AI-Optimized Cash Pricing Can Help Pharmacies Thrive
Learn how one pharmacy chain adopted a cash pricing solution that offered new opportunities for profitability while still offering competitive pricing to customers.
Nearly one-third of independent pharmacies may close their doors by the end of this year,1 leaving many patients who may already struggle to access their prescription drugs in peril. Already 1 in 4 neighborhoods are considered “pharmacy deserts,”2 a problem that is especially acute in rural areas where pharmacies double as de facto health clinics, providing medical advice and critical services such as immunizations, diabetes screening and more.
Concept of AI, medication / Panuwat - stock.adobe.com
Shrinking reimbursements, pricing pressure from insurance companies and pharmacy benefit managers (PBMs), and the high transaction fees3 on some cash discount cards make it extremely difficult for pharmacies to keep medications affordable for customers and still see a modest profit margin. However, even with these headwinds, there are opportunities—just ask OneroRx pharmacies.
Discount Cards Can Destroy Margins
OneroRx serves over 200,000 customers across 7 states, with a network of 65 independent pharmacies dedicated to bringing quality, affordable pharmacy care to underserved communities. For OneroRx, finding a proactive solution that served patients and pharmacy alike was a must.
Most discount card programs came with high administrative fees that were unappealing to the OneroRx team. While searching for lower prices manually, some pharmacists were spending 20 hours a week on the phone to help their customers save money. This manual work and inefficiency further eroded profit margins and made it difficult for pharmacies to offer the ancillary services their rural communities needed.
Unlocking the Data Through AI
Looking for a better way, Amy Mitchell, president of OneroRx Missouri operations, came across Prescryptive’s AI Pricing solution and immediately recognized the potential.
“With increasing prescription insurance deductibles, we believe all generic drug pricing will be cash-based within the next three years,” Mitchell said. “Before partnering with Prescryptive for our cash discount program, our pharmacies struggled to provide affordable cash-based medication options to our patients without compromising our workflow or bottom line. Prescryptive’s comprehensive AI pricing solution has enabled us to implement a cash discount program that is affordable for our patients and profitable for our business.”
Where many discount cards only focus on saving the pharmacy customer money but often at the expense of the pharmacy, Prescryptive’s AI Pricing platform is friendly to both. The solution leverages AI to consider factors like historical claims, population demographics, and more to suggest an optimized cash price that’s calculated in seconds, saving pharmacy staff a tremendous amount of time. Pharmacists can decide on the spot whether to present that price to the customer and process the claim through Prescryptive or reverse it out.
“My advice for other independent pharmacies is to embrace technology and innovation and to optimize their pricing strategies with solutions like Prescryptive AI Pricing,” Mitchell said. “By leveraging advanced analytics and predictive modeling, pharmacies can identify opportunities to enhance profitability while remaining competitive in the market and better serve their communities.”
Balancing Profitability With Patient Savings
Pharmacies using Prescryptive AI Pricing saw nearly 54% gross profit margin in 2023,4 with Q4 2023 data showing that more than 50% of AI Pricing customers averaged greater than $15 gross profit per prescription. In contrast, NCPA’s recent findings for total gross profit margin in 20225 found that independent pharmacies averaged 21%.
But there’s more: patients can save, too—up to 90%, in fact. So far in 2024, the average cash price for a 30-day supply of a generic was just over $20 with the AI pricing solution.
Innovative tools can help pharmacies avoid closing their doors and allow for more available capital to invest in expanding services while patients get affordable access to the medications they need. Yet most important—Mitchell says it also helps pharmacies build trust with customers.
“Access to medications is critically important for the overall health of a community, and our mission at OneroRx is to restore quality, affordable pharmacy care at the local level in underserved communities,” Mitchell said. “Through our partnership with Prescryptive, we are able to achieve this by offering affordable medication options through our cash discount program. This allows us to continue serving our communities by making essential medications more accessible to patients everywhere.”
Miranda Rochol leads the product strategy and sales team for Prescryptive’s mobile-first, blockchain-powered platform that empowers the healthcare consumer with the ability to take ownership of their prescription. Rochol has worked in the healthcare and pharmacy industry for 20 years, holding leadership positions at Healthcare Data Solutions and Walgreens.
READ MORE: Technology and Data Resource Center
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