Branded or generic: what one store earns, and what a reimbursement cut does
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The prompt
Maple Street Pharmacy (a fictional US pharmacy) fills 60,000 prescriptions a year: 90 percent generic and 10 percent branded. A typical generic costs it USD 7 and is reimbursed at USD 25. A typical branded medicine costs USD 985 and is reimbursed at USD 1,000. Each prescription takes about USD 11 of pharmacist and staff time, labels and packaging. What does the store earn from prescriptions before rent and overheads? Then payers cut what they pay for generics by USD 2 each. What happens?
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