Discover Your Savings with PICS
“This is the easiest $3 million savings that we will ever realize . . . and it’s an annual savings!” “The statement of a Board Member of a large healthcare organization after implementing Cost Control Solutions’ Inventory Optimization Service..”
Pharmaceutical Inventory Control Service will identify optimum inventory levels to ensure usage, avoiding the lost inventory value of expired products that fail to qualify for a manufacturer’s credit
Pharmaceutical Inventory Control Services (PICS)
The lost inventory value of expired products that fail to qualify for manufacturer’s credits require action in the form of establishing pharmacy Optimum Inventory Levels, a service provided by Cost Control Solutions. Pharmaceutical Inventory Control Services (PICS) will:
- Identify optimum levels of inventory within a pharmacy to ensure usage.
- With pharmacy management review the levels of inventory in remote locations such as emergency carts to determine the proper quantity of products in each location.
- Identifying the proper levels of inventory will significantly reduce the lost inventory value of expired products that fail to qualify for a manufacturer’s credit, a significant and recurring loss.
- Reduces the potential theft of your pharmacy’s controlled substances as nothing good will occur when a class II product expires, because:
- Products may not be stored with a real-time inventory.
- Reverse distributor personnel have access to Class II product without supervision or inventory reconciliation.
- The destruction of Class II drugs by reverse distributors have very little or no oversight by the DEA.
Pharmaceutical Inventory Control Services — Opioids
Reduces the potential theft of your pharmacy’s expired controlled substances as this occurrence is a potential point of diversion, as:
- Expired controlled substances are stored with no real-time inventory,
- Reverse distributor personnel working at hospitals process Class II products with limited or no supervision,
- With few exceptions, there is no inventory reconciliation for Class II drugs, comparing processed quantities with Form 41 destruction documentation, and
- The destruction of Class II drugs by reverse distributors has very little or no oversight by the DEA. Only a bureaucrat at the DEA would believe that listing of opioids on a DEA Form 41 is oversight. Unlike the past, manufacturers of opioids are now auditing reverse distributors in an attempt to prevent diversion.
The need to establish Optimum Inventory Levels is supported by the following analysis of a five (5) hospital health system’s 12 month history of expired products. The chart documents,
The chart documents,
- $1,962 million in inventory value of expired products with $781,261 not qualifying for a manufacturer’s credit,
- Identifies the inventory value of non-creditable products with the manufacturer’s policy indicating the reason credit was denied,
- The leading reasons for the denial of a credit by manufacturer policies; not accepting partials SKUs for credit, followed by product exceptions and past the date limitation for the return of expired products.
The Pharmaceutical Inventory Control Service Mechanics
The customer will provide Cost Control Solutions the following information to initiate the PICS:
- Beginning pharmacy inventory
- Ending pharmacy inventory, we can provide a service for providing an ending inventory,
- Pharmaceutical purchases of the pharmacy’s 80/20 products, in addition to, all Class II products between the date of the beginning and ending inventories,
- Pharmaceutical returns history between the beginning and ending inventories
From this information, Cost Control Solutions will provide the customer a product analysis identifying the One, Two and Three Week PICS. The analysis will be presented in the following format.
The Value of Implementing Optimum Inventory Levels for Pharmacy
Also provided will be a chart showing the estimated reduction, or better stated, the savings by reducing the on hand inventory to a One, Two or Three Week Inventory Level. The saving is based on a comparison of the inventory value from the Closing Inventory with that of the Pharmaceutical Inventory Control Service inventory values.
