The Impact of Free and Low-Cost Prescriptions on Urgent Care

Ten years ago Wal-Mart launched its $4 generics program, offering 30-day supplies from a diverse list of generic prescriptions, in thousands of stores across the country. Since then, similar programs rolled out in other chain stores, such as K-Mart and Target. Grocery store chains along with other businesses jumped in along the way offering “free generics” to lure customers.

Meanwhile, nearly half—45 percent—of urgent care centers are dispensing pre-packaged pharmaceuticals, according to 2015 data from the Urgent Care Association of America. But how has the rise in low-cost options for prescription drugs impacted that in-house operation at urgent care centers?

Effingham Express Care has offered in-house dispensing at its Illinois clinic since opening in April 2014. CEO Paul Toofan, MD, said he hasn’t noticed any changes in patient habits due to low-cost or free generics being offered elsewhere.

“It’s very popular with patients,” Toofan said, adding that about half of his patients choose to fill their prescription on site. “They mainly like it due to the convenience of not having to go to the pharmacy.”

But some clinics haven’t fared so well. Roswell Urgent Care started dispensing prescriptions about five years ago. But Dr. Judith Dennis, Medical Director, said the service is more of a benefit for patients than a money maker at the Georgia clinic.

The pre-packaged pharmaceuticals are very popular with workers comp patients, Dennis said, because it simplifies the payment process either from the employer or the workers comp carrier. The service isn’t often used by those with private insurance, however, because the center offers only cash-and-carry prescriptions for those patients.

“The only time they buy meds here is on holidays when the pharmacy is closed or if they’re in a real time crunch, like if they’re on their way to the airport,” Dennis said.

The clinic has scaled back its prescription offerings. Dennis said they stopped stocking some medications because of their availability for free or low prices at outside businesses.

“We keep our prices lower for most of the medications we do stock—such as pain meds, eye drops, cough syrup, and inhalers,” she said. “But I do think it’s impacted sales in cases where a patient needs an antibiotic, that they can get for free somewhere, and then a few other medications. They’ll go to the pharmacy where they can get the free antibiotic and just get the other ones there, too. We lose the sales on the adjuvant products.”

Many urgent care centers offer low-priced pharmaceuticals on site as a break-even or loss-leading traffic generator. NextCare, which operates more than 100 clinics across the country, launched a $1 prescriptions program in 2010. But urgent care centers must decide if the approach makes sense in their market.

Here are a few other key points to consider for a successful in-house dispensing operation:

Inventory control: Consider what prescriptions are likely to sell at the clinic, based on patient habits and trends. Unsold inventory dilutes margins and can make a program altogether unprofitable. Only stock the “essentials” that turn on a frequent basis. Evaluate the historic frequency of ICD-10 diagnostic codes to provide a business case for stocking one pharmaceutical over another.

Smooth workflow: It’s vital to have an integrated EMR to send prescribing information director to in-office dispensing systems. Otherwise, manual re-entry of patient and prescribing information can be a time-consuming process—one that many patients won’t stick around for.

Promote patient experience: It’s important that patients know that on-site dispensing is available. Marketing and suggestive selling should focus on the convenience aspect. New York urgent care chain CityMD took this convenience concept a step further this month by partnering with a startup called ZipDrug. After a patient orders medication at the clinic kiosk, Zipdrug delivers the prescription to the patient’s door in Manhattan. It takes on average 16 minutes, according to a statement by the company. Patients can track the delivery on a map.

The partnership with Zipdrug is part of an effort to control more of the patient experience, Ned Shami, chief strategy officer at CityMD, told Crain’s New York Business. “When we looked for areas really beyond [CityMD’s] control, they included referrals and prescriptions,” he said.