Pharmacy Procurement Practice Overview. Richard C. Ponder, Jr., CPhT, CPP, CEPP, BBA, BS(Bio) Pharmacy Supply Chain Supervisor East Jefferson General Hospital . Agenda . 1. Introduction. 2. Knowledge, Skills, & Abilities. 3. Laws & Regulations. 4. Order Cycle. 5.
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Richard C. Ponder, Jr., CPhT, CPP, CEPP, BBA, BS(Bio)
Pharmacy Supply Chain Supervisor
East Jefferson General Hospital
Knowledge, Skills, & Abilities
Laws & Regulations
Cost Management Program
Metrics & Tools
Four primary factors drive growth in overall drug expenditures: price, utilization, mix, and innovation.
Medication cost continue to increase faster than other healthcare expenditure.
Four strategic objectives: procure the most cost-effective drugs in the right quantities, select reliable suppliers of high-quality products, ensure timely delivery, and achieve the lowest possible total cost.
Information is the lifeblood of procurement and is needed at every stage if the procurement process is to be optimal.
Even if appropriate policies and procedures are in place, lack of properly trained staff in key positions can doom any procurement system to failure.Statements about Pharmacy Procurement
Americal Journal of Health-System Pharmacy, Vol. 66, Issue 5 Supplement 3, s20 -s28, 2009.Pharmacy Procurement
Quote by Eva Ombaka
To support the principle of purchase of pharmaceutical products and related supplies by public and private entities using appropriate professional practice to achieve that end; further,
To encourage government acknowledgement of existing local professional activities already in organized health care settings that are methods of promoting quality and cost-effective pharmacist patient-care services.Procurement – ASHP Policy Position #0524
2 – Cost Containment
3 – Technical Capability
4 – Operational Principles of Good Pharmaceutical Procurement
5 – Purchasing for Safety
6 – Ensuring Appropriate Selection
7 – Timely, Accurate and Assessable Information
8 – Ensuring Quality Products
9 – Proper Budgeting and FinancingNine Principles of Pharmacy Procurement
Knowledge, Skills, & Abilities
General knowledge of operations, regulations, and terminology
Supply Chain Management
BOK – Accounting, Economics, Business Mathematics, Business Law, Negotiations, Quality Assurance, & Statistics
Four Elemets: Offer, Consideration, Acceptance, & Mutuality
Examples: Amerinet, Broadlane, Consorta, Med-Assets, Novation, Premier
Anatomy of the Process
The search for one solution is a waste of resources.
Wholesaler; Formulary; Government; Manufactures; Pharmacy,
Point of Sale; Reorder Points; Automated Counting/Filling Device; Dispensing Machines; System Care and Maintenance; Order Entry Devices; System Backup
Stocking & Storage
Automated; Manual; Electronic; Shipping; Material Safety Data Sheets; Pedigrees; Credits/Returns; Receiving; Controls - 222
Unit-Dose; Barcoded; Physical Organization; Refrigeration; Point of Use Stations; Spoilage; Shrinkage; Turnover; Reorder Point - EOQ
Initiation, Validation, Transmission
Supplier Processes and Delivery
Goods Received Processing
Invoice Clearance and PaymentThe Order Cycle
Validated Computer System; Manage Supplier Base; Stock Profiles up to Date; Monitored Stock and Performance; Audit Trails
Trannsparency; Exception Reporting; Price Validation; Right First Time; Consolidated Deliveries; Invoice with Goods or Electronic
Electronic Process; Complete within 2 days; Electronic Transfer; Prompt Payment
Electronic Process; Minimal Manual Intervention; Electronic Records; Electronic link from Pharmacy Management System to Trransmission; Electronic Audit Trail
Bar Coded Receipt and Expiry Dating; Instant Notification of Discrepancies; Delegation of Authority
Traditional (Transaction) Procurement
Tactical (Best Price) Procurement
Strategic (Integrated) Procurement
Pharmacy Directed Activities
2008 Average vs. February 2009 Actual (Therapeutic Classes)
Patient Safety > Cost Savings
9 Principle of Pharmaceutical Procurement
Must have trained procurement professionals dedicated to the procurement process
Metrics are a useful tool; however, you must understand how the metric is created
Do You Have Any Questions?
American Society of Health-System Pharmacist. ASHP guidelines on medication cost management strategies for hospitals and health systems. Am J Health-Syst Pharm. 2008; 65:1368-84.
American Society of Health-System Pharmacist. Current status of medicines procurement. Am J Health-Syst Pharm. 2009; 66: 5: Supplement 3 s20-s28.
CPSP Study Guide, American Association of Pharmaceutical Sales Professionals, Round Rock, TX, 2007.
CPM Study Guide, 7th edition, Institute for Supply Management, Tempe, AZ, 2001
CPP Study Guide, 6th edition, American Purchasing Society, Aurora, IL, 2007.
Deegan, A. & O’Donovan, T. Management by Objectives for Hospitals 2nd edition, Aspen Publication, Rockville, MD, 1982.
McKeller, John. Evaluating the Purchasing Process. NAPM InfoEdge. 1996; Vol. 1 No. 9.
Moini, Jahangir. Law & Ethics for Pharmacy Technicians. Delmar, Clifton Park, NY, 2009.
Puckett, William. Recruiting a manager for financial activities in pharmacy. Am J Health-Syst Pharm. 2008; 65: 2014-15.
Raedels, Alan. The Supply Chain Process, Institute for Supply Management, Tempe, AZ, 2000.
Sanderson, Edwards. Hospital Purchasing and Inventory Management. Aspen Publication, Rockville, MD, 1982.
Wilson, Andrew. Financial Management for Health-System Pharmacists. ASHP, Bethesda, MD, 2009.