(Management Case Study) Low-Hanging Fruit: Utilization of Pharmaceutical Returns Reports to Drive Formulary Changes

Purpose: Minimizing medication waste is important for lowering drug spend and reducing the environmental impact of health-system pharmacies. At our institution, a small workgroup consisting of pharmacy supply chain, performance improvement, and formulary management representatives began meeting regularly to review pharmaceutical returns reports to identify opportunities for formulary optimization and waste reduction. Previously these reports were only reviewed by the supply chain team. The purpose of this presentation is to share our experience so that other institutions can adopt this relatively simple cost-savings initiative.

Methods: The workgroup meets biweekly to review new and historic quarterly pharmaceutical return reports. Non-creditable returns with a value of over $10,000 are prioritized highest, followed by creditable returns over $10,000, followed by any return over $5,000. Each line item is assessed by the team for formulary optimization by examining historic usage, available product presentations, and formulary alternatives. If a formulary change (e.g. removal from formulary, transition of the medication to a formulary non-stocked status, restriction to outpatient use) may be indicated, subject matter experts and key stakeholders are engaged for input and approval and the change request is brought to the Pharmacy & Therapeutics Committee. Other interventions, such as inventory max and par levels, may also be recommended by the workgroup.

Results: Within the first 12 months of workgroup formation, 117 line items from pharmaceutical waste reports received between Q1 2021 and Q1 2024 were reviewed. This resulted in 31 formulary actions either completed or in progress. An additional 15 changes to inventory max and par levels were made. In total, 38.5% of medications reviewed had a resultant action taken to reduce waste. The value of expired medications with a resultant action was nearly $1 million over the 13 quarterly reports reviewed. Additionally, over $100,000 of medications were returned for credit prior to expiration after identifying overstock as a result of this initiative. Specific examples will be provided during the session.

Conclusion: Pharmaceutical returns reports are readily available resources for identifying opportunities to reduce future pharmaceutical waste. Collaboration within the Department of Pharmacy can ensure that this valuable information is used for continual performance improvement and formulary optimization.