Institution A
Business Case Analysis
Date:
Submitted By:
Pharmacy Service
Statement of Opportunity: Procurement Pharmacist GS12/13
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Improve the oversight of procurement of pharmaceuticals
Management of drug recalls and shortages and selection of alternatives
Monitor and update pricing information in drug accountability software and assist with cost
savings initiatives
Oversight of controlled substance procurement
Manage Pharmacy Drug Cache
Oversight of purchasing
Indicate whether or not FTEE will be required to implement this initiative:
YES
1.0
NO
Strategic Goals this Initiative will Help Meet (Explain How):
3. Promote Improved Business Process (explanation below)
b. Optimize resources to benefit veterans
c. Maximize inventory control
Developed collaboratively by the ASHP Research and Education
Foundation, the ASHP Section of Pharmacy Practice Managers,
and ASHP Advantage.
1
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Expected Outcome and Impact (include tangible and non-tangible
benefits):
A. Daily oversight of pharmaceutical purchasing and pricing issues is a critical function for the service
in order to control costs and maintain adequate supplies of medications. The current workload for the
Purchasing Technician is overwhelming, with just the ordering, stocking, drug accountability software
management, and obligation postings leaving little or no time for the oversight functions. More
importantly, a pharmacist is necessary in this role as it requires daily clinical decision making in product
selection particularly due to drug recalls and shortages.
In addition, more thorough oversight of the controlled substance purchasing/inventory purchases is
essential.
Lastly, a Pharmacy Cache is expected on our campus in 2011-2012 and the security and handling
requirements are managed by Pharmacists throughout the Institution A.
Tangible Benefit: $500,000/year savings to the Pharmacy Budget. This is a critical cost savings as
there is little room for any additional savings anticipated for 2010 cost avoidance initiatives. Here are
some examples:
The purchase of brand risperidone (instead of the available generic under FSS) in April resulted in
spending an additional $50 per 30 day Rx. The estimated difference was an extra 12-15K spent in an
ordering error for one month. The ordering error was due to lack of clinical expertise by the
Procurement Technician in bioavailability of brand to generic products. This issue occurs particularly in
sensitive disease states and narrow therapeutic window medications. This clinical expertise can be
obtained with the additional procurement support of a clinical pharmacist. The clinical pharmacist
would also be knowledgeable in the National Cost Savings Initiatives where procuring this generic
product as soon as possible results in cost avoidance for the hospital. Risperidone generic is one of the
VISN 12 specific cost avoidance initiatives where emphasis is placed on purchasing the generic product
and prescription conversion, and necessitates monitoring of price adjustments.
Drug recalls and shortages occur weekly. When long acting isosorbide became unavailable in early
2009, a pharmacist needed to prepare a notification to providers and develop a list of suggested
alternatives. A pharmacy technician simply cannot make these decisions and issue provider
communications.
Chlorpheniramine regular release tablets were discontinued by manufacturer in June 2009. This
medication has several different dosage formulations which are NOT equivalent as are many other
medications. When it became unavailable to order, the Purchasing Technician ordered a different
formulation as she did not know there was any difference. This resulted in the dispensing of the
incorrect product to several patients. This example highlights the necessary daily, ongoing need of a
pharmacist for decision making on drug substitutions.
Developed collaboratively by the ASHP Research and Education
Foundation, the ASHP Section of Pharmacy Practice Managers,
and ASHP Advantage.
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Alternatives Considered:
Pharmacist oversight of procurement, pricing and drug selection has been shared between the
Pharmacy Utilization Manager, Assistant Pharmacy Chief, and Pharmacy Chief. This shared and very
large workload is not managed optimally. Detailed knowledge is required to be effective in cost
savings and price adjustments and the workload of these other three positions does not allow
sufficient time (cost of overtime and comp time is $20,000 + per year). The Procurement Technician
cannot make the necessary clinical decisions.
Cost Estimates of Recommended Approach and Alternatives
(provide a simple summary of costs here – detail will be included in attached spreadsheets):
Salary
$117,000
Office Space/Furniture
$ 4,000
Computer/Printer
$ 3,500
Developed collaboratively by the ASHP Research and Education
Foundation, the ASHP Section of Pharmacy Practice Managers,
and ASHP Advantage.
3
Visit www.pharmacycsuitetoolkit.org