When clinical, operational twain meets

Specialized function can integrate with function of specialists

by Rick Dana Barlow

When two persons perform the same or similar functions in two different areas or departments, process efficiency experts recruited by hospital administration logically call for standardization and perhaps a merger.

For many healthcare organizations, pharmacy and supply chain operations largely claim exception and immunity to the suggestion.

Arguably, either department can learn a great deal from the other. Pharmacy taps into the clinical realm more deeply and typically gains more acceptance by doctors and surgeons. In addition, pharmacy has a reputation for inventory management expertise, aided in part by formularies, P & T committees, drug data standardization and facilitated by direct supplier involvement in data management.

Meanwhile, supply chain oversees a breadth of product that far surpasses pharmacy’s, even though pharmacy may represent the larger dollar volume of annual purchases. Supply chain has developing ties with clinicians and the C-suite with direct links to an organization’s operating budget. In short, pharmacy may be responsible for one area, but supply chain reaches everywhere else, earning a prominent spot on CEO and CFO radar screens.

More than a few healthcare organizations recognize the value that a symbiotic relationship between pharmacy and supply chain can generate. In fact, a number of hospitals and healthcare systems have merged the two areas so that both operate under a single leader – either from pharmacy or supply chain.

Healthcare Purchasing News reached out to a variety of supply chain management professionals who have experience in this area and can address the merits of merging the two functions. Here’s how they responded to a series of questions exploring the motivations and roadblocks affecting supply chain’s partnership with pharmacy.

Mary Beth Lang, R.Ph., MPM, serves as senior director, supply chain management commercial services, University of Pittsburgh Medical Center, where she oversees HC Pharmacy Central, Inc. (HCP), a for-profit membership corporation and group purchasing organization that distributes $550 million in pharmaceutical supplies on behalf of its members, supply chain management services at UPMC Beacon in Dublin, Ireland, and the SCM Affiliation Network Under Prodigo Solutions, where Lang is vice president of operations, sales and marketing placement of technology and services to healthcare providers nationally.

"Hospital executives are looking to expense management as mission critical as pending payment reform is likely to reduce reimbursement by 14 percent. The traditional approach to operating in silos is being challenged. Six years ago, UPMC embarked on a simplification effort to transform, energize and evolve the ‘traditional’ supply chain function by executing a multi-faceted approach consisting of: Centralization of core processes/functions, integration of different activities and systems within an overarching framework, elimination of duplicative and/or non-value-added work, optimization of existing resources, operational focus to everything we do and innovation of new ways to work smarter, better, and faster. This effort moved resource focus from transactional to analytical to strategic as the processes were transformed.

"In six years, UPMC moved from a very inefficient chain to a leader in healthcare as recognized by Gartner in its ‘2011 Healthcare Supply Chain Top 25’ and by HPN as an ‘Elite 18 Supply Chains to Watch’ member. This transformation is directly attributed to the supply chain leadership team made up of experts that predominantly practiced outside of the provider community bringing best in class processes to UPMC.

"The UPMC clinical pharmacy is also recognized nationally for its Drug Use and Disease State Management program. UPMC was one of six awardees of the 2011 ASHP Best Practices Award in Health-System Pharmacy nationally recognized for programs demonstrating best practices in health-system pharmacy, especially in those areas that significantly improve the quality of patient care. UPMC manages and is an owner of a pharmacy group purchasing organization that centrally purchases and distributes [$550 million in] pharmaceuticals for owner and non-owner entities.

"UPMC decided recently to move the management of the pharmacy company under the supply chain management organization since both areas perform many of the same operational processes: Sourcing, requisitioning, ordering, receiving, picking and shipping. In the past, these activities were governed under separate policies using different processes and technologies. Many of the pharmacy processes were manual. Plans were underway to automate procure to pay process. It made sense to tap the resources active in the supply chain transformation and avoid additional staff cost for UPMC."

Rosalind Parkinson serves as administrative director, materiel systems, The Ohio State University Medical Center, Columbus, OH.

"[The] need to cut process costs in healthcare means all different supply chains ending at site of care should be reviewed in search of redundancies that could be eliminated without impacting quality of care.

"These two high-volume supply chains to hospitals have developed differently over time, due to development of commodities and their use in patient care. The two separate processes probably have much to learn from one another in search of a consolidated process of optimal efficiency.

"The emergence of the [electronic health record] as the Master Data for healthcare in the future urges all inputs to be as similar as possible to ease the burden of data entry for clinicians."

Deborah Petretich Templeton R.Ph., MHA, serves as vice president, supply chain services, Geisinger Health System, Danville, PA.

"Pharmaceuticals are a significant percentage of overall supply spend, control of which requires due diligence from both clinical and financial aspects.

"Pharmacists are expensive resources. Their licensed capabilities should be maximized in the clinical aspects of pharmaceutical care. Supply chain can aid in supporting non-clinical activities such as pharmaceutical procurement, logistics and inventory management to allow pharmacists to maximize their licensed potential.

"Both pharmacy and supply chain are challenged by not having true data standards in their operations. Working together to adopt GS1 standards will allow improvement in e-pedigree and track-and-trace capabilities for all supplies, including pharmaceuticals, as well as improving documentation in medical records, research and recall activities.

"Expertise from both arenas can complement each other in future planning and allow optimization of both human and financial resources within an organization."

James Grieger serves as lead guide, ISC Expeditions, and formerly was an executive for a leading distributor.

"Pharmacy is a department of specialists not unlike the other functions within a healthcare delivery setting. It has its unique products and processes as do the other customer/patient-facing functions. Supply chain is a very specialized function with its own unique skill-sets. In many healthcare settings, the products, technologies and processes necessary to support clinicians have rightfully fallen into supply chain’s domain in which effective order management, inventory control and supplier management programs are managed.

"One of several initiatives shared by many health systems is the retention of skilled pharmacy technicians. Allowing supply chain to manage the planning, sourcing, making and delivering processes will allow the pharmacy staff to focus more on intervention.

"Pharmacy spend is a significant spend for a health system. Much like other patient-facing departments that manage their own material flow, there is a tendency to overstock – unintentionally or otherwise. Supply chain can provide proven inventory management and control techniques to ensure precious capital is utilized appropriately.

"The healthcare supply chain, which includes all consumables and assets, is still very much characterized as fragmented. This will only worsen as actual care delivery fragments away from acute-care sites. Some vendors provide both pharmaceutical and medical/surgical products to name a few. Having a vendor and its contracts managed by multiple internal constituents only re-enforces this fragmentation.

"Systems with evolved supply chain management functions have successfully managed to integrate all internal customer needs under a single corporate function. In several cases this includes the implementation of a shared service or consolidated service center operation, which includes pharmaceutical product distribution and unit-dose repackaging side-by-side with medical/surgical supply distribution. This allows the system to aggregate product flows, manage supplier and vendors with a single face, and to provide system-wide formularies for all product categories in their effort to improve the supply cost structure.

"A fourth concept is the idea of managing all supply contracts under a single class of trade. As systems continue growing and fragmenting along the continuum of care with multiple sites and types of care, more evolved systems have instituted a single class of trade with their supply contracts to ensure a system price is shared by all system consumers – acute, physician offices, clinics, ambulatory, alternative care, etc. This would be difficult if each type of care or product centric department managed their respective supply chains."

Terry Forrest, R.Ph., serves as vice president, professional services, AmerisourceBergen Corp.’s Advocate Rx Solutions group.

"The distributive aspects of pharmacy are very closely aligned with that of supply chain and involve very similar delivery points in many cases. The acts of procurement, receiving, storage and inventory management are also closely aligned with that of supply chain, although record-keeping and regulations sometimes differ. The logistics required for distribution of medications and supplies can be mutually leveraged in many cases to bring about more efficiencies and cost containment.

"Given these reasons, pharmacy and supply chain should identify mutually consistent aspects of their services so as to consolidate where possible and meaningful. Pharmacy distribution should, however, maintain its organizational structure to ensure that the clinical aspects and implications of its full scope of services are always in alignment and there is a continual awareness between the clinical and non-clinical distributive functions."

Ron Hartmann serves as senior vice president, pharmacy, MedAssets.

"It’s particularly important for hospital supply chain and pharmacy operations to be aligned so both departments can gain a better understanding and appreciation for the issues and challenges faced in the current healthcare environment. Alignment of these two operations can help identify opportunities for collaboration and efficiencies.

"There are several areas of overlap within the two departments, including IV solutions, contrast media and anesthetic gasses. Where the supply chain is responsible for procurement, pharmacy is responsible for medication storage and distribution. In order for healthcare facilities to see the value that the relationship generates, there must be a willingness to work together and coordinate all related activities."

Ray Moore, MBA, CMRP, serves as system contract manager, PeaceHealth, Bellevue, WA, and 2010 president of the Association for Healthcare Resource & Materials Management (AHRMM).

"As supply chain continues to evolve toward being a more strategic function in healthcare to support our evolving delivery models and reimbursement, expectations are going to increasingly be that supply chain professionals engage in their organization’s total supply spend. 

"In my health system, drugs account for 28 percent of our total supply spend. Pharmacy is a highly skilled, clinically focused department, whereas supply chain is more business trained and focused. A relationship between both functional groups can yield positive operational and financial benefits for an organization. 

"Increasing demands for transparency in total-cost-of-care and outcomes can be better supported if ways are developed to have all supplies, including drugs, documented and tracked in a standard fashion against diagnoses, care, and outcomes."

Joseph Dudas serves as vice chair, category management, where he is responsible for all strategic sourcing, contract administration and informatics, Mayo Clinic, Rochester, MN.

"Given the financial pressures, the amount of money spent on drugs, and the recent supply issues, this topic cannot be ignored or go unchallenged. All supply chain leaders will be asked by their leadership to assess and assist in this area. 

"Supply chain can bring expertise pertaining to procurement, inventory and supplier management. Pharmacists can bring deep and broad understanding of the medicines and their impact on patient care. By working together they can both be more effective in patient care, expense management as well as gain operational efficiencies.  

"The supply chain management and pharmacy of the future will be based more on patient procedure and treatment forecasting than today’s method of reacting to supply ordering cycles. This is another opportunity for them to work together." 

William Woodward, MS, R.Ph., serves as senior director, contracting, Novation.

"Both are cost centers and represent expenses on the hospital budget. Most likely, one group has learned efficiencies that could be duplicated in the other.

"Both areas store or warehouse products.  Facilities might be able to find a way to develop a shared space that could be used by both groups to store at least part of their inventories. Certain products would have specialized storage requirements, like refrigerated or controlled substances, but other products might be able to share storage space.

"[Both areas] fully utilize procurement staff.  Both groups perform similar procurement functions and might benefit from a common training program."

Michael Rudomin serves as principal, HealthCare Solutions Bureau LLC, and is a former healthcare supply chain director.

"Supply chain value analysis efforts can be modeled after/coordinated with the pharmacy and therapeutics committee, leveraging both the clinical efficacy model as well as pharmacy’s usually stronger relationships with clinicians.

"It only makes sense to have all supplies, be they med/surg or pharmaceuticals, managed and coordinated together, as they all require GPO contracting, purchase orders, receiving, inventory management, distribution to the same places, and ultimately invoice payments tied to purchase and receipt data.

"Supply chain may distribute many items bought under the pharmacy budget, such as IV fluids.  Also, some supply chain items, such as contrast media, are best bought under the pharmacy budget with its lower distribution markup."

Michael Louviere serves as vice president, supply chain, Baptist Health Care System, Birmingham, AL.

"Pharmacists are first focused intensely on the patient and can benefit from having a supply chain/logistics-minded professional support them. One of the values supply chain can deliver to pharmacy is combining their distribution dollars with the overall system distribution to leverage more savings. Also, negotiating contracts with all its complexities can be improved with the support of a supply chain professional."

Mary Beth Lang: "Today, pharmacies are overwhelmed with automation – cabinets, carousels, robots, scanners, vaults, smart pumps, etc., regulation – healthcare reform, meaningful use, financial cost pressures, and staffing and drug shortages. Supply chain has been developing leaders and introducing leaders from other industries that bring experience, education and competence to the healthcare supply chain. These supply chain leaders can help reduce the operational noise within the pharmacy and allow the pharmacists to focus on patient care and safety, regulatory requirements and physician satisfaction. Establishing key service dashboards that are mutually created by hospital operations, pharmacy and supply chain sets expectations and lays the foundation for proving the value of supply chain leading the process over time.

"Pharmacy is skeptical that supply chain management understands the uniqueness of the pharmacy supply chain. Having a pharmacist that is part of supply chain leading the pharmacy supply chain process is a key success factor. The pharmaceutical industry is experiencing the largest number of product shortages in history. Determining drug substitution can be tricky requiring clinical pharmacy intervention of therapeutic or dose substitutions that must be coordinated with clinicians when a generic equivalent product is available. It is imperative that health systems have a communication protocol to address product substitutions."

Rosalind Parkinson: "This is a real need to keep certain functions separate relating to the nature of various supply and drug commodities and the regulatory environment addressing each. However, the major barriers to consolidation of the supply and pharmacy supply chains are the momentum caused by separation and the interests of those who currently benefit from separation. Emergence of a neutral leader, such as hospital CEOs who require maximum process efficiencies, and clinicians who want minimal involvement in all supply chains both for patient care and the documentation of such care, will go a long way toward removing these barriers.

Deborah Petretich Templeton: "Supply chain needs to develop a thorough understanding of the critical patient needs in the pharmacy sector. This is a 24/7 demand that can change quickly and dramatically based on the patient population being served. Through education and working together, supply chain can become a credible support resource to these material demands.

"Each discipline needs to be educated on the language common to the other’s area. For example, when integrating pharmacy in to the supply chain item master, the term ‘frozen’ was used by pharmacy to mean something that literally needed to be kept in a frozen state temperature-wise. The pharmacy inventory manager used the term to refer to an item that was no longer able to be auto-ordered, as in ‘frozen’ in the item master. Excellent communication is needed to prevent misunderstandings.

"Fear of the unknown is another reason. Pharmaceutical nomenclature can be intimidating. Traditionally pharmacy has relied on a distributor to translate and deliver their needs. Building a credible, integrated procurement and inventory process together can provide a system that will bring transparency to the business transaction side of pharmaceutical procurement. The use of common data standards will allow streamlined data processes in the future."

James Grieger: "It’s actually a microcosm of the larger prejudice healthcare has with service providers from other industries. It is the attitude that no one else understands our business, therefore how can they serve me better than I can serve myself? We’re finding this to be a myth.

"As functions and organizations improve their self-honesty, they will and should come to understand that their competency is healthcare delivery, not necessarily the functions and processes that sit in the background. Nurses need to spend more of their time interacting with the patient, not running around trying to gather supplies. Similarly, a pharmacist is a specialist whose value is best realized when interacting with patients and clinicians – not ensuring that dispensing cabinets are filled, or filling bottles or creating patient doses.

"Supply chain, as a specialized corporate support function, needs to improve its self-image and skills in selling the value it can bring to the organization. In far too many organizations, supply chain is really relegated to a materials management function, which lacks a good self-image. As well it does not always have the skills to sell itself to the larger organization. If they did, they would and should be able to sell the idea that they are experts in the horizontal management of supply chain capabilities and functions of planning, sourcing, making and delivering for all product categories. A strong governance structure will help enforce this concept with reengaged departments but only if the supply chain organization is strong and effective, and believes it deserves a spot on the leadership team."

Terry Forrest: "I believe as the pharmacy profession continues to focus more heavily on direct patient care and outcomes, the separation of pharmacy services as they relate to clinical care and the physical activities required to provide medications to patients is widening. This is not to say that the act of dispensing medications to patients does not involve clinical functions, but rather that the many actions, steps and touch-points that occur in procuring, receiving, storing, repackaging when needed, labeling for dispensation and distribution do not necessarily represent the best use of the clinician’s competencies or time.

"As such, I think some of the roadblocks between pharmacy and supply chain center around two things primarily. First, pharmacy has traditionally considered its full scope of services as fully integrated into a clinical care model and has not considered the distribution aspects as severable from the true clinical care aspects of services. Second, the very clinical nature of pharmacy and how it is generally seen and treated in the healthcare setting, particularly in hospitals, lends itself to a separation from the less clinical perception of traditional supply chain. An example is the pharmacy and therapeutics functions and committee membership within hospitals where pharmacy is always involved and supply chain is rarely, if ever, included.

"I think to overcome this separation, pharmacy must begin to accept a dichotomy within its services – clinical functions versus distributive functions. The optimal pharmacy operation should seek to achieve excellence in both of these sets of functions, however, the core competencies required for each are vastly different. In addition, supply chain managers must recognize the direct patient care implications surrounding nearly all of pharmacy’s distributive functions. The margin for error or non-delivery is non-existent. Pharmacy distribution can also be complex at times. For example, medication substitution is needed in some cases. This requires that the pharmacy distribution function not be completely disengaged from the clinical decision-makers who are required to make and/or assist with these kinds of decisions."

Ron Hartmann: "While pharmacy and supply chain operations are different in many ways, there are also several areas of overlap, as mentioned earlier. It goes without saying that there will always be roadblocks when two different departments try and merge. Oftentimes, there is a disconnect in the understanding of roles and responsibilities of each department. In order to overcome these roadblocks and challenges, there needs to be a willingness for change. In any environment, it is important to respect the roles and responsibilities of different departments and coordinate all related activities."

Ray Moore: "It’s not unusual for pharmacy and supply chain to have developed divergent processes related to contracting, purchasing, and inventory management within the same organization. Building relationships between these two functional areas, and exploring initiatives that are mutually beneficial can help in bringing these supply chain operations into closer alignment. In the end, anything supply chain can do to help pharmacy leadership focus more on clinical activities should be well received.

"It’s still common for supply chain and pharmacy to utilize different data systems for POs, receiving, payment authorization processes and reports. Considering pharmacy can be a quarter to a third of an organization’s total supply spend, this is surprising. Strategies to help align even these basic processes should yield benefits to the organization."

Joseph Dudas: "Both of these functions have matured within healthcare independently. Breaking down silos through mutual understanding and trust are critical. While there are differences in some of the skills and infrastructure, areas of collaboration need to be explored with an increasingly open mind.   

"I question why big pharmaceutical and med/surg distributors are not more aligned and leveraging cross category synergies to do the same? This is likely a differentiator in a very competitive marketplace."

William Woodward: "Often, the two areas work independently of one another. Building a climate of collaboration and getting buy-in from both groups, possibly even led by a common skilled leader, could go a long way to building an environment that could result in a synergy and efficiency previously unrealized by the separate groups."

Michael Rudomin: "It’s turf, ego, politics. The best way to overcome these is to have the right ingredients present. That includes senior management will and directive and a supply chain department with excellent current operations and proven track record, good customer service and relationships, and reasonably sophisticated leadership."

Michael Louviere: "Time is always an issue – just taking the time to understand the problems and the opportunities. There is a lack of focus on each other’s area. Pharmacists feel the clinical aspect should be their primary role. There is a lack of understanding what the opportunities are."

Mary Beth Lang: "The better-run supply chains have done an excellent job of integrating people, process and technology. This integration has led to reductions in staff, processes which drive efficiency and effectiveness throughout their institutions and automation strategies that work well together and enable the staff to deliver on the mission of the hospital.

"Pharmacy has done a great job standardizing their products under an approved formulary that is governed by a physician-led pharmacy and therapeutics (P&T) committee. Most health systems have a closed drug formulary that tightly controls the introduction of new and emerging therapy. Many supply chains have used the tenants of the P&T committee structure in the development and deployment of the Value Analysis process that include the process being physician-led, with formulary or preferred product selections and tight controls of new and emerging technologies."

Rosalind Parkinson: "Pharmacy has had a long history of efficient inventory management managed through outsourcing to wholesalers. Automation to accurately manage daily [just-in-time] orders and payment was developed in the supply chain long before it was even contemplated for medical supplies. The implementation of this technology is part of the wholesaler service model. Intense regulation of pharma, along with interest in drug pedigree, has encouraged development of unique drug identification and detailed track and trace protocols from manufacture to point of use.

"Medical supply distribution efficiency has developed, for most part, outside of the realm of wholesalers using third-party agencies and software to accomplish inventory and order management. This supply chain tends to use software developed for industries other than healthcare, and thus favors various [electronic data interchange] transaction sets and use of data exchanges, such as GHX.

"A thorough review of both approaches needs to be conducted from within healthcare institutions in order to weigh the benefits and costs of each approach from clinical, patient billing (EHR) and procure-to-pay perspectives."

Deborah Petretich Templeton: "The formulary systems used in pharmacy can be applied to other supply expenses in an organization. The process of how new drugs are requested and approved can lend the same diligence to the non-pharmaceutical supply world, helping to promote standardization, avoiding duplication, decreasing variation and improving expense control.

"Supply chain expertise in contracting and applying technology in the procurement process to allow three-way match of contract price to order price to invoice price, can reduce pricing errors, capture savings and allow manual processes to be automated. Logistics expertise can also help in design of pharmaceutical supply flow. The application of GS1 data standards will also allow improved e-pedigree track-and-trace methods for pharmaceuticals as well as other supplies. We can both educate manufacturers about packaging and data needs for care delivery to the patient."

James Grieger: "The benefit will skew more towards pharmacy as supply chain has had to win this same battle with other specialized departments. Pharmacy will and should learn trust – trust that its products will be available, in the right quantities when they are needed. Not too much, not too little. Pharmacy should come to appreciate the ability to spend more time collaborating with other specialists on patient care, satisfaction and safety."

Terry Forrest: "Generally, I think pharmacies can benefit from supply chain’s core competencies around product movement and logistics, and supply chain can generally learn from pharmacy regarding accuracy, and the clinical interfacing and decision-making regarding patient care matters."

Ron Hartmann: "Each has knowledge and expertise that can benefit the other, including operational efficiencies, inventory management, technology and automation."     

Ray Moore: "Pharmacy can benefit dramatically from supply chain’s process and business knowledge and expertise, and supply chain can learn from pharmacy’s long-time use and leveraging of data standards, including unique identifiers (NDC), generic codes, therapeutic classification codes (AHFS codes), and industry data pools, such as FirstDataBank."

Joseph Dudas: "Supply chain management (SCM) in many organizations has led enterprise shared services and integration efforts. If pharmacy has not done the same, SCM can assist in this area with organizational and systems strategies that have been proven in their own institution.   

"If consolidation is not a priority for pharmacy, SCM can provide services on behalf of pharmacy, such as managing sourcing and contracting, formulary processes, 340B software systems, bulk purchases or maintaining enterprise wide inventory reserves for critical supply. SCM has also adopted processes and methods from other industries, such as Category Management, Six Sigma, Sarbanes Oxley, CPFR, etc. These same tools can be used to resolve difficult issues and continuous improvement in pharmacy.  

"Pharmacy has long been using data standards, price transparency, associated reporting regulation as well as linkages to patient charging and reimbursement. It is also likely that product life cycle challenges that have been seen in pharmacy are likely to occur over time in other products and services. Pharmacy experts can be engaged to effectively determine signals for consolidation, commoditization, rapid price changes, recalls and new technology."

William Woodward: "Each group brings a wealth of experience that could benefit the other. For example, products are ordered through different distribution channels with different cost structures by these two groups. Careful review of which procurement channel offers the best value could result in overall organizational savings."

Michael Rudomin: "Pharmacy can learn expanded negotiating and contracting skills, since the supply chain has to deal with significantly more vendors and products.  Supply chain can use pharmacy’s DUE/P & T program as a model for its value analysis efforts, and can certainly leverage pharmacy’s clinical relationships." 

Michael Louviere: "When I first moved from pharmacy to supply chain I brought over the concept of a drug formulary and the P & T committee. This translates to driving a formulary, reducing the number of products by standardization and a value analysis committee similar to a P&T Committee to review new products and technology before just allowing it to come into your hospital."

Mary Beth Lang: "Supply chain managers need to expand their lexicon to include pharmacy terms. For example: 340B pricing, closed-door pharmacies, own use, class of trade pricing, Medicare Part D and J codes.

"The P & T determines the formulary status of every pharmaceutical prescribed in the facility then the sourcing process can begin. Product price is a factor but not the main driver of the decision of clinical acceptability and patient safety.

"First thing supply chain managers need to understand is the challenge of pharmacy to dispense and deliver the appropriate medication, in the correct form and dosage, at the correct time. This is only possible if the medication is available in the pharmacy.

"Pharmacy has a very difficult job of serving the clinicians and physicians who take care of our patients safely. The role has many demands and issues every day that pull pharmacists in multiple directions. The supply chain professional needs to ask questions and understand the similarities as well as the differences between supply chain operations and pharmacy operations. Understand the issues pharmacy faces and propose solutions. Anyone who can remove obstacles throughout the pharmacy supply chain will establish a new working relationship and long-term support for aligning pharmacy and supply chain."

Rosalind Parkinson: "When pharmacy is understood as one large group of commodities, it needs a very special focus by people who understand the commodities themselves – pharmacists. These professionals are accustomed to the challenges of maintaining control over many life saving [stock-keeping units] as well as volatile market conditions introduced by government regulations.

"Supply chain managers need to approach this supply chain with respect, but if they feel confident about their own technical knowledge of the benefits of automation residing within the health system as well as benefits of selected process consolidation, they can go a long way toward improving the pharmacy supply chain as well as introducing significant cost savings for the total enterprise."

Deborah Petretich Templeton: "Mutual respect, trust and credibility are key critical factors in establishing a supply chain-pharmacy partnership. The complexity of supply chain can be compounded in the pharmaceutical arena by such phenomena as back orders and shortages of drugs with no generic alternatives. This requires key coordination of supply demand with clinical decisions on what substitutions may be applicable.

"A responsive supply chain will build credibility and pharmacy benefits by being able to direct its resources to clinical utilization issues. The common bond is that both disciplines are focused on delivering quality, cost effective outcomes to the patients we serve. It places less of a focus on the differences and direct focus on how to work together to accomplish this important mission on a daily basis."

James Grieger: "It’s difficult for health systems to understand that products are widgets. Some products have more constraints on them than others. Orthopedic implements, cath lab devices, laboratory products, all have their own unique constraints.

"Pharmacy is best characterized as carrying a heavy regulatory burden with state board of pharmacy, FDA and DEA licensure and process requirements. This is the complexity of pharmacy, but supply chain is all about designing and managing optimal flows of product, information and capital which necessitate incorporating all product, customer and organizational constraints."

Terry Forrest: "Again, I believe both pharmacy and supply chain need to respect the core competencies of one another, and the similarities and differences of one another. Both have provided very important roles within healthcare for many years and the leveraging of one another’s intellectual and knowledge assets can bring about better patient care and higher performance."

Ron Hartmann: "I believe it is very helpful for supply chain managers to understand and be supportive of some of the challenges facing pharmacy. In addition to all of the procurement, storage and dispensing activities, pharmacy is a clinical discipline responsible for many aspects of patient care, including playing a critical role in the prevention of medication errors. 

"Pharmacy is also very highly regulated – including State Boards of Pharmacy, State Departments of Health, DEA, EPA, FDA, OSHA and others. In addition, The Joint Commission has a long list of accreditation standards and National Patient Safety Goals related to medication management that are either pharmacy specific or require pharmacy’s active participation for compliance. Another item unique to pharmacy is the growing nationwide issue in and around drug shortages. Therapeutic alternatives are often limited and these supply challenges are having a major impact on pharmacy departments everywhere."

Ray Moore: "Think of pharmaceuticals as just being another physician preference item. In time you’ll become familiar with what therapeutic classes are clinically sensitive, and which are more like commodities, and of course, everything in between. Like any other clinical area, supply chain professionals can help pharmacy be able to focus more on their clinical activities. They also must become familiar with how to leverage the capabilities and strengths of pharmacy’s data standards. 

"If your facility is 340B eligible, learn at least at a high-level what 340B is, and the extreme value it brings to eligible pharmaceutical purchases. There’s nothing simple about 340B purchasing, so don’t be discouraged if it takes awhile to begin understanding the program.

Joseph Dudas: "Differences should not drive decision making; opportunity should. Start small, learn how to work together and commit to being open minded about the possibilities."

William Woodward: "Standardization in pharmacy can be achieved with the correct approach. Pharmacy leaders have built a bridge with physicians utilizing the Pharmacy and Therapeutics committees and other methods and have been able to achieve standardization in many therapeutic categories. This requires a delicate balance between the need for cost savings and quality patient care. Physicians will respond to the appropriate scientific evidence.

"In many therapeutic categories no one agent will be effective for every patient, and perhaps multiple agents may be required in a category. Because the decision-making for these agents is based upon a scientific approach to be effective, supply chain managers should participate in these types of analyses and discussions. Supply chain managers will need to understand clinical expertise is required and cross functional relationships are needed to make standardization decisions successful for pharmaceuticals."

Michael Rudomin: "I think one issue is operational, and one is emotional. On the operational side, supply chain managers must understand and accept the tighter levels of inventory control and smaller units-of-issue that are mandatory for pharmaceuticals. On the emotional side, most pharmacy managers value their role as clinical influencers, earned through rigorous education and professional credentialing.

"As such, they may not always welcome the ‘intrusion’ of ‘non-professionals’ from the supply chain world into their domain. Regardless of whether this is justified, supply chain managers would do well to ensure their operations are well-run and their interactions/relationships with clinicians are good before expanding their sphere of influence into the pharmacy."

Michael Louviere: "Pharmacists are great individuals but have a very intense focus on patient care before being concerned about supply cost. It is not unusual for a pharmacist to spend more dollars on some drugs but drive the total cost of patient care down because this tactic was more cost effective. Using the right antibiotics heals patients faster, and cardiovascular medications do prevent visits to the Cath Lab and open heart surgery."