Revolutionizing Pharmacy Supply Chain Management: The Time is Now! William M. Parker, PharmD, MHA, BCPS March 11, 2018

Transcription

1 Revolutionizing Pharmacy Supply Chain Management: The Time is Now! William M. Parker, PharmD, MHA, BCPS March 11, 2018

2 Learning Objectives Explain how supply chain management is integral to overall financial performance Define key supply chain players and their evolving influence Describe the hub-and-spoke or centralized pharmacy supply chain model Discuss application of technological advancement in the realm of supply chain management

3 Disclosure I have nothing to disclose concerning possible financial or personal relationships with commercial entities (or their competitors) that may be referenced in this presentation.

4 Polling Question: How many of you present today have an inventory management process? Source:

5 Supply Chain Management Inventory Management Information Management Supply Chain Strategy Procurement Planning & Optimization Logistic Management

6 SCM Defined The active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage

7 SCM in Action

8 Consider These Questions How much inventory is on the shelves? What medications are nearing expiration? How many days on hand are available for a particular drug? Where can medications at risk of shortage be located? How much of a given medication will be needed two months from now?

9 Our Competitive Advantage Source: global.agfahealthcare.com/us/enterprise-imaging/value-based-healthcare/

10 Pharmaceutical Supply Chain Source: fda.gov

11 Key Player: GPOs $120 GPO Annual Spend Volume ($B), Calendar Year 2016 $100 $80 $60 $40 $20 $- Vizient Premier HealthTrust Intalere Source:

12 The Supply Chain Dinosaurs GPOs of Yesterday Small, local groups of community hospitals who pooled volume, and bid out commodities Members were more collaborative than competitive Supplier margins were quite healthy lots of room to gi e a little GPOs of Today More volume, less compliance Consulting, data management, benchmarking Vie ed as just another supplier Best prices no go to large IDNs, rather than GPOs

13 Evolving Influence: GPOs National GPO Regional GPO Collaborative Buying Group Self Contracting U.S. Pharmaceutical Supply Chain

14 Polling Question: How many of you present today are a member of a Regional GPO? Source:

15 Key Player: Wholesalers $180.0 $160.0 $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $- Revenues at Big Three Wholesalers, Calendar Year 2016 Revenues ($B) % Change, 2016 vs AmerisourceBergen Corp Cardinal Health, Inc. McKesson Corporation The Economic Report on Pharmaceutical Wholesalers and Specialty Distributors (Drug Channels Institute, Oct. 2017). Available at 16% 14% 12% 10% 8% 6% 4% 2% 0%

16 Evolving Influence: Wholesalers Continue to be major players Tighter margins means fewer discounts Shift to specialty distribution Amazon anyone? Is there a better way?

17 Polling Question: How many of you present today use a direct account(s) with a manufacturer(s) during shortages? Source:

18 The NEW Supply Chain Model Centralized pharmacy SCM services Procurement Compounding (USP 797 & 795) Repackaging Kit/Tray production Drug shortage management ADC fulfillment Low unit of measure (LUM) distribution Self distribution

19 The NEW Supply Chain Model A centralized model will enable: Ability to source products directly from the manufacturer Development of an efficient operating model to leverage the system scale Standardization of products and work processes across multiple hospitals Increase supply chain resiliency

20 GHS Pharmacy Consolidated Service Center COMPOUNDING & REPACKAGING SUPPLY CHAIN MANAGMENT BUSINESS OPERATION/INSIGHTSS USP <797> Compliant Clean Room Sterile Admixture Robots FDA Registered High Speed Unit Dose Packager Liquid Unit Dose Cups Regional Distribution Center Strategic Sourcing Contracting Product Readiness Kit & Tray Production Centralized ADC fulfillment Revenue Enhancement Capital Planning Expense Management Budget Forecasting Financial Analytics Centralized 340B Management

21 PCSC by the Numbers

22 Question: What do the following individuals all have in common? Watson, Alexa, Siri, Cortana Source:

23 Technological Advancement Ale a, order ore va co ci 1 gra vials. Source: amazon.com

24 Artificial Intelligence (AI) Makes it possible for machines to learn from experience, adjust to new inputs and perform human-like tasks Significant use-cases Inventory Optimization Predictive Analytics Demand Planning Shortage Monitoring Pricing Forecast

25 Radio Frequency Identification (RFID) Uses electromagnetic fields to automatically identify and track tags attached to objects Offers: Visibility of accurate real-time information Fast locating of products Possibility to record losses Ability to plan product locations strategically

26 Blockchain An open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way Four significant use-cases DSCSA Controlled substance distribution Cold chain monitoring API to finished product Source:

27 Our Competitive Advantage Source: global.agfahealthcare.com/us/enterprise-imaging/value-based-healthcare/

28 Start a Revolution! Talk tuna ith your C-suite or executive leadership Visibility is key Enable or invest in technology Create processes to track performance

29 Assessment Successful supply chain management can positively impact the triple aim of cost, quality, and outcomes. A. True B. False

30 Assessment The growth of large IDNs has contributed to the waning influence of GPOs on the U.S. pharmaceutical supply chain. A. True B. False

31 Assessment If appropriately designed and executed, a centralized pharmacy supply chain model can provided which of the following? A. Efficiency to leverage the system scale B. Standardization of products C. Increase supply chain resiliency D. All of the above

32 Assessment You would like to optimize inventory par levels and suggested reorder points, which of the following would should you use? A. Artificial Intelligence B. RFID C. Blockchain D. A really smart high school drop out