Feasibility of prime vendor purchasing for a state university hospital

The economic feasibility of implementing a prime vendor purchasing system for pharmaceuticals was evaluated in a midwestern university hospital. Inventory costs, personnel costs, and check processing costs under the current purchasing system were compared with costs estimated for a proposed prime vendor purchasing system. For each step in the purchasing process that would be changed under the proposed system, work measurement techniques were used to determine personnel costs. The total savings from reductions in inventory holding costs, personnel costs, and check processing costs under the proposed prime vendor system was +98,396.37, or 2.4% of the value of pharmaceuticals purchased. Since the pharmacy department could not negotiate a contract in which the prime vendor's service fee was 2.4% or less, implementing a prime vendor purchasing system would not have been cost effective. Therefore, the hospital retained its existing purchasing system. Through detailed analysis of the major costs involved in pharmaceutical purchasing, the hospital was able to determine that it was not cost effective for it to use prime vendor purchasing.     

Inventory management to reduce costs: a case study

This paper presents the 2-year goals that were set by the Department of Pharmaceutical Services at Sioux Valley Hospital in 1992 regarding inventory cost savings. These goals included decreasing inventory by 10%, increasing turnover rate, controlling formulary additions, removing low-usage drugs from the formulary, ensuring compliance with group contracts, and the appropriate selection of generic equivalents for all multisource drugs. By using available computer technology offered by the prime vendor wholesaler, these objectives were accomplished. Cost containment was monitored from May 1, 1992 to April 30, 1994, two fiscal years. Inventory decreased by 16%, turnover rate increased on the top 90% of dollar-volume pharmaceuticals from 31 to 46, 72 drugs were removed from the formulary, and savings generated by using group contracts was 32% of purchase cost.     

药库零库存成本效益分析

目的:用药物经济学评价的方法综合评价药库零库存带来的收益和成本,为药库零库存管理提供参考。方法:利用药物经济学成本效益分析方法对我院药库零库存成本和效益情况进行分析,以2018年数据测算零库存条件下医院资金周转成本、库房成本、人员成本、房屋经济效益等,并测算同等条件下非零库存模式时的理论成本效益,并进行敏感度分析。结果:零库存和非零库存药库成本分别为4 081.07万元和4 739.79万元,其中医院资金周转成本最高,二者占比分别91.64%、87.47%。采用药库零库存预计每年可为医院节约成本658.72万元。而随着药品采购时间延长2 d、4 d时,成本将增加至4 475.93万元和4 870.79万元。结论:绝对零库存是一种理想状态,零库存只是一种降低成本的策略,不应该成为医院刻意追求的目标。医院应该根据自身的条件、制定一个全面的、科学的、合乎自身的经营需求的储备药品方案,在保证药品供应前提下提高药品周转率、优化库存,降低成本提高医院经济效益。     

运用零库存订货法降低我院中成药库库存成本

目的:寻求有效、经济的医院药库药品采购模式。方法:运用库存周转率分析法对我院中成药库曾经使用的周期订货法和零库存订货法的库存成本和周转率进行比较。结果:2种方法平均库存成本分别为15.56、10.38万元,平均周转率分别为199.23%、301.16%。结论:零库存订货法更有利于降低医院药库库存成本。     

A review of limited lists and formularies: are they cost-effective?

The 'limited list' or 'formulary' concept has been used to promote rational use of drugs and to set standards for drug use. Recently the concept has been aimed more toward containment of drug costs. Effective hospital formulary systems assist in purchasing and inventory management. Application of the formulary concept has resulted in savings within specific classes of drugs and in total hospital drug costs. Key features which promote effectiveness are development of policies by prescriber consensus and continued education along with feedback on drug usage. The formulary concept also provides a foundation for appropriate use of drugs in hospitals. In the community setting, limited lists can achieve cost savings and can assist in the rational use of drugs. National limited lists have been less successful in controlling overall drug costs, probably because they have focused on economic effects, rather than education, feedback or user participation. Properly organised drug rationalisation policies embracing the limited list concept can improve health outcomes by promoting rational drug use. They can also contain or reduce drug costs.     

Introduction of pharmaceutical expertise in a palliative care team in Sweden

Objective This paper presents for the first time the inclusion of dispensing pharmacists, a special group of pharmacy professionals, in a Swedish palliative care team. It also presents the drug stock management in the medication room of the clinical area and the improvement of drug logistics. In addition to a dispensing pharmacist, a pharmacist was included in this part of the project as well. Setting The palliative care team at ASIH L?ngbro Park, Sweden. Method The intervention with the dispensing pharmacists as new members of the interdisciplinary palliative team was evaluated by a questionnaire to the staff. An inventory of the different drugs in stock was performed in March 2006 and in April 2007, respectively. The inventory turnover rate was determined and the drug consumption for the last 6 months of 2005 and 2006, respectively, was also analysed. Main outcome measures The questionnaire used rating scales allowing participants to rate the questions/statements. The number of different drugs and drug packages in stock were recorded during the inventories. Drug costs were calculated and the inventory turnover rate was determined by dividing the annual cost of drugs by the value of the inventory. Drug consumption was analysed using the Xplain statistical programme, a statistical tool from Apoteket AB. Results The overall impression of the dispensing pharmacists was positive. The staff reported advantages in having a dispensing pharmacist present at ASIH not only for the drug logistics, but also for drug-related queries. The inventory of the drug stock and the drug-handling process resulted in a 14% reduction of product numbers and a 36% reduction in the tied-up capital for drugs in stock. The inventory turnover rate increased from 6.7 to 9.5. A 7% reduction of medication costs was also observed when comparing the last 6 months of 2006 with the costs in 2005. Conclusion The principal result of this project is that inclusion of pharmaceutical expertise on a palliative care team can be a valuable asset for the team in pharmaceutical issues and of great benefit for stock management, including cost savings and improvement of drug logistics.     

Small molecule compound logistics outsourcing--going beyond the "thought experiment"

Increasing pressure on the pharmaceutical industry to reduce cost and focus internal resources on "high value" activities is driving a trend to outsource traditionally "in-house" drug discovery activities. Compound collections are typically viewed as drug discovery's "crown jewels"; however, in late 2007, Johnson & Johnson Pharmaceutical Research & Development (J PRD) took a bold step to move their entire North American compound inventory and processing capability to an external third party vendor. The authors discuss the combination model implemented, that of local compound logistics site support with an outsourced centralized processing center. Some of the lessons learned over the past five years were predictable while others were unexpected. The substantial cost savings, improved local service response and flexible platform to adjust to changing business needs resulted. Continued sustainable success relies heavily upon maintaining internal headcount dedicated to vendor management, an open collaboration approach and a solid information technology infrastructure with complete transparency and visibility.     

ASHP national survey of hospital pharmaceutical services--1987

The results of a fall 1987 national mail survey of pharmaceutical services in short-term hospitals are reported and compared with similar surveys conducted in 1975, 1978, 1982, and 1985. A sample of 875 hospitals was selected randomly from among the estimated 5600 U.S. short-term hospitals that employ a pharmacist on at least a part-time basis. The survey had a 71.1% response rate (617 usable replies). Nearly three-fourths of the respondents had complete unit dose drug distribution services (UDD), 68% reported complete i.v. admixture services (IVA), and 57% reported both complete UDD and complete IVA. Nearly 5% of respondents offered five specified clinical services (up from 1.8% in 1985); 24% reported having no clinical services (versus 38% in 1985). Nineteen percent said their departments had one or more clinical specialists. Overall, about one-third of pharmacy technicians had completed formal training. The number of respondents with programs to contain drug costs increased about 10% since 1985. Weekly hours of pharmacy operation averaged 102; 36.7% of respondents had pharmacy service around the clock. The percentage of hospitals with computerized drug distribution systems increased from 32% in 1985 to 52% in 1987. Prime vendors were used by 94.6% of respondents, and only 2% reported that they did not use a purchasing group. National expenditures for drugs and fluids for community hospitals were projected at $4.7 billion, personnel costs at $1.8 billion, and other pharmacy expenditures at $0.4 billion. The projected numbers of open positions nationally for pharmacists in community hospitals was 1950. The survey also collected data on the use of personal computers, inventory turnover, quality assurance, continuing-education philosophy, revenue-generating programs, and outpatient services. Drug control in community hospitals is improving, and clinical services are more widespread. Twenty percent of respondents had comprehensive pharmaceutical services, defined as complete UDD and complete IVA plus three or more clinical services.     

Group purchasing: an overview

The various types and operational methods of purchasing groups are described, and evaluation of groups is discussed. Since group purchasing is increasing in popularity as a method of controlling drug costs, community and hospital pharmacy managers may need to evaluate various groups to determine the appropriateness of their services. Groups are categorized as independent, system based, or alliance or association based. Instead of "purchasing," some groups develop contracts for hospitals, which then purchase directly from the vendor. Aside from this basic difference between groups that purchase and groups that contract, comparisons among groups are difficult because of the wide variation in sizes and services. Competition developing from diversification among groups has led to "super groups," formed from local and regional groups. In evaluating groups, advantages and disadvantages germane to accomplishing the member's objectives must be considered. To ensure a group's success, members must be committed and support the group's philosophies; hospital pharmacists must help to establish a strong formulary system. To select vendors, groups should develop formal qualification and selection criteria and should not base a decision solely on price. The method of solicitation (bidding or negotiating), as well as the role of the prime vendor, should be studied. Legal implications of group purchasing, especially in the areas of administrative fees and drug diversion, must also be considered. The most advantageous group for each organization will include members with common missions and will be able to implement strategies for future success.     

Utilizing the computer for a hospital bid program

The goals of a computerized bid program include acquisition of pharmaceuticals at lowest possible cost, guaranteeing prices for a fixed period of time, having the ability to provide budget and patient charge information, decreased payroll hours and expenses vs. a manual system, and having the ability to retrieve data for accounting and purchasing procedures. These goals can be obtained by separating the bid procedure into five operations, which are identifying the pharmaceuticals to bid, preparing a vendor bid list, tabulating the bids received, selection of awarded bids, and vendor notification of awarded bids.     

Controlling financial variables--purchasing, inventory control, and waste reduction

Purchasing, inventory control, and waste reduction techniques designed to minimize nonpersonnel expenditures are reviewed. Cost-saving purchasing mechanisms described include competitive bidding, contract negotiation, group purchasing, and primary wholesaler purchasing. The relative benefits of basic inventory management methods, including the ABC method, minimum and maximum levels, economic order quantity and value, and volume discount evaluation, are described. Waste and pilferage reducing methods discussed are unit dose drug distribution, i.v. admixture systems, and policies for use of i.v. sets and infusion pumps. Pharmacy departments in all institutions can reduce costs.     

Hospital pharmacy purchases and inventories.

The results of the hospital pharmacy purchases and inventories portion of a 1978 national mail survey of pharmaceutical services in short-term hospitals are reported. A sample of 815 hospitals was selected randomly from among 5,200 U.S. short-term hospitals that employ a pharmacist on at least a part-time basis. The inventory question had a response rate of 67.7%, the purchasing question, 62.2%; inventory turnover was calculated based on a response rate of 60.5% to both questions. Inventories were inordinately large in small hospitals. Inventory turnover rates, which increased with hospital size, were somewhat less than optimal in small and medium hospitals. The Pacific region's inventory/bed and purchases/bed values were substantially greater than those of any other region. Large hospitals had a 20% higher annual purchases/bed figure than the smaller hospitals, perhaps because of their relatively greater volume of outpatient services. Based on their respective demand (as measured by adjusted inpatient days), the drug purchases of the New England and Mid-Atlantic regions were less than expected, while the Mountain and Pacific regions' drug purchases were much greater than expected. Total 1979 purchases of pharmaceuticals and related supplies by pharmacies in all short-term hospitals are estimated to reach $2,215 to $2,772 million.     

ASHP national survey of hospital-based pharmaceutical services--1990

The results of a national mail survey of pharmaceutical services in community hospitals conducted by ASHP during May through July 1990 are reported and compared with the results of earlier ASHP surveys. A sample of community hospitals (short-term, nonfederal) was selected randomly from the population of community hospitals registered by the American Hospital Association. Questionnaires were mailed to each director of pharmacy. The adjusted gross sample size was 881. The net response rate was 66% (582 usable replies). The average number of hours of pharmacy operation per week reported by the respondents was 96. Complete unit dose drug distribution was offered by 89% of the respondents (up from 74% in 1987). About 70% offered complete, comprehensive i.v. admixture programs (essentially unchanged from 1987). Most of the hospitals (70%) had centralized pharmaceutical services. A computerized pharmacy system was present in 64% of the departments, and 75% had at least one microcomputer. More than 90% reported participation in adverse drug reaction and drug-use evaluation programs. Some 80% participated in drug therapy monitoring. Almost half of the respondents regularly provided written documentation of pharmacist interventions in patients' medical records. Approximately one third provided patient education or counseling, and one third provided drug management of medical emergencies. A well-controlled formulary system was in place in 58% of the hospitals; therapeutic interchange was practiced by 49%. A total of 98% of the respondents participated in group purchasing, and 96% used a prime vendor. Half of the departments served as training sites for pharmacy students. Less than half had a staff development program, but about two thirds supported continuing-education activities for pharmacists. The 1990 survey revealed a continuation of the changes in many hospital-based pharmaceutical services documented in earlier surveys and identified static areas that merit the attention of pharmacy leaders.     

Bid purchasing of radiopharmaceuticals and radiopaque contrast media

Use of product standardization and competitive-bid purchasing for radiopharmaceuticals and radiopaque contrast media in a 1000-bed teaching hospital is described. The hospital's use of radiopharmaceuticals was reviewed, and all agents were listed with their product specifications and order quantity or frequency. Manufacturers and wholesalers were asked to submit unit prices for each of their products. Similar procedures were followed for radiopaque contrast media; wholesalers and manufacturers were asked to submit unit prices that would be guaranteed for a 12-month contract period. A nuclear pharmacist and radiologists reviewed the submitted bids and awarded contracts, basing their decisions primarily on product acceptability and selection criteria and then on relative costs of the agents. Annual costs were reduced 16% ($16,500) for radiopharmaceuticals and 21.3% ($66,500) for radiopaque contrast media. The program also resulted in decreased inventory of radiopaque contrast media and in faster and less expensive acquisition of emergency orders. Working with the radiology department to compile a standard list of radiopharmaceuticals and radiopaque contrast media and soliciting competitive bids by vendors of these products resulted in annual savings of more than $83,000.     

Economics of providing antineoplastic drugs in a manufacturer-mixed bulk package

The cost impact of converting from a hospital-mixed (HM) system for preparing antineoplastic-drug doses to a manufacturer-mixed bulk package (MMBP) system in a 565-bed comprehensive cancer center is analyzed. The cost per dose for nine antineoplastic agents--bleomycin, cisplatin, cyclophosphamide, doxorubicin, fluorouracil, methotrexate, mitomycin, vinblastine, and vincristine--was assessed for each system. The average dose for each drug was determined by reviewing nearly 2200 physician orders collected over nine days. Cost per dose was calculated by allocating the costs associated with the production of multiple-dose containers and withdrawal of a single dose. A time-and-motion study using standard industrial engineering methodology measured labor times for all tasks associated with the production of drug doses. Calculated costs included direct labor, drug expense, supply expense, drug waste, waste removal, overhead, management labor, and inventory reduction. Operating costs (labor, supplies, overhead, and waste and waste removal) were reduced by an average of 26% per dose for all drugs, using the MMBP system. This institution produces a high volume of antineoplastic admixtures; thus, the impact on operating costs is likely to be different in other institutions. The total measured operating and drug acquisition costs decreased for three drugs, marginally increased for five drugs, and increased substantially for one drug. Based on this institution's use of the nine antineoplastic agents, the total first-year savings from conversion from the HM system to the MMBP system would be $31,219, including a one-time inventory reduction of $94,621. However, in subsequent years, use of the MMBP system would result in increased costs of $63,402.(ABSTRACT TRUNCATED AT 250 WORDS)     

System to maximize inventory performance in a small hospital

A computerized system to maximize inventory performance in a small hospital is described. An inventory control system, which integrates economic order quantity (EOQ) and ABC inventory models was implemented in a 146-bed hospital. The perpetual inventory control data base, supported by the hospital's mainframe computer, generates monthly inventory statistics that are segregated into A, B, and C reports. Using a hand-held computer that interfaces with the perpetual inventory system, a series of inventory management reports were developed. These reports, which are based on the EOQ model, provide the following information for each drug line item: EOQ, EOQ proposed carrying cost, actual inventory carrying costs, safety stock, order point, average inventory, and the "on hand/on order" point. Several supplemental inventory management reports were also developed. While implementing the computerized inventory system, the pharmacy also changed its purchasing strategy from predominantly direct accounts to a progressive prime-vendor wholesaler. From December 1980 to December 1981, the ABC/EOQ system with progressive prime-vendor involvement essentially doubled total aggregate inventory turnover. A 46.5% reduction in standing inventory levels occurred. The drug cost per line item dispersed remained relatively constant over the one-year period, despite price increases. The application of the computerized ABC/EOQ inventory model to an online perpetual inventory control data base effectively reduced the inventory operation costs.     

两种门诊库存管理方法的对比分析

目的：将ABC分析法和排序分析法进行对比分析,选择适合于我院的方法,以降低药品的管理成本。方法：通过医院His系统对我院门诊药房2014年1月~12月药品入库数据和实际销售数据进行统计分析,分别运用ABC法和排序法对药品进行分类,计算库存周转天数,设置每类药品的库存上下限。结果：根据ABC法进行分类,A类药品71个品种,实行重点管理;B类药品70个品种,实行一般管理;剩余的331个品种为C类,适当宽松管理;A、B、C分类分别占药品总品种数的15.04%、14.83%、70.13%。根据排序法进行分类,重点管理的品种数为163种,占药品总品种数的34.53%,剩余的309种药品实行非重点管理。ABC法划分的A类、B类药品的库存周转天数均在15天以内,库存上下限设置为A类为3~7天、B类为7~15天、C类在此基础上适当延长;排序法划分的重点管理品种98%以上药品的库存周转天数在15天以内,库存上下限设置为7~15天,剩余部分的重点管理品种以及非重点管理品种库存上下限适当延长至20天或1个月。结论：以两法对比分析结果为依据,综合两法的优点,取长补短,建立适合我院门诊药房的药品分类管理方法,保证药品供应,降低药品管理成本,实现药品库存的科学化管理。     

Computer-assisted inventory control utilizing ABC inventory analysis and EOQ in a hospital pharmacy.

In this paper, a project whose purpose was to develop and implement a workable inventory control system is discussed. Specific objectives of the project included the avoidance of out-of-stock situations, minimization of total inventory costs, and increased efficiency of the purchasing power. The initial step in the project was the determination of both fixed and variable ordering and carrying costs. Then a micro-computer was enlisted to print an inventory listing according to the total cost based on usage of the item for the past year and the inventory was subsequently classified into A, B and C categories. The economic order quantity (EOQ) was calculated for items in class A, while B and C items were purchased on a min/max basis. Also, a weekly ordering schedule for class A items was developed based on frequency of ordering. Following this schedule, all items to be ordered on a particular week are printed by the computer. The computer maintains a perpetual inventory, and a list of B and C items below minimum quantity is printed upon request. The efficiency of the inventory control increased dramatically (50%) after project implementation. Although cost savings were found, they were not substantial compared to our previous system (less than $5,000). Out-of-stock situations for B and C items occurred almost as frequently as before project implementation. This study demonstrated that the EOQ concept in conjunction with ABC inventory analysis may be an effective inventory control system in hospital pharmacy. Increased efficiency and cost savings were achieved. Protection against unpredictable demand and avoidance of out-of-stock situations can be achieved by closer adherence to stated ordering procedures for B and C items.     

Quality assurance standards for purchasing and inventory control

A process is described for quality assurance in pharmaceutical purchasing and inventory control. A quality assurance program should ensure that quality drugs are purchased at the lowest price, drug products are available when needed, the system is managed efficiently, internal controls are provided, drug products are stored under appropriate conditions, and laws, regulations, accreditation standards, and procedures are followed. To meet these objectives, product quality, vendor performance, the department's system of internal controls, purchasing data, and storage conditions should be monitored. A checklist for evaluating purchasing and inventory practices and a sample audit form listing quality assurance criteria, standards, procedures, and recommended actions are provided. A quality assurance program for pharmaceutical purchasing and inventory control should define institution-specific criteria and standards and use these standards for continual evaluation of all aspects of the purchasing and inventory control system. Documentation of quality assurance activities should be provided for use by the purchasing department, hospital administration, and regulatory bodies.     

Implementation and pharmacoeconomic analysis of a clinical staff pharmacist practice model.

The implementation and pharmacoeconomic analysis of a clinical staff pharmacist (CSP) practice model are described. Staff pharmacists at a large, tertiary care, academic medical center were selected and trained to perform clinical pharmacy services under the direction of clinical pharmacy specialist mentors. Clinical interventions by these CSP practitioners were evaluated in terms of direct cost savings (the difference in actual acquisition costs between therapies) and cost avoidance (the dollar value of adverse drug events [ADEs] avoided). The CSPs performed a total of 4959 interventions during a 12-month period. The interventions provided direct cost savings of $92,076 and an estimated cost avoidance of $488,436. Comparing cost savings and cost avoidance with the expenses of providing these services indicated a net economic benefit of $392,660. A new model of pharmacy practice that integrates staff pharmacists into existing clinical practice has the potential to minimize the risks, decrease the costs, and improve the outcomes associated with drug therapy.