DPO: Optimized Drug Procurement Planning with Proven Results
DPO uses the latest in optimization mathematics to model the constraints of wholesaler agreements, direct supply offers and inventory management guidelines to quickly generate an optimal procurement plan to fulfill a given demand profile. Simultaneously considering millions of variables, the optimizer drives expenditures to the absolute lowest amount, directly benefiting the bottom line.
Unlike Excel workbooks, DPO can instantly react to market fluctuations and regenerate plans in a matter of minutes. You can even work “offline”, in order to experiment with multiple scenarios and compare them side-by-side. The system is highly visual and interactive, featuring custom-designed reports and integration with external data sources.
Contact us today to schedule a demonstration of the Drug Procurement Optimizer!
DPO uses an optimization engine to fulfill market demand by selecting between brand and generic drug options (when the option is available), in consideration of spending and generic compliance-based discount incentives. For example, the DPO might recommend purchasing a brand drug in order to reach a higher spending discount bracket, or a generic drug to achieve better generic compliance.
DPO incorporates multiple purchasing periods and allows for inventory carryover if higher savings are possible as a result. Inventory management rules can be configured by the user in the interactive data input screens.
A scenario management tool allows you to perform analysis in an “offline” environment. Here, you can experiment with the effects of generic product launches, inventory management rules, or different projected demand profiles. Using the scenario comparison tool, you can get a side-by-side view of the key differences between any two scenarios. Results can be easily recalled and exported to a number of different media including Excel, PDF, or external data systems.
Run the optimizer against past purchases to identify areas for improvement, or use it to generate a procurement plan based on projected demand. Perhaps most importantly, use DPO to monitor your current contract position and adjust your procurement plan to maximize savings while obliging wholesaler requirements within a given time period.
- Optimizes procurement planning
- Scenario management tools allow for risk-free experimentation and analysis
- Generates detailed reports describing procurement decisions and projected inventories
- Customizable to meet the unique needs of any Pharmacy Benefits Manager
DPO streamlines the process of drug procurement planning, drastically reducing the amount of manual labour, and allowing much more time for scenario analysis and experimentation.
By applying DPO against historical purchases, we can calculate actual savings in dollars that would result from a DPO implementation. A recent implementation resulted in a 5% reduction in annual expenditures, or about $1,000,000!
- Optimal procurement plan generated in minutes
- Standardized decision process across multiple users
- Instant evaluation of direct manufacturer supply offers
- Visibility of projected stock inventory levels and values
- Three modes: historical analysis, forecast planning and intra-period maintenance