1. No category

Pharmacy Track
Realizing Pharmacy Supply Chain Savings
Presenters:
Jack Temple, Manager of IT and Medication Use
Systems, University of Wisconsin Hospital and
Clinics
Debbie Albin, Assistant Director HC Pharmacy,
UPMC
Clinton Taylor, Category Lead HC Pharmacy,
UPMC
FACULTY(DISCLOSURE(
The(faculty(reported(the(following(financial(relaAonships(or(
relaAonships(to(products(or(devices(they(or(their(spouse/life(
partner(have(with(commercial(interests(related(to(the(content(of(
this(CE(acAvity:((
(
Jack(Temple,(Manager(of(IT(and(MedicaAon(Use(Systems,(
University(of(Wisconsin(Hospital(and(Clinics(
(
–(No(financial(interest/relaAonship(relaAng(to(the(topic(of(this(
acAvity(
Learning(ObjecAves(
1.  IdenAfy(opportuniAes(for(savings(in(the(
pharmacy(supply(chain(
2.  List(the(steps(to(linking(purchasing(data(to(
clinical(data(
3.  Compare(and(Contrast(the(approaches(taken(to(
maximize(operaAonal(efficiencies,(miAgate(
medicaAon(shortages(and(allow(pharmacists(to(
spend(more(Ame(with(paAents(
4.  Discuss(the(challenges(to(addressing(pracAce(
variaAon(
Virtualizing(Supply(Chain(Management((
Across(the(Pharmacy(Enterprise(
Jack(Temple,(M.S.,(PharmD(
Manager,(InformaAon(Technology(and(
MedicaAon(Use(Systems(
University(of(Wisconsin(Hospital(and(Clinics(
UW#Health#
UW#Health#
UW#Hospital#and#Clinics(
Beds
(((((((((((((((((((((((((((((((((((((((((((592(
ICU(beds^pediatric(and(adult((((((((((((
InpaAent(admissions
(83(
((((((((((((((((((28,120(
Emergency(Dept(visits((((((((((((((((((((((((47,369(
Clinic(visits
(((((((((((((((605,174(
Staff(physicians((((((((((((((((((((((((((((((((((((((1,352(
House(staff((residents/fellows)
Employees
(
(580(
((((((((((((((((((((((((((((((8,296(
UW#Health#
•  UW(Health(Pharmacy(Services((
–  University(of(Wisconsin(Hospital(and(Clinics(–(592(beds(
–  2(addiAonal(faciliAes(with(pharmacy(operaAons(
•  American(Family(Children’s(Hospital(((AFCH)(
•  DigesAve(Health(Center(((DHC)(
–  12(community(pharmacies(
–  Partnership(with(a(home(infusion((
((((pharmacy(
–  Service(a(local(hospice(facility(
•  Daily(staAsAcs(
–  14,500(inpaAent(medicaAon(doses(
administered(
–  1,800(retail(prescripAons(filled(
Organiza6onal#Growth#
UW(Health(at(The(American(Center((TAC)(
UW(Health(RehabilitaAon(Hospital(
UW(Health(Regional(partnerships(
UW(Health(Physician(Office(medicaAon(
management(
•  Specialty(MedicaAon(DistribuAon(
(
• 
• 
• 
• 
8(
UW#Health#Pharmacy#Financials#
•  Pharmacy(revenue(was($474.4(million((FY14)(
•  UW(Health(spent($170.9(million(in(drug(costs(
–  Retail(=(39%(
–  Oncology(clinic(including(AFCH(=(28%((
–  Infusion(center/clinics(=(18%(
–  InpaAent(=(15%(
•  Highly(evolved(medicaAon(management(strategy(for(
the(inpaAent(pharmacy(
•  Opportunity(for(the(clinic(administered,(infusion(
center,(and(specialty(pharmaceuAcals(
UW#Health#Automa6on#
UW#Hospital#(CSC)#
UW#Diges6ve#Health#
Center#(DHC)#
American#Family#
Children’s#Hospital#
(AFCH)#
(1(Robot(
6(Cabinets(
1(Carousel(
3(Carousels(
NarcoAc(Cntrl(System( Inventory(Shelving(
Inventory(Shelving((
11(Cabinets(
51(Cabinets(
NarcoAc(Cntrl(System(
NarcoAc(Cntrl(System(
(
UWHealth#at#The#
American#Center#
1(Carousel(
1(High(Speed(Pkgr.(
Inventory(Shelving((
12(A^carts(
10(Cabinets(
NarcoAc(Cntrl(System(
UW#Health#Distribu6on#Models#
•  UW(Hospital((CSC)(–(automated(hybrid(distribuAon(
system(
–  70%(centralized(robot(and(carousel(
–  15%(extemporaneous(preparaAons(
–  15%(ADCs((controlled(substances,(once,(prn)(
•  DHC(–(Decentralized(
•  AFCH(–(semi^automated(hybrid(distribuAon(system(
•  UW(at(The(American(Center(–(high(speed(packager(
with(a(carousel(
Pharmacy#Inventory#Management#
•  What(problems(are(health(systems(facing(
today(related(to(their(pharmacy(inventory?(
–  MedicaAon(receiving(process(is(manual(
reconciliaAon(
–  GL(cost(accounAng(is(a(manual(process(
–  Some(inventory(locaAons(sAll(require(manual(
inspecAons(
–  Drug(shortages(
12(
John#Needs#to#Buy#a#Shovel#
1
John(goes(to(BigBoxHardware(on(the(web(
and(searches(for(a(“shovel”.(
13(
John#Needs#to#Buy#a#Shovel#
2
A(list(of(possible(shovels(appear(for(John(to(view,(
compare(details,(and(check#inventory#levels#at(the(local(
stores.(
14(
Shovels#vs#Pharmaceu6cals#
Shovels##
at#BigBoxHardware#
Pharmaceu6cals##
within#a#Hospital#
Cost#
Cri6cality#
Know#RealPTime#Inventory#On#
Hand#in#All#Loca6ons#
Track#Lot#Numbers#
Track#Expira6on#Dates#
15(
What#if#100%#of#your#Pharmacy#Inventory#
was#visible?#
Monitor#usage#and#
inventory#of#shortage#
medica6ons(
Easily#find#drugs#across#
your#enterprise#that#
are#cri6cal#for#a#pa6ent(
Inventory#
Visibility(
16(
Benefits#of#an#Enterprise)Wide#
Inventory#Management#System#
OpAmize(pharmacy(staff(
Ame(through(automaAon(
Reduce(stock^outs(
Improve(cash(on(hand(
for(company(through(
opAmizaAon(of(inventory(
Reduce(carrying(costs(
Reduce(expired(meds(
Take(advantage(of(bulk(
purchasing(discounts(
17(
EnterprisePWide#Inventory#
Management#
Reduce#waste#due#to##
expired#medica6ons#
Manage#replenishment#to#
all#sites#including#clinics#
Mi6gate#the#Impact#of##
Drug#Shortages#
Facilitate#centraliza6on#of#
pharmacy#opera6ons#
Iden6fy#&#act#on#
procurement#opportuni6es#
Enable#IV#compounding#
Create#visibility#and#
access#to#all#medica6ons#
Connect#with#all#
pharmacy#automa6on#
18(
Goal#for#EnterprisePWide#Inventory#
Management#System#
OpAmize(inventory(visibility(and(management(
through(centralizaAon(and(virtualizaAon(
•  Increase(inventory(turns(
•  MiAgate(drug(shortages(within(the(health(system(
•  Centralize(high(cost,(low(use(medicaAons(within(the(
health(system(
•  Expand(the(use(of(virtual(inventory(management(in(
manual(areas(
19(
UW#Health#Inventory##
Management##Strategies#
• Package#Sharing#(
Distribute(as(needed(from(central(
stocking(locaAon(
• Consolidate#Demand#Bigger(
quanAAes(qualify(for(lower(price(
Aer(
• Stock#in#Central#Loca6on(
Deliver(to(hospital(as(needed(
Demand#
Aggrega6on(
• Meds#in#Central##
Stocking#Loca6on#Deliver(to(
hospitals(as(needed(
• Consolidate#Demand#Bigger(
quanAAes(qualify(for(lower(price(
Aer(
• Shortage#Management#
• Special#Buys#
• Recall#Management#
Inventory#
Visibility##
and#Transfer(
• Centralized#Management#
One(locaAon(maintains(systems(for(
all(
• Contract#Compliance#Maximize(
rebates(and(drive(value(
• Shortage#Management(
• Recall#Management#
• Cost#Accoun6ng#
Standardiza6on(
Medica6on#Logis6cs:##
Implementa6on#Strategy#&#Impact#
REDUCE,#
OPTIMIZE(
GAIN#CONTROL,#ACCESS(
Phase#1:##Central#Pharmacy##
Founda6on
(
Phase#2:##Integrated#Medica6on#
#Distribu6on#Pla]orm
DistribuAon(model(evoluAon(
Central(Pharmacy(RoboAcs(
Carousels(
Technology(Infrastructure(
• 
• 
• 
• 
• 
• 
• 
#
IMPACT#
• Re^deployment(of(pharmacist((
and(technician(labor(
$(
Phase#3:#Enterprise#Inventory##
Visibility#&#Management(
(
• 
Cabinetry(deployed(on(
integrated(plaporm(with(
central(pharmacy(
Dynamic(Inventory(
Management(
Common(formulary(
ConnecAvity(to(EHR(for(
nursing(workflow(
IMPACT#
#
• Cabinet(re^stocking(
efficiency(
• Leverages(exisAng(interfaces(
• One(system(to(upgrade(
$(
EXPAND,#LEVERAGE(
Centralized(distribuAon(
management(
•  Total(inventory(visibility(
•  Demand(aggregaAon(
•  Shortage(management(
•  Special(buys(
•  Recall(Management(
•  Future(development(of(a(
consolidated(operaAons(
center((packaging,(
compounding,(distribuAon)(
IMPACT#
• Ordering/OperaAons(
Efficiency(
• Overall(inventory(
reducAon(
• ReducAon(in(waste(
• 
$$$(
Phase#4:##Extension#to##
Affiliated#Organiza6ons
(
• 
• 
• 
• 
Leverage(centralized(
distribuAon(experAse(
Align(with(health(system(
partnership(strategy(
Leverage(exisAng(
infrastructure(
Regional(support(and(
distribuAon(services(
offered(to(area(providers(
(possible(for(compounding(
and(shortage(inventory(re^
distribuAon)(
$$$(
Medica6on#Logis6cs:##
Implementa6on#Strategy#&#Impact#
REDUCE,#
OPTIMIZE(
GAIN#CONTROL,#ACCESS#
Phase#1:##Central#Pharmacy##
Founda6on
(
Phase#2:##Integrated#Medica6on#
#Distribu6on#Pla]orm
DistribuAon(model(evoluAon(
Central(Pharmacy(RoboAcs(
Carousels(
Technology(Infrastructure
• 
• 
• 
(
• 
• 
• 
• 
#
IMPACT#
• Re^deployment(of(pharmacist((
and(technician(labor(
$(
Phase#3:#Enterprise#Inventory##
Visibility#&#Management(
(
• 
Cabinetry(deployed(on(
integrated(plaporm(with(
central(pharmacy(
Dynamic(Inventory(
Management(
Common(formulary(
ConnecAvity(to(EHR(for(
nursing(workflow
(
IMPACT#
#
• Cabinet(re^stocking(
efficiency(
• Leverages(exisAng(interfaces(
• One(system(to(upgrade(
$(
EXPAND,#LEVERAGE(
Centralized(distribuAon(
management(
•  Total(inventory(visibility(
•  Demand(aggregaAon(
•  Shortage(management(
•  Special(buys(
•  Recall(Management(
•  Future(development(of(a(
consolidated(operaAons(
center((packaging,(
compounding,(distribuAon)(
IMPACT#
• Ordering/OperaAons(
Efficiency(
• Overall(inventory(
reducAon(
• ReducAon(in(waste(
• 
$$$(
Phase#4:##Extension#to##
Affiliated#Organiza6ons
(
• 
• 
• 
• 
Leverage(centralized(
distribuAon(experAse(
Align(with(health(system(
partnership(strategy(
Leverage(exisAng(
infrastructure(
Regional(support(and(
distribuAon(services(
offered(to(area(providers(
(possible(for(compounding(
and(shortage(inventory(re^
distribuAon)(
$$$(
Medica6on#Logis6cs:##
Implementa6on#Strategy#&#Impact#
REDUCE,#
OPTIMIZE(
GAIN#CONTROL,#ACCESS(
Phase#1:##Central#Pharmacy##
Founda6on
(
Phase#2:##Integrated#Medica6on#
#Distribu6on#Pla]orm
DistribuAon(model(evoluAon(
Central(Pharmacy(RoboAcs(
Carousels(
Technology(Infrastructure
• 
• 
• 
(
• 
• 
• 
• 
#
IMPACT#
• Re^deployment(of(pharmacist((
and(technician(labor(
$(
Phase#3:#Enterprise#Inventory##
Visibility#&#Management(
(
• 
Cabinetry(deployed(on(
integrated(plaporm(with(
central(pharmacy(
Dynamic(Inventory(
Management(
Common(formulary(
ConnecAvity(to(EHR(for(
nursing(workflow
(
IMPACT#
#
• Cabinet(re^stocking(
efficiency(
• Leverages(exisAng(interfaces(
• One(system(to(upgrade(
$(
EXPAND,#LEVERAGE(
Centralized(distribuAon(
management(
•  Total(inventory(visibility(
•  Demand(aggregaAon(
•  Shortage(management(
•  Special(buys(
•  Recall(Management(
•  Future(development(of(a(
consolidated(operaAons(
center((packaging,(
compounding,(distribuAon)(
IMPACT#
• Ordering/OperaAons(
Efficiency(
• Overall(inventory(
reducAon(
• ReducAon(in(waste(
• 
$$$(
Phase#4:##Extension#to##
Affiliated#Organiza6ons
(
• 
• 
• 
• 
Leverage(centralized(
distribuAon(experAse(
Align(with(health(system(
partnership(strategy(
Leverage(exisAng(
infrastructure(
Regional(support(and(
distribuAon(services(
offered(to(area(providers(
(possible(for(compounding(
and(shortage(inventory(re^
distribuAon)(
$$$(
Current#State#
UW#Health#Phase#1P2#
Health#System#
Challenges#
Source(
Clinic(
Clinic(
Excess#Inventory(
(Can’t(opAmize(
package(size,(quanAty(
discounts,(safety(stock(
Hospital(
Expired#Meds#(
(Excess(inventory(
expires(before(it(can(be(
used(
Shortages#(
(Meds(not(available(
where(needed(
Inconsistent##
#Workflows#and#
Procedures#Distracts(
management(arenAon((
from(clinical(care(
24(
Future#State#
UW#Health#Phase#3#
Source(
UW#Health’s#road#to#
consolidated#services#
Clinic(
Centralized#Stocking#
Hospital(
Demand#
#Aggrega6on#
Minimize(inventory(and(
expiraAons(by(combining(
demand(
(Inventory#
#Visibility#and#
Transfer#Manage(
shortages(and(demand(
fluctuaAons(
Clinic(
Hospital(
(Standardiza6on#
(Use(best(pracAces(
to(free(up(management(
Ame(for(clinical(care(
Long#Term#Vision#
UW#Health#Phase#4#
Source(
Clinic(
AffiliaAon(with(
other(Sites(
Centralized(
Services(
Demand#
#Aggrega6on#
Minimize(inventory(and(
expiraAons(by(combining(
demand(
Clinic(
Hospital(
Hospital(
Hospital(
UW#Health’s#road#to#
consolidated#services#
(Inventory#
#Visibility#and#
Transfer#Manage(
shortages(and(demand(
fluctuaAons(
(Standardiza6on#
(Use(best(pracAces(
to(free(up(management(
Ame(for(clinical(care(
UW#Health#
Savings#Opportunity#
•  Year(1(ProjecAon(–(Main(Hospital(Campus(
–  Inventory(reducAon:($158,000((
–  ExpiraAon(reducAon:($37,400(
–  0.5(technician(FTE(reducAon:($23,780(
–  Total#Impact:##$219,180#
(
•  Year(1(ProjecAon(–(TAC(
–  Inventory(reducAon:($64,000((
–  Total#Impact:##$64,000,
(
UW#Health#
Savings#Opportuni6es#P#Addi6onal#
ROI#–#5#Year#Projec6on#UW#Health#
• 
• 
• 
• 
Inventory(reducAon:($675,160(
ExpiraAon(reducAon:($351,200(
0.5(technician(FTE:($118,900(
Total(Impact:(($1,026,360((ROI(=($509,758(savings)(
AddiAonal(categories(of(benefits(not(included(in(5(year(ROI(
•  Inventory(opAmizaAon,(waste(reducAons(for(the(AFCH(NICU(Pharmacy((
•  Re^evaluaAon(of(FTE(for(inventory(management(across(the(enterprise(
•  Leveraging(space(and(opportunity(at(Chartwell(facility(to(support(IV(
compounding(for(all(sites(
•  DistribuAon(savings(by(supporAng(UW(Medical(FoundaAon((redistribuAon(of(
right(unit(of(measure,(reduced(inventory,(and(waste)(
•  OperaAons(experience(to(plan(for(consolidated(services(center((impact(on(
space,(FTE,(inventory)(
•  Regional(support(and(distribuAon(services(offered(to(area(providers(
(compounding(and(inventory(re^distribuAon)(
(
Pharmacy Track
Realizing Pharmacy Supply Chain Savings
Presenters:
Debbie Albin, Assistant Director HC Pharmacy,
UPMC
Clinton Taylor, Category Lead HC Pharmacy,
UPMC
FACULTY(DISCLOSURE(
The(faculty(reported(the(following(financial(relaAonships(or(
relaAonships(to(products(or(devices(they(or(their(spouse/life(
partner(have(with(commercial(interests(related(to(the(content(of(
this(CE(acAvity:((
(
Debbie(Albin,(Assistant(Director(HC(Pharmacy,(UPMC(
Clinton(Taylor,(Category(Lead(HC(Pharmacy,(UPMC(
(
–(No(financial(interest/relaAonship(relaAng(to(the(topic(of(this(
acAvity(
UPMCs Integrated Delivery & Finance
System
20 Hospitals with
~4,500+ licensed beds
10,300 STAT MedEvac
transports
5,000+
Credentialed MDs
UPMC Home Care
483,000 visits
UPMC Senior
Communities
20 facilities with
2,400+ beds/units
9 UPMC Urgent Care locations
and 3 Children’s Express Care
centers
UPMC’s Single Supply Chain
• 
• 
Significant Spend: >$3B Spend
• High Volume Shop
Self-Contracted: ~85% under local agreements
• 74,000+ invoices per month
• 
Self Distributed
Consolidated Service Center
•  150k sq ft distribution facility
HC Pharmacy - $700M
•  Regional GPO
•  21 UPMC and 2 Affiliate Hospitals
•  20k sq ft distribution center
•  22 hospitals
•  Cancer Centers (PA, OH)
•  Outpatient Pharmacies
•  Physician Offices
• 9,000+ purchase requisitions/
week
• Technology Driven Automation
• ProdigoMarketplace
• ProdigoXchange
• Voice Directed Picking
• Peoplesoft
• Oracle WMS
2012,SCM,Dept,
of,Year,
-2 0 1
1
1
0
2
4
Learning Objectives:
1.  Identify the steps to linking purchasing
data to clinical data
2.  Understand the challenges to addressing
practice variation
3.  Apply strategies for pharmaceutical
sourcing using big data
Purchasing Loop
Experience Improves Process!
Evaluate##
Supplier#
Performance#
Standardize#
Product#
Formulary#
System P&T
Drug Review Panel
•  System#P&T#Chair##
•  Medical#Director#Pharmacy#Service#Line
•  #PUH#Pharmacy#Director
•  Clinical#Pharmacists#
•  HC#Pharmacy#and#Health#Plan#
Representa6on
Implement#
Op6mal##
Contract#
Monitor#
Compliance#
Op6mize#
Logis6cs#
Streamline#
Purchasing#
HC Pharmacy
Formulary Management
HC Pharmacy
• 
• 
• 
• 
• 
• 
• 
Self GPO/Distribution Center
Consolidated Service Center
Oracle EBS/Cerner/EPIC
Inventory Control
Stock/Non-Stock
P&T Decision Implementation
Drug Shortage Management
(1,300 items/ 3,500 alternatives)
•  Control Non-Formulary/No Buy
•  Utilization and product selection
74% Contracted Purchases
$36M savings
Understand the challenges to
addressing practice variation
Vigilance of Appropriate Use(
Bupivacaine Liposome (Exparel®)
2012 - 2015
P&T UPMC Recommendations
•  Postsurgical analgesia with limited evidence
•  2012: designated bupivacaine liposome (Exparel®) a no-buy for
all indications
•  2014: Remained no-buy for all indications, with exception
•  Reviewed new literature (e.g. IMPROVE, nerve block)
•  Approval of pilot at Women’s hospital - 4 vials used in 7 months and pilot
is not expanding at this time.
Vigilance of Appropriate Use(
Acetaminophen (Ofirmev®) Injection
•  February 2014
–  Mallinckrodt Plc. bought Cadence
Pharmaceuticals, Inc.
•  May 2014
–  IV acetaminophen price increased 75%
($1.8M)
–  Company stated product was “under
valued”
IV Acetaminophen Dashboard(
P&T Actions
•  Formulary- restricted to max of two doses
•  Created new order sets and alerts in Cerner
Results
•  Narrowed guidelines, increased surveillance, and significantly
reduced usage.
•  Instead of $450K increase UPMC achieved a $34K decrease in
the first 6 months.
#
(
Apply strategies for pharmaceutical
sourcing using big data
Increased Pressure on Provider Revenue &
Margin
Changing(Payment(
Models(&(Shit(to(Value(
Delivered(
Increased((&(
Uncertain(PaAent(
Access((((
Unprecedented(Margin(Compression(
New(Technology(
Perpetually(Increases(
Costs(
UPMC’s Supply Chain Transformation :
Self Reflection
UPMC
2015
UPMC
2006
(
Source:((bobthompson.net
UPMC HCP Standard Strategic Sourcing
Process
1.(Assess((
((2.(Data((
(((((((Opportunity(( ((((CollecAon(
(((3.(Gather((
((Market(
((Intelligence(
((4.(Develop((
((Sourcing(
(Strategy(
Estimated)Annual)Purchases
Generic)based)brand)rebate
(5.(Develop((
RFx((
((&(Invite((
Suppliers(
((6.(NegoAate((
((&(
((Implement(
7.(Manage(
(Supplier((
((RelaAonship(
$300,000,000
Current)Contract Minimum)Proposal Maximum)Proposal
0.45%
0.20%
0.45%
Annual)Purchase)Volume)Rebates
Generic)Compliance)Rebate
Estimated)annual)Savings
0.17%
0.05%
$1,849,200
0.17%
0.21%
$2,980,800
Drug Shortages
1,000 unique generic shortages / 3,500 alternatives
Source:http://www.usmedicine.com/agencies/department-of-veterans-affairs/dcpharmacy-chief-finds-creative-solutions-to-manage-drug-shortages/
Shortage Management
Weekly Shortage Report and Call
NDC#
25021081710(
39822019001(
55390046001(
Shortage#
Indicator#
AP(
AP(
S(
Generic#Name#
Acetazolamide(InjecAon(
HC#
Alloca6on#
((
Descrip6on#
Stock/
#Hospital#
OnHand#
NS#
Cost##
ACETAZOLAMIDE(500MG(VIAL(PF/LATEX(FREE(1(X(EACH(
Acetazolamide(InjecAon(
Acetazolamide(InjecAon(
((
((
ACETAZOLAMIDE(SDV(500MG(X^GEN(((((1X10ML(
ACETAZOLAMIDE(500MG(VIAL((BEDFORD(1X10ML(
Stock(
Stock(
Stock(
#Resolu6on##
#Details##
57(
($(((((23.50((
(
(
(
(
($(((((26.00((
($(((((28.00((
(
(**NO(RELEASE(DATE((
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(PRODUCT(IS(ON(A(LONG(TERM(BACKORDER(STATUS((
54302502(
S(
Acetylcysteine(InhalaAon(SoluAon(
((
ACETYLCYSTEINE(SOL(10%(30ML(ROXANE(1X3(
Stock(
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(**NO(RELEASE(DATE((
(PRODUCT(IS(ON(A(LONG(TERM(BACKORDER(STATUS((
54302602(
54302702(
S(
S(
Acetylcysteine(InhalaAon(SoluAon(
Acetylcysteine(InhalaAon(SoluAon(
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ACETYLCYSTEINE(SOL(20%(30ML((ROXANE(1X3(
ACETYLCYS(SOL(10%(10ML(ROXANE((((((((1X3(
Stock(
NS(
(
(
($(((((31.88((
($(((((15.98((
(**NO(RELEASE(DATE((
(**NO(RELEASE(DATE((
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(PRODUCT(IS(ON(A(LONG(TERM(BACKORDER(STATUS((
54302802(
S(
Acetylcysteine(InhalaAon(SoluAon(
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ACETYLCYSTEINE(SOL(20%(10ML(ROX((((((1X3(
NS(
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($(((((19.97((
(**NO(RELEASE(DATE((
(PRODUCT(IS(ON(A(LONG(TERM(BACKORDER(STATUS((
409330703(
S(
Acetylcysteine(InhalaAon(SoluAon(
((
ACETYLCYST(SOLN(10%(30ML((((HW(((((((1X3(
Stock(
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($(((((17.85((
(AVAILABLE(LATE(MAY(2013((
(VENDOR(EXPERIENCING(UNANTICIPATED(INCREASE(IN(
DEMAND((
409330803(
S(
Acetylcysteine(InhalaAon(SoluAon(
ACETYLCYSTEINE(20%(30ML((((HW((((((((1X3(
NS(
2(
($(((((18.30((
(AVAILABLE(LATE(MAY(2013((
(VENDOR(EXPERIENCING(UNANTICIPATED(INCREASE(IN(
DEMAND((
517750425(
S(
Acetylcysteine(InhalaAon(SoluAon(
ACETYLCYSTEINE(10%(4ML(AMER(REG(((((1X25(
Stock(
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($(((((71.93((
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Clinical
Alerts
YES(
((
Operational Plans
The(Business(Side(of(Pharmacy(
•  Align with formulary and
therapeutic class interchanges
•  Consider owned or consigned
inventory
•  Strategic Planning and Leadership
•  Budgeting and Cost Savings
•  Performance Dashboards/Key
Indicators
•  Financial Planning
•  Vendor scorecards
•  Determine where to source product
•  Attempt a contract – balance access,
risk and legal
•  Consider distribution channel
•  Maximize discounts (GPO)
•  Establish ordering process
•  Purchasing terms and conditions
•  Consider legal aspects of purchasing
•  Consider insourcing versus
outsourcing
Price Changes:
!!Vendor!Scorecard
Contract Summary:
Price Protection: 60 day written notice to price increases
Price!Increase!Impact! > FY14!
Volume! at!Given!Price
FTS: On sole award products, maximum 120% of contract price
First Refusal: 10 business days from receipt of written notice from HCP to respond
Prompt Pay: 2%
$4.4M
$4.4M
Admin Fee: 0%
$4.3M
Rebate: 3%, additional tiered rebate on direct
- 163 Items (25%) subbing to another brand for better pricing or to fill shortage
$4.1M
- Unique items purchased down from 659 to 638 (3%) over FY 13, total spend down
from $4.6M to $4.2M (9%) over FY 13
$3.9M
638
100K
95K
551
90K
85K
650
600
103K
96K
88K
80K
550
500
Units&Purchased
Unique&NDCs
FY13
100
$4.6M
$4.M
$2.M
$1.M
Direct
Indirect
$1.2M
$1.2M
$1.1M
FY12
FY13
FY14
0
40
20
22
16
35
0
JanC13
Rebate Tier:
JulC13
JanC14
Annua l &Di rect&Spend:
$5,000,000.00&a nd&a bove&&→!!5%
FY13
$4,000,000.00&to&$4,999,999.99&&→!!4%
FY14
$2,750,000.00 to $2,999,999.99 → 2%
$2,500,000.00 to $2,749,999.99 → 1%
$0 to $2,499,999.99 → 0%
Next Steps:
- Realign rebate tiers to properly incentivize HCP
200%
100%
0%
C100%
129
60
155
400%
Spend
$2.3M
FY14
$3,000,000.00 to $3,999,999.99 → 3%
$4.2M
$3.1M
FY13
80
95
FY12
300%
$3.4M
100
FY14!Item!Price!Change!(%)
$3.5M
$3.M
168
50
Spend!per!FY
$5.M
FY14&End&Price
0
FY14
92%
Items!on!Shortage
Report
120
FY13&End&Price
150
450
FY12
FY12
$4.M
200
88%
0%
140
Price!Increases
700
Direct!Fill!Rate
50%
Shortages:
$4.1M
Product!Utilization
659
93%
100%
7%
$4.2M
Product Spend/Utilization:
105K
Fill Rate:
- Buying current annual volume at FY13 end prices compared to current price
results in a 7% increase in spend
Period: 12/1/13 - 11/30/16
- Add buy-in volume terms to price increase notifications
- Adjust minimum purchase quantities to better fit HCP needs
- Apply FTS to all products
JulC14
HC(Pharmacy(Efficiency(and(Savings(
HC#Pharmacy,#P&T,#and#Drug#Panel#Review#Savings##Analysis#(FY15)
FY15 Savings TYD (Feb 2015)
Category
340B'Savings'(Contingent'on'Approval)
Therapeutic'Interchanges
Patent'Expiration
Key'Contract'Negotiations
Total
Report'Prepared'by:'Mary'Beth'Lang/Andy'Badger
FY15#Savings
$'''''''''''''''''''''''A
$''''''''''''''570,176
$''''''''''1,071,387
$''''''''''3,176,163
$##########4,817,726
FY15#Goal
$''''''''''''''''''''''''10,000,000
$''''''''''''''''''''''''''1,200,000
$''''''''''''''''''''''''''1,300,000
$''''''''''''''''''''''''''3,000,000
$########################15,500,000
2012 – 2015 Accumulative Savings: $58M
2016 Projected Savings: $50M
Category
Percent#to#Goal Percent#to#Stretch#Goal
340B'Savings'(Contingent'on'Approval)
0%
0%
FY15#Stretch#Goal
$''''''''''''''''''11,200,000
$'''''''''''''''''''''1,800,000
$'''''''''''''''''''''2,000,000
$'''''''''''''''''''''4,000,000
$##################19,000,000
New(Technology(and(ContracAng(
“Experts say that spending on new
health technology—not just fancy
machines but also drugs, devices, and
procedures—makes up as much as two
thirds of the more than 6 percent annual
increase in healthcare .”
US News & World Reports, July 2009
Vigilance of Appropriate Use