Inventory control is one aspect of pharmacy that is always a battle. Every independent pharmacy owner and PIC for a major chain knows the focus that is placed on controlling inventory levels. Prescriptions drugs are expensive and stocking too many drugs that the pharmacy won’t sell ends up affecting the bottom line. But what does a pharmacy do about all of those drugs that are short dated? A website may have the answer to that question.
The problem pharmacies face is the dilemma over what to stock and how much to stock of each medication. Especially in the case of special order items for uncommon drugs pharmacies that get these products in for patients often don’t use the entire bottle and are left with expensive excess inventory. Most suppliers have return policies that allow to get rid of these products but usually the pharmacy only recoups half of their purchase price when returning these excess medications. Is there a better way?
Now there is a website based on an idea from an intern who saw a need. RxDrugExchange.com is a relatively new website that specializes in setting up a network for qualified businesses to buy and sell excessive inventories of prescription medications. It is an alternate to simply returning the medications to the supplier for 50% credit. For a modest yearly access fee and a transaction fee for each drug purchase buyers and sellers can come and distribute excess inventory. It is an interesting business model with the potential to save pharmacies money on their inventory control efforts.
One of the struggles of operating a pharmacy is that certain drugs only come in packages of say 100. So if it is a specialty item that isn’t used often and a patient has a prescription for say #40 of this unusual item the pharmacy is on the hook for buying the entire #100 bottle just to fill one prescription for 40 tablets. This isn’t a big deal if the drug is relatively inexpensive but if it costs hundreds of dollars and the patient’s prescription doesn’t have refills then a store is stuck with excess inventory that will be difficult to sell and it will inevitably sit on the shelf.
Some pharmacies try to avoid ordering these items in for patients at all. Others try to find other locations that can use the excess product and exchange it for something else. But in the end often a pharmacy is stuck accepting $0.50 on the dollar just to get rid of this inventory as the expiration date approaches. And all of that money lost goes right to the bottom line in a negative way.
This website offers some kind of alternative for pharmacies that have this excess inventory and need a place to get rid of it. It is an interesting idea worth examining if a pharmacy has excessive amounts of this kind of overstock. But I wonder just how many pharmacies are using the service and what kind of drugs are available for ordering.
The company’s website states that even after shipping the drugs offered should have at least one month’s time before expiration so the end user can distribute the product while still in date. And pharmacies can buy these drugs at a discount from the regular price. Both the buyer and seller can come out ahead.
Inventory control is one of the biggest concerns for a pharmacy. If you work for a chain inventory control is beat into your head from day one. While the chains often try to distribute inventory among other locations to save money the smaller chains or single independents that don’t have this big distribution network might find a good alternative to simply returning their product by using RxDrugExchange. At least there is an option for pharmacies looking to buy or sell items they need or want to get rid of without taking the 50% hit by simply returning the products to their supplier.
This kind of marketplace might not be the ultimate solution for inventory control for pharmacies. And I would worry that drug shipments are handled properly so they are still safe and effective to use after shipment. But at least this is an idea that is thinking outside the box to try and tackle a problem all pharmacies face. Inventory control is a big issue for pharmacies and finding ways to better manage that issue can only lead to increased profitability in an era where pharmacy margins are low and pharmacies are increasingly struggling to survive. And perhaps a website like RxDrugExchange.com is exactly what is needed to give pharmacies an alternative for getting rid of excess inventory.
The Redheaded Pharmacist