Out of stock of medicine or the improper storage of medicines can not only lead to financial losses but also have a significant impact on patients.
Many hospitals found it difficult to achieve this goal as they have not known exactly how medicines are managed, supplied, and used to save lives and improve health.
The various methods, policies and guidelines are required to understand the operations in health care industries and to offer decision support tools that improve health policy, public health, patient safety, and strategic decision-making in the pharmaceutical supply chain and inventory control.
Preparation of Drug Lists
For the management of supply chain and inventory control, It must need to classify the drugs in various categories.
•The categories generally are
High Risk Drugs,
Emergency Drugs,
Schedule H1 Drugs,
NDPS Drugs,
Reserved Antibiotics, etc., that depends on policies of the hospital.
1. High Risk Drugs
There are certain drugs that have narrow therapeutic index (aminoglycosides, cyclosporin, carbamazepine, digoxin, digitoxin, flecainide, lithium, phenytoin, etc.).
These drugs are categorized as high-risk drugs, so it is list of the drugs that having risk to produce harmful or toxic effects on patients if not administered by safe route at safe dose in a certain patient.
The mnemonics used to remember is APINCHS.
A – Antimicrobials (Aminoglycosides: gentamicin, tobramycin, and amikacin; vancomycin; amphotericin – liposomal formulation)
P – Potassium and other electrolytes (Injections of concentrated electrolytes: potassium, magnesium, calcium, hypertonic sodium chloride)
I – Insulin (all insulins)
N – Narcotics, opioids, and sedatives (hydromorphone, oxycodone, morphine, fentanyl, alfentanil, remifentanil, and analgesic patches; Benzodiazepines: diazepam, midazolam thiopentone, propofol and other short-term anesthetics)
C – Chemotherapeutic agents (vincristine, methotrexate, etoposide, azathioprine e Oral chemotherapy)
H – Heparin and other anticoagulants (Heparin and low molecular weight heparins (LMWH): dalteparin, enoxaparin, Warfarin, Direct oral anticoagulants (DOACs): dabigatran, rivaroxaban, apixaban)
S – Safer systems (Drug systems that depend on double check such as safe administration of liquid medications, standardised order sets and medication charts etc).
Emergency drugs are important to manage patient condition immediately and successfully. A delay in inadequate response to an emergency may adversely affect the outcome.
There are two groups of emergency medications. The first category consists of medicines that are necessary and belong in every emergency medicine pack.
The second category of medications comprises of helpful but optional medications.
3. Schedule H1 Drugs
The purpose of schedule is to control the rampant use (that probably includes a large component of misuse through over-the-counter dispensing) of antibiotics in India. The drugs under this schedule cannot be sold by retailers without prescription of the qualified register practitioner.
The packaging of these drugs will have mandatory Schedule H1 warning printed on the label in a box with red border and the Rx symbol in red.
Ex. Alprazolam, Cefpodoxime, Ertapenem & Nitrazepam etc.
SCHEDULE H1 DRUG WARNING
It is dangerous to take this preparation except accordance with the medical advice.
Not to be sold by retail without the prescription of a Registered Medical practitioner.
4. NDPS Drugs
The Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985 prohibits, except for medical or scientific purposes, the manufacture, production, trade, use, etc. of narcotic drugs and psychotropic substances.
NDPS drugs: A drug or other substance that affects mood or behavior. These drugs produce sense of wellbeing and is consumed for non-medical purposes, especially one sold illegally.
The list of the NDPS drugs according to the NDPS act, 1985 is given below.
Ex. Opium, Morphine, Heroin, Codeine etc.
5. Reserved Antibiotics
Microorganisms have capacity to produce resistance against the antibiotics.
Undiscriminating use of antibiotics produce major problem of resistance and no any antibiotic will be effective.
The reserve group of antibiotics are drugs that are accessible but reserved for treatment of confirmed or suspected infections caused by multidrug-resistant organisms.
These drugs are considered as “last-resort” drugs and to be used when all alternatives have failed.
Purchase of drug and medical supplies is one of the important functions of hospital pharmacy.
A proper purchase of the drugs, medicaments and hospital supplies as well as control the stock is of great importance in pharmacy.
The following principles of 6 R’s may be followed while purchasing the materials for hospital pharmacy. These are recognized as objectives of the purchasing.
Right Source
Right Quality
Right Quantity
Right Price
Right Time
Right Mode Of Transportation
Purchase Procedure
1. Purchase Requisition
–Pharmacist must get the requisition from the department for their needs or items required.
–Requisition is document that demands the items towards the pharmacy or purchase department. It contains the type, quantity, quality, specific standards, and probable price.
2. Selecting Suppliers
–On receiving the quotations from different suppliers, the comparative statement of all the quotations received is prepared.
–The supplier who has quoted the lowest price is generally selected.
3. Preparing Purchase Order
–Once the supplier is selected then prepare a purchase order. Purchase order is Legal document between the supplier and purchaser with the terms and conditions abide to both.
–This order contains the details of items, quantity required, price, discounts, and other terms of delivery, payment, etc.
4. Receiving and Checking of Material
–Sometimes the checking of ne material that a likely to be procured is inspected at the supplier’s place. If supplier has shifted the material, It must be received and inspected for its quantity and quality.
5. Checking of Invoice and Bill
–If the items are received in satisfactory condition, then the invoice or bill is checked before it is approved for payment.
–The rates of various items charged in the bill and the other terms and conditions are thoroughly checked and compared with the supply order.
6. Recording of Bills in Account Books
–Send the bill to the account section, where it is entered into the account books.
7. Releasing the Payment to the Supplier
–According to the terms and conditions of the purchase order, the payment is released by the account department to the supplier.
(A) Drug Selection, Short Term, Long Term
The selection of drugs and other hospital supplies is a basic and important function of hospital pharmacist. He oversees making decisions regarding the quality of the drugs of products, quantity to purchase, specifications of products, selection of vendors.
The selection of drugs is the authority of the pharmacist, but the brands are selected based on economic considerations, this shall be achieved by having competitive bid purchasing.
With this method he can achieve a balance between quality and cost when two or more acceptable suppliers market a particular product that meets to the pharmacists’ specifications.
The selection of the drugs can be done from inventory turnover ratio.
The inventory turnover ratio is calculated by dividing the cost of items by average inventory for the same period.
A higher ratio indicates to point to strong use and a lower one to weak use.
According to the inventory turnover ratio pharmacist can take a decision.
Drugs are purchased for the short term or for long term. Those required for short term should be purchased in less quantity than the those required for long term.
Example: XYZ Pharmacy
Suppose XYZ Pharmacy operates over a one-year period, and we want to calculate its inventory turnover ratio.
Cost of items used:
Let’s say XYZ Pharmacy’s total cost of acquiring or producing medications and other products to be sold during the year is Rs. 100,000/-
Average Inventory:
–At the beginning of the year, XYZ Pharmacy had Rs. 20,000 /-worth of inventory.
–At the end of the year, the inventory had increased to Rs. 30,000/-
–Therefore, the average inventory for the year is (20000+ 30000)/2 = Rs. 25,000/-
Now, we can use the formula:
Inventory Turnover Ratio= Cost of items used/Average Inventory
Inventory Turnover Ratio= 100000/25000=4
Inventory Turnover Ratio=4
This means that, on average, XYZ Pharmacy sold and replaced its entire inventory four times over the course of the year.
Interpretation:
A ratio of 4 suggests that XYZ Pharmacy is efficiently managing its inventory, indicating a relatively high turnover. This could be seen as a positive sign, as it implies that the pharmacy is selling its products quickly and restocking efficiently.
(B) Tender or E-tender Process
Tendering is the process of purchasing for the huge amount.
Tender is an invitation to the supplier, distributors manufacturers to bid for a particular item, products, or supplies by accepting a formal offer.
Open Tender: It is regarded as the standard method for tendering, where consumer (Pharmacist) requests bids using an electronic tendering system or print advertisement, and the tender includes details about items, supplies, specifications, quantity to attract suppliers and manufacturers.
Selective Tender: The alternative bidding procedure like improves the quality of purchasing and gives manufacturers or distributors with the necessary expertise the chance to submit bids within the allotted period.
(C) Quotations
Quotation is another form of the purchasing when purchasing is not done in huge amount.
The quotations are called for the items (indicate quantity, quality standards, specifications, place, etc.) from the known suppliers.
After receiving the quotation, prepare a comparative table for each item and select the supplier who fulfills the terms and conditions and quoted lowest price.
Offer a purchase order to him and purchasing will be carried out as given earlier.
Inventory Control Techniques- Objectives, Advantages and Disadvantages
From both the perspectives, financial and operational, efficient inventory management plays a great role in pharmacy practice.
Mismanagement of inventory causes unnecessary rise in procuring and carrying costs and an imbalance in the supply and demand equation.
The visual method, periodic method, perpetual method, barcoding method and Just-in-time (JIT) method are the methods used in pharmacy to manage inventory.
Objectives of Inventory Control
Minimization of the inventory investment.
Determination of the right level of customer service.
Balance of supply and demand.
Minimization of procurement costs and carrying costs.
Advantages of Inventory Control
Cash flow will improve upon saving on purchasing and storing less costly products.
Ensures meeting customer and patient demands.
No losing the customer due to unavailability of a product when needed.
No predisposed inconvenience to the prescribing physician.
Disadvantages of Inventory Control
Could have deleterious consequences on patient safety.
Availability of expired, counterfeit, substandard, or spoiled products may harm patients.
(A) Economic Order Quantity
Economic order quantity (EOQ) is a calculation that gives ideal order size considering the annual demand and carrying cost.
The pharmacist has to calculate EOQ to minimize carrying costs and excess of inventory to manage the allocation of budget effectively and get optimal quantity.
Finding optimal order quantity for item is the goal of calculating its EOQ.
Where,
Demand: It is annual demand (in units)
Order cost: Cost of the one order
Holding cost: Carrying cost per unit, per year
Example
Demand = 2,000 bags of rice per year
Order Cost = ₹500 per order
Carrying Cost per Unit = ₹10 per bag of rice per year
Plug these values into the EOQ formula:
After calculating, let’s say the EOQ is 200 bags of rice.
This means that, to minimize costs, you should order 200 bags of rice each time. Ordering fewer might result in more orders, increasing order costs, while ordering more might lead to higher carrying costs. EOQ helps businesses find the right balance for cost-effective inventory management in terms of Indian Rupees.
(B) Reorder Quantity Level
When an order needs to be placed to avoid the risk of running out of an item, it is called the reorder level of that item’s stock in the hospital pharmacy.
The quantity of the order to be put on a new purchase order for the specific item is the reorder quantity.
Safety level or safety stock level is the level of the stock that should be in hand to avoid out of stock danger.
Example
Avg Daily Usage Rate = 100 pens
Lead Time in days = 14 days
Safety Stock = 20 pens
Now, plug these values into the formula:
Reorder Quantity Level = (100×14)+20 => 1420
After calculation, let’s say the Reorder Quantity Level is 1420 pens.
This means that when your inventory reaches 1420 pens, it’s time to place a new order. Setting a Reorder Quantity Level helps you avoid stockouts and ensures a continuous supply of pens for your customers. And, of course, you would factor in the costs involved in ordering and holding inventory in terms of Indian Rupees for your specific business context.
(C) Inventory Turnover
The inventory turnover is calculated as inventory turnover rate. This is ratio of the time required for the dispensing and replacing the stock during a given period.
It is calculated for taking decisions about pricing, manufacturing, and purchasing new inventory.
If the ratio is low, it indicates less dispensing and excess inventory, also called overstocking.
High ratio indicates strong dispensing but also insufficient inventory.
Inventory Management of Central Drug Store
After procurement of drugs, they stored in central drug store.
The drugs have different storage condition and while managing the inventory their storage condition should be considered.
Central drug store contains huge quantity and different drugs, the storage should be so that it is easy to find out drugs and get them easily.
For this, various storage conditions, storage techniques, and distribution techniques known to the pharmacist.
Storage Conditions
The hospital pharmacy has to create storage facility for the items present in the hospital formulary.
Pharmacist should be aware of all the storage conditions, so that he can manage the storage of inventory in pharmacy.
The proper storage conditions maintain the potency of the drugs and save the cost.
According to pharmacological actions: The drugs are stored according to pharmacological actions like anti-diabetic drugs, antimalarial drugs, antihypertensive drugs, etc. this makes easy for the distribution and dispensing.
According to dosage forms: This method implies the storage of medicines according to dosage forms, like eye drops, nasal drops, tablets, capsules, syrups, etc. The drugs categories should be separated after Separating dosage form wise. Many pharmacists found it easy for the storage and dispensing.
According to alphabetical order: This method store the medications according to the alphabetical order. In addition, the dosage form category is also taken into consideration. First prepare a list of the tablet dosage form drugs and then arrange them alphabetically in separate shelves. Same has to done for other dosage forms. By this method, dispensing is very much easy.
Distribution
Pharmacists need to make sure that every medical product including medicine samples is handled and delivered in a way that ensures the supply of medications is reliable and safe.
To recall medical items that are known to be faulty, spurious, incorrectly labelled, falsified, or counterfeit quickly and efficiently, pharmacists should set up an efficient distribution system that includes a documented protocol and a designated person or people to handle recalls.
Where part of a catastrophe or pandemic preparedness strategy, pharmacists should work with manufacturers, distributors, and government agencies (as applicable) to design an access plan for the continuous supply of necessary medications.
Pharmacists shall be aware of safety concerns and to put in place necessary mechanisms for monitoring the occurrence of adverse events.
Maintaining Cold Chain
The cold chain is the equipment and procedures that used to keep increasingly, temperature-controlled drug products like monoclonal antibodies and vaccines, cellular and gene therapies, certain types of insulin, and some cancer treatments within the correct temperature range (between -15°C to 8°C), so that they remain in good condition.
There are three key elements of the cold chain:
Personnel: To manage storage and distribution (cold-chain handler at each cold-chain point)
Equipment: To store and transport and monitor temperature
Procedures: To ensure correct utilization of equipment and ensure drugs are stored and transported safely
Devices Used for Cold Storage
Pharmacist must be aware about devices used for cold storage, so that he can store the drugs appropriately and decrease the deterioration of the drugs.
If pharmacist fails to maintain the storage condition for this drug, then the drug will expire soon before its clamed date.
Various devices are used like refrigerator, iced-lined refrigerator, deep freezer, walk-in cold rooms (WIC) and walk-in freezer rooms (WIF), etc.
Refrigerator
–Domestic refrigerators maintain a cabinet temperature of +2°C and +8°C.
–Used only for vaccines
Ice-lined Refrigerator (ILR)
–At the PHC and district levels, it is utilized to stockpile vaccinations.
–With as little as 8 hours of power in a 24-hour period, an ILR with a top-opening lid may keep vaccines safe by preventing the loss of cold air during door opening. There are two sizes of ILRs: large and small.
Walk-In Cold Rooms (WIC)
–This is a refrigeration system method that is installed within the existing building and is only accessible via at least one door which is big enough for a person to walk into.
–WICs, which are often employed at the central or national level, are significant storage points in the temperature-controlled supply chain. They are also utilized at the district or regional level in various nations.
FIFO Method
FIFO is acronym for First-In-First-Out. The FIFO method, which has to do with inventory control, keeps the stock based on the date (received & sale).
The FIFO approach will keep things in the situation where the freshest inventory is kept on hand and the oldest stock is flushed away.
Imagine you own a pharmacy in India, and you stock medicines. At the beginning of the month, you have 100 packs of a particular medicine, which you bought for ₹50 each. Later in the month, you purchase 50 more packs at ₹60 each.
Now, applying the FIFO method in the context of your pharmacy:
First Medicines In Are the First Sold:
FIFO assumes that the medicines you bought first are the ones you sell first. It’s like saying the medicines that arrived earliest are the first to be given to customers.
FEFO Method
FEFO is an abbreviation for First-Expired-First-Out.
To preserve the stock of foods, medicines, and other items that spoil quickly, utilize the FEFO technique.
It is regarded as a perpetual inventory system and is used for the same purposes as the FIFO approach. It may cope with stock that has a short shelf life and maintain the freshness of the inventory.
Imagine you own a pharmacy in India, and you stock medicines with different expiration dates. You have 100 packs of a particular medicine with an expiration date of January 2023, which you bought for ₹50 each. Later in the month, you purchase 50 more packs of the same medicine with an expiration date of March 2023 at ₹60 each.
First Expired Medicines Are the First Used or Sold:
FEFO prioritizes using or selling the medicines that will expire first. In this case, you’d aim to dispense or sell the packs with the January 2023 expiration date before the ones expiring in March 2023.
Expiry Drug Removal, Handling, and Disposal
The expired medications are not legally and ethically acceptable to use in clinical practice irrespective of potency, toxicity, etc.
The expired medicine not only cause harm to the patients but also to the environment due to improper disposal.
If expired medicine comes in hands of children and may cause deleterious effects on them.
If the expired medicines disposed of in landfill that is not secured there are chances these medicines can go to the animals.
The following disposal methods have been recommended by the various authorities
1.Returning to the Manufacturer: The expired medicines send back to the manufacturer. It is feasible and should be the first choice because the manufacturer is likely to have good disposal method at its disposal.
2.Landfill: The waste materials are directly placed into a land disposal site without prior treatment. This is the oldest and widely practiced method for solid waste disposal.
3.Waste Immobilization (Encapsulation): Drugs that have expired are solidly immobilized in a steel or plastic barrel. The drum is filled with a mixture of lime, cement, and water in the proper proportions once these materials have been added up to around 75% of its capacity. The sealed drums might then be buried beneath a fresh layer of municipal solid garbage at the landfill’s base.
4.Waste Immobilization (Inertization): The drugs are crushed, then water, cement, and lime are combined to create a homogeneous paste. The paste is then carried to a landfill in a liquid form by a concrete mixer truck and dumped into the common urban waste. It will set as solid mass dump waste. It is inexpensive method.
5.Sewer: Liquid pharmaceuticals like syrups and intravenous (IV) fluids diluted with water and flushed into the sewers.
6.Burning in Open Containers: Burning of drugs in open container is not permitted as it may release some danger pollutants in air. The packages of the medicines like cardboard, leaflets, if it non recyclable then burn into open container.
7.Incineration: The incinerators are used for the burning the pharmaceutical waste.
8.Chemical Decomposition: When a proper incineration process is unavailable, the approach is only helpful for limited amounts of medications because it is laborious and time-consuming.
(A) Disposal of Narcotics Drugs
Depending on national rules, controlled narcotics must be destroyed under the supervision of a pharmacist or the police.
Such drugs shouldn’t be made available to the general population since they may be misused.
They ought to be rendered useless by encapsulation or inertiation, then either burnt or distributed among the municipal solid trash at a landfill.
(B) Disposal of Cytotoxic Drugs
Antineoplastic drugs are used to treat cancer and has ability to kill or stop growth of living cells.
Their disposal must therefore be handled with care. They should be packed and separate container away from the other pharmaceuticals and send back to the manufacturer for its disposal.
If the above option not possible, then it must be destroyed in two chamber incinerators with high temperature of at least 1200°C.
Never dispose of antineoplastic medications or waste in a landfill without first encapsulation or inertization.
They must not be dumped untreated into surface water drains or untreated natural watercourses; they may only be dumped in a sewage system upon chemical breakdown.
Documentation-Purchase & Inventory
As the pharmacist while taking care of patients performs many functions, one of them is documentation. The Drugs and Cosmetics Act 1940, rules 1945, rule 65 states various records to be maintained by the registered pharmacist who has taken a license to sell drugs. It is stated that the sale of drugs on the legal prescription of medical practitioner is done and the records maintain serially in register that includes
Serial number of the entry,
The date of supply,
The name and address of the prescriber,
The name and address of the patient, or the name and address of the owner of the animal if the drug supplied is for veterinary use,
The name of the drug or preparation and the quantity or in the case of a medicine made up by the licensee, the ingredients and quantities thereof,
In the case of a drug specified in Schedule C or Schedule H and Schedule H1, the name of the manufacturer of the drug, its batch number and the date of expiry of potency, if any,
The signature of the registered Pharmacist by or under whose supervision the medicine was made up or supplied.
Pharmacist has to maintain the records of purchase of a drug proposed for resale or sold by wholesale and such records shall include the particulars:
–(a) The date of purchase,
–(b) The name, address and the number of the relevant licence held by the person from whom purchased.
–(c) The name of the drug, the quantity and the batch number, and
–(d) The name of the manufacturer of the drug
–(e) Purchase bills including cash or credit memos shall be serially numbered by the licensee and maintained by him in a chronological order.
