, weekly for thousands of generic and brand products from a survey of retail pharmacies; it is a public benchmark, not a price you must match.
For brand-only drugs, every pharmacy pays roughly the same wholesale price, so your cash price competes only on margin. For multi-source generics, acquisition costs differ a great deal by supplier and contract, which is where an independent with good purchasing can price well below a chain.
Add a dispensing fee that covers your real cost
Each prescription costs you pharmacist and technician time, verification, labeling, packaging, counseling, software and overhead, whatever the drug costs. A transparent model prices that as a dispensing fee per prescription and adds a modest percentage or fixed margin on the drug. Cost-of-dispensing studies done for state Medicaid programs are a reasonable reference for what a fee needs to cover.
A per-prescription fee explains a pattern patients notice: for cheap generics, small quantities are mostly fee, and a ninety-day supply costs far less per day. Pricing ninety-day fills attractively wins the maintenance patients who stay for years.
Your own cash price versus discount cards
When a patient presents a discount card, the claim is usually adjudicated through a processor that sets the price and takes a fee from the pharmacy, much like a PBM, and you have little control over the result. A cash price you set yourself is yours: no processor, no fee, no clawback. Many pharmacies quote their own cash price and compare it with the card price at the counter, charging the patient the lower of the two.
A good fit if
- You know your acquisition cost per unit for the generics you dispense most.
- You can calculate what a prescription costs you to dispense.
- You want cash prices you can explain to a patient in one sentence.
- You want to compete for maintenance prescriptions with ninety-day pricing.
Check before you quote
- Usual and customary: many PBM contracts require you to bill plans no more than your U&C price, and some define U&C to include cash prices offered to the general public. A published cash price list can therefore cap what plans pay you. Read your contracts and ask your PSAO before publishing prices; quoting individual cash requests is a different situation, but check how your contracts treat it.
- State law: some states regulate usual-and-customary reporting, price posting, or discounts to particular groups.
- Consistency: apply the same method to everyone, and document it, so prices are defensible.
Questions pharmacies ask
Should I just match whatever competitors charge?
Only if it covers your acquisition cost and your cost of dispensing. Patients who pay cash value a fair, consistent price and good service; a price that loses money on every fill is not a strategy.
What is NADAC and should I use it?
The national average drug acquisition cost, published weekly by CMS from a survey of retail pharmacies. It is a useful check on whether your acquisition cost is competitive and a transparent basis some pharmacies use, but your price should rest on your own costs.
Will a low cash price hurt my insurance reimbursement?
It can, if your PBM contracts define usual and customary to include it. That is the single most important thing to check before you publish cash prices.
How does Script Unlock fit?
Patients upload a prescription and you quote your cash price for that request. You decide request by request, and the patient pays you at collection. The fee applies only to orders you mark collected.
Apply to join
Tell us the pharmacy and an email. A person checks your NPI record and state license before your account can see requests. Terms are on the pricing page.