Inventory Management

1. Inventory Management • Purchasing Systems • Independent Purchasing: a single pharmacy entity establishes a contractual agreement with a pharmaceutical manufacturer or wholesaler. • Group Purchasing: contractual agreement between a manufacturer or a wholesaler and a group of pharmacies • I.e.. CVS , Walgreens and other chains as well as a health system pharmacies like the medisys system which includes Jamaica, Flushing and other hospitals in the NY area • Competitive pricing and better terms

2. Purchasing Methods • Direct Purchasing • Involves buying directly from drug companies (Drop Shipment) • Not commonly done, only for restricted items Wholesalers and primary vendors are not direct purchasing venues but rather are firms whose business is to provide a warehouse of drugs where pharmacies can order multiple drugs, both brand and generic from a single source. Examples include Cardinal Health, McKesson , AmerisourceBergen and Anda Generics. They offer next day service (sometimes same day). Higher cost than direct purchasing but more convenient

3. Order Process • Generating the order can be done manually by a technician surveying the inventory and creating the order. Automated methods involve drugs that a pulled from selves which are scanned and the quantity deducted from inventory. When the inventory falls below a certain level the drug is ordered (PAR) • Confirmation of an order requires an inspection of the order before it is transmitted • Submit the order (usually by computer) • Processing the order by wholesaler • Order Delivery by company’s courier • Matching the physical number of totes received with the PO manifest • Once the manifest is signed, the totes are the pharmacy’s responsibility • Order Verification: matching the purchase order/invoice with what was received to determine if any items are missing that should have been sent • Inventory Adjustment: computerized adjustment of inventory • Stocking of medications

4. Returns and Recalls • Sometimes drugs can be returned to the wholesaler because it’s damaged, ordered in error, or simply not needed • Expired drugs are destroyed • Drugs nearing expiration are returned to the manufacturer for partial credit. Reverse Distributors like Pharmalogistics handle these issues for hospitals. • Recalls are FDA or manufacturer initiated and involve the voluntary or mandatory surrender of drugs by pharmacies and consumers. It may involve pharmacies contacting customers. Often only certain lots are required to be surrendered. • Class 1 Adverse health events (AHE) that are serious and can cause death • Class 2 recalls are not as serious and involve AHE that are temporary and reversible • Class 3 recalls usually involve misbranding and other regulatory issues. Product will not cause an adverse health event

5. Types of Orders • Purchase Order • Pharmacy technician will submit their daily order to a person in the institution called a buyer • The buyer will create a purchase order (PO) and generate a purchase order number (PO#) and formally place this order with the wholesaler • Invoice • Lists all the items on the PO • The invoice is a record of what was order and what was shipped • If any item is order but not shipped • It may be “manufacturer discontinued” • The wholesaler have be out of the item; something the wholesaler will arrange for the manufacturer to send the drug to the pharmacy directly via a “Drop shipment” • The manufacturer may have the product on “back order” • Back order is a temporary suspension of drug distribution due to manufactering or regulatory issues

6. Waste Disposal • Reverse distributors • Companies that handle returning and/or expiring drugs • Are registered with the DEA to accept controlled substances from the pharmacy • Are permitted to accept drug recalls. • Normally we receive recall notices from the wholesaler or FDA and are instruction to return affected NDC and lots directly to the manufacturer • Secure and Responsible Drug Disposal Act of 2010 • Prior to this act, retail pharmacies were forbidden to accept drugs back from public • If pharmacy is contracted with a reverse distributor, drug “take back” is permitted • Passed to address rising prescription drug abuse in the country and to prevent access to disposed drug • Also, EPA noted large burden on water treatment plants due to prescription drug contamination of groundwater • If drug “take back” is not done, instruct patient to dispose of unused medication by crush tablets and mixing with kitty litter and throwing away • Advise against toilet flushing

7. Storage Temperature for Inventory • As defined by the USP, the following are legal definitions of storage conditions • Freezer: -25C to -10C or -13 F to 14 F • Refrigerated: 2 C to 8 C or 36 F to 46 F • Controlled cold temperature: 0 to 15 C or 32 F to 59 F • Room Temperature: 20 C to 25 C or 68 F to 77F • Dry Place: relative humidity of not more than 40%

8. Medications that require refrigeration storage

10. Medication that must be Frozen for storage Most refrigerated medications should be refrigerated by the patient while taking at home. The most notable exception are insulin products, they may be keep at room temperature by the patient and they must be dated with a 28 day expiration from date vials are open

11. Waste Disposal in Hospitals • All Expired medications and all medications that are unusable are segregated from all other pharmacy medications in plastic containers away from other inventory • In addition to medications that may be returned for partial credit, most hospitals contract with a waste disposal vendor for their unusable, uncreditable drugs • Hazardous drugs are defined as K, P, or U listed drugs as per the RCRA

12. K Listed Drugs are: • Flammable with a flash point under 60 degree F • Corrosive: pH less than 2 or greater than 12. i.e Glacial acetic acid • Reactive: Silver nitrate • Toxic: Silver nitrate, mercury, drugs with low LD50 • P listed Drugs • Commercial grade drugs where the drug is the sole active ingredient • Warfarin (>0.3%) • Nicotine • Epinephrine • Nitroglycerin • Physostigmine • U listed Drugs • Mitomycin • Phenol • Selenium • Chloral hydrate

13. Pharmacy Security • Most state require pharmacy to have a workable alarm service when the pharmacy is closed • Each Organization must have a policy and procedures to ensure safety of staff, patients, and customers • In most states for a pharmacy to be open a licensed pharmacist must be on the premises. Some larger stores may have the pharmacy area locked after hours