Troubleshooting Low or Negative Gross Profits

This topic is intended for Independent pharmacies only and is not applicable to Rexall pharmacies.

The Gross Profit by Prescription report can help identify any prescriptions that have obvious negative accounting values. If you preview the report, you can sort it by Gross Profit or Markup so that the negative values are at the top of the report and easier to find.

If generating the report for a long date range (e.g., a month), schedule the Gross Profit by Prescription report to run overnight.

To further investigate the prescriptions, open the prescription in Rx Detail and review the Requested Cost and Claim Summary windows.

Check this on the Gross Profit by Prescription report...	What does it mean?
Compare Acq Cost vs. Rx Cost	If the Acq Cost is higher than the Rx Cost, the product was potentially sold at a loss. Ideally, Rx Cost should be higher or the same as the Acq Cost.
Are there any large amounts in the Waived column?	If so, the user may have waived amounts that should have been charged to the patient. For example, perhaps they waived a large cost difference for a prescription where the patient usually pays the difference. Waived amounts will also be reflected in the Markup columns; the waived amounts are subtracted from the Markup $.
Are there negative markups?	These can be caused by various scenarios: Waived amounts are subtracted from the Markup, therefore large waived amounts may result in a lower markup. When the variable costs are negative amounts that reduce the prescription's cost to less than the Acq Cost, the prescription is potentially being sold at a loss. Variable costs are the result of Variable Rules set up in the Pricing module. If a drug is priced incorrectly in the Drug Folder and the cost is changed in Rx Detail instead of the Drug Folder, it will cause the gross profit to be skewed and appear lower than it should be. This results in a "paper" loss because the prescription is submitting for the correct amount, but since the gross profit is based on the Acq Cost in the Drug Folder, it appears as though the prescription was filled at a loss. For example, a drug is incorrectly priced too high (e.g., $40 instead of $4) and you manually change the price to a lower cost from Rx Detail (instead of changing the Drug Folder). This will result in a lower gross profit, because the gross profit is calculated from the drug's acquisition cost at the time of dispensing. Since the drug's cost was wrong, the gross profit will be skewed and lower than it should be.

Check this on the Gross Profit by Prescription report...

What does it mean?

Compare Acq Cost vs. Rx Cost

If the Acq Cost is higher than the Rx Cost, the product was potentially sold at a loss. Ideally, Rx Cost should be higher or the same as the Acq Cost.

Are there any large amounts in the Waived column?

If so, the user may have waived amounts that should have been charged to the patient. For example, perhaps they waived a large cost difference for a prescription where the patient usually pays the difference.

Waived amounts will also be reflected in the Markup columns; the waived amounts are subtracted from the Markup $.

Are there negative markups?

These can be caused by various scenarios:

Waived amounts are subtracted from the Markup, therefore large waived amounts may result in a lower markup.
When the variable costs are negative amounts that reduce the prescription's cost to less than the Acq Cost, the prescription is potentially being sold at a loss. Variable costs are the result of Variable Rules set up in the Pricing module.
If a drug is priced incorrectly in the Drug Folder and the cost is changed in Rx Detail instead of the Drug Folder, it will cause the gross profit to be skewed and appear lower than it should be. This results in a "paper" loss because the prescription is submitting for the correct amount, but since the gross profit is based on the Acq Cost in the Drug Folder, it appears as though the prescription was filled at a loss.

For example, a drug is incorrectly priced too high (e.g., $40 instead of $4) and you manually change the price to a lower cost from Rx Detail (instead of changing the Drug Folder). This will result in a lower gross profit, because the gross profit is calculated from the drug's acquisition cost at the time of dispensing. Since the drug's cost was wrong, the gross profit will be skewed and lower than it should be.