Retail Pharmacy
340B Compliance Audit Improves Processes and Reduces Risk
| Industry | Retail Pharmacy |
| Problem | A 340B contract pharmacy client requested a gap analysis to identify any issues that needed to be addressed in the management controls, processes, and procedures to ensure that their pharmacies and their associated covered entity health system complied with 340B Drug Pricing Program regulations. |
| PHSL Solution | A compliance audit was conducted including pre-selection of auditable claims by type, onsite interviews, review of policies and procedures, and management controls. This review enabled PHSL to recommend operational changes to their policies and procedures, along with implementing feedback mechanisms for better management controls of the end-to-end process. |
| Results | Additionally, PHSL identified Medicaid fee-for-service claims that were being captured as 340B eligible, despite the covered entity being a carve-out facility. The contract pharmacy was able to work with the covered entity and the third-party administrator to avoid duplicate discounts and a potential HRSA audit finding. |
PHSL Analyzes Data to Save Retail Pharmacy in Drug Costs
| Industry | Retail Pharmacy |
| Problem | A small retail pharmacy chain’s wholesaler contract was expiring, and the chain needed to renegotiate a new contract. The pharmacy chain’s main goal was to obtain a more profitable contract. They also wished to simplify the number of rebates and discounts to create a more simplified agreement where it would be easier for the chain to track wholesaler compliance. |
| PHSL Solution | PHSL benchmarked agreements between wholesalers and similarly sized pharmacy chains to ensure fair pricing. PHSL used historical purchasing data and created dynamic excel models to map out contractual points for negotiation. |
| Results | PHSL negotiated a new wholesaler contract that saved the client $2.5 million per year over the life of the three-year agreement. |
Pharmacy Chain Inventory Management System and Financial Reporting Evaluation
| Industry | Retail Pharmacy |
| Problem | A mid-sized regional pharmacy chain requested an independent assessment of their pharmacy inventory management system and financial reporting to identify issues and address concerns. The chain was hoping to optimize a systematic process to better manage their pharmacy inventory and improve the accuracy of their financial reports. |
| PHSL Solution | PHSI reviewed the pharmacy operational policies and procedures, wholesaler agreements, pharmacy practice management system manuals and training guides. PHSI conducted on-site interviews with corporate and retail pharmacy management to understand current financial reporting and inventory management processes. PHSI reviewed financial reports and identified the source of inconsistent output and developed solutions leading to accurate reporting. PHSI provided insight on inventory control functionalities within the pharmacy system, metrics for measuring inventory management effectiveness, including methods to control cost and enhance efficiency. |
| Results | The regional pharmacy chain implemented consistent financial reporting and inventory management practices leading to improved operational results. |
Retail Pharmacy Profitability on 90 Days’ Supply Prescriptions
| Industry | Retail Pharmacy |
| Problem | A retail pharmacy chain was concerned whether aggressive third party 90 day reimbursement rates were profitable and if third party contracts should be continued for 90 days’ supply. The retail pharmacy chain feared they were losing money overall on 90 day prescriptions, particularly with brand medications. |
| PHSL Solution | PHSI first collected and analyzed the claims of the largest third party plans served by the pharmacy chain. The prescriptions were categorized into four prescription types: 30 day generic, 30 day brand, 90 day generic, and 90 day brand. These segmented claims allowed PHSI to evaluate the profitability of each group independently. |
| Results | After reviewing the claims data, PHSI was able to demonstrate the value of the 90 day contracts with the client. PHSI explained that while there was some loss on selected 90 day brand prescriptions, they are marginally profitable. However, 90 day generic prescriptions are the most profitable of the four segments analyzed. The ratio of profitable 90 generic prescriptions more than made up for the few unprofitable brand prescriptions. The resulting analysis supported the overall profitability of 90 day at retail contracts and provided insight for the client on the various profit margins for each subgroup of prescriptions. |
Generic Discount Programs – Monitoring and Measuring Uptake and Retention
| Industry | Retail Pharmacy |
| Problem | A mid-sized regional pharmacy chain implemented a generic discount and free antibiotic program with assistance from PHSI. Years later, senior management wanted to measure the value these programs brought to the pharmacy. The chain lacked the resources needed to analyze the data and evaluate the financial impact of the programs. |
| PHSL Solution | The client provided PHSI with transaction data used to measure uptake and retention from the generic discount and free antibiotic program. PHSI also measured patient, prescription and dollar volume for each program segment and determined the additional business program patients bring to the pharmacy in the form of non-program prescriptions. |
| Results | PHSI continues to monitor drug movement, producing actionable reports with recommendations allowing the client to fine tune their program to meet sales and profit objectives. |
PHSI Identifies $3 Million in Opportunities to Improve Gross Margin
| Industry | Pharmacy |
| Problem | A national long term care (LTC) provider was concerned that they were not maximizing third party margins based upon their prescription pricing and operational procedures. They needed outside expertise to provide an independent assessment of their pricing strategies and negotiating tactics with PBMs. |
| PHSL Solution | PHSI reviewed pharmacy operations and pricing as it pertained to the third party contracts. PHSI developed model contract language for the client to use to maximize reimbursement. We undertook an exhaustive claims analysis to identify opportunities to improve pharmacy margins through changes in procurement, pricing, and staff training. Functional specifications were developed for the client’s IT department to write software code to insert into their proprietary dispensing system to realize the margin opportunities and prevent losses. |
| Results | PHSI identified over $3 million in opportunities to improve margins and the client has implemented PHSI’s recommendations to improve profitability. |
Pharmacy Chain Pricing Support
| Industry | Retail Pharmacy |
| Problem | A pharmacy chain needed to revise their prescription pricing strategy as they implement a new pharmacy practice management system. In addition, the system needed to display the preferred generic drug manufacturers to pharmacy users in order to assure proper drug product selection to control and ensure uniformity across the chain. |
| PHSL Solution | PHSI worked with the pharmacy administrator to develop pricing formulas that allowed the company to properly price their prescriptions and assure profitability. PHSI created files which included the necessary pricing information and proper references for preferred generic drug products. These files make it easier for pharmacists to select the most cost effective drug when substituting for the brand. |
| Results | The pharmacy chain was able to implement their new pharmacy management system on schedule and with up-to-date, accurate retail cash pricing and algorithms. The pharmacy chain’s administrative implementation work load was decreased. |
Nursing Home Pharmacy’s Operations and Financials Dramatically Improved
| Industry | Pharmacy |
| Problem | A privately held nursing home company with ten facilities opened a pharmacy to service their homes. Pharmacy management had failed to improve operating results and additional funding was required from the parent company. |
| PHSL Solution | PHSI worked on site with the chief operating officer and general manager to evaluate the functional areas, understand the workflow, assess the capabilities of the dispensing system, and create a turnaround plan. A perpetual inventory system was created using dispensing software and purchase information from the wholesaler. PHSI helped the company set specific goals for inventory turns that enabled the pharmacy to free up $300,000 in inventory while maintaining service levels. Operational reports were created to assist management in assigning duties to the staff. Meetings were held with the pharmacy billing staff, facility administrators, and directors of nursing to discuss outstanding prior authorization issues, requests from facilities for non-covered items, and cycle fill procedures. A standard set of operating processes and procedures were jointly developed and implemented to improve operating efficiency and profitability. Pharmacy workflow was revamped to increase dispensing efficiencies and better allocate resources to improve customer service. |
| Results | Ownership regained control of the pharmacy operation with new business processes and internal controls that freed up over $400,000 tied to excess inventory, supplies, and staffing. |
PHSI Helps Supermarket Chain Move Toward Providing Pharmaceutical Care
| Industry | Retail Pharmacy |
| Problem | A division of a national supermarket pharmacy chain was exploring the idea of implementing patient care services but had been unable to determine, prepare, and present a business case to senior management on how to proceed. |
| PHSL Solution | After identifying the client’s needs, wants, and desires, PHSI targeted strategic areas that needed to be addressed including software, training, marketing, opportunity cost analyses, compensation, and payment for services. |
| Results | A business plan was developed and presented to senior management driving the stalled project to completion. |
Pharmacy Validates Business and Information Technology Practices
| Industry | Retail Pharmacy |
| Problem | A client needed to validate a recently completed project that documented business and information technology practices for its pharmacy operations. They wanted a best practices comparison with leading organizations in the industry. |
| PHSL Solution | PHSI evaluated the new business practices relative to industry best practices and provided the client with a report outlining the findings through a GAP analysis. |
| Results | The client used the research to plan enhancements to its own product development list to improve pharmacy efficiency and profitability. |
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968 Perry Highway
Pittsburgh, PA 15237
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Phone: (412) 635-4650
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