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Should You Dispense Medications Out of Your Practice?

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I receive this question often as it is a very important decision to make within your niche practice. Dispensing medications directly from your practice can significantly increase your revenue, but it does come with a few issues that you need to be aware of.

First and foremost, I cannot tell you if your state allows this or not. I wish I had the knowledge of all 50 states regulations for everything, but I do not. Therefore, you need to first check with your states Board of Nursing, Board of Pharmacy, and Board of Medicine (typically only in restricted states). The regulations should be clear in the nursing practice act and on the Board of Pharmacies website. Some restricted states will allow the nurse practitioner to dispense medications only under the supervision of their physician collaborator, so be aware of that. If you cannot dispense medications from your practice due to regulatory burden, then your only option is to have pharmacies send the medications directly to the patient’s homes, as discussed in the majority of our courses.

If your state allows you to dispense medications directly from your practice, then congratulations! You have now hit a potential gold mine in revenue that you need to take advantage of.

The next step is to determine what types of hoops you need to jump through to dispense medications. Most states will require a system in place in your practice that keeps track of the medications. Typically, you need to keep track of the lot numbers, medication inventory, how many you are dispensing, and to who you are dispensing the medication to. This can be done with an excel sheet/log you print and keep in your medication supply room/closet/cabinet. You can use fancier electronic tracking systems, but I have found them to be more trouble than they are worth. Sometimes good old fashion paper and pencil is more efficient, but this comes down to your volume and preference.

You also need to determine if you are going to be dispensing controlled substances or not from your practice. That open up an entirely different set of regulations and rules. When it comes to controlled substances, you MUST keep very very very accurate records of all the controlled substances you have. This includes lot numbers, inventory, invoices from the supplier you obtained them from, detailed patient information of when you dispensed it, and you will even have to put the record into your states PDMP system (again, check your states regulations on what is required to dispense controlled substances). It is burdensome and every “i” needs to be dotted and every “t” needs to be crossed.

I used to dispense testosterone from my men’s health practice, but I found the documentation and increased risk it brought into my practice wasn’t worth it. I have even treated DEA agents in my practice, and they all told me they wouldn’t recommend it either. So, take that for what it’s worth. But if you want to deal with the strict record keeping and the potential risk of having a random audit, then go for it. It could potentially increase your revenue significantly (I am thinking testosterone and phentermine here for the most part. I would adamantly recommend to AVOID OPIOID dispensing from your practice.).

With all that fun out of the way, why would you even want to dispense medications from your practice in the first place? 2 reasons:

  1. The margins are VERY high.
  2. You avoid shipping costs from compounding pharmacies.

What does this result in? More profit! Not only that, but it also increases patient satisfaction. Patients love the practice that is a one stop shop in terms of treatment. Keep that in mind.

Let me give you two examples from my men’s health practice when it comes to dispensing medications:

Patient convenience factor: Anastrozole costs me approximately $3 for a 30-count bottle of 1mg tablets. Most men that need this will be on 0.5mg twice weekly. Therefore, this bottle will last them A LONG TIME. I provide this free of charge to all my patients who need it. It costs me practically nothing and increases overall patient satisfaction. I could charge for it, but it is included in my subscription model.

Margin factor: Sildenafil costs me approximately $4 for a 30-count bottle of 100mg tablets. I mark this up considerably for a healthy profit. Not only am I making a great profit on this medication, but it increases patient satisfaction and reduces their cost. Even with my profit margins, it is cheaper for them to obtain sildenafil from me compared to the pharmacy. It is a win-win situation!

So, where do you obtain the medications? Any pharmaceutical distributor will work. There are literally dozens of them. You can even obtain medications from most medical supply companies like McKesson and Henry Schein. As always, create a few accounts at various places and shop around for the best prices!

Now, what about actually dispensing it to the patient? You will need a medication bottle and a label. Think of those little orange medication containers when you get a prescription. You can get 50+ bottle count bulk orders cheaply off Amazon just FYI. In terms of labels, I just use a Dymo label printer. Each state will require different pieces of information on the medication label, therefore check your Board of Pharmacy for that, but in general, it will be the same information you will find on a prescription from a retail pharmacy in your state.

That’s it! If you are looking to increase your practices revenue, then seriously consider dispensing your most commonly prescribed medications from your practice. You will not regret it!

7 Responses

  1. HELLO
    I am trying to open a weightloss clinic and am completely new to all of this. I am in Florida. Can you tell me what kind of license I need to be able to dispense the phentermine and vit B12 injections, MIC and HCG injections from the facility?

    1. Ivonne,

      It was my understanding that you need a dispensing license in FL but I am not 100% certain as I do not practice there. In terms of starting a weight loss clinic, be sure to check out our courses, especially the Weight Loss Clinic Course: https://elitenp.com/products

  2. Do the compounding pharmacies typically send more than one month’s supply at a time or ship monthly to the patients? Do they include the syringes if relevant? Thinking injectables.

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