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Essential Inventory Management Strategies for Pharmacy Operations

Learn about inventory management in pharmacy operations, including ordering procedures, supplier types, inventory counts, and medication disposition. Understand the importance and strategies for efficient inventory control.

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Essential Inventory Management Strategies for Pharmacy Operations

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  1. Inventory Management Jessica Tagerman, Pharmd, rph Adapted from Pharmacy Technician Quick Study Guide & Mosby’s Review for the Pharmacy Technician Certification Exam

  2. What is Inventory Management?Why is it important?

  3. What is inventory management? • Inventory • Products or merchandise (e.g. drugs, devices) available to meet future demand • 2 Main Goals of Inventory Management: • Ensure medication is available to patients when they need it • Ensure costs associated with product procurement/time spent on inventory management are minimal.

  4. Ordering Inventory • Ordering procedures are different for each pharmacy. • Factors that influence product ordering decisions: • Inventory turnover rate • Manufacturing sources • Purchase price

  5. What are some strategies used to manage inventory?

  6. Inventory Management Strategies • Just-in-time ordering: • Ordering a product just before it’s used. • PAR (Periodic automatic replacement) Value • Drug that is automatically reordered based on minimum and maximum inventory levels. • ABC Analysis: • A method used to identify and define inventory items based on their usage. • Focuses efforts based on the products that will have the greatest inventory turnover rate

  7. Inventory Management Definitions • 80/20 Rule: • 80% of a pharmacy’s drug costs are derived from 20% of the pharmaceuticals carried. • Focuses on inventory control of the top 20% of the items carried. • Inventory turnover rate: • The cost of goods sold over the average inventory value • The larger the # of inventory turns indicates better utilization of financial resources of an institution

  8. What are the types of different suppliers a pharmacy can use for the acquisition of medication?

  9. Suppliers • Wholesale drug distributors • Stock medications from all manufacturers • Manufacturers • Allows pharmacies to purchase in bulk, resulting in a savings for the company • Other pharmacies

  10. Receiving Inventory • Upon delivery, a technician must verify accuracy of the received order with the original purchase order and the packing slip. • Drug name and manufacturer • Strength and dosage form of the medication • Appropriateness of packaging type • Quantity • Number of units received vs. number ordered • Damaged inventory • Should always document incorrect products or product shortages • Controlled substances require additional documentation

  11. Storing Inventory • Technicians must learn which products require special storage conditions (i.e. refrigeration) • Stock rotation procedures are VERY important! • Items that expire soonest should be placed in the front.

  12. What are the different types of inventory counts?

  13. Types of Inventory Counts • Initial • Accurate inventory of all controlled substances taken before a new pharmacy opens or when there is a change in PIC • Biennial: • Inventory required by DEA of all controlled substances every 2 years • CII- must be exact, CIII-CV, may be estimated • Perpetual: • Inventory that reflects exactly what is on hand at a particular time • Most commonly performed on CII medications • Physical: • An inventory conducted on a basis (typically yearly) to determine exactly what is on hand at a particular moment in time and the value of the inventory based on the current cost of that item

  14. Medication Disposition • Recalls • Can be initiated by the manufacturer or the FDA • Class I- reasonable probability that use or exposure will cause serious consequences or death • Class II- use or exposure may cause temporary or reversible adverse consequences, with a remote possibility of serious consequences • Class III – use or exposure is not likely to cause adverse consequences • Expired medications • In many cases, pharmacies return expired, discontinued, recalled, or unusable products to the seller, and get a partial credit on return • Some medications cannot be returned- need to dispose of in accordance with federal and state laws and regulations. • Each pharmacy’s policy/procedures regarding expired medication is different

  15. FDA Approved: How the FDA approval process works • Whiteboard discussion!!

  16. Financial Accounting Terminology • Be sure to learn & familiarize yourself with the terms listed on pages 196-197 of Mosby’s Review for the Pharmacy Technician Certification Exam!

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