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Growth Strategies: Psst … Buddy - Want to Sell Some Drugs?


A small but growing number of physicians are selling and dispensing medications right from their offices - boosting revenue while adding a convenience for patients. And new technologies are making it easier. Can it work for you?

Bruce Sabin went from practicing internal medicine in a large HMO-owned office in Atlanta to opening his own practice in Snellville, Ga., for one reason: He wanted to treat patients the same way he would want his own family members treated.

In his mind, that meant overseeing the entire “circle of care.”

“I diagnose and treat medical problems. So I want to provide patients with their prescriptions and make sure they are taking their medications,” Sabin says. “When I was working at a large group, I noticed that patients were not compliant and didn’t properly take their prescriptions. They wouldn’t get their prescriptions filled at the pharmacy or they waited too long to get them filled or would never get refills.”

Sabin’s patients are hardly an aberration. Indeed, about 21 percent of patients never get their prescriptions filled, according to the American Association of Retired Persons. Also, about 30 percent of patients who should get their prescriptions refilled fail to do so, according to the journal Internist.

So for business and quality-of-care reasons, some physicians - perhaps 7 percent, according to some estimates - have started to dispense prescriptions to their patients at the point of care. To do so, many practices have implemented prescription-dispensing systems within their offices that make it easy to provide prepackaged medication while patients are in the office in lieu of writing prescriptions for them to fill at pharmacies.

These prescription-dispensing systems can also bring in additional revenue. But some industry observers say the extra time and effort required to sell prescriptions within practices is not worth the headache, despite the additional income.

There is also an ethical concern. Although it is legal for physicians to sell medications to their patients at the point of care in most states, some question whether physicians should profit from this practice. Critics worry that the money-making motive might cloud doctors’ clinical judgment.

For example, physicians might prescribe only the medications that they stock rather than a more clinically effective alternative. Indeed, the American Medical Association discourages selling prescriptions within physician offices except at cost.

Weighing the benefits

But supporters of the practice say the benefit of in-office drug dispensing to patients and physicians outweigh the drawbacks. They claim the following advantages:

  • Reduced risk of medication errors. Errors occur in about 5 percent of all medications dispensed from a pharmacy, according to the National Association of Boards of Pharmacy.

Azar Korbey, a primary-care doctor who uses an Allscripts prescription-dispensing system in his two-physician practice in Salem, N.H., claims the system increases his control and decreases his chances of making a prescribing error.

“We have had quite a few problems with patients not getting the exact prescription or dosage that we prescribed,” Korbey says. “When I am actually dispensing the medications, I know that the patients are actually getting what I want them to take.”

  • Increased compliance. As Sabin claims, many physicians who dispense medications at the point of care say because their patients can get their prescriptions filledon-the-spot, compliance increases.

Sabin, who uses a system from Physicians Total Care, says his patients have become more compliant with their treatments simply because he personally goes over their prescription protocols as he dispenses medications to them.

“Patients take their medications a lot more seriously when they receive the prescriptions and instructions directly from me, the doctor who is treating them,” Sabin says. “I’ve seen a big difference in how closely they follow the instructions and actually complete their treatment regimens.”

Being able to track patient compliance with refills is another plus, say advocates. “I have the ability to track the refills,” says Korbey. “I know that a patient with high blood pressure, for example, should be getting refills every month. If the patient is not having the prescription refilled, I can follow up and see what is going on.”

What’s more, the dispensing systems - many of which offer access to patients’ prescription histories - can help clinicians detect when patients are trying to get unneeded drugs, says Patrice Pash, practice manager at Physicians Immediate Care in Rockford, Ill., which uses an automated dispensing system from DRx Pharmaceutical Consulting.

“The biggest advantage with the Web-based system is that we will be able to integrate all six of our care-center sites together,” Pash says. “By doing so, we will be able to see if patients have been at each of the locations and what their prescription history is.”

She adds, “We get hammered by narcotics seekers. With this system in place, we are able to see if someone has gotten medications at other locations. So it quickly becomes apparent if they are going from location to location trying to get drugs to support their addiction.”

  • Better customer service. Susan Miller, RN, administrator at Family Practice Association of Lexington, says her nine-doctor practice in Kentucky started using a dispensing system from Allscripts about five years ago primarily as a way to improve patient services.

“For example, say it is 28 degrees outside and the snow and wind is blowing [and] a parent brings a child in with an ear infection,” says Miller. “Well, we can provide the medications right on the spot, instead of having the parent and child go to the pharmacy.”

Providing patients with a convenient means to get medications was one of the reasons the four oral surgeons at Oral Surgery Plus in Spokane, Wash., implemented a prescription dispensing system, says Debbie Bradley-Kizziar, a physician at the practice.

“Since virtually all of our patients come in for some type of surgery, just about every patient requires some type of medication,” she explains. “Most of our patients need to have someone drive them home. Getting the prescriptions right here just makes the process much easier. Whoever is driving doesn’t have to leave them in the car and trek into the pharmacy to get the medications. The patient can get home a lot quicker, get comfortable, and start recovering,” she says.

  • Less expensive for patients. In many cases, onsite dispensingsystems enable physicians to offer prescriptions to their patients at a price that is less than what the patients might pay at a commercial pharmacy.

“The patients really appreciate having the ability to get their medications in the office, especially on the many occasions when we can savethem considerable amounts of money,” Korbey says. “I had a patient not too long ago who was literally able to get his prescriptions at half the price of what he could have gotten them for in the pharmacy.”

Is it worth it?

So is there anything wrong with making some extra money while providing patients a service they want and can benefit from? “Doctors have been dispensing medications since the days of house calls. So I don’t really see any reasons why they should not do it,” says Andrea Serratte, CPA, president of Specialty Services of America, a Phoenix-based healthcare consulting company.

Vendors who sell prescription-dispensing systems say practices can clear anywhere from $20,000 to $100,000 a year if they adopt in-house drug dispensing.

Bradley-Kizziar notes that each of the four doctors in her practice bring in about $1,000 per month in additional revenue through in-office prescribing. Korbey estimates that his two-doctor practice earns about $2,500 per month in additional revenue. For Sabin’s practice, the extra money adds up to $6,000 a month.

Randy Vogenberg, senior vice president in the Life Science Practice at AON Consulting in Chicago, agrees that on-site dispensing could help practices bring in additional income, but she stresses that physicians need to carefully analyze the pros and cons of selling prescriptions in their practices.

First, she says, physicians should assess whether the money they will make from dispensing is worth the time it takes to actually administer the dispensing system.

Second, practices need to evaluate their liability risks. Physicians need to know the regulations in their states regarding who may dispense drugs. A few states, such as Texas, forbid the practice altogether. In others, only a physician may dispense pharmaceuticals. Other states allow nurses and nurse practitioners to dispense. But whoever does the dispensing, physicians will still carry all of the liability.

“The physician is liable for all of the drugs that are dispensed. So they would have to make sure that there is nothing out of date or any other problems,” says Vogenberg. “How do you measure the liability? If something goes wrong it could become a nightmare. Physicians need to think about whether or not it is worth the aggravation.”

But Priscilla Ray, a Houston psychiatrist and chairperson of the American Medical Association’s Council on Ethical and Judicial Affairs, says that physicians simply should not seek to profit from the sale of prescriptions to their patients.

“The concern, of course, is that there would be a risk of exploiting patients - even inadvertently,” she says.

Ray suggests that physicians offer their prescriptions free or at cost to avoid any questions about motives. Physicians who do choose to earn revenue from filling prescriptions should disclose that fact to their patients, she says.

Many physicians who are already dispensing medications in their offices claim they would never let the profit motive interfere with their clinical recommendations. They perceive in-office dispensing as a win-win solution for all involved.

“Honestly, I can’t see any negatives or drawbacks to dispensing in the office,” says Korbey, who has been dispensing medication himself for about 20 years. “I am giving patients the best medicine at the best price. I am saving them money out of their pocket and helping them recover better and faster. And, honestly I just think that is good medicine.”

John McCormack has been working as a healthcare journalist for 15 years. He has served as associate editor for Materials Management in Health Care and as managing editor for Health Data Management. He can be reached via

This article originally appeared in the June 2006 issue of Physicians Practice.

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