1. 11
Inventory Management and Health Insurance Billing

2. State Standard
12) Formulate a list of facility, equipment, and supply requirements (e.g., space requirements, prescription file storage, cleanliness, and reference materials) required for a retail pharmacy as compared with a hospital-based pharmacy.
18) Interpret quality assurance practices for medication and inventory control systems (e.g., matching National Drug Code (NDC) number, bar code, and data entry) and for infection control procedures and documentation (e.g., personal protective equipment [PPE], needle recapping).
27) Distinguish between the functions and applications of NDC number, lot numbers, and expiration dates of inventory found in a pharmacy. Articulate the importance of this information as it relates to protecting the safety of the public.

3. Objectives Students will be able to…
Identify the types of purchasing methods used to maintain a pharmacy inventory.
Describe the process of ordering stock.
Identify the needs of a retail pharmacy in reference to stock and storage, through an activity in which they design a pharmacy. Per st. 12

4. Purchasing Systems Independent purchasing Group purchasing
Pharmacy director/buyer responsible for contracts (written agreements) with each pharmaceutical manufacturer
Group purchasing
Pharmacy joins a group purchasing organization (GPO) that contracts with pharmaceutical manufacturers collectively for all members

5. Methods of Purchasing Purchasing direct Wholesalers
Pharmacy buyer places separate orders with each pharmaceutical company and receives separate shipments
Wholesalers
Pharmacy purchases a large number of products by various manufacturers from a single source
Cardinal Health
Anda Generics

6. Methods of Purchasing Primary vendors
Pharmacy contracts with a single vendor
All of the benefits of using a wholesaler
Better pricing and service terms
Require dollar-volume commitment and purchasing restrictions
Amerisource Bergen
Cardinal
McKesson

7. Formularies Listing of drugs approved for a specific purpose
Formularies can be used as:
Reference manuals
Recommendations for prescribing
Strict parameters for medications stocked and approved for reimbursement

8. Evaluating Costs Cost analysis Cost control
All information about financial disbursements of a certain activity, agency, department, or program
Cost control
Efforts by pharmacist and pharmacy technician to meet cost objectives

9. Evaluating Costs Costs of medications vary based on:
Name brand vs. generic drug
Drug strength
Drug manufacturer
Output/volume of the type of drug sold
How long medication has been available on the market.
Range of services pharmacy offers
Relative efficiency

10. Evaluating Sources
To learn about resources and new prescriptions as they become available:
Research manufacturers' websites and press releases
Talk to medication representatives
Research competition and prices of other pharmacies to help with ordering and stocking.

11. Figure The first step in the ordering process is generating an order. Source: Ben Edwards/Getty Images, Inc.

12. The Ordering Process Ordering Medications
Generate order: automatically, manually, or both
Review order to be sure it is correct.
Confirm order (make any corrections if necessary).

13. The Ordering Process Ordering Medications
Submit order electronically or by telephone
Supplier's receipt confirms order received, provides confirmation number

14. Figure 11-2 Verifying an order. Source: Josh Sher/Science Source

15. The Receiving Process Receiving an Order
Order delivery via supplier-employed courier in secured plastic totes, FedEx, UPS, USPS

16. The Receiving Process Receiving an Order Order verification
Reconcile purchase order, packing list, invoice, and actual order
Inventory adjustment
Automated
Manual

17. The Receiving Process Receiving an Order Stocking the order
Medications stored according to manufacturer's specifications
Organized by routes of administration ROA, the alpha by brand name
Recordkeeping for each order received
Maintain inventory reports, copies of packing slips for each order as manual backup to electronic files

18. Ordering Atypical Products
Biologics (immunotherapy) used to treat cancer using natural or synthetic substances that stimulate the immune system

19. Ordering Atypical Products
Interferon
Hormone-like proteins produced by body's white blood cells
Used to fight cancer
Severe side effects, especially at higher doses

20. Ordering Atypical Products
HIV medications
Most often found in hospital pharmacies
Investigational drugs not yet FDA approved or approved for new use.
Obtained
Through a clinical trial
Through expanded access (compassionate use)

21. Ordering Atypical Products
Nonformulary drugs
Must prove medical necessity

22. Activity Complete drug cards for the following… Bupropion (Welbutrin)
Cetirixine (Zyrtex)
Topirmate (Topamax)
Per St 12, Design a Retail Pharmacy that you would like to own. You will need an illustration of the layout of your pharmacy. Specifically detail (space requirements, prescription file storage, cleanliness, and reference materials, equipment) Also give information over how you will complete inventory checks, order supplies (choose a company to order from), and store your medication inventory.

23. Inventory Management Problems

24. State Standard
12) Formulate a list of facility, equipment, and supply requirements (e.g., space requirements, prescription file storage, cleanliness, and reference materials) required for a retail pharmacy as compared with a hospital-based pharmacy.
18) Interpret quality assurance practices for medication and inventory control systems (e.g., matching National Drug Code (NDC) number, bar code, and data entry) and for infection control procedures and documentation (e.g., personal protective equipment [PPE], needle recapping).
27) Distinguish between the functions and applications of NDC number, lot numbers, and expiration dates of inventory found in a pharmacy. Articulate the importance of this information as it relates to protecting the safety of the public.

25. Objectives Students will be able to…
Identify common problems seen when maintain inventory for a pharmacy.
Determine how and when to perform a stock return for inventory.
Identify threats to the pharmacy due to maintaining stock of scheduled drugs.

26. Back-ordered Products
Drugs that are currently unavailable from the supplier are backordered.
If customer needs the drug immediately, may need to find it at a different pharmacy
Pharmacy can order from the manufacturer, which can take 2–7 days depending on the product.

27. Communicating Changes in Product Availability
Communicating changes to patients
State specific change in drug order.
State reason for change in drug order.
Communicate what decisions need to be made to solve the problem.
Discuss alternatives to the problem or drug alternatives.
Provide time frame for problem to be solved or drug to be ordered.

28. Communicating Changes in Product Availability
Communicating changes to health care providers
Written
Verbal
Nonverbal
All pharmacy communication should be clear, concise, and free of error.

29. Figure 11-6 Handling returns is part of inventory management
Figure Handling returns is part of inventory management. Source: Mark Richards/PhotoEdit, Inc.

30. Returns Typically related to one of following reasons: Expired drugs
Manufacturer recalls
Overstocked/undesired products
Incorrect product sent by supplier
Item incorrectly ordered

31. Returns Product Returns
For a pharmacy to return a product that is not expired or recalled, product must be in its original condition: unopened, unmarked.
Each supplier has specific procedure for handling returns.

32. Returns
Recalls
Drug manufacturer or the FDA requires that specific drugs or devices be returned to the manufacturer because of a specific concern about the recalled product.

33. Returns
Recalls
Recalled products are returned directly to manufacturer from the pharmacy.
Manufacturers distribute directions on how pharmacies should respond to a recall.

34. Returns Recalls Class I (most dangerous) Class II
Products are defective and could cause serious adverse health effects or death
Class II
Products could cause temporary or moderate adverse health conditions

35. Returns Recalls Class III
Products are mislabeled or otherwise not in compliance with FDA regulations but are not harmful

36. Returns
Expired drugs have not been dispensed as of the manufacturer's printed expiration date.
Check expiration dates regularly.
Drugs that will expire within 6 months are marked with expiration sticker to alert pharmacy staff.

37. Returns
Expired drugs have not been dispensed as of the manufacturer's printed expiration date.
Expired drugs must never be dispensed.
Expired drugs must be returned to manufacturer or destroyed (documented).

38. Returns Problem with excessive inventory Importance of cash flow
High cost, sales, finances
Importance of cash flow
Medication disposal
Medications that are expired, deteriorated, contaminated, or dropped should be disposed of properly.
Credit for returning broken, damaged, or tainted products

39. Returns Destroying of controlled substances
Should be disposed of properly if no longer needed or if tainted, damaged, broken, chipped, melted, or expired
Marked for store credit and returned to the manufacturer or marked as damaged products

40. Returns Destroying of controlled substances
Kept locked up and monitored carefully
Report filed every 10 days and list kept at all times

41. Returns Dropped drugs Considered tainted
Cannot be given to patients under any circumstances
Dropped pills should be swept up right away and packaged for store credit or proper disposal

42. Theft and Diversion
Technicians should receive training on how to handle robbery and theft.
Stay calm.
Report theft immediately to proper authorities and DEA (if narcotics stolen).

43. Theft and Diversion
Technicians should receive training on how to handle robbery and theft.
Employees who take or steal medication face firing and criminal charges.
Security systems and guards help prevent theft.

44. Theft and Diversion
Counterfeit medications, theft, and chemical dependency
Counterfeit drugs are fake medications.
Pharmacists and technicians should be aware and follow FDA announcements.
Report counterfeits to supervisors, appropriate authorities, and FDA.

45. Theft and Diversion
Counterfeit medications, theft, and chemical dependency
Watch for altered prescriptions.
Addicts will sometimes resort to theft or robbery.

46. Activity Complete drug cards for the following… Valacyclovir (Valtrex)
Eszopiclone (Lunesta)
Acyclovir (Zovirax)
Per St. 27, write a 5 paragraph essay the distinguishes between the functions and applications of NDC number, lot numbers, and expiration dates of inventory found in a pharmacy. Articulate the importance of this information as it relates to protecting the safety of the public.
Once finished, add information over what you and your staff would do in the case of a theft or emergency in the pharmacy that you designed yesterday.

47. Summary
Evaluating costs and sources is a large part of pharmacists, and pharmacy technician's job duties.
Technician must be familiar with ordering practices, insurance norms, inventory management, appropriate return policies, theft and counterfeit drug deterrence and response.