Physicians and other healthcare providers are increasingly adding in-office physician medication dispensing to their practice. There are many benefits to dispensing at the point of care, including:

  • Improve patient outcomes
  • Increase patient satisfaction
  • Generate additional revenue for the practice
  • Improve service offering

You can find an extensive list of Patient Benefits and Provider Benefits at the pages referenced here.

Before beginning to dispense, there are several things you should consider to ensure success of your in-office pharmacy. This blog post will help guide you in those decisions, but as always, feel free to Contact Us if you want PharmaLink to help!

Medication bottles

Key Considerations Before Adding Physician Medication Dispensing to Your Practice

1. State Physician Medication Dispensing Regulations

United States map

Physician in-office medication dispensing in the U.S. is regulated on a state level, with widely varying rules. Currently (as of May 2022) there are 43 states plus the Disctrict of Columbia that have favorable dispensing rules, while the other 7 states either ban it outright or have rules that make it impractical (such as limiting physician dispensing to a maximum 72-hour supply).

Before you begin dispensing, you should review the dispensing regulations in your state and ensure you will be compliant with any license requirements or other limitations. Many states require that you apply for a dispensing permit or notify the state medical or pharmacy board of your intent to dispense. Before credentialing your account, PharmaLink will request copies of any required licenses or permits, so we encourage you to review the regulations in advance so you can apply for the proper permits well before you plan to dispense.

2. Medication Suppliers

You will need to find a source for medications in order to dispense at the point of care, and which supplier or suppliers you use will depend on whether you plan to dispense from bulk bottles or source unit of dispense medications.

Bulk Dispensing

Bulk dispensing refers to ordering large quantities of medications (typically 500-1,000 pills per bottle) and repackaging and labeling bottles in your office before dispensing. The main benefit of bulk dispensing is cost, since the wholesale price of the medications is relatively low. The primary downsides are the additional time burden on you or your staff (whether your staff can package the medication legally depends on their qualifications and the state’s regulations), risks associated with potential errors, and increased regulatory burden (i.e. complying with labeling and medication handling requirements). If you choose to go this route, PharmaLink provides Inventory Management Software that helps with tracking your inventory and labeling the medications.

Dispensing Prepackaged Medications

Most providers who dispense at the point of care opt to dispense prepackaged medications from licensed, reputable repackers. PharmaLink integrates with a number of repackagers for our Turnkey Dispensing Solution. The benefit of dispensing prepackaged medications is it is extremely quick and easy, with a typical dispense requiring only 15-20 seconds. The downside is that the per-package cost is a bit higher than bulk dispensing, but in general the prepackaged prices on generic medications are still very competitive.

If you dispense with PharmaLink, we will work with you to determine the best option for your practice and credential you with one or more of our medication suppliers, depending on your location and the types of items you plan to dispense.

3. Payment Options

Depending on your patient mix, you will need to decide if you plan to offer Cash & Carry Dispensing, Workers’ Compensation Dispensing, Private Insurance Dispensing, some combination of these options, or if you will include the medications as part of your service offering. We’ll discuss each of these options below.

Cash & Carry Dispensing

Cash & carry dispensing is the most popular dispensing option because it is very simple to implement and results in very limited financial risk. In most specialties where low-cost generics are common (e.g. family medicine, urgent care) or where the common medications are not covered by insurance (e.g. weight loss, men’s health), practices will almost always opt for cash & carry dispensing. Because you know your cost on the medication and you can set your own price, you know your profit on every medication before dispensing, unlike with insurance billing. You also collect payment upfront, and with our flexible billing options, you can be cash flow positive from day one. PharmaLink offers over 2,000 common medications so we’re certain to carry the items that you prescribe on a day-to-day basis.

Various payment methods

Workers’ Compensation Dispensing

To the extent your practice sees workers’ comp patients, or is considering offering this service, dispensing medications at the point of care and billing workers’ comp could be a good solution for your practice. The actual reimbursements vary from state to state, so if you’re interested in this service, please contact us for a risk-free consultation with one of our experts. You can offer this service alongside a cash & carry dispensing option for your non-workers’ comp patients.

Private Insurance Dispensing

Most practices initially set out on their dispensing path expecting to bill insurance. Unfortunately, the reality is that it can be very tough to manage the private insurance billing process and to generate income with dispensing when billing insurance. If you choose to bill insurance, you will be a price taker, meaning you have to accept your patients’ insurance for the medications, and you have to accept the reimbursements mandated by the PBM. Depending on your payer mix and the medications you choose to carry in the office, this can sometimes mean that the reimbursements are less than the cost of the medications. There are certain specialties where it can make sense to bill insurance but in most situations it’s better to offer cash & carry. Ultimately if your patients want to use their insurance, they can take their prescription to the pharmacy just like they do today.

Including Prescription Costs in Your Service Offering

In certain situations, such as Concierge or Direct Primary Care Medicine, it can make sense to offer a prescription medication plan or even include certain prescriptions in your standard monthly fee. This can be a way to further market your practice to patients as well as improve patient satisfaction and patient outcomes.

We’ve also seen practices in Weight Loss and Men’s Health offer an “all-included” model. For example, if you have a weight loss practice, you may offer a 90-day all-included weight loss program, where patients pay a fixed fee for their visits, nutrition plan, exercise plan, and medications to the extent they are recommended by the provider. This can be a great selling point for patients to sign up for the program, but the danger with this approach is patients may get upset if the doctor does not recommend the medications. An alternative option is to offer the medications at cost to patients, where recommended.

4. Compliance

In addition to state dispensing regulations, there are a few requirements you must follow when dispensing medications to your patients in-office. We’ve compiled some additional resources on each, and if you work with PharmaLink we will help you remain in compliance.

Recordkeeping Requirements

In most states, you are required to maintain detailed records of all medication inventory, including dispense records, expired inventory, lost inventory, etc. PharmaLink’s easy-to-use dispensing software helps you satisfy these requirements. As long as you use the system to dispense medications to your patients, the system will track all inventory coming and going.

Medication Labeling Requirements

Labeling requirements are mandated by the U.S. Food and Drug Administration. All medications dispensed to patients must contain certain information about the medication itself, the patient to whom it was dispensed, and the dispensing provider/practice or pharmacy. If you’re using our turnkey dispensing program and dispensing with the PharmaLink software, our system makes compliance a breeze.

Drug Storage Requirements

The U.S. Drug Enforcement Administration provides guidelines around drug storage for controlled medications. We generally recommend keeping medications, whether controlled or uncontrolled, in a locked cabinet or closet at a minimum. Exact requirements depend on the specifics of your practice location.

PDMP Reporting Requirements

If you are dispensing any controlled medications, you must report those dispenses to your state’s Prescription Drug Monitoring Program. In fact, once you start dispensing controls, in most states you must also file zero-fill reports to the extent you don’t dispense any medications in a 24-hour period. If you dispense medications with PharmaLink, our system automates PDMP reporting, saving you time and stress of manually reporting.


While there is a lot to consider before deciding whether dispensing is right for your practice and how to implement, PharmaLink is here to help you along the way. We have experts in state dispensing regulations, billing methods, labeling requirements, and much more, and we’d be happy to work with you to set up your dispensing program. If you want to learn more,  please fill out our contact form and a PharmaLink representative will be in touch with you shortly.