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Retail Pharmacy and the PTCB Exam.

Jan 11th, 2024
retail pharmacy ptcb

Pharmacies as Business

The fundamental purpose of any pharmacy is to dispense medicines to patients. But that isn’t the only role of the pharmacy. Pharmacies also exist as businesses and pharmacy technicians play an important role in the smooth operation of that business.

For this reason, retail pharmacy gets tested on the PTCB exam. Whilst technicians are not expected to have an in-depth knowledge of the full operation of any pharmacy business, they are expected to have a grounded understanding of the following definitions and math operations:

  • Turnover
  • Inventory
  • Selling price and cost price
  • Markup
  • Profit and loss
  • Insurance reimbursements
  • Discounts

At most, pharmacy technicians must understand:

  1. The definition and concept of each.
  2. How each is applied in simple arithmetic operations.

If you can study each of these seven topics with these two focal points in mind, you will have done enough to prepare for this subject of the pharmacy technician exam.

Below, we will review some sample retail pharmacy questions – understanding the nature of each question before going on to break that question down, helping you understand how to work through problems of this nature.

First though, it’s worth exploring the advantages that studying retail pharmacy can have on your future career prospects in this industry.

The Broader Picture

Initially as you embark on your career as a pharmacy technician, concepts such as markup and inventory control and calculating turnover may seem distant and irrelevant.

After all, isn’t it all about dispensing medicines safely to patients?

Initially, yes.

But as you develop and learn within the pharmacy business, you will need to acquire new skills and understandings. Most of these skills will relate to the following:

  • how you work within a team.
  • how you can potentially manage a team later in your career.
  • how you can become part of the managerial process itself.
  • how you can position yourself as business oriented.

Studying retail pharmacy should be considered with these factors in mind; that is to say, your potential to acquire these skills and work your way up the managerial ladder.

At that stage, an understanding of retail pharmacy becomes essential.

So, whilst studying these financial concepts may initially seem pedestrian, it’s worth zooming out to consider the bigger picture – and worthwhile relevance – of actively seeking to develop a broad understanding of these financial concepts.

In years to become, it may prove valuable to you as your career progresses.

Sample Retail Pharmacy Questions

Below we have put together a sample of the kind of retail pharmacy question you can expect to encounter on your PTCB test.

Take a few moments to review each question and try to answer the question first. If you have yet to study this topic, then skip ahead and learn about each question through our answer explanations below.

Q1. Bayside Pharmacy has been in business for the past 4.5-years. Over the past 12-months, Bayside Pharmacy has an estimated inventory total of $820,000. In the last quarter of that year, the business made inventory purchases worth $980,000. What is the approximate turnover rate for Bayside Pharmacy?

  • 2
  • 3
  • 4
  • 5

Q2. A drug was purchased by a pharmacy for $9.80 and was subsequently sold to a member of the public for $20.40. What is the percentage markup of this transaction?

  1. 86.5%
  2. 108.2%
  3. 120.4%
  4. 132.6%

Q3. Trenton Pharmacy is holding an 18% off promotion on the sale of blood glucose monitoring machines. The unit cost for each machine is $3.80. The pharmacy sells each product for $21.90. After the promotion is applied, how much does each monitoring machine now cost?

  • $16.54
  • $16.78
  • $17.96
  • $18.32

Answer Explanations

Answer 1: Five

Turnover rate is cost of goods sold (COGS) divided by inventory cost.

When calculating turnover rate, COGS must provide the annual figure. Note that we are only given the quarterly figure ($980,000), so we must multiply this figure by 4 to establish the approximate cost of all goods sold for the entire year.

$980,000 per quarter x 4 = $3.92 million

Now, we can divide this figure by the value of the average inventory stock to begin with which, from the question, was $820,000.

$3.92 million / $820,000 = 4.78

When rounded up, that’s a turnover rate of 5.

Therefore, Bayside Pharmacy turned over their average inventory value almost 5-times over the course of the year.

The higher the turnover rate, the more profit that the pharmacy makes.

Answer 2: 108.2%

Markup is the difference between the cost of a product against how much the product was sold for.

To calculate markup, we use the following formula:

Mark up = Average Selling Price – Unit Cost / Unit Cost

In the case of this sample question:

  • Average selling price of the product: $20.40
  • Unit cost: $9.80

$20.40 – $9.80 = $10.60

$10.60 is then divided by the unit cost, $9.80, to give us: 1.0816

To find the percentage markup, we must multiply this value by 100.

1.0816 x 100 = 108.2% markup.

Answer 3: $17.96

When answering pharmacy math, only focus on the relevant information needed to answer the question. In this case, the unit cost of the blood monitoring machine is not relevant.

Cost of each blood glucose monitoring machine sold: $21.90

Promotion: 18% off

Therefore, we must find the value of 18% of $21.90:

18 / 100 x $21.90 = $3.94

Now we simply need to subtract this value from the cost of the product:

$21.90 – $3.94 = $17.96

Trenton Pharmacy is selling each machine at a discounted price of $17.96.

Take Home Message

Retail pharmacy is an important subject to study for your PTCB exam success.

As we have learned, it is not only important for the pharmacy technician exam, but also for your future success as you develop and grow within the pharmacy as a business. Your ability to secure a promotion within the business will depend on your understanding and practical application of retail pharmacy. That is also true of hospital and industrial pharmacy, too.

Whatever the pharmacy setting, inventory control is paramount. Keeping control of costings is of considerable importance, too. It feeds into how much the pharmacy is making and, ultimately, that is what ensures the continued viability and existence of that business.

Found this post helpful? Become a full member of our exclusive online program and gain instant online access to your complete suite of features to guarantee your exam success – including a separate module on pharmacy calculations and retail math.

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Author:

Elaine Walker

Elaine joined PTCB Test Prep in 2017, currently serving as the lead product development manager overseeing both course development and quality improvement. Mrs. Walker is a graduate of California State University and has worked as a pharmacy technician for over twenty years – with particular interests in pediatric pharmacy, extemporaneous compounding, and hospital pharmacy. Over the past 8-years, she has helped prepare thousands of students for the PTCB examination.