The National Community Pharmacists Association (NCPA) has renewed its recommendation of Prescryptive Health’s artificial intelligence (AI) cash pricing system, the health care technology company said in a release.1 NCPA said that using the AI-powered system can help independent pharmacies stay competitive by optimizing their cash pricing.
The technology from Prescryptive Health, which was first recommended by NCPA in September 2022, is an AI-optimized pricing engine.2 The tool, along with a team of data scientists, analyzes claims data to find opportunities based on certain parameters, including a pharmacy’s location, and information about a specific drug. The predictive model adjusts prices based on new data and gives pharmacists actionable insights for cash pricing.
Key Takeaways
- The NCPA's endorsement of Prescryptive Health's AI cash pricing system underscores the importance for independent pharmacies to leverage technology to remain competitive amidst evolving market dynamics and digital innovations.
- With independent pharmacies facing shrinking profit margins over the past several years, adopting AI-powered cash pricing systems can offer a strategic solution to enhance revenue streams and financial sustainability.
- Implementing AI-driven cash pricing solutions like Prescryptive Health's platform can lead to immediate improvements in profitability for pharmacy owners, offering predictability and efficiency in managing cash pricing while ensuring competitiveness and fairness to customers.
“As the voice of the community pharmacist, we know that helping our pharmacists compete in the digital age is imperative,” Douglas Hoey, CEO of NCPA, said in a release.1 “By utilizing this technology, our NCPA member pharmacies can utilize cutting-edge technology to stay competitive while also continuing to do what they do best: take care of their patients.”
Over the past several years, independent pharmacies have dealt with continually shrinking profit margins. In 2023, gross profit margins for independent pharmacies fell to 21%—the lowest seen in 10 years, according to NCPA’s 2023 digest. This is likely due to multiple issues, including low or below-cost third-party reimbursements, inflation, and higher dispensing costs. This has left many pharmacists and pharmacy owners searching for any way to increase their bottom line.
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Cash pricing is one way pharmacies can boost their revenue. At the 2024 American Associated Pharmacies (AAP) Annual Conference in April, Hoey told Drug Topics that NCPA is seeing more and more patients choose cash pricing because it's less expensive than going through their insurance. In a 2022 survey from Prescryptive, 31% of respondents said they primarily pay for medications with cash and 61% of those with insurance said they pay in cash, despite being insured.4
Although cash pricing can benefit a pharmacies profit margins, it can take more work. In the Prescryptive survey, 55% of pharmacists said they spend 2 to 6 hours every week reviewing drug prices weekly, and 42% reported spending more time each week on similar tasks compared to 2 years ago. This is where the company’s AI cash pricing system can help.
Jonathan Marquess, PharmD, a pharmacy owner who uses the tool, said in a release that he saw an “immediate uplift in profitability” after implementing the AI.1 Marquess added that he looks forward to the “new predictability and sustainability” that the cash price solution brings to his business.
“Prescryptive AI Pricing provides a critical service and pricing insights to community pharmacists at a key time,” Chris Blackley, CEO of Prescryptive Health, said in a release.1 “We are enabling these entrepreneurial business owners and critical healthcare providers to be more efficient and have consistent, predictable cash pricing that’s competitive for the pharmacy yet fair to their customers.”
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References
2. NCPA Partners With Prescryptive Health to Bring AI-Optimized Pricing to Community Pharmacists Nationwide. News Release. September 29, 2022. Accessed May 1, 2024. https://prescryptive.com/ncpa-myrxai-partnership/
4. Rewriting the Script: Independent Pharmacy Trends. Report. Prescryptive Health. September 13, 2022. Accessed May 1, 2024. https://prescryptive.com/2022-pharmacy-study/
