Healthcare

The Future of Pharmacy 2022: The Year of Supply Chain Transformation

Future of Pharmacy

“If we stay under budget, nobody asks any questions.”

That is a common response among hospital pharmacy leaders when asked if their health system’s C-suite is concerned about the procurement and management of drug products in their facilities.

Hospital pharmacies have historically flown under the radar, with pharmacists managing drug products using their own systems and processes outside of the health system’s centralized supply chain operations.

It is the age-old idea that if it isn’t broken, don’t fix it. The problem in health systems today is that most executive leaders don’t consider the future of pharmacy or haven’t looked under the hood to determine whether their pharmacy supply chain operations are broken.

It is similar to what we have seen with supply management in the perioperative space and cath/IR labs. Nobody could pinpoint what was broken until supply chain applied its technology and expertise to these areas and uncovered considerable cost and waste from supplies expiring on shelves and substantial revenue loss from missed charge capture.

Is pharmacy the future opportunity for supply chain transformation? Here are four factors that are driving health system leaders to rethink drug supply management in 2022 and beyond.

4 Key Factors Driving the Future of Pharmacy

1. Growing Financial Pressure

Over 90% of hospitals surveyed said they had to identify alternative therapies to manage drug spending, with one in four reducing staff to mitigate budget pressures, according to research conducted by NORC at the University of Chicago before the COVID-19 pandemic began.

Nearly two years into the pandemic, financial pressures have escalated. At the same time, drug prices continue to rise. Vizient predicts a 3.1% increase in total pharmaceutical spending in 2022, with specialty pharmaceutical pricing growing at a rate of 4.68% over 2021.

If health system leaders weren’t concerned about drug spend in the past, they should be now. In order to prepare for the future of pharmacy, they need visibility into what their pharmacies are purchasing, using and wasting.

2. Strains on Supply and Demand

Drug shortages have long been a problem in care delivery and are predicted to continue into 2022.  In the event of a shortage, the American Society of Health-System Pharmacists (ASHP) advises pharmacy technicians and pharmacy buyers to determine:

  • How much medication is on hand?
  • How long will it last?
  • Where is it located in the hospital?
  • Possible sources of alternative medications.

When looking under the hood of pharmacy supply chain operations, most don’t have the systems needed to accurately determine these factors in a fast and reliable manner. As hospital pharmacies confront new shortages, there will likely be growing recognition for the limitations of current systems and processes.

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3. Growing Job Pressures

The COVID-19 pandemic has pushed health system pharmacists to their limit, with nearly two-thirds (65%) of those surveyed citing a moderate to high likelihood of experiencing burnout and 51% reporting a high probability of secondary traumatic stress (STS).

A recent article in Pharmacy Times reports, “In 2022, there will likely be continuing evolvement and expansion of the pharmacist’s role with their recognition as critical frontline workers in the fight against COVID-19.”

Pharmacy teams have declined the offer of supply chain support in the past preferring to manage inventory on their own. In today’s climate, some pharmacists are likely to be more receptive to offloading their inventory management burden.

4. Emphasis on Analytics

As times are changing and faced with rising costs and shrinking revenues, health system leaders are seeking evidence that every aspect of their operations are generating value (high quality/low costs). The medical/surgical supply chain has long been required to justify its spend. It is reasonable to predict that pharmacy will be next.

A 2021 survey found 96% of healthcare organizations have deployed or are planning to deploy data analytics technology. Health system leaders clearly want analytical evidence to guide and measure strategic decisions.

Most technology systems used by hospital pharmacies simply don’t have the capabilities that will be required in the future pharmacy supply chain. With a heavy reliance on manual intervention and inability to connect with the health system’s electronic health record (EHR), pharmacists can’t offer accurate and timely insights on the linkage between drug purchases, utilization and reimbursement.

Supply Chain to the Rescue

Just as health systems have consolidated medical/surgical supply management under a centralized strategy, model and supply chain management (SCM) platform, these organizations should now be closely examining the future of their pharmacy supply chain.

By consolidating oversight of all supplies to the supply chain team and employing solutions to automate the tracking of drug products from receipt through usage, health system leaders can gain the level of visibility and control they need to mitigate risk and make better decisions for clinicians and patients, while enabling pharmacists to focus on care delivery.

 

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