A prescription discount program is made to help people reduce prescription medications by providing its people a prescription discount cards used when having to pay for prescriptions. Pharmacies are prepared to accept these discount cards from clients for various reasons.
The very first could well be dependent on competition between pharmacies. Pharmaceutical drugs is really a $500 billion industry, so levels of competition are fierce. If a person pharmacy doesn’t accept the discount card, the pharmacy lower the road can, therefore attaining the process of the cardholder. Remember whenever you began that lemonade stand whenever you were a child, after which that annoying neighborhood boy replicated your idea, but offered his lemonade for five cents less? Unless of course you can prove that the lemonade was worth 5 cents greater than his, you’d to reduce your cost too. (And let us be truthful–your moms were making the lemonade anyway.)
Since medication in one pharmacy is similar to medicine from another, pharmacies are obliged to recognition the discount card. Second, even in the lack of competition, pharmacies realize that some medication is useful, although not essential (think antacids), therefore if the cost is simply too high, some might not fill their prescriptions whatsoever. In short, there’s an entire market segment to become acquired by accepting the discount card–the segment that, according to cost, would need to decline to buy their medication unless of course the cost was decreased. Third, pharmacies realize that by accepting the discount card, they customize the customer with the door who may finish up purchasing even more than just their medication. Ever thought about why Walgreens places their pharmacy (the primary reason you are in the shop) completely in the rear? While you walk to the pharmacy, you pass 1000’s of items from groceries to batteries to stuffed creatures to handmade cards to–other great tales an on. Therefore the more and more people they cope with the doorway, the greater money they create on products apart from medication.
Prescription discount programs are produced by pharmacy benefits managers (PBMs) who use pharmacies in several different ways. In the situation of prescription discount programs, PBMs negotiate great deals for his or her cardholders, which pharmacies are prepared to accept for that reasons pointed out above. But what’s in it for that PBMs? Whenever a prescription is filled using among the PBMs discount cards, the PBM will get half the normal commission from the revenue from that purchase.
In essence, everybody wins. Pharmacies have more business. Cardholders obtain prescriptions filled in a lower cost. And PBMs obtain a share from the profits. It is a classic win, win, win situation.