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Unformatted text preview: Assume patient pays their co-pay and/or co-insurance Assume ASP @ $9,300 Practice Drug Spend: GPO vs. non-GPO Contracts
GPO Contract, 35% Non-GPO Contract, 65% How to Select a GPO
Services and Products
Contracting Educational Programs
Practice requirements Quality Initiatives Regimen Analyzers/Profilers Practice Analyzers Clinical Trials Technology
Pharmacy Dispensing/Inventory Control EMR Financial Services Customer service Inventory Management
Why are effective purchasing and inventory management important?
Pharmaceutical inventory can represent the single largest investment of the practice Goals of inventory control
Minimize the inventory investment Maintain as low an inventory as possible Balance supply and demand Minimize procurement costs and carrying costs Maintain an up-to-date inventory management system Increase inventory turnover without sacrificing service Effective purchasing Avoid expired drugs and waste Formulary Management
Important to control costs and improve margin Selection of supportive care formulary can have a drastic effect on finances and reimbursement
Maximization of contract incentives and rebates Utilization of generics
Contracts within some GPO’s provide financial incentives if majority of generic purchases are through them Purchasing
Maximize contracts and obtain lowest possible pricing
Utilize more than one purchasing source Not all inventory items deserve the same attention
High cost vs low cost goods (e.g. bevacizumab vs dexamethasone) 80/20 rule – the 20% probably accounts for up to 90% of the inventory investment Lead Time
The interval between placing the order and having it ready for dispensing Safety Stock
Extra units carried a protection against running out of stock Reorder Point
Inventory level where stock is replenished Inventory Turnover Rate (1/2)
Measures the effectiveness of the inventory management system Inventory turnover rate represents the average number of times the inventory is sold and placed during a defined period A high turnover rate represents indicates effective product management in relation to average inventory on...
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