John Karwoski, RPh, MBAJDJ Consulting, LLC

john@jdjconsulting.net03.19.2014

Buying Group Yes or No, Group Name

Yes HPG

Yes Broadlane

Yes Med Assets

Yes HPG

Yes PSS

Yes Med Assets

Yes Novation/Med Assets

Yes Broadlane/Med Assets

Yes Med Assets

Yes Provista

Yes Provista

Ofirmev on Formulary Yes or No

Yes NoYesYesNoNoNoNoNoNoNo

Caldolor on Formulary Yes or No

Yes NoNoNoNoNoNoNoNoNoNo

Yes NoYesYesNoNoNoN/AN/AN/AN/A

NoNoNoNoNoNoNoNoNoNoNo

NoNoNoNoNoNoNoNoNoNoNo

Acquisition Costs:

Selected Drugs

Not Given$6.47$8.00$2.36$3.34$3.98$2.19$6.47$6.59

$32.37/Box 5$2.43

Not Given$1.05$4.00$0.36N/A

$0.72$0.42$1.08$0.55

11.08/Box25N/A

Not Given$0.30$1.40$1.42$0.49$0.53N/A

$1.42$2.80

22.53/Box 25100mg/ml $.90

Most drug cost comes directly off the bottom line

Drivers of Drug CostNew TechnologyNew pharmaceutical are more costly than

the older version – ARE THEY WORTH THE COST?

P and T must review the data to determine the relative effectiveness, relative toxicity, relative cost and relative benefit.

Some are worth it and some are not but you need to analyze

Drivers of Drug CostNew technologyContract complianceInefficient purchasingInefficient processingWastePackaging and unit sizePhysician preferenceAdverse events

Drug CostDrug Cost Components

AWP – what is cost?Contract with buying groupContract with wholesalerWastageOut datesOverchargesBilling ErrorsInventory Management

Inefficient PurchasingInjectionsZofran $10.44 vs. Ondansetron $0.76

Lanoxin  $3.06 vs. digoxin inj $1.70

Zantac $ 3.91 vs. ranitidine $0.95

Lopresson $14.00 vs. metoprolol $1.43

Suprane Vendor 1 $193.24 vs. Suprane Vendor 2 $ 173.80

These are examples of findings from a recent JDJ review of ASC invoices

Drivers of Drug CostWholesaler overcharges – who

checksOutages- who is responsibleOutages – are you reimbursed for

themReverse distributor

Opportunities

Inventory Cost Wholesale contractBuying group contract

Management of Drug CostEfficient ManagementFormulary managementBuying GroupWholesaler contractUtilization of generics day 1Utilization of therapeutic interchangeCheck invoicesCharge backsReduce waste Inventory management

Drug costWho is managing your drug cost?

NoNoYesYesNoNoYesNoNoNoNo

NoNoNoNoNoNoYesNoNoNoNo

NoNoNoNoNoNo

Based on BehaviorNoNoYesNo