Buyers Beware (of a Formulary Spreadsheet!)

Did you know there are still spreadsheets posing as effective formulary tools? I know, right? 

Believe it or not, some pharmacies have yet to make the leap to a formulary management solution like Formweb, citing costs and implementation time. The benefits to the healthcare system formulary are mostly obvious, but a less obvious benefactor is the pharmacy purchasing team. 

While Formweb is generally implemented through the pharmacy, the pharmacy purchasing team at several of our clients has also realized some actual cost savings using Formweb. Here are three ways a formulary management solution can save money when used by purchasing. 

Hospitals often substitute a low-cost drug for a high-cost drug with similar therapeutic effects. This allows the hospital to reduce costs while still providing high-quality patient care. 

A Colorado analysis of 1,000 generics found that high-cost generics were, on average, 15.6 times more expensive than their therapeutic alternatives. Shockingly, if facilities had used lower-cost alternatives, total spending would have been reduced by 88.3%.

While a spreadsheet may be able to list approved therapeutic alternatives, maintaining that list is a beast, and quickly accessing the necessary drug information is just not happening. On the pharmacy purchasing side, a spreadsheet does not allow them to efficiently access and manage the information they need to make cost-effective buying decisions like real-time updates on usage, drug availability, and, of course, pricing. 

Dumb question incoming … Speaking of drug availability, has anyone been affected by shortages lately? Drug and medical supply shortages due to natural disasters, supply chain challenges and regulatory issues have been rampant and debilitating this year, so why make things more complicated by relying on a spreadsheet? 

A formulary management solution can provide the purchasing team with the shortage reporting and notification they need to find alternatives and give advanced warnings to clinicians. Many of our clients use Formweb to communicate shortages to the organization - both their own system shortages and the national shortages published by ASHP.org and the FDA. 

Both links to outside resources and a custom list of organizational shortages can be housed in Formweb as can be seen in this demo. ***This image is from the Formweb.com/demo website and should not be relied on for the most up-to-date information on shortages.

The pharmacy purchasing team often works with a larger group consisting of the pharmacy director and clinicians to address shortages and workarounds like substituting doses, accessing another facility's inventory or therapeutic exchanges for similar drugs. 

The ability for anyone within the organization - from the PharmD to the purchasing group - to access current shortage information quickly improves patient care and outcomes.  It’s a win-win-win!

3. Use Data To Get Volume Discounts
Now, we know a spreadsheet can’t do this. With advanced reporting and analytics, a formulary management solution provides the purchasing team with the ability to:

• Identify cost-saving opportunities through therapeutic interchanges
• Make data-driven decisions by reviewing site usage.

This can include negotiating lower prices with manufacturers or suppliers based on purchasing trends.  Plus, on the inventory side, a formulary management solution allows you to manage inventory efficiently, use drugs that are efficacious, and minimize waste.

A Bonus Benefit! 
In 2023, Charlotte Dixon, Manager of Pharmacy Contract-Utilization at Ochsner Health System, shared her experiences with Formweb. One of the main highlights?  The consistency Formweb provides, especially for a large and growing system. No longer is one person in charge of overseeing that darn spreadsheet, which can lead to errors or mistakes. Formweb allows more options for approved access and also a consistent record of drugs and documentation that will still go on after an employee leaves the organization. 

Want to Learn More?
If you have more questions about formulary management solutions or Formweb, please check out this blog about Duke University Hospital’s 13 years of Formweb use; they’re some of our most loyal and longest clients. Also, check out why we are passionate about patient safety. It’s truly a personal mission to prevent tragedy from striking another family. 

As always, if you’d like to ask questions directly, please email me at info@rpharmy.com.  We’re here when you’re ready to make the leap from spreadsheets to smarter solutions.