Lessons · Pharmacy · AWP, markup and the dispensing fee
AWP, markup and the dispensing fee
A price is the cost of what is dispensed, plus a markup worked on that cost, plus a flat fee for the work, and all three are given to you.
Hone is a place to practise a career, one idea a day. This is one of its lessons, written out in full and free to read without an account.
What it is for
A cash patient asks what it costs and wants an answer, not a lookup. The pieces are simple and the order they go in is fixed, and the one that trips people is that the markup is a percentage of the cost, not of the price.
How to think about it
Scale the cost to the quantity you are dispensing first, because the AWP is quoted for a package size. Take the markup percentage of that cost. Add the fee last, because it is flat and no percentage touches it. Round to the cent.
Worked example
AWP given as $60.00 for 100 tabletsThe cost figure the problem gives.
Cost of 30 tablets = $60.00 x 30 / 100 = $18.00Scale the package cost to what is going in the vial.
Markup at 20% = $18.00 x 0.20 = $3.60A percentage of the COST.
Price = $18.00 + $3.60 + $4.00 fee = $25.60Cost, then markup, then the flat fee, to the cent.
Your turn
A cost of $40.00 carries a 25% markup. Write the markup in dollars.
40.00 x 0.25 =
Solve one, graded on the server
The trap
Taking the markup on the price instead of the cost, or applying the percentage to the fee as well. The fee is flat; nothing is a percentage of it.