Generic Profitability – Part One

How are you purchasing your bulk dispensed generics?

A large volume of your dispensed items in a dispensing practice will be your everyday generic items. Most dispensary managers will have a good idea of what those are, and they will be ordered regularly. Most of these will have a low Drug Tariff price, and the margin gained dispensing them will be relatively low in terms of actual profit per item dispensed.

It is a fact that a 50% discount on a £1.00 generic item gives a high % Gross profit per item [calculated as 50% minus Clawback of 11.18% = 38.82%] but only a profit per item of 39p.

And these are items going out of the dispensary daily, or even hourly!

So how do you manage these everyday generics and ensure you are maximising your profitability?

The simplest way is to negotiate the best possible deal you can with your first line wholesaler and utilise a one out, one in buying system. But this may not be the most profitable way of purchasing your bulk dispensed generics.

Let’s go back to basics, and one of the most valuable commodities in a busy dispensary manager’s life is time. When looking at bulk dispensed generics is it worth the time to be constantly checking various prices to see what the best deal is? Not really. Saving 10p per pack on a medicine which you dispense 100 packs of a month only leads to an extra margin of £10. And if that takes an hour’s work it is probably actually not worth doing as the wage cost and lost opportunity is surely greater than that £10.

There are various companies out there who offer to price match generics which are certainly worth looking into and the shortliners may very well be your best option for buying generics all round. Talk to your first line wholesaler about their generic offering and do not be afraid to talk to other wholesalers and suppliers to see what they can offer.

Consider the main buying groups, PSUK and Forte, both should be able to offer their members a generic scheme which is easy to use and should be as transparent as possible. Being able to see the net price you pay would be an ideal way to compare offerings.

One thing you may want to consider is putting out your top 20 generic lines by monthly spend to tender to several suppliers, and then purchasing those in bulk. This should ensure a good margin, take up a small amount of your valuable time and guarantee an agreed margin for that month’s bulk dispensed items.

And finally, what about special offers?

Do you still get those ebulletins offering guaranteed discounts on bulk orders?

They used to get sent out by fax, but as fax machines are a thing of the past, they are most likely to come in via email. It is worth checking your spam/junk folders just in case. Sometimes these special offers are well worth taking as the manufacturer may have some short-dated stock they need to sell cheaply. Do not automatically discard special offer emails, they may well have an actual offer that suits your needs.

You will mostly know your top moving generic lines, but just in case here is a list of the Top 20 Generics by cost to the NHS dispensed in England in November 2020:

Top 20 by NHS Sales
Metformin 500mg tablets
Paracetamol 500mg tablets
Sertraline 100mg tablets
Sertraline 50mg tablets
Omeprazole 20mg gastro-resistant capsules
Co-codamol 30mg/500mg tablets
Atorvastatin 20mg tablets
Lansoprazole 30mg gastro-resistant capsules
Tamsulosin 400microgram modified-release capsules
Salbutamol 100micrograms/dose inhaler CFC free
Naproxen 500mg tablets
Amlodipine 5mg tablets
Atorvastatin 40mg tablets
Levothyroxine sodium 25microgram tablets
Cyanocobalamin 50microgram tablets
Levothyroxine sodium 100microgram tablets
Aspirin 75mg dispersible tablets
Amitriptyline 10mg tablets
Gabapentin 300mg capsules
Clopidogrel 75mg tablets
The Top 20 Generics Dispensed by Cost Nov 2020 in England

If you need any help, advice or support please email