This study measured the effect of Medicare Part D on community pharmacy profitability using data from the first months of implementation. Gross margins for individual prescriptions before and after January 1, 2006, were compared to determine any changes. A random sample of 30 prescriptions from each of 10 community pharmacies across the United States was examined to compare total pharmacy compensation for individual prescriptions. The average gross margin decreased 22.3% after implementation of Medicare Part D. If 30% of all prescriptions will be covered by a Medicare Part D provider, that decrease in gross margins will result in an overall decrease in margins to 22.0% from 23.6%, assuming margins for the other 70% of prescriptions remain constant. Such a decrease would likely result in a 21.1% reduction in the average total owner compensation for community pharmacies in the US. Funding: This study was funded by a grant from the Community Pharmacy Foundation.
