Feature: Smart Purchasing
On any given day, Randall Peck, director of compliance and quality at Pharmore Drugs in Skokie, Ill., is purchasing 300 to 400 different items for this long-term care pharmacy that has been in business for 11 years and services 13,000 beds. Finding the best deal quickly is top of mind for him. One tool he’s used for the past five years is the web-based purchasing app from PharmSaver that lets customers see the best deals available at wholesalers beyond the customer’s primary wholesaler. For the past six months, Peck has benefited from the added value of a short-date purchasing app — the result of a partnership between Datarithm, a provider of inventory control software, and PharmSaver.
“We’re a pretty good size operation, and we have seen in excess of $1 million in annual savings from the PharmSaver app, with 2% to 3% of our savings beginning to come as a direct result of the short-date buying application,” Peck says. “There’s even more savings if you take into account the favorable impact on contract generic compliance with our prime wholesaler.” Peck’s staff uses the app to search pricing on close to 30 different products across a wide range of drug wholesalers; even searching on 10% of that number without the app would be prohibitive from a time standpoint. “It’s a fantastic application to pull up a single web page and see some 30 different short-dated products offered by a wide variety of wholesalers, and look at each product to see what the price and savings opportunity is for each product,” he says.
The app has saved PRN Pharmacies, three Medicine Shoppe pharmacies based in Harrisburg, Ill., southeast of St. Louis, up to 75% on products, says Steve Ledbetter, R.Ph., the company president. PRN uses Datarithm in two of the pharmacies, and Ledbetter says integration between Datarithm and PharmSaver, along with his pharmacy system vendor, Rx30, makes it easy to pick the sale items the pharmacy uses on a daily basis. He’s found that the overstock expirations, usually slightly less than one year, gives the pharmacy adequate time to move the discounted products from the inventory.
PharmSaver receives pharmacy data via Datarithm to match sale items and short-dated items with store sales and lists these daily as opportunities, along with calculating the amount of each product that could be safely bought within the dating time frame. Datarithm provides the historical dispensing data, based on data extracted from the pharmacy management system, so the PharmSaver software can flag the best deals available at its list of wholesalers, allowing pharmacists to comparison shop.
“We look at the app daily to see what products are available, and match that to existing stock to determine if the buying opportunity warrants purchase,” says Ledbetter. “The app fits well into our workflow, because most of the calculations of quantity are done for us. We have parameters set at 20%, so only products with a 20% savings are shown in the daily buy.”
Partnership Is a Win for the Pharmacy
Both Peck and Ledbetter quickly saw the benefits of the short-date app from the integration between Datarithm and PharmSaver. The short-date app interested Peck because it reflects purchasing recommendations based on historical dispensing data analyzed by Datarithm, and sometimes there are products there that are items the pharmacy does use, but not on a daily basis. This is important, says Peck, because the staff might miss a purchasing opportunity for a low-volume drug that’s on a short-date sale list. Inventory data is exported from the SoftWriter’s FrameworkLTC software, and Datarithm’s algorithms populate the PharmSaver website with the valid opportunities to save money. “We give Datarithm the pharmacy’s usage information and the current costs, and in turn what we get back is a page loaded with opportunities to save money on short-dated goods,” explains Peck.
Both PRN Pharmacies, left, and Pharmore Drugs, right, have found the short-date app makes it easy to select sale items used on a daily basis. The SaaS (software as a service) interface with the pharmacy management system means inventory is updated as purchases are made.
The system is flexible in responding to a pharmacy’s individual inventory needs. Ledbetter says that the Datarithm recommendations based on historical use for the month will recommend a reasonable quantity to purchase using the product dating, but it’s up to the pharmacy to purchase what it needs. Even if there is a good deal, if there isn’t enough room to store the inventory, Ledbetter just purchases what he needs.
“The integration between Datarithm and Rx30 makes it very easy to manage the app, since the system picks the items on a daily basis that we are using and are on sale at the wholesaler,” Ledbetter says. “And it calculates the quantity we can order that would still be used within the reasonable time frame. It’s a calculation that’s pretty safe, not just up to the expiration date, but what we can use 60 days prior to expiration.” This keeps the patients safe, as they will use the medication prior to the expiration date.
A Fit for Any Pharmacy
Since the purchasing options presented in the app are based on the individual pharmacy’s dispensing volume, any size pharmacy benefits. PRN Pharmacies fills 1,200 to 1,300 prescriptions a day, while Pharmore Drugs services about 90 different skilled-nursing, assisted-living, and independent-living facilities in three states. When the pharmacist logs in, there are close to 30 different products on the page for the pharmacy, explains Peck, with only the products the pharmacy uses listed, and allows for how much short-date inventory could be purchased and used well before the product expiration date. The app also tells the staff what it’s paying for the drug now and the sale price, giving an estimate on the savings. Peck likes the ease of the one-click shopping — orders for various wholesalers can go into one shopping basket for one checkout.
|Owners set purchase parameters, above, such as generic discount and minimum inventory dating. The app calculates the products to buy and quantity to maximize savings, based on actual 12 months of dispensing data from the pharmacy system.|
“Not only do they show the item and the price, they show you what your monthly usage is and in turn a recommended quantity based on your usage and the product short date,” Peck says. “You get the information and how much you will save if you buy the recommended amount. It’s a very powerful and effective tool to use on the buy side.”
Ledbetter agrees. “ This could benefit anyone who wants to spend the time to look for items being sold at a ‘discount’,” he says. “It is a really good tool to look at multiple sources of products and search out the best buys across all the warehouses that PharmSaver links with.”
Another example of the ability to tailor the system is managing inventory over multiple locations. When Peck does purchase through the app, the product is then removed from the list of options displayed in the app. This is important to avoid duplicate orders, if you have multiple people making the purchases in the pharmacy across different shifts.
“It’s just an incredible tool,” says Peck. “It’s a very efficient way to buy inventory at the best price.” CT
Maggie Lockwood is VP, director of production, at ComputerTalk. If you have a story about how you use technology in your pharmacy, email her at firstname.lastname@example.org.