Your hospital pharmacy’s supply chain can be a powerful tool. You can use it to mitigate the impact of drug shortages. You can use it to reduce costs. And, you can use it to improve drug safety and patient care outcomes. All you need is the right information.

In this edition of Ask a Supply Chain Expert we sat down with Cindy Jeter, a supply chain management consultant for McKesson RxO®. She explains how your hospital pharmacy can use data to perfect your supply chain processes and create more value for your healthcare organization.

What are you responsible for in your role at McKesson?

Jeter: I’m a supply chain expert, and I spend most of my time working with hospital system pharmacies. My team works with customers to help them maximize their financial success. We teach them techniques to control their drug costs and ways to decrease waste and increase efficiency. My team also focuses on helping customers develop the skills they need to be astute buyers of drugs and other pharmaceutical supplies.

Meet the Mind Behind Our Gene Therapy Product StrategyWhat are some common hospital pharmacy supply chain challenges?

Jeter: The number one supply chain challenge hospital pharmacies face is drug shortages. That’s something all pharmacies are concerned about. A close second would be managing many disparate computer systems. Pharmacies have multiple computer systems that house different types of data. Drug utilization is in one system, accounting is in another system, purchasing data is in another system and wastage and expired medications are also located in different systems. The challenge is pulling data from all the systems, putting it all together and coming up with actionable information they can use. Third is the sheer volume of work that hospital pharmacies must do. They’re so busy with the day-to-day that they don’t have time to step back and look at their supply chain processes, other workflows and make improvements.

Does having multiple dispensing sites add to the supply chain challenges at health systems?

Jeter: Yes, it does. If your health system has 10 dispensing sites, multiply those challenges I mentioned by 10. The supply chain for hospital pharmacies has really grown in complexity over the past few years. You used to have one account from which you ordered all your drugs. Now, one hospital pharmacy can have 20 or more different accounts for 340B purchases, GPO account purchases, WAC purchases, plasma and biologics purchases and specialty drugs. Again, managing all the purchasing data from a variety of accounts increases the complexity of inventory management.

How can hospital pharmacies minimize the impact of drug shortages?

Jeter: The first and most important thing they can do is become educated about drug shortages and what causes them. That’s more complicated than it seems because hospital pharmacies get lots of conflicting information. Pharmacies should gather as much information as possible from professional organizations like the FDA and the American Society of Health-System Pharmacists (ASHP). The FDA and ASHP regularly release information on drug shortages. You also should talk to the drug reps who stop by your pharmacy. They often hear about drug shortages before that information reaches the FDA or ASHP. Being educated on drug shortages also means being up-to-date on current news stories. An example is the hurricane that hit Puerto Rico. Several major drug companies have manufacturing plants there. When those factories went down, the drugs they made were going to be in short supply. The sooner a pharmacy realizes this information, the more prepared they are to mitigate the shortage.

What ways can hospital pharmacies use their supply chain to minimize the effect of shortages on patients?

Jeter: By gathering as much information as possible and having a process in place to deal with the challenges, a pharmacy can mitigate shortage impact. You need to have a process in place to manage a shortage before it happens. A shortage management team is critical to success. By having a well thought out process of at which point in the shortage cycle certain tasks should be performed helps. For example, the minute a hospital is aware of a shortage, they should think about the average current monthly usage of the drug, any alternatives, what patient population needs the drug and whether the drug is on allocation. Information feeds this process. You can’t wait until you’re in critical need of a drug to start thinking about those things. Hospital pharmacies can’t control drug shortages, but they can handle the challenges better if they’re prepared.

How can hospital pharmacies improve their workflows and become more efficient?

Jeter: Pharmacy in general has seen tremendous change over the past five years and we have experienced countless technological advances over the past decade. However, the supply chain processes at most hospital pharmacies have not advanced in many years. Most pharmacies have automated their supply chain processes. That’s good. But few of them are using the data contained in those automated systems to tell them how to improve their supply chain. They’re not using automation to its full potential. They’re not making operational changes based on the scientific data bottled up in those systems.

What data is in those systems and how can hospital pharmacies use it?

Jeter: What we often find is that a hospital pharmacy orders the same quantity of inventory as they have always done. And they do not adjust their par levels according to current utilization patterns because that’s what they’ve always done. Then they wonder why that drug sits on a shelf and expires. It’s really about inventory management. The data can tell them whether the demand for a drug has diminished. It can tell them whether a newer drug with better clinical results is available. It can tell them whether historic prescribing patterns have changed. It can tell them whether clinicians are using drugs appropriately. It can tell them whether they need to adjust their PAR levels, which is the amount of a drug that they need to safely have onsite at any one time. Pharmacies need the time and ability to extract that data from their automated systems to be more efficient purchasers. When they become more efficient purchasers, they save money and cut waste.

What ways can hospital pharmacies use supply chain management to improve patient care?

Jeter: The hospital pharmacy supply chain is the first line of defense in drug safety. Hospital pharmacies buy the drugs and are the first to eye the drugs as they’re delivered. They are the first to watch for things that could lead to a drug error. Many things can lead to a drug error and the pharmacy supply chain staff must be diligent to keep a mindful eye on any drugs that could cause a medication error. One important thing to watch for is when you order something that’s just a little bit different than what you usually order. It could be because of a shortage. It could be the same drug but in a different strength. It could be the same drug from a different manufacturer. It could be the same drug from the same manufacturer, but in different packaging. Anything that deviates from the norm creates the potential of a medication error. Communication is key. It’s up to the hospital pharmacy to communicate any changes and to determine processes and procedures that help to mitigate drug errors.

How will hospital pharmacy supply chain processes be different five years from now?

Jeter: In the next five years, I anticipate the complexities in pharmacy purchasing will continue to increase. They’re going to be more complex. Specialty drugs and individualized treatment plans will continue to evolve. Regulations will continue to change and the financial health of the organization will continue to be challenging. Hospital pharmacies will need new ordering, distribution, storage and inventory systems for all these new specialty drugs. The challenges that hospital pharmacies face now are only going to get more complex. That’s why it’s so important for them to learn how to make their supply chain processes as efficient as possible now.

What do you enjoy most about working with hospital pharmacies?

Jeter: The thing that I enjoy most in my position is how many hospital pharmacies I’ve been privileged to visit. If I had continued to work in my local hospital pharmacy, I would only know the environment and the people there. By working with McKesson RxO, I get to visit hospital pharmacies across the country. I always learn something that I can share with other hospital pharmacies. It’s just been a wonderful opportunity. And I can honestly say that I’ve made friends in every state.

Editor’s note: Have a question for one of our supply chain experts? Please leave a comment and let us know. We'll be sure to cover it in a future edition of Ask a Supply Chain Expert.

Related: Learn more about McKesson’s pharmaceutical distribution services for hospital and health system pharmacies

© 2018 McKesson Corporation and/or one of its subsidiaries. All rights reserved. McKesson RxO® is a trademark of McKesson Corporation and/or one of its subsidiaries.

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McKesson editorial staff is committed to sharing innovative approaches and insights so our customers can get the most out of their business solutions and identify areas for operational improvement and revenue growth.

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