The Challenge

Pharmacy staff are asked to do more with less, often from both a personnel and budgetary perspective. Over the last decade, drug prices have tripled the pace of inflation, yet the pharmacy department’s drug budget is often only slightly increased, expected to remain flat, or in some situations, reduced.

The majority of a typical health system pharmacy’s cost-containment strategy surrounds preset GPO, wholesaler, and 340B approaches that include negotiated fixed pricing for a duration of time. This leaves little room for creativity with respect to how the pharmacy department can procure drugs and generate instant or incremental savings in the near-term.  

Even if health systems are fortunate enough to have direct relationships with pharmaceutical manufacturers, it is still a time-consuming struggle to:

• Devise an organized plan to find medications to meet a pharmacy’s diverse needs;
• Determine inventory availability and any requirements across multiple manufacturers (minimum order requirements, shipping fees, etc.);
• Execute contracts in a timely manner;
• Access pre-approved price points;
• Ensure pharmacy credentials are up-to-date in manufacturer systems;
• Submit online P.O.’s to manufacturers and ensure the order is transmitted for immediate processing;
• Obtain shipment tracking details and real-time updates;
• Engage with reliable manufacturer customer support (when required).

Solution

Incorporate ASHP’s Drug Shortages Application Programming Interface (API) into an eCommerce technology that provides short-dated and shortage medications to healthcare providers.
eCommerce technology implementation has led to cost-containment outcomes and greater flexibility for providers strained by increased patient demands and product shortages. A new channel, MedShorts, was developed to aggregate excess drug supply and match it with each pharmacy’s usage levels. More and more drug companies are listing their short-dated stock at discounted prices directly to pharmacies in need. As with other industries, allowing direct procurement cuts costs by eliminating unnecessary intermediaries and simplifying the supply chain. Over 60 pharmaceutical manufacturers have participated in this marketplace and contributed to over $100MM in pharmacy savings Wholesale Acquisition Costs (WAC) across more than 475 healthcare facilities.

ASHP has collaborated with MedShorts to synchronize real-time drug shortage data that helps generate reports and custom email alerts to over 1,300 pharmacy users. 
Throughout the pandemic, the channel has been a valuable resource for hospitals to directly purchase COVID-related treatments in limited supply. Pharmacies had to manage limited allocation in a variety of ways as COVID-patient levels spiked, and MedShorts served as a key resource linking health systems and manufacturers across the United States. 

Outcomes

The Los Angeles County Department of Health (LAC) has 14 individual facilities varying from high and low volume, in-patient and out-patient pharmacies, and correctional facilities. “We are always looking for innovative ways to improve sourcing options and the MedShorts marketplace was checking the right boxes,” said Mark Burstyn PharmD, Pharmacy Supervisor of LAC.

Time and Cost Savings
As LAC first began using MedShorts, the marketplace matched relevant listings with significant savings on drugs. The medications listed on the channel are discounted by the manufacturer because they have less than 12 months to the expiration date. To date*, the system has saved $638,000.

Most LAC pharmacy users on MedShorts elect to receive the weekly notifications and product match reports sent via email. This helps the buyers decide on the best opportunities without spending too much time navigating the site. “ASHP feeds into the MedShorts system and the alerts give me real-time information and sourcing options. All products that are on the ASHP drug shortage list have a special icon and aisle in their catalog,” Burstyn details. 

Increased Medication Access
Los Angeles County sourced essential medications during the early peaks of the COVID-19 pandemic that were not available (or on limited allocation) through traditional channels.  Examples include: Azithromycin tablets, Cisatracurium, Hydroxychloroquine, Magnesium Sulfate, Ondansetron, Rocuronium, and Sodium Bicarbonate. Some of these listings were actually “short-dated drug shortages” and provided health systems with both medication access and drug savings. About 30% of LAC’s total savings were achieved on drugs in shortage during the pandemic.

Improved Sourcing Options
Compared to sourcing hard-to-find products with secondary or tertiary vendors, the offerings on the MedShorts marketplace are all open-market prices listed directly from the source pharmaceutical manufacturer. Listings and price-points change regularly, and having a free-market channel to source pharmaceuticals provides more options for pharmacies in need.

*as of September 2021