Managed Care

 

Analyst: Pharmacists have nothing to complain about

MANAGED CARE July 2013. © MediMedia USA
Snapshot

Analyst: Pharmacists have nothing to complain about

The National Community Pharmacists Association (NCPA) asserts that “pharmacists are underappreciated, judging by the design of many public and private sector prescription drug plans” (http://tinyurl.com/Dose-blog).

Adam J. Fein, PhD, author of the Drug Channels blog (http://tinyurl.com/Fein-blog), begs to differ. “Are pharmacists undervalued?” he asks. “Not if money equals appreciation.”

Adam J. Fein, PhD

Fein, president of Pembroke Consulting, analyzed the Bureau of Labor Statistics’ just-released 2012 Occupational Employment and Wages report and finds that pharmacist salaries “grew faster than did overall health care worker salaries and overall U.S. salaries.”

Pharmacist salaries grew 2.6% from 2011 to 2012, when the average gross salary for pharmacists at retail, mail, and specialty pharmacies was $117,000. Meanwhile, salaries for all “health care practitioners and technical occupations” (a classification in the government’s Standard Occupational Classification System) grew by only 1.1% in 2012.

It looks as if buying medications at such places as Walmart is also having an effect. “For the first time, pharmacists at mass merchants had the highest average pharmacist salaries,” says Fein. “Pharmacists at mass merchants, who also saw the biggest pay jump, now earn a full-time average of $117,990 (+3.8%).”

When evaluating pharmacy dispensing fees, pharmacy directors at health insurance plans should realize that salaries are a retail pharmacy’s biggest expense, says Fein. “Payroll is about 70% of a pharmacy’s operating costs.”

Pharmacist employment and salary, by dispensing format, 2012
Dispensing format Total employment % change vs. 2011 Average annual salary % change vs. 2011
Mass merchants with pharmacies 31,870 2.2% $117,990 3.8%
Chain and independent drug stores 122,840 2.7% $116,980 2.6%
Supermarkets and pharmacies 22,590 1.7% $111,040 2.0%
Mail pharmacies 3,110 8.7% $109,640 3.2%
Total 180,410 2.6% $116,288* 2.7%
*Weighted average
Data include only pharmacists employed in retail, mail, and specialty pharmacies
Source: 2012 National Occupational Employment and Wage Estimates, U.S. Bureau of Labor Statistics. March 2013

Pharmacy revenue growth slowdown

That’s not the only shift that occurred in the pharmacy business last year. Fein reports, “For the first time, revenues at U.S. pharmacies and drugstores declined ... in 2012.” The orange line tracks the data; the straight line averages the data.

Pharmacy revenue growth slowdown

Source: Pembroke Consulting analysis of Bureau of Census data. Data are not seasonally adjusted.
2013 data compare 2012:Q1 to 2013:Q1.

Meetings

Private Health Insurance Exchanges Conference Washington, D.C. October 7–8, 2014
National Healthcare Facility Management Summit Palm Beach, FL October 16–17, 2014
National Healthcare CFO Summit Las Vegas, NV October 19–21, 2014
National Healthcare CXO Summit Las Vegas, NV October 19–21, 2014
Innovative Member Engagement Operations For Health Plans Las Vegas, NV October 20–21, 2014
4th Partnering With ACOs Summit Los Angeles, CA October 27–28, 2014
2014 Annual HEDIS® and Star Ratings Symposium Nashville, TN November 3–4, 2014
PCMH & Shared Savings ACO Leadership Summit Nashville, TN November 3–4, 2014
World Orphan Drug Congress Europe 2014 Brussels, Belgium November 12–14, 2014
Medicare Risk Adjustment, Revenue Management, & Star Ratings Fort Lauderdale, FL November 12–14, 2014
Healthcare Chief Medical Officer Forum Alexandria, VA November 13–14, 2014
Home Care Leadership Summit Atlanta, GA November 17–18, 2014