Hospitals and pharmacies across the nation lose billions of dollars every year from disposing of expired or unused medications. For example, a hospital in Boston gets rid of $200,000 worth of expired drugs per year. If other hospitals followed the same process, the hospital industry would see a nationwide loss of $800 million per year.
Unfortunately, this “waste” problem extends to cancer drugs as well. A 2016 study projected that physicians waste $3 billion every year because of leftover cancer drugs.
Reducing the impact of medicine waste is a crisis that requires more attention. In recent years, third-party reverse distribution of pharmaceuticals has increased in prevalence, largely due to the need to optimize the arduous process of reconciliation and the need to enhance profitability.
What do Reverse Distributors do?
Reverse distributors help hospitals and pharmacies improve the ROI and compliance of their inventory by removing unused or expired pharmaceuticals and returning them back to manufacturers. These returns generate credit for healthcare organizations that can be used to purchase new medications, helping providers stabilize revenue and expand ROI.
Reverse distribution is most often provided in two different models: onsite service or box and ship service.
- Onsite Service: With an onsite reverse distribution service, representatives travel to the site of the hospital or pharmacy to take care of the packaging and carrier pickup, and review paperwork to ensure compliance. Using an onsite service can save companies hours of paperwork and free their staff to focus on the number one priority—patient care.
- Box and Ship Service: A box and ship service minimizes interruptions to the daily routine of a hospital or pharmacy. Prior to shipping, they are provided prepaid shipping labels and tamper-proof bags. Once technicians have filled out the necessary regulatory forms and packaged returns, they can ship the products to the reverse distributor on their own schedule. Reverse distributors handle the rest and email a closing statement.
Improving cash flow
Pharmacies are constantly faced with the challenge of stabilizing their cash flow. Third party credits and reconciliations often take 6 to 12 months with a traditional credit program. The long wait for return credit and the inability to anticipate when those funds will arrive can significantly impact the ability of a pharmacy to run its operations. Reverse distributors can lighten the weight of this financial burden by offering a rapid credit program, which provides return credits in advance of third-party credits and reconciliations.
Under a rapid credit program, the risk and turnaround are passed to the reverse distributor and the pharmacy can get credit back in as little as 30 days from receipt of returnable product.
For hospitals, the burden of the long reconciliation process is shortened. Meaning, they can reconcile accounts sooner and free up staff from bookkeeping, allowing them to focus on patient care and other responsibilities that keep the hospital running smoothly.
Safely disposing unused drugs
The disposal of unused prescription drugs and controlled substances is a public health issue. The latest survey shows that 6.4 million people in the US abused controlled prescription drugs in 2015. In 2016, 2.4 million Americans had a form of opioid disorder.
Reverse distributors offer programs that help hospitals and pharmacies remove pharmaceutical waste while maintaining full compliance with regulations established by the Environmental Protection Agency and the Food and Drug Administration. Typically, these programs include:
- Credit for Repackaged Controlled Substances: Reverse distributors provide a hassle-free, safe way to remove repackaged controlled substances from hospitals and pharmacies. A reverse distributor is tasked with ensuring its clients remain compliant with all federal regulations during this process.
- Consumer Drug Take-Back Program: To reduce pharmaceutical waste in the environment and to ensure the overall safety of local communities, reverse distributors often offer Drug Take-Back programs. As a part of these programs, reverse distributors provide the pharmacy with secure bins where customers can place their unwanted pharmaceutical products. Once they are full, the bins are shipped to the reverse distributor for disposal. This program is designed to reduce prescription drug abuse and avoid other safety issues by removing excess pharmaceutical products from the public.
For more information, please visit the Pharma Logistics website to learn what reverse distribution can do to improve patient care, community involvement and customer service.
