Streamline Your Pharmacy Inventory and Navigate DIR Fees with Ease.
Almost 70 percent. That’s how much of a typical pharmacy’s operating budget is taken up by inventory costs. In terms of dollars, the National Community Pharmacists Association (NCPA) puts the figure at about $210,000 every month. Pharmacies spend more on inventory than anything else, including DIR fees and labor costs. And it’s not even close.
Managing inventory then and ensuring every dollar is spent wisely is a priority for pharmacies. As NCPA advises new pharmacy owners in its “startup benchmark” report: “The goal of inventory management is to minimize the investment in inventory while ensuring that inventory is available when needed.”
In other words, they are finding a way to have enough proper medications at the right time.
To do this, pharmacies pay attention to key metrics, including their inventory turnover rates, which, according to NCPA, indicate the number of times inventory is sold or used each year. The average pharmacy turns its inventory 12.2 times, or every 30 days. Pharmacies also monitor other metrics such as fast-selling drugs, laggards, expiration dates, and medication costs.
Despite these best efforts, inventory counts can go awry. Medications expire on the shelf; returns aren’t added back to inventory; compounding ingredients aren’t accurately adjusted; counts don’t reflect what’s on the shelf; and certain medications are always out of stock. Mishaps like these affect the bottom line and can interfere with a pharmacy’s ability to ensure patients have ready access to their medications.
But fear not because, chances are, PrimeRx can help.
Inventory management is a core competency of the PrimeRx pharmacy software system, with extensive capabilities that address far-reaching inventory needs. Many of these capabilities were developed in direct response to pharmacists who reached out for help.
For example, Princeton, New Jersey pharmacy owner Jada Macksound credits PrimeRx with allowing complete visibility into her inventory. Macksound is co-owner of Plainsboro Pharmacy and, like many pharmacy owners, is very attuned to current industry trends – declining reimbursement rates and DIR fee assessments – that affect profitability. She says she watches every penny and, thanks to PrimeRx, is able to track her inventory carefully. “I’m constantly looking at what’s on my shelves,” she says. “With PrimeRx, I can look back historically at turn rates and really understand my inventory.
“No pharmacy,” she adds, “wants to be sitting on medications these days.”
Pharmacists can rely on PrimeRx for optimal inventory management by accessing features that include:
- Physical Inventory. The system’s comprehensive, real-time tracking capability allows pharmacists to know the precise content and value of their inventory at any given time. This includes medications stored in a pharmacy’s refrigerator and on the shelves. Pharmacy staff can quickly adjust inventory levels as medications are dispensed, and to account for medications returned to stock.
- Compounding Ingredients. Inventory levels are adjusted automatically to reflect medication quantities used in preparing compounded medications.
- Cycle Count Settings. Patients who receive medications on a recurring basis can be assured of medication availability via PrimeRx’s cycle count solution. The pharmacist can easily set up a “cycle count” schedule for a drug, which will monitor inventory levels to ensure that the required quantity will be available when needed. Cycle counts ensure that inventory is “set aside” to meet recurring demand, and can be used for both 340B and regular inventories, and for all types of medications.
- Vendor Management. Pharmacies can know precisely which medications have been purchased from each wholesaler/vendor. The system carefully tracks inventory received from a particular vendor, with each medication – and supporting information — scanned and stored within a vendor’s record. The system maintains separate 340B and regular inventories, and also records product returns. Multi-store owners have the ability to record instances in which medications are transferred between pharmacies.
- EDI/Automatic Reordering: Once the quantity of a medication reaches a pre-determined level, PrimeRx will automatically submit a reorder request.
- EDI/Purchase Order Generation. The system allows pharmacies to create online purchase orders that are electronically transmitted to a supplier.
- Automated Pricing Updates. PrimeRx ensures that medication pricing lists are regularly and seamlessly updated. EDI integration allows pricing updates to occur automatically. Otherwise, the pharmacist will be alerted whenever a new pricing list has been received and prompted to quickly update its records.
- Extensive Report Generation. PrimeRx allows users to customize reports on all aspects of pharmacy operations, including inventory management. The sky is the limit when it comes to report topics and frequency. Specific to inventory though, PrimeRx includes a “reports at your fingertips” dropdown menu that allows direct access to report topics that include:
- Inventory Status Report – A comprehensive overview of inventory holdings on a drug-by-drug basis.
- Inventory consumption – Shows inventory received versus inventory dispensed over a selected time frame.
- Physical Inventory Sheet – Printable listing of drug holdings that can be validated by pharmacy staff during site checks.
- Inventory Received – Documents each shipment of drugs entered into PrimeRx.
- Physical Inventory Report. Documents each time a physical inventory has been completed.
- Drug Inactivity Report. Documents drugs that have not been dispensed during a selected period of time.
- Drug Activity Report. Depicts movement of drugs during a selected time.
- Unused Activity Report. Builds on the “drug inactive” report to offer more specific details about drugs that have not been dispensed during a selected time value.
- Average Consumption Report: Shows daily, weekly and monthly usage on a drug-by-drug basis.
- Inventory Reconciliation. Serves as a “master” report that details any discrepancies between physical inventories, and system accounts. This gives the pharmacy an opportunity to investigate and locate the source of any discrepancy, and make sure all accounts are in sync.
- Drug Files. Pharmacies can easily add new drugs to the list of available medications. The system prompts the user to add detailed drug information by navigating a series of user-friendly drop-down menus. This ensures the pharmacy’s records are detailed, accurate, and easily accessible.
- Patient Communication. Pharmacists can avoid the risk of a high-cost medication going unused by reaching out to a patient prior to making the purchase, to ensure the medication is needed. PrimeRx includes extensive 2-way communication features that pharmacists can use to generate patient texts and emails. The patient can respond directly, which can help guide the pharmacy in its inventory planning process.
- Price Comparisons. PrimeRx provides direct access to multiple wholesalers, which allows pharmacies to compare costs before an order is placed. Depending on a pharmacy’s geographic location, the software also integrates with multiple group purchasing organizations, which allows access to medications at reduced cost.
- PrimeINVENTORY App for Flexibility and Added Efficiency. PrimeRx users can have real-time access to their pharmacy’s physical inventory via the PrimeINVENTORY Users can access and update their inventory records from anywhere. Medications can be quickly entered by scanning barcodes directly from bottles and packing via the device’s camera. The app is user-friendly and requires no additional hardware.
As this list indicates, PrimeRx offers multiple tools for helping pharmacies with inventory management. Working together, these solutions allow pharmacies to know precise details about what’s on their shelves and stored in their refrigerators. Because of PrimeRx, pharmacies can better manage their pharmacy’s most valuable asset, and ensure steady access to the drugs most needed by their patients.