You probably didn’t learn how to calculate generic compliance ratios or navigate tiered rebate structures in pharmacy school–but here you are. Managing primary vendor compliance is a complex, often tedious and potentially very expensive part of pharmacy operations. Even if your pharmacy meets compliance standards, it may still lose money.
This blog post will break down the biggest misconception about compliance that leads to significant costs for pharmacies. But we’ll also show you how the right strategy and solution can optimize primary vendor compliance while driving savings and improving how you work.
Too many pharmacies assume that satisfying compliance means they’re saving money. Unfortunately, if you're just meeting compliance, you’re probably not getting the best deal.
Following your primary vendor’s agreement without understanding rebate tiers, compliance ratios, spend requirements and other “fine print” means you’re not spotting better purchasing opportunities. Many pharmacies don’t even track compliance in real time. We get it–there’s no time to understand the inner workings of agreements, but that means missing out on rebates and paying penalties.
Many pharmacies rely solely on vendor reports for compliance metrics without verifying them. Like everyone else, vendors make mistakes, but vendors’ mistakes cost pharmacies a lot.
Relying on a single vendor for all purchases eliminates potential savings. If you’re not leveraging sources like secondary vendors, buying groups and group purchasing organizations (GPOs), you can’t take advantage of their competitive prices and negotiated discounts (and have a backup when drug shortages hit).
Without understanding a primary vendor agreement, pharmacy teams buy products without knowing what percentage of purchases need to be from their primary vendor or how generic ratio compliance impacts rebates. Then comes the penalty fees and even more lost savings.
Besides failing to meet the agreement's requirements, these pharmacies often don’t reach the minimum spend requirements that unlock additional savings. They’re essentially leaving “money on the table.” In many cases, if they see the issue, it’s simply too late to adjust their strategy.
Pharmacies often feel stuck with these costly and frustrating approaches to compliance. Traditional pharmacy purchasing means navigating a maze of items, vendors, catalogs and other purchasing data across separate interfaces. Add in the complexity of vendor agreements, and it’s no wonder that “compliance” often comes down to simply satisfying the bare minimum.
Without the right tools, teams can’t optimize compliance. They’re not getting the maximum value from all of their existing agreements. It takes too much time to analyze that volume of data. There are too many variables and too much potential for manual errors. Plus, purchasing teams are already stretched thin.
With an integrated purchasing solution, your pharmacy can harness real-time compliance insights. These tools empower you and your pharmacy staff to track vendor agreements and understand their rebate structures and compliance standards. The platform can also help identify additional cost-saving opportunities. Instead of waiting for vendor reports, you generate compliance metrics when you need them, which you can use to verify vendor data and to address their errors.
For example, a solution like SureCost automatically captures vendor agreement terms such as:
Instead of manually calculating all these metrics, the right purchasing solution instantly lets you know where you stand for each vendor agreement. You gain compliance at a glance. Reports and dashboards let you and your team analyze purchasing decisions and strategies using clear data visualizations.
A unified purchasing management solution also compares pharmacy purchasing options against vendor contracts. Before you or your team submits a purchase order, you see how that potential purchase might affect compliance. That allows your pharmacy to buy outside your primary vendor without compromising compliance.
Primary vendor compliance can be complicated. It can lead to huge financial losses and a lot of stress. Or it can drive savings, unlock better purchasing opportunities and generate valuable business intelligence. With the right solution, pharmacies can do more than meet compliance; they can optimize compliance and make their agreements work for them (not the other way around). Compliance becomes a strategic asset—not just a box to check.