Even as pharmacy teams face unprecedented challenges, many are still trying to manage them with the same old tools. Traditional approaches to pharmacy purchasing are especially detrimental: paying too much for prescription drug products, missing out on savings, struggling or failing to achieve compliance and burning out staff. Pharmacies can overcome these challenges, but that starts with having the right tools.
This article will discuss the crucial difference that pharmacy purchasing software makes. We’ll show you how the right solution meets current challenges and how to start finding the best solution for your pharmacy.
The Hidden Impact of Pharmacy Purchasing
Margins on prescription drug products are notoriously tight. That’s hardly news to most pharmacy professionals. Some of the factors chipping away at your pharmacy’s profitability will also come as no surprise. However, under all the processes and data, there are more issues at work.
SureCost’s Smarter Purchasing Report continues to show why many retail and LTC pharmacies pay too much for prescription drugs. That includes the items they ordered and even those they didn’t purchase:
- Unexpected vendor substitutions can cost pharmacies over $127K a year.
- Pharmacies lost approximately 15% of their GPO average spend to incorrectly invoiced products.
- Reorders due to vendor issues increased the cost of goods sold (COGS) by nearly $2M.
The report also found that shopping outside the “top 200” generics saved pharmacies over $255M.
Pharmacy teams recognize that non-compliance can be costly due to penalties and damaged relationships. But if your pharmacy isn’t optimizing compliance, you’re not making the most of your agreements.
For example, are you adjusting your purchasing strategy to reach higher rebate tiers? Can you easily calculate potential reimbursement (and not just chase what merely seems to be the lowest price)? Can you do it without losing time and energy on tedious manual comparisons?
An expanded vendor portfolio opens up competitive pricing, negotiating opportunities and backup sourcing when the next drug shortage hits. Still, if you can’t see how purchasing from another vendor will affect primary vendor compliance, you risk penalties.
That’s “when” (not if) the next drug shortage hits. The number of drug shortages hit a ten-year high just last year. The current rate is nothing to dismiss, and we’ll likely continue to see significant drug shortages. That often means scrambling for other options, which means paying even more for some of the highest-priced drugs in the world.
As drugmakers, PBMs and insurers adjust pricing and strategies to compensate for the Inflation Reduction Act, drug prices will increase even further. Even more complicated DSCSA regulations, including technical requirements, present a greater risk for expensive fines and even sanctions.
Finally, in the midst of all these challenges, the pharmacy industry faces immense staffing shortages. Pharmacies have to equip smaller teams to do even more or prepare for turnover, another huge expense.
Why Focus on Software Now
The right purchasing management solution is more crucial than ever. There are too many processes, too many ways to lose a lot of money, too much data to track and too few people to leave to outdated procurement practices. Manual processes, siloed workflows and homegrown systems cannot handle modern pharmacy purchasing. They also waste time and burn out staff.
With a comprehensive solution for pharmacy purchasing, you integrate all vendor catalogs into a single interface for both shopping and submitting purchase orders. A best-in-class system quickly analyzes all sources to find the true best option, comparing multiple purchasing variables such as unit price, alternatives, packaging, quantities and availability.
You can also ensure compliance even as you expand your vendor portfolio. The right solution will show you any potential adverse impact on compliance before you buy, project potential reimbursement and help you adjust purchasing to reach higher rebate tiers.
The best pharmacy purchasing software manages purchasing, inventory and compliance together as one unified procurement system. Combining multiple processes—from shopping to ordering to validating received items and tracking the chain of custody—means knowing what you have in stock and what you need to purchase. It also means you’ll be ready for any audits.
Choosing software for smarter purchasing enhances how you and your team work. Smoother workflows save time and simplify procurement while reducing tedious manual processes. Staff can get back to serving patients and other high-value work. This improves job satisfaction and increases staff retention.
A Buyer’s Guide for Pharmacy Purchasing Software and Who Needs It
SureCost recently released its Comprehensive Guide for Pharmacy Purchasing, Inventory and Compliance Solutions. It’s a concise explanation with a checklist for what to look for when selecting pharmacy purchasing software, pharmacy inventory management tools and pharmacy compliance software—including DSCSA compliance.
Be sure to download this guide if you want to accomplish any of the following goals:
- Unlock additional savings
- Make your team’s job easier
- Stay confident you’re compliant
- Mitigate the impact of drug shortages
- Avoid adding more work to your day
You may be uncertain whether a pharmacy purchasing solution is even feasible for your operations. By showing you what a solution can do and how it should accomplish those goals, you’ll get a better handle on why it’s actually essential to improving operations, patient service and your bottom line.
If you’re already “sold” on the advantages of harnessing software but aren’t sure where to start, this shows you what a state-of-the-art solution should do for your pharmacy. You can see what to look for based on different ways to enhance your pharmacy purchasing. For example, you may know that a data-driven strategy is important, but what should you consider when assessing reporting capabilities? If you want to compare purchasing options, what features should be in place for accurate, easy and fast analysis?
3 Signs It’s Time to Reevaluate Your Purchasing Tools
Of course, every pharmacy’s needs are different. SureCost has advised thousands of pharmacy professionals about how to meet the common challenges every pharmacy faces and their unique issues. We continue to see a few common “warning signs.”
Paying too much for pharmacy products indicates that the pharmacy is either missing out on savings or simply lacks the “bandwidth” to consistently find better options. Either way, these pharmacies are losing money, and they don’t need to. But they do need tools to make smarter decisions without complicating their work.
To some pharmacy professionals, compliance seems easy because they only purchase through their primary. Others admit that they can’t focus on compliance alongside other aspects of purchasing. There are also plenty of teams that constantly feel stressed about whether they’re compliant. Whether compliance seems like a given, an afterthought or a pain point, leverage a purchasing management solution to make it an opportunity to save more and optimize purchasing.
Finally, and most importantly, there’s the human side of things. Maybe patients can’t get their medication or are paying too much for prescription drug products. Perhaps your staff seems tired or makes simple but troubling manual errors. Or maybe you’re coming home stressed and exhausted because you’re doing so many things you never learned in pharmacy school (like calculating generic spend or researching the specifications for DSCSA data storage).
If you’re seeing any of these signs, it’s time to find the right tools for your patients, your team, your business and yourself. Download the guide and decide on the ideal purchasing solution for your pharmacy.
