RIMS

A Returning Problem

They’re back…your pharmacy’s returns processing company. They’re going to perform your quarterly inventory sweep, inventory the returnable products, write-up Form 222’s for your Scheduled II products. Then at their processing facility, they will document product lot numbers, expiration dates and exact quantities. They will then forward your returns to the manufacturers for credit, sometimes in a batch process. This process may result in you not receiving your entitled credits. We can explain why if you call us. Also, they will have your non-returnable outdates destroyed, most likely by incineration which is not necessarily good for the environment.

The fee for your returns processing service has fallen since third party reverse distributors have entered the pharmaceutical supply chain…

and you feel good about the reduced costs…

but your good feelings should be limited…as the cost of your outdated pharmaceuticals is not the fee you pay for their processing…rather it is lost inventory value of your non creditable returns.

RIMS

Cost of Returns

Here are some facts about the true cost of returns. The following spreadsheet identifies the pharmacy returns for five (5) hospitals in Florida:

Cost of Pharmacy ReturnsFlorida Hospitals

Creditable Product Value

Pharmacy Name Pharmacy No Returns No Partials Exp DateProduct

ExceptionPartial

ExceptionPartial

MinimumTotal Lost ERV by Pharmacy

Hospital Pharmacy 1 $144,252.46 $39,533.90 $34,009.12 $36,262.83 $28,434.34 $0.00 $97.64 $138,337.83

Hospital Pharmacy 2 $33,976.44 $5,400.37 $18,050.29 $3,000.04 $6,523.85 $101.34 $133.14 $33,209.03

Hospital Pharmacy 3 $532,240.03 $57,576.51 $104,173.54 $33,775.88 $81,550.53 $226.80 $609.42 $277,912.68

Hospital Pharmacy 4 $287,231.06 $51,882.15 $59,945.26 $25,259.69 $51,495.10 $886.41 $438.10 $189,906.71

Hospital Pharmacy 5 $183,157.24 $56,890.32 $41,949.37 $16,585.79 $25,428.16 $643.69 $397.06 $141,894.39

$1,180,857.23 $211,283.25 $258,127.58 $114,884.23 $193,431.98 $1,858.24 $1,675.36 $781,260.64

$1,962,117.87Percent of Returns - Creditable 60.18%Percent of Returns - Non-Creditable 39.82%

Totals

Inventory Value of Returns*

Non-Creditable Product Value

RIMS

Unhappy Returns

Bed sizes for the hospitals range from 79 to 353. As you can see, the cost of returns is not the processing fee charged by the hospital’s reverse distributor (6.9% or $81,479 of the estimated credit value) but rather the lost inventory value of the expired products that did not qualify for credit which totaled $781,260 or 9 ½ times greater than the processing fee.

Par level determinations by your providing wholesaler or distributor do not include your pharmacy’s returns history and are inflated and thus inaccurate. Credit optimization assistance from your third party reverse distributor does not address the need to control inventory levels and thus eliminate returns.

Let Cost Control Solutions perform a little magic on your pharmacy inventory and make your returns disappear. Call us today for an honest discussion concerning inventory control and the benefits of the CCS Par Level Service.