Pricing Models
Johanna Taylor Katroscik, PharmD
Nate Hux, PharmD, is a pharmacist in Pickerington, OH, who owns two different pharmacies that are right next to each other. One is a traditional pharmacy that accepts commercial insurance, and the other is a self-pay pharmacy.
As drug prices continue to rise, more pharmacists and pharmacies are starting to think outside the box to help patients afford their medications. Self-pay pharmacies, also known as cash-only pharmacies, have started springing up over the past few years.
So, what are these self-pay pharmacies and how do they fit into an already complicated health care system?
Self-pay pharmacies offer a transparent payment model
Self-pay pharmacies are pharmacies that do not contract with insurance companies to fill prescription medications. By avoiding these contracts, self-pay pharmacies are able to eliminate the middlemen, also known as PBMs.
This allows pharmacies to choose the products they want to purchase to dispense and to set the price that they will charge for the medications.
Self-pay pharmacies generally only carry generic or lower cost medications. Pricing models may vary slightly based on the pharmacy, but most charge a set fee and are transparent about how they set their prices. For example, some charge the average wholesale price of the drug plus a fee that covers pharmacy operation costs. Others build operational costs into the prices of all their medications and charge the same fee for all prescriptions they fill at the pharmacy.
These pricing models let patients know how much the medication will cost before filling it—something that is beneficial for patients who have high drug costs if they fill through their insurance companies. Additionally, the pricing models offer benefits to the pharmacy. Pharmacies that operate as cash only know what their bottom line is and don’t have to worry about hidden fees or claw backs from insurance companies or PBMs.
Patients who benefit
Self-pay pharmacies offer one solution for patients who struggle to afford their medications, but they will not save money for everyone. Cash-only pharmacies best serve patients who are primarily prescribed generic medications that may have high copays or deductibles through their insurance plans. However, patients who are taking newer therapeutics only available as name-brand drugs will likely save more money purchasing their medications through an insurance plan.
Hux and his pharmacies were highlighted by Pharmacy Today in May 2021 after he opened the self-pay pharmacy in 2020. More recently, NBC news wrote an article highlighting how he serves his community and patients by helping them figure out which pharmacy they should use—the pharmacy that accepts insurance or the one that does not.
Hux has a unique model that serves both patient populations, but not all self-pay pharmacies offer this luxury.
Self-pay pharmacies are still a fairly new model, and while there are more of them now than there were a few years ago, they are not necessarily easily accessible to all patients.
CostPlus Drug Company, the self-pay internet pharmacy that was recently started by Mark Cuban may be one option for patients, but patients will still need internet access and a prescriber who is willing to send the prescription to an online pharmacy. Additionally, patients will have to spend their own time researching the difference in medication prices between a pharmacy that accepts insurance and the cash-only pharmacy. Another benefit of a local pharmacy option like Hux’s is that patients will still have access to a local pharmacy and a pharmacist who can help them manage their medications and offer the type of customer service that an internet-based pharmacy is not able to provide. ■