CASE STUDY - PHARMACEUTICAL

Opportunity:

A large mental health hospital located outside of Philadelphia, PA had been purchasing an annual volume of roughly $600,000 of pharmaceuticals and certain over-the-counter medications from a local pharmacy. The organization had a long-standing relationship with the pharmacy and had never explored any alternative sources of pharmaceutical supply. In addition, a seven (7) year-old contract had never been renegotiated, and had rolled over to a month-to-month arrangement, and prices have steadily increased every year.

Challenge:

Purchasing Management Associates, (PMA), was hired to assist the organization in reducing costs, creating efficiencies, and identifying any additional opportunities within this expenditure category. 

Strategy:

PMA employed the following strategy:

• Analyzed historical usage
• Assembled a cross-functional team of end users to ensure feedback from all disciplines throughout the organization
• Developed a comprehensive Request For Proposal, (RFP), including annual volume, and qualitative requirements to five (5) best in class suppliers
• Provided the Team with vendor responses, (sanitized of company name), to be graded in a qualitative grading matrix
• The top three (3) vendors chosen by the team were invited to present their proposed solution
• The Team selected one (1) bidder to be the prime outsourced Pharmaceutical Supply Vendor

Results:

• Electronic invoicing tied directly to Accounts Payable
• Increased reporting capabilities
• Online ordering
• Better utilization of therapeutic interchange and generic medication usage
• PMA was able to negotiate a 16.4% savings

OR

Annual Savings Achieved = $97,008

 

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