In-office Generic Drug Sales Can Boost Bottom Line

By Sharon H. Fitzgerald

In-office Generic Drug Sales Can Boost Bottom Line
Middle Tennessee is the newest territory for a company that helps physicians set up retail sales of generic pharmaceuticals to their patients. Levregy, based in Georgia, serves as a liaison and marketer between doctors interested in point-of-care sales and the drug packagers and distributors.

"I'm not a drug rep. I'm a businessman. We're about helping a physician practice save, make and recapture money," explains Chuck Catterton, Levregy's Middle Tennessee account manager. Currently, Levregy partners with one drug packager and distributor – Diversified Healthcare Services with its REDI Rx product – to offer generic pharmaceuticals custom-packaged for sale by an individual physician or group practice in Middle Tennessee. Yet Catterton says Levregy expects to offer the product lines of other pharmaceutical distributors throughout 2006 as he identifies the needs of area physicians.

Because many private-practice physicians are seeing more patients yet making less money, Catterton says in-house pharmaceutical sales can heal doctors' bottom lines. "It's truly a win-win, and that's why I like it. The patients like it because they can get their script and go home. It's convenient. And it's a money-maker for the doctor," he says. According to Levregy sales materials, physicians can expect to average $5 to $6 per prescription sold.

Roxie Kelley, Levregy regional director serving Tennessee, Alabama and Mississippi, says Levregy is "the face-to-face interaction with the physicians. We call on the physicians, detail the program, coach the physicians on how it's going to work for them, set it up for them and support them. We have a local presence and establish an ongoing relationship. It's our intention to be long-term business partners with them."

As the needs of a practice change, that Levregy account manager may recommend the pharmaceutical product of a different company. "As medicine changes, and it is always changing, what we introduce to one particular physician group this year for their point-of-care service may not be the company that can serve their best interest two years down the road. We represent the physician, and our market niche is to develop a relationship with a physician and have enough arrows in our quiver, so to speak, that depending on what their current need is, we have something that matches them the best."

Should a doctor or group join up with Levregy, the account manager helps the practice determine each physician's prescribing habits. That protocol is the basis for the practice's pharmaceutical ordering. "We in no way whatsoever try to encourage, change or manipulate their prescribing habits," Kelley explains. "This is a program designed on their current prescribing habits for 50 to 80 percent of the generic prescriptions that go out of the office … The physicians are not stocking a full pharmacy. They're stocking the generic pharmaceuticals most commonly prescribed in their practice. The pharmacist is back at the companies we represent, because these companies are FDA and DEA licensed and must have pharmacists on board in order for them to do any of the packaging."

Before the drug shipment arrives at the practice, the account manager trains the staff and determines where the drugs should be stored and secured. Once the drugs arrive, the account manager helps the practice set up for sales. The orders arrive "prepackaged and presealed with childproof caps exactly to the doctor's formulary," Kelley explains.

This concept is not new, notes Kelley, but has been mostly used by physicians treating workers' compensation cases. "Regulations in the state of Tennessee are very friendly for physicians to do this, even though physicians may not be aware that they have been able to do this for a very long time," she says. The state board of medical examiners regulates dispensing physicians. Competitors in the field include Allscripts and Doctors RX, mostly involved in workers' compensation to date, and Nations Pharmaceuticals, Southwood Pharmaceuticals and New Care Pharmacy

"This is the hot, new buzz," Kelley says. Yet she adds that Levregy's approach differentiates itself because the focus is strictly on generic drugs, which can be sold by private-practice physicians at highly competitive prices. "It's cash and carry," she says, meaning that participating physicians don't deal with filing insurance forms and awaiting insurance reimbursements. Most of the medications are available to the physicians at a wholesale price that allows the physicians to price them for sale to their patients at or below the national co-pay average of $15 or the price of national discount chains. Whether patients buy from their doctor is "always the patients' option. There's no pressure," Kelley adds.

Not only could the physician sell acute-care generic pharmaceuticals such as antibiotics, but also maintenance drugs for patients on a quarterly basis. Also available are "surgical packs" that include the prescription medications a patient needs before and after a surgical procedure.

Kelley says another reason physicians like the idea of in-office sales is because patients leave the office with the their medications in hand. The American Association of Retired Persons estimates that about 30 percent of all prescriptions are never filled, resulting in $1.8 billion in catastrophic care.

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