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Practical Information for Formulary Management, Procurement of Oncology Medications

TOP November 2015 Vol 8 No 4
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Austin, TX-Oncology formulary management is a complex process requiring a structured approach and multidisciplinary engagement, according to Lindsey B. Amerine, PharmD, MS, BCPS, who spoke at the 11th annual Hematology/Oncology Pharmacy Association conference.

Formulary Management Structure

The Academy of Managed Care Pharmacy (AMCP) defines a formulary as a "continually updated list of medications supported by evidence-based medicine, judgment of physicians, pharmacists, and other experts in the diagnosis and treatment of disease and preservation of health."

"A formulary is the list of medications that you've agreed upon within an interdisciplinary environment, and that your hospital will routinely stock," explained Dr Amerine, Assistant Director of Pharmacy, University of North Carolina (UNC) Medical Center, and Assistant Professor of Clinical Education, UNC Eshelman School of Pharmacy, Chapel Hill.

According to AMCP, a formulary management system is the promotion of high-quality, affordable care for patients by selecting medications through interdisciplinary assessment of current, evidence-based literature. "A formulary management system is all-encompassing," she noted. "The bottom line is that we want to make it safe, effective, and affordable."

Medication Procurement

Formulary drugs are always kept on hand, and the process for ordering these drugs is driven by periodic automatic replenishment (PAR) levels. "We try to make the procurement of formulary drugs very streamlined," said Dr Amerine. "From an operational and staff perspective, they know that formulary drugs will always be there."

PAR levels for formulary drugs are based on a few principles, as outlined by Dr Amerine. Usage data and frequency of shipments are taken into account, and any adjustments are based on prior 3-month purchases. "Any changes to the PAR levels have to be approved by supply chain and oncology leadership so that we can make sure we have appropriate drugs on hand at all times," she explained. "And if we know our usage is going to increase, we want to be able to adjust it appropriately."

Procurement of formulary drugs for use in an acute care setting is a different process than the one in an ambulatory care setting. In acute care, Dr Amerine and her colleagues developed a model to account for having the drug on hand at least 80% of the time. "While that may seem low, even if we had to get it from some other institution in our area and it was delayed an hour or 2, the patient is still in the bed, so there's not a big urgency to keep even more of that drug on hand," she explained.

Dr Amerine and colleagues account for ambulatory drugs being kept on hand 99% of the time. This is very important because they don't want to run out, or have outpatients waiting 1 to 2 hours for a drug.

In addition, Dr Amerine suggests setting minimum and maximum PAR levels for formulary drugs. In her pharmacy practice, the minimum PAR level is set to account for the maximum number of patients between shipment cycles, and also accounts for drop-ship items and specialty distributors. The maximum PAR level is set to account for 1.3 of the minimum PAR level, or enough to treat ≥2 patients. "When I first started we ran out quite a bit. We didn't have the minimum levels set up properly in the ambulatory environment, and we didn't have enough drugs on hand to treat our maximum line of patients," Dr Amerine said. "But this system has worked successfully; since we started, we haven't run out of drugs."

Nonformulary drugs are not kept on hand. Orders for these drugs are first reviewed for appropriateness by a Drug Information Specialist, and require a 72-hour lead time, she explained. "This structure is put in place for physicians so they know they have to give us warning that a drug needs to be filled," stated Dr Amerine. "We don't want a patient to be in the chair and we don't have the drug they need because it's not formulary." There is a lot of structure involved in the process, she added.

Managed Inventory

"We've also developed perpetual inventory to make sure that our counts are right," Dr Amerine explained. "I don't care how much you educate; somewhere along the way, something slips through and your count gets off by 1." She suggests weekly cycle counts, and the use of metrics (eg, monthly audits of cycle counts).

"Every Friday evening our technicians carry out weekly cycle counts for all drugs," described Dr Amerine. "We're actually able to see which drugs got touched, so if 1 drug was touched 3 times in a month instead of 4, I know we didn't appropriately cycle count that one. So we also keep track of how well we're doing cycle counts."

Keeping track of inventory turns is another useful metric. "We've been able to increase our inventory turn amounts by decreasing the difference between the maximum and the minimum on our PAR levels, and by not keeping nonformulary stock on hand," she noted.

"It's a lot of work to go through every line item, but it's definitely worth it in the long run," stressed Dr Amerine. "The ultimate goal for oncology pharmacy leadership? Do not run out."- MB

Last modified: July 22, 2021