All pharmacies have a dynamic and vast supply-chain network they should manage, irrespective of whether it is part of a medical facility or an independent shop. The supply costs of any pharmacy are vulnerable to several factors which contribute to increasing costs and affect profitability.
The stock inventory projection should also be assessed accurately. Although pharmaceutical products tend to have a mid-term shelf life, overstocking still usually leads to a loss of value. Pharmacies should address important aspects like proper storage, expiration dates, and more.
This makes pharmacy inventory management a must-have for most drug stores today.
$1.6 Trillion
The total global pharma market was estimated at around $1.6 trillion in 2023.
$6.7 Billion
The number of medical prescriptions dispensed in the U.S. was around $6.7 billion.
CAGR of 9%
Pharmacy Inventory Management Market is expected to grow at a CAGR of 9% from 2023 to 2030.
The Architecture of an Inventory Management System in Pharmacy
Pharmacy is made up of several modules: inventory, deliveries, prescriptions, billing, loads of documents, employee, user management, etc. Managing these processes can be organized in the following architecture:
Inventory Management
In contrast to paper-based inventory (which is difficult to manage and is linked with human mistakes), inventory management pharmacy units allow pharmacies to look up stock levels, define the location of required items, and keep data updated as soon as someone buys from the pharmacy. Inventory management software also allows for data-driven decisions based on history: what drugs will be in demand for refills, time of the season, weather, and other factors.
Document and Data Management
Pharmacies deal with a vast range of documents (prescriptions, data, orders), so small notes are often lost, and documents require lots of space for storage. Pharmacy inventory software allows you to store the documents neatly in virtual folders so staff can find data just by entering keywords.
User Management
User management grants access to authorized users only. Pharmacies can establish role-specific access, meaning some staff will only get data about inventory while management will be able to explore the entire picture with analytics, sales reports, as well as the performance of specific employees.
Prescription Management
The prescription management module helps pharmacists to reduce the risk of stolen or faked prescriptions, receive e-prescriptions and process them faster, and get notifications regarding contradicting medications or allergies. This module allows for higher efficiency, lifts off the pressure of producing and selling controlled substances, and improves patient care.
Pharmacy Analytics
Analytics remains the most crucial pharmacy software module. It helps pharmacies to achieve business goals faster by offering a clear overview of the drug store’s performance over an estimated period. The performance analysis includes the following:
- Revenue;
- Biggest expenses and losses;
- Reasons for shortages;
- Customer behavior.
Reports allow pharmacies to manage their inventories better, optimize losses from lack of insurance reimbursements and adopt new practices safely.
eCommerce
Pharmacies, pretty much like hospitals, are considered to be among the places where the chance of getting a virus is always high (and now we are not talking solely of COVID, people have become afraid of offline shopping or clinic visits).
It makes sense to add an eCommerce module while developing pharmacy management software so the pharmacy is able to run its own website without creating it from scratch.
Multi-Store and Multi-Location Support
Large pharmacy chains are one of those who need pharmacy management systems the most – they need to manage several stores in different locations. The ability to see a bigger picture while still being able to take a look at individual points in detail becomes a must-have with multiple locations. Therefore, it is best to have analytics on each chain level and inventory management for further distribution.
Integrations
A healthcare data integration module means a pharmacy will be able to integrate with e-prescriptions, point of sales, and EHR/EMR systems. This module eliminates the need for manual data entry, which will only increase the employees’ workload and a number of mistakes.
Pharmacy Software Systems: Key Features
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E-Prescription
- Eliminate prescription errors by offering a user-friendly option for healthcare providers and patients.
- Reduce confusing paperwork and facilitates rapid dispensing of the right medication.
- Allows pharmacists to manage drugs, improve productivity, ensure quality care and patient’s satisfaction.
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Automated SMS Messages and Notifications
- Schedule reminders and send notifications to patients before their prescription runs out.
- Get feedback from patients.
- Drive personalized engagement between patients and pharmacies.
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Expiry Control
- Prevent huge losses from expired drugs and medical products.
- Pharma stores can keep track of expiry dates.
- Sell medications based on a first-in, first-out strategy.
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Stock Reorder Management
- Strike a balance between reordering and supply levels.
- See a clear picture of how medications sell (those in high/low demand and will be out of stock soon).
- Receive data to set a minimum stock level.
- Create time to easily place an order for new supplies.
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Centralized Database and Backup
- Eases the process of retrieval.
- Schedule automated data backups to avoid data loss in case of unauthorized access.
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Data Reporting and Analytics
- Review data-driven reports regarding the standard prerequisite of drugs and their performance.
- Manage medication inventory with various metrics, including ROI and sales.
- Calculate reorder points according to the product and category.
- Customize reports to check marketing insights, budgeting roadmaps, and patterns.
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Multi-Store and Multi-Location Synchronization
- Manage data and stocks across all points of sale.
- See comprehensive reports in a central database.
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Integration with Third-Party Software
- Integration with EHR/EMR systems, prescription monitoring programs, interactive voice response, point of sale software, DHL, and medical insurance verification software.
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Compliance and Regulatory Feature
- Stay compliant with primary regulations (HIPAA, GDPR, DEA, and more).
- Implement current security measures.
- Ensure the smooth handling of business activities.
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Customer Support System
- Improve customer satisfaction.
- Record patient data for effective data management.
- Automatically update patients’ lists to control patient treatment.
Pharmacy Inventory Management System: Operational and Financial Benefits
- #1: Increased Speed
- #2: Increased Accuracy
- #3: Improved Time Management
#1: Increased Speed
One in five U.S. residents will be of retirement age by 2030. Given that 87% of people between the ages of 65 to 79 use prescription drugs, pharmacies can expect a drastic increase in prescriptions to fill. Manual efforts will not effectively cover all needs and keep up with the demand. Pharmacy inventory management software will greatly increase each pharmacy’s productivity.
#2: Increased Accuracy
People make mistakes, regardless of how many checks, balances, and safeguards pharmacies implement. While making mistakes is expected, in the pharmaceutical industry (overall medical field), even the smallest error can lead to a financial and operational disaster.
On-hand stock accuracy provided by pharmacy management software assists in avoiding overstocking and stock-outs. Some solutions also help re-calculate optimal order points every month for each item or group according to the changes in dispensing.
#3: Improved Time Management
Manual data input and paper trails are not needed in today’s state. Inventory management software for pharmacies streamlines inventory tasks, freeing up technicians and pharmacists so they can focus more on patients and the care they provide.
Alongside the increase in patient load, new regulatory requirements and compliances are put into place often, and the requirements for medications increase. This forces pharmacies to transition from manual to error-free tools and processes. Inventory management is a clear step in this direction.
Pharmacy Inventory Management Types
There are 3 types of pharmacy inventory management:
Visual Method
The visual method requires medical staff to manually inspect the inventory. If the inventory of any drug appears insufficient to cover an upcoming demand, the pharmacy triggers a replenishment. In most cases, both pharmacists and technicians are usually too busy to place an order on-time and will often write themselves a note or commit the needed reorder to memory.
As a result, stock issues are not realized until it is too late. This method is not effective. It is an almost impossible task to keep up with constantly changing inventory stock and patient demand.
Periodic Method
Similar to the first option, the periodic method focuses more on performing basic inventory management tasks at specific routine intervals. Pharmacies may incorporate basic technology that can remove the need for manually updating each status as well as incorporating barcode scanning. Therefore, pharmacy staff inspects the inventory at specific periods: either once a week, month, or year.
Although more systematic compared to the visual method, the staff members may notice inaccuracies after status updates, so the method still relies on pharmacy personnel to make decisions based on their observations, experience, and analytical knowledge.
Perpetual Method
The perpetual method is used to measure inventory in real-time using a computer system. This system continuously and automatically updates on-hand quantities based on delivery and dispensing.
It utilizes an automatic replenishment system that guarantees medications are identified for reorder when the stock level either falls below or reaches a calculated replenishment point. Items identified by the system are then reviewed and accepted by the staff, removing the need for a visual inventory. The system electronically orders the items via EDI through the pharmacy management system.
Off-the-Shelf vs. Custom Pharmacy Management System
Ready-Made
You may have already encountered many off-the-shelf inventory management solutions. Most of them promise to instantly streamline any inventory management process with an easy set-up. Although these solutions are great for medical set-ups, they also have several downsides to learn before choosing which option to use.
Custom
Custom software development by a telemedicine app development company offers a highly personalized approach to technology implementation designed to cover customers’ unique needs. Every part of the solution, including security measures, the chosen technology, features, and user interfaces, are designed and developed in regard to the target user base, budget, particular business requirements, and existing processes.
Pharmacy Inventory Management System by Interexy
Electronic pharmacy inventory systems will continue to enhance the overall quality of care provided and help pharmacies optimize their operations. These systems also form a large part of the broader integrated care management strategy in large medical set-ups.
Get a quoteFAQs on Pharmacy Inventory Management
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What is a pharmacy inventory management system?
A pharmacy inventory management system is a software solution designed to track and manage pharmaceutical products within a pharmacy. It helps streamline the process of inventory control by monitoring stock levels, expiration dates, and orders. The system can automate purchasing, manage sales and returns, and generate reports for better decision-making. By using a pharmacy inventory management system, pharmacies can ensure that they have the right products available while minimizing waste and stockouts.
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How much does it cost to develop a pharmacy inventory management system?
The cost of developing a pharmacy inventory management system can vary depending on factors such as the complexity of the system, the required features, and the platform chosen. A basic system may cost less, while a more sophisticated solution, such as one with integrated pharmacy stock management system features, reporting tools, and mobile compatibility, can be more expensive.
Generally, the cost ranges from a few thousand dollars for a simple system to tens of thousands for a custom-built medical store inventory management system. It’s essential to define the scope and objectives of the pharmacy inventory management software before getting an accurate estimate.
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What are the most common features in a pharmacy inventory system?
Common features in a pharmacy inventory system include real-time tracking of inventory levels, automated reordering, stock alerts for low or expired items, barcode scanning, and integration with sales systems. Additionally, many systems offer reporting capabilities, such as tracking sales data and inventory trends. The system may also include inventory management in pharmacy tools, such as batch tracking, multi-location management, and vendor management, to ensure optimal stock levels and improve operational efficiency.
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What are the 4 types of inventory management system?
The four main types of inventory management system are:
- Perpetual Inventory System – Continuously updates inventory levels in real-time, offering accurate tracking of items at all times.
- Periodic Inventory System – Updates inventory records at regular intervals, typically after conducting physical counts of the inventory.
- Just-in-Time (JIT) Inventory System – Focuses on ordering and receiving products only as needed to minimize inventory costs.
- ABC Inventory System – Categorizes inventory into three groups (A, B, and C) based on value and turnover rate, helping prioritize stock management efforts.
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What are the best inventory management systems?
The best pharmacy inventory management systems include McKesson Pharmacy Systems, QS/1, and ScriptPro, offering features like automated restocking, expiration tracking, and EHR integration. Broadly, tools like NetSuite and Zoho Inventory are also popular for real-time tracking and flexibility. Choosing the right pharmacy stock management system depends on integration needs, compliance, and project specifics.
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“Working with Interexy has been incredible, the team is easy to communicate with, understands the healthcare industry in-depth and is always open to implementing new ideas as they come up. Solstice would not have been able to develop our MVP or test out our proof-of-concept without Interexy’s help and are grateful for the hard work and passion they have put in to our project.“