Read the blog and embrace smarter purchasing to protect your pharmacy from rising drug prices.
The Inflation Reduction Act (IRA) provides significant savings on medications for Medicare recipients. This is great news for those patients, but it also means increased drug prices from drug manufacturers. They’ll need to make up for those losses somewhere, and their price hikes could sink your pharmacy’s cost of goods sold (COGS).
It’s unlikely that these trends will slow down (and it's reasonable to assume they’ll accelerate). That’s why pharmacies must find savings and decrease costs as much as possible in other areas.
This article will show how smarter purchasing can fortify your pharmacy in the face of increased drug prices. Technology designed for your pharmacy provides a unified purchasing and data-driven strategy to compensate for spiking drug prices. It also empowers you to optimize how you work while maintaining compliance. We’ll first cover why the IRA’s good news means challenges to your pharmacy’s margins.
The Impact of the IRA on Your Pharmacy
Medicare beneficiaries can look forward to the savings promised by the IRA. For example, manufacturers must pay the government a rebate if they raise the cost of a Medicare-covered drug faster than the inflation rate. That means lower prices for the patient—which is excellent! But one pharmacy veteran compares drug pricing with a balloon: squeeze one side, and it will pop out the other. Manufacturers will make up for the lower value somewhere. That’s when your pharmacy feels the pressure.
The chief adverse effects of the IRA on your pharmacy include:
• New drugs launch with higher prices because the “inflation penalty” changes how manufacturers set and raise prices
• Non-Medicare customers pay more for specific drugs as legislation disrupts pricing structures, changes the competitive landscape and causes manufacturers to make different portfolio decisions
• Commercial plans will pursue similar approaches to gain similar advantages in a changing market
Because the IRA reduces or even caps a manufacturer’s potential reimbursement, pharmacy benefits managers (PBMs) may also adjust their formulary to compensate for lower gross profit margins. Calvin Hunsicker, SureCost's Founder and Chief Product Officer, has observed some PBMS “engaging in cost-shifting practices that impact reimbursement dynamics which directly influence the amount a pharmacy must pay. This shift is product-dependent and often results in higher costs for the end-user.” He adds “Someone has to cover these additional expenses, and unfortunately, it often ends up being passed along to the pharmacy.” Read more >
Smarter, Simpler, Unified Pharmacy Purchasing Software: SureCost is the only end-to-end purchasing management software that unifies your process without disrupting it. With your entire catalog in one solution, SureCost allows you to set purchasing configurations, drive compliance (with your primary, buying group, GPO and more) and maximize rebates. Save 2-5% on your cost of goods year over year and experience 6x to 30x ROI. The SureCost Success team, with over 100 years of collective pharmacy experience, brings all of your vendors into one online catalog and integrates with your pharmacy management system for you. Stop wasting time searching for NDCs, reconciling errors manually and relying on spreadsheets. With SureCost, save more, stay compliant and work smarter.
