Working my way through a dispensary’s monthly purchase books and comparing to the Open Exeter statement is a good way to get an overall view of the profitability of dispensing. Usually, the actual wholesaler spend is less than the NHS reimbursement. And if this is the case, the dispensary bumps along as normal making a profit.
But as part of my investigations, the wholesaler statement may have this big, long list of manufacturers and the discounts given to the dispensary. This is very reassuring to the dispensary management team as they can see the manufacturer name and discount received.
I will not mention any company names here, but here are some genuine sample figures from a dispensing GP practice wholesaler statement:
| Company | Spend | Discount | % Discount |
| Xxxxx | £137.69 | £9.64 | 7.00% |
| Xxxxx | £109.62 | £5.48 | 5.00% |
| Xxxxx | £97.54 | £3.66 | 3.75% |
| Xxxxx | £214.47 | £6.97 | 3.25% |
| Xxxxx | £535.80 | £37.51 | 7.00% |
| Xxxxx | £262.68 | £18.39 | 7.00% |
| Xxxxx | £501.33 | £20.05 | 4.00% |
| Xxxxx | £122.16 | £4.89 | 4.00% |
| Xxxxx | £190.58 | £9.53 | 5.00% |
This piece of information, presented very clearly, shows the level of discount given across a wide range of branded products. On the actual sheet there are twenty-six companies who are showing/giving a discount of less than 10% with an approximate spend of £2,800 for the month.
I went on to discuss this with the dispensary manager who assumed that this discount was on top of their 12% wholesaler discount and that this meant that all twenty-six companies were helping to increase the dispensary income. I explained that this was not necessarily the case which led to a deafening silence as the realisation hit this dispensary manager.
The fact is that further work needs to be done, and the wholesaler needs to provide clear and accurate information about this sort of thing to dispensary managers.
With clawback at 11.18% and across those twenty-six discounts the average was about 6%, then where no wholesaler discount is being given on top of the manufacturer discount, each item is dispensed at a loss of 5.18%.
If this is applied to all twenty-six company schemes the loss to the practice [before dispensing fees] is 5.18% of £2,800 which is £145.04 per month or £1,740.48 per year. That is a substantial amount of money to be losing and it needs to be addressed.
Email contact@dispensingdoctorexperts.co.uk to find out how we can help your Dispensary profitability and analyse your surgery spend versus NHS income and benchmark your profitability.
