On average pharmacy represents 25% of the total supply spend, be it a 200 bed facility or health system, the millions of dollars we as pharmacy purchasing professionals manage is a concern for any CFO. The current landscape of increasing cost, extended length of stay, rapidly growing indigent patient loads, compounded by an aging physician workforce, antiquated faculties, and deceasing reimbursement rates has forced the C-suite to make difficult decisions. To manage the financial implications of our respective facilities a CFO usually has to two options: reduce labor, which is about 52% of total operating cost, or supplies, which is about 24% of total operation cost.

When evaluating supply reduction efforts, it would only be logical for the CFO to turn to the primary purchasing professional within their facility. This role might be a Vice President of Supply Chain and Support Services, Chief Procurement Officer, Director of Materials Management, a consultant, or your GPO. According to the Pareto principle, a principle we as pharmacy purchasing professionals utilize daily, logic would dictate these purchasing professionals address pharmacy spend quickly because as an individual department, only surgery exceeds our purchasing volume; however, pharmacy has always been the pink elephant within most faculties. While this elephant still eludes many primary purchasing professionals, starting in the late nineties and with a recent explosion in 2005 this elephant is quickly being tamed.

The lack of clinical expertise in the purchasing department gave way to clinical resource mangers, a position to help align the efforts of the value analysis teams, similar to P&T’s function, but for non-pharmaceutical items. Several articles have been written regarding the importance of addressing pharmacy’s spend from the primary purchasing professional’s perspective, for example: From the Basement to Boardroom by Way of the Pharmacy, Pharmacy operations: The Next Logical Extension of Supply Chain Operations, Supply Chain and Pharmacy Integration: Improving Patient Care, and Supply Chaining the Pharmacy. In addition to these articles, pharmacy as a profession has also been addressing these same concerns through articles, books, and position statements, for example, Institutional Pharmacy Practice Handbook, Financial Management for Health-System Pharmacist, ASHP Guidelines on Medication Cost Management Strategies for Hospitals and Health Systems, and Prudent Purchasing of Pharmaceuticals.

Just as clinical resource managers deliver a unique skill set and diverse background to the purchasing department so will the pharmacy purchasing professional. Several articles in the past year call for business managers within the pharmacy department to address the perceived supply chain management deficiencies and now GPOs are supporting the advancement of non-pharmacy personnel managing purchasing, contracting and business processes in the pharmacy, but few CFO’s or primary purchasing professionals utilizes the greatest resource already at their disposal, the pharmacy purchasing professional. The National Pharmacy Purchasing Association and a few professional advocates seem to comprehend the financial impact pharmacy purchasing professionals have on the CFO’s vision of tomorrow, while managing much more than a purchase order today.

The skill set required to manage a productive and cost effective purchasing department is already integrated within pharmacy through the pharmacy purchasing professional. Instead of sponsoring the training of non-pharmacy professionals to manage purchasing, contracting and business processes in the pharmacy, support the professionals already performing these functions. These professionals are highly educated, trained, certified, and already comprehend the complexities associated with managing a pharmaceutical supply chain.

A pharmacy purchasing professional traditionally begins a career as a pharmacy technician, exposing themselves to the daily operations of pharmacy, while absorbing the language of the profession. While working as a technician and after becoming National Certified, some technicians peruse additional pharmacy training/certification. This additional pharmacy training encompasses compounding, sterile preparations, and chemo therapy, but also extend beyond the pharmacy. Certification in purchasing, supply chain management, six sigma, lean, project management, and inventory management are but a few of the certification earned by these purchasing professionals. As purchasing professionals in the pharmacy these professionals seek out additional education, be it excel courses offered by their internal education department or the graduate degrees in the collegiate arena their learning never stops. In addition to intimate application of purchasing laws required for any purchasing professionals, the pharmacy purchasing professional must also be as familiar to all regulations concerning pharmacy.

To accurately understand the value of a pharmacy purchasing professional you must know one. I challenge each CFO, each primary purchasing professional leader, and each industry sponsor to meet, engage, and utilize the expertise of a pharmacy purchasing professional in your next cost control initiative for pharmacy.

Name of Facility: East Jefferson General Hospital

City, State: Metairie, LA

Richard,

Along with your challenge to the CFO, each primary purchasing professional leader, and each industry sponsor to meet, engage, and utilize the expertise of a pharmacy purchasing professional in your next cost control initiative for pharmacy. I would also challenge each of the Pharmacy Purchasing Professionals to engage the aforementioned people by providing reports, become involved in the budgeting process and know the numbers of the Pharmacy each month if they are on budget or not and why. Discuss these numbers with finance and the department Directors.

We, as Pharmacy Purchasing Professionals have significant influence on a daily basis. We need to promote our profession by being seen and heard.

Name of Facility: St. Francis Health Center

City, State: Topeka, KS

Years as a Buyer: 7 in healthcare and 25+ in home improvements