NCPA survey finds LTC pharmacies face higher dispensing costs than retail

Long-term care (LTC) pharmacies face dispensing costs that are 25% higher than those of traditional retail pharmacies, according to a survey issued by the National Community Pharmacists Association’s (NCPA) LTC Division.

The division and NCPA Foundation teamed up with researchers from the Virginia Commonwealth University School of Pharmacy and Midwestern University – Glendale to look into the cost-to-dispense for LTC (or “closed-door”) pharmacies.

In their report, “Analysis of Costs to Dispense Prescriptions in Independently Owned Long-Term Care Pharmacies,” the researchers found that a typical independently owned LTC pharmacy incurs dispensing costs of $13.54 per prescription for a 30-day supply, whereas retail pharmacies’ costs are estimated at $10.64 by the State of Alabama and $10.72 by Oregon in their respective analyses. 

LTC pharmacies also incur additional dispensing-related costs to serve residents’ needs, including specialized packaging, 24-hour on-call pharmacy services, and providing deliveries to LTC facilities several times a day on almost all days of the week.

The findings also indicated that while shorter-cycle medication supplies may result in LTC dispensing costs that are lower per prescription, the cost may be higher overall for a 30-day supply. A 14-day supply of medication resulted in an average dispensing cost of $11.63 per prescription, but dispensing two 14-day cycles incurred nearly twice the cost of dispensing a one-month supply, causing costs to rise to $23.26, NCPA noted.

"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," said NCPA CEO B. Douglas Hoey, RPh, MBA. "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."

NCPA established the LTC Division in 2011 to help ensure that federal and state policymakers hear the views of independently owned LTC pharmacies. The report is available free-of-charge to these division members.