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Drugstore Management and Inventory Control
d. Achieve the lowest possible total cost: Gettingthe lowest possibletotalcost of
drugsandotheritemsarebasicaimofthecentralizedprocurementanddistribution
systems.
TYPES OF PROCUREMENT
A. Procurement from Medical Store Depot
Many medical store depots exist in different cities in India like Delhi, Chennai, Kolkata,
Karnal (Haryana), Hyderabad, Guwahati, etc., who are responsible for procurement of
drugs and other items. The main functions of these stores are:
i. Toprocureandsupplymedicines,surgicalequipmentsandotheritems,forwhich
requestisreceivedfromgovernmenthospitalsanddispensaries,etc.
ii. Toreceive,keepinstoreandsupplydrugsandallieditemsincludingvaccinessent
byWHO,UNICEF,andotherinternationalbodies.
iii. Tokeepstockandissueofdrugsrequiredunderanti-TB,anti-Leprosy,NMEP,RCH,
etc.includingNationalHealthandFamilyWelfareprogramacrossthenation.
iv. Tofulfiltheemergencyrequirementsoflifesavingdrugsacrossthenationduring
naturalcalamitiessuchasfloods,cyclones,droughts,riotsetc.andothers.
The government hospitals/CGHS dispensaries usually procure most of the
medicine from medical store depot. They quantify their needs and send to the
medical store depot in the indent form in the early financial year. Procuring is done
by medical store depot and then send the medicines to these hospitals/dispensaries
at the time of need.
B. Procurement from Manufacturer/Distributors
Procurement procedure: This procedure is applicable, when the drugs and supplies have
to procure from the manufacturer or distributor. In most of the situation, manufacturers
do not supply, they sell their items through the distributors appointed for India. It may
be due to involvement of lot of government formalities.
The following steps are involved in the procurement procedure:
1. Prediction of demand: Demandatstatelevel/districtlevelispredictedpriortothe
commencementofthefinancialyeartogetthecompetitiveprices.Itisfollowedby
initiationofprocurementprocedureaspernorms.
2. Deciding procurement strategy including technical specifications: It is
importantto frame anacceptable policyfor the procurementstrategybefore
initiatingthetendering.Forexample,procurementofdrugswithshortexpiry
requiresdifferentprocurementstrategyincomparisontonon-perishableitems
likehospitalbeds.
3. Mode of procurement: Thefollowingprocurementmethodsarefollowed:
i. Global tender/international competitive bidding: If supplies need import or
involvementofforeignfirmsisdesirable.
ii. Open advertised tender/national competitive bidding: Open tendermethod,
whichisacompetitivebiddingprocedure,isfollowedforpublicprocurement
inIndia.Itismostefficientandeconomicalwayforprocuringgoodsorgetting
work.Reasonablepricesareobtainedthroughcompetitivebidding.
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Textbook of Pharmacy Practice
iii. Limited tender (national/international):Inexceptional circumstances, this
methodis followed. Biddingis done through the involvement of qualified
suppliersasprovidedinapprovedlistandotherknownpotentialsuppliers.
iv.Single tender/direct contracting:The singletender system is appropriate in
caseofitemsincludingdrugsandequipment,whichareproprietaryinnature,
orwhereonlyaparticularfirmisthemanufacturerofrequireditemsoritems
meantforuseinextremeemergency.
v. e-tendering: Itisaninternetbasedtenderingprocesstofloattenders.Quotations
arealsoreceivedthroughinternet.Thecompleteprocessrelatedtotendering,for
exampleadvertisementofthetender,theselectionofvendors,etc.aredoneonline.
Inthe presentscenario,due toaccuracy,transparency, speedyand efficiency
andcosteffectiveness,e-tendersarepreferredbymostgovernmentandprivate
organizations.Throughe-tenderingprocess,nationalandinternationalvendors
canparticipate and get the best solutions to addresstheir issues. Moreover,
organizationsgetthemostcompetitiveratesduetoincreasedcompetitionamong
differentnationalandinternationalvendors.
Benefits of e-tenders
Itoffersseveralbenefitsas:
Reduced costs: Thereisreductionine-tendering process,which is associated
withtheusualtenderingprocess.Forexample,costinvolvedinadvertisingthe
tendersinnewspaperortradejournalsandinvolvementofpaperwork,etc.
Transparency: e-tendering avoids the corruption, malpractices and
mismanagement,henceitatransparentmethod.
Increased productivity: e-tenderingimprovetheproductivityoforganization,
dueto the involvement of lessnumbers of employees. The entireprocedure
isautomatic and followed throughinternet. The rest of the employees can
concentrateonothercrucialtasksoforganization.
No paperwork: e-tenderingprocessdoesnotrequireanypaperwork.Electronic
format is used tostore everyinformation, which iscirculated online.The
informationcanberetrieved,whennecessary.
Increased speed: Throughe-tenderingprocess, speedof the whole-tendering
processisincreased.Thereisnowaitingperiodaseverystepisdoneonline.
Live tender: Floatingthetenderdocumentonawebsite,keepitvisibleuntilthe
deadlinewhileadvertisingthetraditionaltendersinnewspapersandjournals,
keepitvisibleonlyforaday.Ithelpsinreachingtomorenumbersofsuppliers,
whocanprovideinnovativesolutions.
Standardized process: e-tenderinghelpstostandardizethecompleteprocurement
process.Thisisthereason,mostofthegovernmenttendersaregoingonline.
Low scope of errors:Manual errors areavoided or prevented duringthe
e-tenderingprocess.Duetouseofelectronicformat,itiseasytocomparedifferent
documentsandstatements,wheneverrequiredtoensureaccuracy.
Proactive approach: There is proactive approachin online tendering. In
electronicformat, organisationcaninstantlymakeanychanges,sendpost
addendumsandcorrigendum,anduploadsoftcopiesofthetenderdocuments,
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Drugstore Management and Inventory Control
whileitcannotbedoneintraditionaltenderingprocess,wheretendersare
advertisedinnewspaper.Inonlinetendering,completeinformationcanbe
notified;nolimitationonthesizeofthetendernotice.
vi. Quotation: Itisrelativelysimpleprocess,inwhichsuppliersarerequestedtogive
theirratesfortherequireditems.Itisrelativelysimplemethodincomparisonto
tenderprocess,whichavoidthemostoftheformalitiesinvolvedinthetender.
Fixedpriceisquotedtothecustomerinresponsetothetendernoticeinquotation
method.Onthe acceptance ofprice,it has alegalbinding,means, cannot be
changed.
vii. Purchase through contract: Here items are purchased through agreement
executed with the manufactured or their agents. Prices for the purchase of
medicines or other hospital items required for the hospitals are fixed on a contract
basis. This may be fixed quantity contract or short-term/long-term contract based
on fixed period of time.
4. Planningandnotificationoftenderdocument
5. Issueofbiddingdocuments
7. Openingandevaluationofthetender
8. Contractawarding
11. Notifytoconsigneefordelivery
12. Inspection,testing,andreceivingofconsignment
13. Approvalandstorageoftheconsignment.
15. Settlingtheconflict,ifany.Theconflictordisputeresolutionmethodology
shouldbeclearlyindicatedinthecontractdocument.
C. Procurement of Drugs from Local Market
The drugs and supplies are procured from the local market in emergency cases or when
the same drug/supplies are not available in the hospital or dispensaries. The hospital
approves some medical store on the basis of cost comparison. Then, particular item
which are not available can be procured from the market. In some cases, the three copies
of indent forms are made ready; one copy is for patient, on which basis, he can procure
directly from that particular medical store. In every case, the bill is reimbursed directly
to that medical store from the hospital organization.
Emergency Purchases
As a general rule, the requesting department is responsible for product included in list
of emergency purchases. Examples of emergency purchases are:
i. X-raytubewhichisdamaged.
ii. Partofequipment,whichisrequiredurgentlytoapatient.
iii. Product,notavailableinhospitalstoreinventories,buturgentlyneededfortreatment
oftraumaticpatient.
iv. Pharmaceuticalproduct,necessarilyrequiredforpatientinatraumaticsituation.
Person who is member of purchase committee or purchase committee will be required
to judge the authenticity of an emergency request. After making the judgement about
the authenticity, he can forward the request for the purchase of product if it is genuine.
Emergency purchases during regular working hours are to be complied through the
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Textbook of Pharmacy Practice
purchasing department. After making the judgment regarding genuity, purchase committee
issues a purchase order to the vendor, who can respond most promptly. Every hospital
organization has some limit on emergency purchase. The limit for emergency purchase
depends on size of hospital or type of hospital. For example, the limit for emergency
purchase may be `5000/for small hospital but it is more in cardiac caring hospital.
All requests exceeding limits must be processed in a requisition from the requesting
department and appropriate written documentation justifying the request for emergency
purchase. Emergency purchase requests, which exceed the limit are to be reviewed and
verified by the purchasing coordinator or authorized person prior to processing.
METHODS USED FOR THE ANALYSIS OF EXPENDITURE OF DRUGS
ABC Analysis
ABC analysis is based on cost criteria, generally followed in a big drugstore. In the ABC
(Always Better Control) technique, stock is categorized, into three categories A, B, and
C, based on their revenue.
A Items.Intheentireinventory,theseitemsareessentialandisofhighestcost.These
itemsconsistofapproximately20%ofthetotalproductswith80%ofrevenuevaluein
thebusiness.Itisconsideredasacategorywithminimumitemsbutmaximumvalue
intermsofrevenue.Hence,extrastockingisavoided,butonlyrequiredquantities
oftheseitemsareprocuredandkeptforminimizationofinvestmentontheseitems.
B Items. Itemsincludedinthiscategoryhasa slightly higher cost than category ’C’
items.Approximately,these manage 30%of totalnumber of itemsand govern 15%
revenuegeneration.Itisnotneededtomentionthatitemsinthiscategoryaremorein
numbersbutoflessutility.
C Items. Costwisetheseitemsareofleastvaluableamongallitemsintheinventoriesand
manage70%ofthetotalnumberofitemsoftheinventories.Ascomparedtocategories
AandB,‘C’categoryitemshavejust5%revenuegeneration.
In conclusion, category ’A’ signifies the most required items, ‘B’ suggests moderately
necessary items, while category ‘C’ items are least essential items.
VED Analysis
VED analysis for inventory management is based on importance of item. All of the
listed items are classified into three divisions:
Vital (V): Theseareessentialitems,whosenon-availabilityputa halt to hospitalor
businessoperation.Hence,theseitemsshouldbepresentallthetimeinstock,otherwise
businessorworkingofhospitalwillbeaffected.
Essential (E): Thisreferstoitemsthatarelessneeded.Thesearerequiredinlessquantity
torunthehospitalorbusiness.
Desirable (D): Theselisttheitems,withlowestcriticallyneeded.Theshortageofthese
itemswillnotaffectthefunctionofhospitaloraffectproductioninbusiness.
ABC-VED Matrix Analysis
By cross-tabulating the ABC and VED analysis, the ABC–VED matrix is formulated. The
resulting combination has given three categories: I, II and III. AV, AE, AD, BV and CV
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Drugstore Management and Inventory Control
subcategories are included in category I while BE, CE and BD subcategories are a part
of category II, and the remaining item, CD subcategory is component of category III.
In these subcategories, the first and second alphabets denote their place in the ABC
and VED analysis respectively. The drugs included in category I need top managerial
control, whereas those included in categories II and III require moderate and lowest
managerial control respectively.
EXERCISE
Multiple ChoiCe Questions
Tick mark the appropriate choice
1. What is required to be fulfilled for effective inventory management?
(a) Functional need (c) Process reliability
(b) Customer demand (d) Sales forecasting of a firm
2. Which one of these models is good to calculate the timing of the inventory order?
(a) Economic quantity order model (c) Reorder level model
(b) Constant quantity order model (d) Constant inventory order model
3. Whole human blood, should be stored at ____________ temperature.
(a) 2–8° (b) 2–25° (c) 0° (d) 25°
short Questions
4. What are the objectives of procurement of drugs in hospital?
5. Write a note on emergency purchase in hospitals.
6. Mention the storage conditions for various types of items in drugstore.
long Questions
7. Discuss the objectives of inventory control? Illustrate the various methods of inventory control
with brief discussion.
8. Discuss the various types of procurement methods in hospitals.
Answer to MCQs
1. (a) 2. (c) 2. (a)
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Chapter
The drugs, which are not been approved by the drug regulatory authority or the legal
authority of the respective country for clinical use, are referred to as investigational
drugs. These may be defined as drugs, which have not yet received approval by drug
regulatory/legal authority of the respective country, but under question for clinical use.
Clinical study for investigational drug is recommended if drug is likely to support a:
• Newintimationfortheexistingdrug.
• Betterrouteofadministration.
• Modificationforinclusionorexclusioncriteriaintheapprovedpatientpopulation
Forexample,pediatricorapopulationatgreaterrisk(elderly,HIVpositive,etc.)
• Noteworthy change in the promotionof anapproved drugfor treatmentof
particulardisease.
PRINCIPLES FOLLOWED IN HOSPITALS FOR THE USE OF INVESTIGATIONAL DRUGS
Basic Principles
Safety profile of these drugs must be ensured for doing clinical studies on investigational
drugs in hospitals and related healthcare institutions. Policies for clinical studies on
investigational drugs should be framed, based on the following basic principles:
i. Theremust be assurance for adequate protection for the investigatorsalong with
staffsand especiallypatient, involvedin investigational drug studies in institution.
The institution must framewell-organized, clear-cutwritten accepted policies and
proceduresfortheapproval,managementandregulationofinvestigationaldrugstudies.
ii. Approvedandacceptedethical,legalandscientificstandardproceduresfordoing
clinicalstudies on investigationaldrugs, must befollowed by investigator,who
shouldhavequalification,relevanttostudies.
iii. Consenttosupportclinicalstudiesismandatoryfrompatientsorhis/herlegally
authorizedrepresentative,beforeinitiating the studies on investigationaldrugs.
Theconsentshouldbeinwriting.Thepurposeofclinicalstudiesandtherisksand
benefitsassociated withadministration of investigationaldrugs, shouldbe well
explainedbeforethecommencementofstudies.
iv. Itisaresponsibilityofinvestigatorforconductingstudiesinaccordancewiththe
protocolandmanagethecasereportfileandotherrelevantrecordsusedinthestudy,
asrequiredbysponsor,orinstitution,ordrugcontroladministration.
Investigational Drugs
20
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Investigational Drugs
v. Thereshallbesuitablefacilitiesprovidedbyinstitutiontoenableanddocument
thereceipt, storage, and packaging, preparation,labeling ofinvestigation
drugsunder properconditions. The administration should encourage in
makingawarenesstothenursingstaff,inventory and controlsystemsregarding
investigationaldrugs.
As a sponsor probably want to ship the investigational drug to clinical investigators in
many states, it must seek a permission for shipment of a drug across state lines (usually
to clinical investigators) before a marketing approval is granted. Investigation new drug
application is reviewed by drug regulatory authority to ensure the safety and absence of
unnecessary risk associated with new drug. The candidate drug usually enters a Phase
1 clinical trial, if the application is cleared.
GUIDELINES FOR INSTITUTIONS
Guidelines for investigational drug procedures are as follows:
i.The institutions,in which clinical study is done, must havecommittee like
institutionalreviewcommittee,orcommitteeon human investigation orclinical
researchcommitteetomonitortheclinicalstudyasperprotocol,legalandscientific
standards.Itisalsorecommendedbydrugcontrolauthority.
ii. Principalinvestigatororauthorizedco-investigatorsmusthavedirectsupervision
ontheclinicalstudyoninvestigationaldrugs.Othersupportingmembersmustbe
institutionalprofessionalstaffmembers.
iii.Consentofthevolunteers(patient)inwrittenformismusttoparticipateinclinical
studyon investigational drug,which isa prime task of principalinvestigator.
Theinformedconsentprocessmustbeasperrulesrecommendedbystatedrug
authority.
CLASSIFICATION OF INVESTIGATIONAL DRUGS
There are four distinct purposes, involved in the use of investigational drugs in hospitals.
It consists of the following:
i. Toestablishadrugclassification.
ii. Tocentralizepertinentinformationconcerningdrugsavailableforresearchuse.
iii. Todefinetheavailabilityofsuchdrugstostaffmembers.
iv. To establish a single stocking and dispensing unit within the hospital.
One simple classification, which can be adapted to any hospital research program,
is to categorize:
Class A: Should contain all investigationaluse drugs that are in a preliminary
experimentalstage.Theuseofdruginthiscategoryisusuallyrestrictedtotheprincipal
investigator.
Class B: Shouldconsistofinvestigationalusedrugs,whichhavepassedthroughthe
preliminaryresearchstage.Usually,drugsinthiscategoryaresuppliedtothedepartment
ofpharmacyby theprincipalinvestigator and aredispensedonlyupon hiswritten
prescription.
Class C:Is limited to drugs approvedby the USP, NF or passed bythe regulatory
departmentforcommercialdistribution.Drugsinthiscategorymaybeusedwithinthe
hospitaloritsclinicsifthephysiciancomplieswithsomespecificprocedures.
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Textbook of Pharmacy Practice
Class D: Drugsarepreparationswhichhavebeenacceptedforuseinthehospitaland
arelistedinthehospitalformulary.
Another simple classification which can be adjusted to any hospital pharmacy
operation, is:
i. General: Theapproveddrug,whichisinconsiderationforuseforpatientcare.After
acceptance,maybeprescribedbyallthemedicalpractitioners.
ii. Conditional: Underthis,drugsareconditionallyapprovedforcertainperiod
oftrial for general use. Conditional marketing authorizations are valid for
oneyearandcanberenewedannually.Committeeevaluateforgivenperiod
beforefinal judgementregardingapproval, may be givenconsent to all the
medicalpractitionerstoprescribethedrugs.DuringtheCOVID-19pandemic,
theconditional marketing authorizationprocedureisbeing usedtoexpedite
theapproval ofsafe and effective COVID-19 treatments and vaccines in the
EuropeanUnion.
iii. Investigational: These drugs are not approved for use by the drug control authority
but can be used under controlled clinical settings, which must be approved by the
Research Advisory Committee. Study protocol regarding investigational drug must
be submitted to the pharmacy department of the institution.
CONTROL OF INVESTIGATIONAL USE OF DRUGS
ICH Guidelines for Good Clinical Practice for safety, effective control and handling of
investigational drug/biologicals are comprehensively illustrated. Selected summarized
relevant criteria are as follows:
1. All the informationrelatedtoinvestigationaldrugsshould be senttoPharmacy
andTherapeuticsCommitteebytheprincipalinvestigator,along with following
information:
i. Newdrugnumber vii. Pharmacology
ii. Genericname viii.Toxicology
iii. Manufacturer ix. Doserange
iv.Chemicalname x. Methodofadministration
v. Proprietaryname xi.Antidote
vi. Generalchemistry xii. Therapeuticuse
Various forms areusually developed by pharmacies toprovide the above
informationonaninvestigationaltotheotherstaffincludingnursingstaffmembers.
Theseformsareasfollows:
Data Record for Physicians
i. Investigationaldrugname.
ii. Sourceofinvestigationaldrugs(e.g.manufacturerorothersource).
iii. Dosageformofinvestigationaldrugalongwithitsstrength.
iv.Howmuchquantityreceivedalongwithdateanditsbatchorcontrolnumber.
v. Pharmacologicandtherapeuticproperties.
vi. Precautionstobeobserved.
vii. Arrangements,whichisrequiredforitsadministrationofdrug.
Signatureofprincipalinvestigator____________
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Investigational Drugs
Data Record for Nurses:
i. Investigationaldrugname.
ii. Sourceofinvestigationaldrugs(e.g.manufacturerorothersource).
iii. Dosageformofinvestigationaldrugalongwithitsstrength:
iv.Pharmacologicandtherapeuticproperties.
v. Precautionstobeobserved:
vi. Arrangements,whichisrequiredforitsadministration.
Signatureofchiefpharmacist___________
Data Sheet for Pharmacists
Investigationaldrugname:____________ Source:____________
Maininvestigator:____________
Date Physician Volunteer Rx.no Quantity Wardno.
(name) (Patient)
_______ _______ _______ _______ _______ _______
2. Investigational drugshould be administered tovolunteer onlyunder the direct
supervisionofprincipalinvestigator'sorunderthesupervisionofaco-investigator.
3. Investigationaldrugshouldbesuppliedbyinvestigatoronlytoauthorizedperson,
whoisresponsibletoreceiveit.
4.Investigator isrequiredto document the disposal ofthe investigational drugs,
including dates of dispensing,quantity currentlyavailable for dispensing,and
quantityofinvestigationaldrugdispensedtoparticipants.
5. In case eitherterminationorsuspension of clinicaltrialoninvestigationaldrug,
unusedinvestigationaldrug/biologicalshouldbeeitherreturnedtothesponsor
ordisposedofasdirected/asmentionedintheprotocol.
6.Toprevent pilferage or diversion ofthe IND into illegal channels,especially if
theinvestigational drugcomes under the Controlled Substances Act, necessary
precautionsmustbetaken.Forcompliance,investigationaldrugmustbestoredin
asecurelylockedcabinetorothersecurelylockedconstructedenclosure,whichhas
limitedaccesstogeneralpublic.
Identification of Investigational Use Drugs
Labeling of class, A or class B investigational drug should be done in such a way, which
can enable easy differentiation from routinely used prescription drugs in hospital. For
example, labeling of investigational drug is done with red ink on white paper in some
hospital. Apart from this, there may be provision of indicating the code number allotted
to IND, along with patient name, serial number of prescriptions, name of physician
and direction for use. Double check relative to the identity of the drug dispensed is
facilitated by double set of number, number of prescription and drug code number.
Role of Hospital Pharmacist in Investigational Drugs Handling
Efforts are continued for getting more effective and safer drugs to prevent or treat
diseases with the aim to improve patients’ quality of life. Globally, research to develop
these new drugs is in continuous progress in healthcare system. All health professionals
involved in the development of research product are responsible for welfare of human
population.
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Textbook of Pharmacy Practice
As per American Society of Health System Pharmacists (ASHP). pharmacists
should play a pivotal role in the conduct of clinical studies on investigational drugs.
Pharmacist can be essential part of healthcare system in supporting clinical trials on
both approved and investigational drugs in present scenario due to their qualification
and knowledge. Some of the roles which can be performed by pharmacist are given
here:
1. Helping in the development of the plan for clinical trial.Pharmacistscansupport
inthedevelopmentoftheprotocolontheuseofinvestigationaldrugsinthehospital.
Fordispensingpurposes,theinvestigationaldrugsaresuppliedtothepharmacist
accordingtoawrittenorderissuedfromtheprincipalinvestigator.
2. Role in coordinating with team: In hospital, pharmacist act as an independent
coordinatorby maintainingcomplete recordsand codesin the handling of
investigationaldrugs.Itfacilitatestheinvestigatorstocodeinformationavailable
roundtheclock.
3. Role in collection, storage, and distribution of information related to investigational
drug: Thepharmacistmakesadatasheet(Table20.1)ontheinvestigationaldrug
basedonthebrochureprovidedbythemanufacturer.Thedatasheetprovidesall
informationabouttheinvestigationaldrugstomedical,pharmacy,andnursingstaff
members.Thisdatasheethasgivenbelowinformation:
• Categoryofdrugdesignationandcommonsymptomsinwhichthiscanbe
used.
• Dosageformalongwithstrength.
• Scheduleofdosagealongwithrouteofadministration.
• Pharmacologicalandtherapeuticeffects.
• Expectedpotentialundesirableeffects.
• Contraindications.
• Storageconditionsforstorage.
• Instructionstopreparetheformulationandadministration.
• Instructionsforunuseddosestodisposedof.
• Namesofprincipalandco-investigatorsalongwiththeircontactnumbers.
Principalinvestigatorreviewsthedatasheetontheinvestigationaldrugandthen
circulatesthecopiestotheappropriatepharmacystaffmemberandpatientward,
wheredrugissupposedtobeused.
4. Packaging and labelling of investigational drugs:Investigationaldrugsmustbe
properlyputinthecontainerasperstandardrecommendedbydrugregulatory
authority.
Table 20.1: Data sheet for investigational drug
Name of investigational drug: XXX Name of manufacturer: XYZ
Name of chief investigator ABC
Date of
Dispensing
Name of
physician and
order number
Name of
patient
Ward number Batch
number of
drug
Amount to be
dispensed