Specialty drug consignment programs – which place distributor-owned product at hospital sites – can offer providers significant cost savings, immediately – in addition to flexibility, product availability and control.
That’s the key message that Bethany Huffman, National Consignment Executive, Specialty Pharmaceutical Distribution, shares with hospital pharmacy leaders throughout the United States, in her efforts to dispel common myths and misconceptions regarding consignment models – which she views as essential to containing rising specialty drug costs.
“In today’s healthcare environment, there’s more pressure than ever before on hospitals to do more with less,” said Huffman. “However, the increased use of specialty medications—which can have an unpredictable demand and can often carry higher price tags—can make it more challenging for hospital pharmacies to contain costs. That’s why it’s so important that hospitals consider adopting a consignment model for managing their specialty drug inventories. The consignment model offers cost savings by ensuring that hospitals only pay for the specialty medications they actually dispense to patients.”
Huffman says that when hospitals use the consignment model for specialty medications, Cardinal Health manages the slower moving products—cycling-out short-dated or expired inventory, and absorbing all the risk related to product obsolescence.
She says most hospitals still use a traditional ownership model for specialty drugs – even though it frequently leads to waste – oftentimes because of misconceptions about how the consignment model works. Here are five truths Huffman says can help clear up those misconceptions:
- Cloud-based technology gives hospitals the inventory flexibility and visibility they need. The Cardinal Health RxID® cloud-based inventory management platform enables hospitals to track and manage consigned medications online or through the mobile app. You can easily add, use, relocate, return and reconcile inventory with no need for IT involvement, and with no software.
- Automated technology ensures continuous product availability. Powered by automation, the Cardinal Health Consignment Program provides the same level of product availability as traditional ownership models.
- RFID refrigerators aren’t required. The Cardinal Health Consignment Program can be managed with a hand-held barcode scanner or an app. This is particularly helpful for hospitals whose pharmacies don’t have room for an RFID refrigerator, and for hospitals that store medications in multiple locations.
- Split invoicing helps optimize 340B savings on specialty medications. Cardinal Health RxID® technology also enables hospitals to take advantage of the benefits of consignment, while billing separately, and compliantly, for specialty medications that are eligible for cost savings through the Federal 340B Drug Pricing Program.
- Network-wide visibility into specialty medication inventory and utilization. For hospitals and health networks that have multiple locations, our dashboards provide visibility into consigned specialty medication inventory at each location. This makes it easy to share and transfer specialty medications in emergent situations – while leveraging automation to ensure the right facilities’ inventories are replenished and billed.