To ask a mathematical question?

[MatildaTheCat]

Shameless post for traffic.

If an item costs 2pence per unit and is then sold to the consumer at £1 per unit what is the percentage markup?

This relates to vet prescribed medication.

Thanks in advance and extra marks for showing your method 🤣

4900%

mark up £1.00-£0.02 = £0.98

% mark up £0.98 / £0.02 * 100% = 4900%

It is (100-2)/2 * 100 = 4,900%

The percentage markup is equal to the profit divided by the cost times 100%.

So 2p to £1 is a profit of 98p:

Profit / cost * 100 = % markup
0.98 / 0.02 * 100 = 4900 % markup

So the markup is 4900 %

I'd say, start your own business selling these 😂

I agree with the above calcs.

Marvellous, thank you. It feels a little bit like being mugged in broad daylight.

Every extra 2p is a mark up of 100%. 49 extra 2p s so mark up is 4900%.

What they all say.
However there are loads of other costs no doubt related to the product, or maybe selling products subsidises other services.

You need to account for the cost of prescribing, admin, possible delivery, contribution towards the general staff and facility and yes, subsidy of other services.

Vets do quite a few things below 'full price' (neutering, microchipping, vaccinations) to get people through the door, so they need to make a larger profit with other goods and services to balance the books. Veterinary work is actually quite poorly paid compared with human medicine and dentistry despite being comparable or probably more difficult due to multiple species.

Was it at least prescription only? Because then at least if you’d tried to buy it for 2p you’d have had to pay the massive price for the prescription. Makes £1 seem much more reasonable.

Does the 2p cost include all the costs that are incurred before it reaches the consumer's hands?

For instance, it might cost 2p to manufacture one tablet. But there would be other costs for it to be packaged, stored and transported, plus the dispensing of the item, the accounting and so on.

And is the 2p cost the real cost? Does it include the labour and machinery needed to create it? What about less measurable things like gas, electricity, water?

In your example the mark-up % is high BUT does not necessarily mean the remaining 98p is pure profit for the seller.

Oh and with medicine you also have to factor in the development cost - the years of development, all the trials that were done to ensure it worked, plus offset some of the development costs for alternative ideas which turned out to be unsuitable so were scrapped.

2 pence is the price ( rounded down slightly) listed on the nhs bnf site. The drug is gabapentin which is a long established medicine which has been overtaken somewhat in human prescriptions by newer formulations.

This isn’t a vet bashing thread. I know they are badly paid. The much larger companies who own the chains are the people who set the price, presumably at a point they know people will accept because they love their pets.

Obviously there are associated costs. Just not this much.

But is the vet buying the drugs from the NHS BNF site?

That price might only be available to NHS/pharmacies/medicines prescribed to people.

I don't think it's as straightforward as you're implying and it's also probably not the case that the vet is coining it in with these drugs. What is the particular issue you have?

The vet isn’t buying it at NHS contract price though.

4900% is a headline grabber, but it’s 98p. Whether a drug is cheap or expensive, some costs to the vet are they same.

NHS purchasing generally knocks commercial smaller vet practices including chains into a hat. And activity-based costing might show cost drivers for lower-value medication still lead to a minimum price for a prescription that has a significant multiple of the input.