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Generic Purchasing

Given the volume of prescriptions that are prescribed and supplied as
generics, it is essential that as many of these as possible turn you a profit.
Don’t get me wrong – brand losses will always be important to avoid,
because the branded medicines are so often much more expensive, but
your generics are your bread and butter and every penny profit counts.
Generics tend to be sold as part of a buying scheme run by the supplier.
So you could be on a scheme direct with a manufacturer or alternatively
and more often for DDs, one offered by your wholesaler. These schemes
are designed to give you the best margins on Drug Tariff in exchange for
your loyalty – the wholesaler shares a greater part of the margin via loyalty
discounts.

Understanding your scheme is important but understanding why you are
purchasing generics off scheme is even more important. Most off scheme
purchases become loss makers and this picks away at your profit margins.
When I ask for the reason for off scheme purchasing in a dispensary, the
answers given are usually the same; the item was out of stock with my first
line wholesaler; our order didn’t turn up; when I sent the order it came back
as not stocked or pip code not recognised; I thought the price was cheaper
elsewhere when I looked at the wholesaler portals.
Let me quickly address these one at a time:

• Generic item out of stock – try ordering again and check the
pip code if you are ordering via the clinical system as sometimes
incorrect pip codes have been saved. Order again because the out-
of-stock status may have been updated and the item is now available.
Inconvenient I know but better than making loss.

• Order failed to arrive – frustrating I know! But again better to wait
for the order to arrive than to fill all those waiting prescriptions with
unprofitable stock. Let patients know their supply will be a day late
perhaps?
• Messages received about pip codes and stock not held are often
wrong and as above the pip codes in your clinical system can
often be incorrect (especially if you have had a system change in
the past eg EMIS to S1). Try ordering all the stock via the PSUK
portal before going shopping elsewhere – you may find that most
lines are now available.
• Price appears lower elsewhere – well this would make sense of
buying elsewhere wouldn’t it, but can I please remind you to compare
apples with apples and understand the pricing schemes.
Your APM (PSUK) generics scheme works on a rebate basis. This is
important to understand because it means you cannot compare the portal
or invoice price with another suppliers price as the rebate has not yet been
applied. This is misleading if you don’t understand that this is the case and
it leads to many dispensers ordering stock from elsewhere in the opinion
that they are saving money. If you want to understand the competitiveness
of your APM scheme, then ask for your NET prices. Now you can compare
with the prices you thought were such a bargain, apples with apples.

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