Every pharmacy manager dreams of a well-managed inventory in which drug levels are synchronized with patient demand, inventory remains on the shelf for a minimal amount of time, and patients in need of high-cost or rare drugs regularly pick up their medications. The reality though is most pharmacists regularly find themselves holding inventories of expired medications which, in most cases, impose a cost to the pharmacy’s bottom line.
The problem of expired medication is so severe, thatputs the annual cost to hospitals and pharmacies at roughly $1 billion annually.
Some in the industry have launched a campaign to try and persuade theto extend the expiration dates for certain medications that have been shown to retain their potency long after their shelf dates have passed. The FDA does, in fact, allow certain agencies that stockpile drugs in case of national disaster – including the Defense Department and the Centers for Disease Control – to hold on to certain medications after their expiration dates. Reporting by cited an official with the Department of Defense who said that during 2016 alone, the department was able to avoid replacing $2.1 billion in expired drugs.
But since retail pharmacies don’t have the access or volume of the U.S. military, they must look for other ways to mitigate the effects of expired drugs.
The easiest way, of course, is to minimize the risk of drugs expiring while held in inventory. An obvious approach would be to maintain a bare-bones supply, but this, of course, would put a pharmacy at risk of stock-outs, or of only being able to partially fill prescriptions.
A better solution is to rely on an integrated pharmacy technology system that includes inventory management capabilities. While most pharmacies are using technology to help manage prescription dispensing processes and track patient records, not all have recognized the benefits of an electronic inventory management system, especially with regard to minimizing the risk of expired drugs. Key benefits include:
Real-time inventory tracking. “Pareto’s Law,” also known as the “80/20 Rule” is a bedrock principle in purchasing decisions, that can be applied to pharmacy inventory practices. The “law” relies on the assumption that 80 percent of a pharmacy’s budget will be spent on 20 percent of its products. According toby Dr. Katie Ingersoll, RPh, PharmD, under this principle, it becomes important for a manager to closely monitor sales to determine which medications fall in the top 20 percent, and to ensure these drugs are never out of stock.
A technology system will provide real-time sales and inventory levels for each drug stocked by the pharmacy. The system will automatically update the inventory whenever a prescription is filled, or a particular drug is used to make a compound. In addition, the system will make the required adjustment when a drug is returned to inventory if a prescription is not picked up by a patient.
Real-time expiration tracking. In addition to tracking the number of drugs on hand, the system can also delineate the expiration dates for a supply of a particular drug. The expiration date for each unit in a pharmacy’s supply of Advair disks, for example, can be scanned into the system and readily identifiable to the pharmacist.
Automatic reordering. An integrated technology system will link directly to a pharmacy’s wholesalers and distributors so that reorders can be transmitted automatically when the supply of a particular drug reaches a pre-determined level. For fast-moving drugs, a reorder “trigger” can be set at a much higher level than for a slower-moving drug. This ensures that inventory replenishment keeps pace with patient demand.
Verification of Patient Demand for Expensive Drugs. Filled prescriptions that are not picked up by patients – referred to as “abandoned” prescriptions – impose added costs to the pharmacy and can result in excessive inventory levels. This is especially true when the medication in question was ordered specifically for that patient and is unlikely to be needed by another patient. A technology system can minimize the risk of prescription abandonment by generating a text or email to the patient requesting confirmation that, in fact, the patient would like the prescription filled.
Returns of Excess Inventory. Unexpired medications can sometimes be returned to the wholesaler if it becomes apparent that inventory levels exceed demand. In general, packages that have not been opened or damaged, and that do not expire for at least 12 months may be eligible for return. A technology system will monitor sales levels, and flag slow-moving items that may be at risk of languishing on the shelf.
Maximize Opportunities to Recapture Value. In certain instances, a pharmacy can return an expired medication to the wholesaler or distributor, and receive at least partial credit. However, in most cases, returns are only accepted within a specific window of time. A “smart” technology system can remind a pharmacy technician when it’s time to return a certain expired medication, and when the deadline for making that return is approaching.
In certain instances though, despite a pharmacy manager’s best efforts, drugs will expire while held in inventory. When this does occur, a technology system can play an important role in helping to identify and record the expired drugs, and track the steps taken to properly remove the medication from the pharmacy.
As effective as a technology system can be in helping to manage incidences of expired drugs, it will never be able to eliminate the important role of pharmacy staff. Pharmacists and technicians will always be the eyes and ears of the pharmacy, with ultimate responsibility for visually identifying and physically removing expired drugs from the shelves. But qualified personnel working with an integrated pharmacy system can be a powerful team in working to manage expired medications.