The future of AI in pharmacy

With so much in the news about artificial intelligence, it’s hard to imagine all the ways the emerging technology will have an impact. But what if I told you the future of AI in pharmacy was already here—in rural Kerrville, Texas?

Case study: Increasing profitability for cash pricing in 30 days

Kerrville Drug Co., a single independent pharmacy nestled in rural Kerrville, Texas, exemplifies the challenge pharmacies face to balance competitive pricing and profitability.

Margie Hocker, pharmacy manager and certified pharmacy technician, recalled the days when they had to turn away cash-paying customers who wanted to use a popular drug discount card. The pharmacy couldn’t accept the card due to high, unsustainable fees charged back to the pharmacy.

“At one point, we had no choice but to turn customers away,” said Hocker. “But now we are able to offer our cash-paying customers something even better to help patients save on their medications.” What changed? Kerrville Drug Co. implemented a unique cash pricing program from Prescryptive, a healthcare technology company.

AI: Balancing profitability with patient savings

At Prescryptive, we’ve harnessed AI to help pharmacists with their cash pricing through an AI pricing engine that analyzes opportunities based on many factors. Kerrville Drug Co. saw the
difference:

• In 30 days, Kerrville Drug Co. saw a 96% increase in average per prescription profitability for cash pricing
• 6% increase in total cash claims processed in the same 30-day period
• 88% average per prescription savings for patients for cash pricing

Hocker at Kerrville said: “We have confidence that the patient is getting a good price, and our pharmacy improves its profitability. It’s very transparent. Very affordable. And customers’ information will not be shared. It’s just a win-win on both sides.”

When a patient advocate from a nearby hospital called Kerrville Drug Co. on behalf of a patient who was newly diagnosed with diabetes, “we were able to save the patient more money on his prescriptions than other popular discount cards. He has now become a regular customer—and his wife, too,” said Hocker.

A wider lens: What can AI do for pharmacies nationwide?

America’s pharmacies face major headwinds, battling reimbursement challenges, increasing fees and more. But there is an opportunity: a solution for cash-paying customers at the counter.

And pharmacies need a solution now, as the use of high-deductible health plans continues to grow. A 2023 study from Kaiser Family Foundation found enrollment in these plans increased over the past decade, from 20% of covered workers in 2012 to 29% in 2023.

With more cash customers at the counter, pharmacies can use AI to help increase profitability in one lane of their business. New profitability data from Prescryptive Health underscores the powerful potential that AI can bring to cash pricing: In a recent analysis, the gross profit margin in 2023 for Prescryptive AI Pricing was nearly 54%. NCPA’s recent findings for total gross profit margin in 2022 found that independent pharmacies averaged 21%.

But using AI for a cash pricing system isn’t just about numbers—it’s about empowering pharmacies like Kerrville Drug Co. to stay profitable while doing what they do best: patient care in their communities.

Miranda Rochol is the SVP of Provider Solutions at Prescryptive Health.