What Costs are involved with regards to pharmacy software?

Evaluating pharmacy software systems and figuring out how much to expect in overall costs can be complicated. Pharmacy systems vendors price their products differently, and virtually no two package their systems the same way. Pharmacy software systems have initial startup fees, monthly support fees, and then transactional fees for switching and electronic prescribing.  Some even offer money back through revenue-sharing programs. Let’s take a look at the types of fees you can expect.

Startup Costs

These are all of the upfront fees you can expect to pay when opening a new pharmacy or converting your pharmacy system to another vendor. These are one-time charges and often include a software license for the pharmacy software and point-of-sale software, training costs, any hardware or equipment you may be purchasing, and conversion costs (if you have an existing system you need to switch over from). These costs vary from vendor to vendor and are often negotiable depending on contract lengths, startup store discounts, and prescription volume for existing independent pharmacies. For a new startup pharmacy, you can expect a range of $2,500 and up, depending on what software and hardware you need. Pharmacies looking to convert from their existing software may be eligible to pay next to nothing depending on volume and length of contract. When converting, assuming you can use your existing hardware (and in most cases, you can), you can expect to look at quotes that include:

• The conversion cost to migrate your data to the new pharmacy system 
• The cost of on-site training with your staff
• Cost for the new pharmacy software and POS software (potentially heavily discounted)

These quotes will vary by vendor and the deals they are offering. Datascan is known to offer deep discounts to pharmacies looking to convert away from their current pharmacy software vendor.

Monthly Fees

These are the base fees you can expect to pay monthly to cover the software maintenance and support both during and after hours. These will also include the new features offered in many systems that are constantly being updated. The ‘maintenance’ factor has to do with the constant changes within our industry. Pharmacy software systems are constantly in need of updating whether it be to keep up with the newest NCPDP standards set for processing claims, changes with the electronic prescribing standards, or even changes brought about by ASAP for the transmission of controlled substance prescriptions to your state PMP. Some vendors include features at no additional cost, while some will charge as add-ons for features such as  document management, delivery software, patient mobile applications, controlled substance reporting, backup services, and more.  It is important to compare the true side-by-side costs figuring out what some vendors are including in their base fees vs what others are charging for.  For example, Datascan does not charge for our mobile application for your patients, while some vendors can charge upwards of $100 or more a month for theirs!  Features you want may often not be included in standard pharmacy software packages and can very quickly add up. Datascan’s pharmacy software package is inclusively priced and includes features like document management, a patient mobile app, and controlled substance reporting for free.

Transactional Fees

Transactional fees are variable fees that will vary with your volume. These are fees for switching, electronic prescribing, and text messaging. The pharmacy systems vendors are paying for these services, and therefore the pharmacy itself must pay for them as well.  

The variable fees are for your ‘switching’ and electronic prescribing transactions.  Switching occurs when you send an insurance claim for a prescription for payment to the PBM or insurer.  The ‘switch’ is what routes the claim. Pharmacy management software vendors are charged for this routing, and therefore pharmacies are as well. Electronic prescribing is when a physician sends a pharmacy the prescription electronically directly into the pharmacy systems (which is mandated in many states as the push to do away with paper prescription pads grows). Many refer to these transactions as “Surescripts” because that is the primary vendor that routes the eRxs.  Surescripts charges for these transactions, therefore pharmacies pay for them as well.  Both of these are variable in nature because it all depends on the pharmacy’s volume.  The greater the volume, the more the cost.

The amount is often different among each pharmacy software system vendor, but typically falls within a similar range. One vendor, PioneerRX, charges an RX completion fee, which is a charge for every prescription picked up, cash or third party, in your pharmacy.  This is not a typical fee you would find from most other pharmacy software vendors. Datascan’s pharmacy software system is among the best-priced when it comes to both base fees and transactional fees.

Revenue Sharing

The best pharmacy software vendors offer a variety of revenue share programs designed to help keep your monthly costs down. Many vendors subscribe their clients to programs but do not share the revenue streams for them. Data sharing programs such as IQVIA pay for independently owned retail pharmacies to submit HIPAA-compliant, deidentified prescribing data. Other revenue share programs like cash RX rebate programs, e-vouchers, and Carepoints all offer incentives for you and help reduce your monthly software charges.

Final Thoughts

As a pharmacy owner, you can expect to see a breakdown of different fees and costs for your pharmacy management software.  There are one-time upfront fees for software licensing and training, and then there are monthly fees for software maintenance and support as well as transactional fees for switching and electronic prescribing. Costs will vary depending on the vendor you choose, but you should never pay more for less.  Datascan is the overall best-priced retail pharmacy system on the market. While searching for the best pharmacy software package for your independent pharmacy, be sure to allow us to do a true side by side comparison of the costs associated with each vendor.  Quite often we find potential clients are not comparing the pharmacy systems side by side by taking into consideration the add on costs for some features not included in the monthly cost by each vendor.  Sometimes they miss the small print or do not realize what the true cost is per transaction until we point it out in the language from the other pharmacy systems vendor.