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I am sure over the years we have all in our own way expressed the thought of “having seen it all.” Retail pharmacy by its very nature puts you in every type of situation imaginable. On top of that, when it comes to the challenges inherent in purchasing the medications for your pharmacy, you come across market shortages, reimbursement challenges, prior authorization battles, and multitiered co-pays. But now in hindsight, those all pale in comparison with the recent pandemic declaration.
With the outbreak of COVID-19 each of us has had to deal with runs on products – hydroxychloroquine and azithromycin, for example, refill timing and quantity issues, general market fear of generic product shortages industry-wide, and general fear bordering on panic. Unfortunately, we have seen much of the traditional distribution channels be either unprepared or incapable of reacting to many of these demands. How does limiting a pharmacy to quantities based on the past three to six months’ purchasing history pre-pandemic help to meet the current demand during a crisis? The net result is having orders where items are either short-shipped or cut after the fact and not shipped at all.
Over the last five to ten years we have seen some dramatic changes in the pharmaceutical distribution model and how pharmacies are using distributors for pharmacy inventory management. Whereas in the past one relied either exclusively (95% or more) on your primary vendor, we have seen pharmacies looking for other alternatives. The evolution in technology and market pressure has spurred the rise of analytic purchasing pharmaceutical platforms. While a significant number of pharmacies have “taken the plunge” and given these alternative pharmacy resources a try, some still seem to be skeptical as to their utility.
Now the COVID-19 pandemic strikes and all bets are off. The old distribution system is put to the test and proves inadequate for pharmacy inventory management. While the traditional primary vendor still relies on a system where you place your order and hope for the best; a new multiwholesaler platform approach like PharmSaver’s functions very differently.
Let’s recap how an analytics platform works: A number of wholesalers/distributors have the ability to upload catalogs and maintain them in real-time through a cloud-based platform. Pharmacies can then use these platforms either in a manual or preferably automated fashion. The advantage of pharmacy automation is the ability to shop for the best opportunities by price, NDC specificity, package size, or general availability while maintaining compliance with any contractual obligations that pharmacies may have with their primary vendor.
Once items are identified and assigned to a distributor, this being done based solely on rules that are preset by the pharmacy, wholesaler/distributor orders are created. In using a platform such a PharmSaver not only are all of the above accomplished but when that order is placed, the system uses a “web service” that actually checks and confirms inventory in real-time. This pharmacy software capability confirms that the quantity placed is both actually in stock and is now allocated to your pharmacy. The pharmacy inventory management system will also advise pharmacies if either a full quantity is not available (for example, the order is for 10 but only eight can be confirmed), or will let a pharmacy know that in an order for six only three will ship as this is the wholesaler’s limit on this particular product. With this information available in real-time, pharmacies can move on to check out the edited order and/or, additionally, look to other distributors for the balance of product they require to meet their pharmacy inventory management needs. The power of this instantaneous inventory check and order confirmation results in the PharmSaver system regularly delivering fill rates of 99.5% and above.
The generic pharmaceutical market has been and will continue to be a commodity market. With no time constraints, one can manually go from vendor to vendor and often find a lower price. However, is there really any instance where you have no time constraints? The reality of running an independent pharmacy is that time is your most valuable commodity and the one where you have the greatest challenges in pharmacy management. Tools that can both save time and increase efficiency can and do prove themselves invaluable.
In conclusion, while each of us fervently hopes that we never come close to what we have been experiencing with COVID-19, we have learned that we need to be cognizant and prepared. Additionally, going through this situation we have seen firsthand the utility of the analytic purchasing approach. Finally, our premise is that these trying times have truly validated both in concept and practice the utility of using the right pharmacy resources to enhance your business.