The Right Pharmacy Management System

Parag Damle & Kunal Puri

Abstract
The key benefits of pharmacy management systems - automating processes,
streamlining workflow and thereby enhancing the customer base - are
attractive enough to draw retail pharmacy chains competing in a world of growing
challenges. However, the choices are tough with a handful of products and the
high cost of customized solutions. This Infosys paper outlines some ideas on
selecting the right option.

May 2007
Challenges for pharmacy chains
Pharmacy chains competing for growth in the face of significant competitive challenges face a dire need to improve
productivity (to cope with the severe shortage of trained pharmacy staff) and revenue (in the light of reducing
reimbursements from insurance and government). To address these challenges, the need is for streamlined operations aligned with
their business objectives. As proven by leading Pharmacy chains, selecting the right Rx workflow system can provide a definitive
competitive edge in the marketplace.

Pharmacy Management Systems - An Overview

To enable operational efficiency across the chain, managements need to deploy the right-fit pharmacy management system. With
adequate due diligence and the right implementation approach, these systems can help with
• Addressing the shortage of pharmacists by streamlining and automating the workflow process steps. The system
should aim for efficient filling of prescriptions while freeing up pharmacists for customer consultation and allowing
technicians time for valueadded activities
• Streamlining operations through data sharing across store locations allowing patients to order / refill their Rx from any
store. Significant improvement is possible in this area with workload balancing and remote / distributed operations
• Segmentation of work process for efficient division of labor
• Systemic data checks to scan impact of drug combinations or drug allergies to ensure patient wellness and provide
counseling to improve relationships with the patient
• Enhancing customer satisfaction levels and repeat business through timely and consistent customer service

Pharmacy Management Systems - Critical Features

Pharmacy management systems must work unfailingly, flawlessly and seamlessly in complex multi-store, cross-geography
environments to enable drugstore chains to operate efficiently and profitably.
Some of the functionality driven critical features include:
1. Smooth workflow processes enabling external services such as third party payments, DUR (Drug Utilization Review),
consultation, wait time calculation, etc.
2. Integration capabilities for robotics/central fill, refill alerts, grouping of Rx‟s, point of sale (POS), reporting, order-to-
promise, order/inventory management, labor scheduling, etc.
3. Centralized view of data including patient history, inventory and ability to fill prescriptions anywhere in the chain,
vicinity store inventory view, Rx transfers
4. Ability to improve store productivity by off-loading activities to alternate locations using remote processing and
workload balancing
5. Maintain schedule and records of counseling activities, particularly for Medicare MTM requirements as well as allow
for electronic signature capture
6. Ability to extend services and integrate across channels, viz., e-commerce, eprescriptions, IVR/mail-order, kiosks,
concierge, etc.
From the architecture perspective, pharmacy management systems can be centralized with Corporate as the hub and client
terminals at the stores as spokes. An alternative could be standalone store-driven systems where frequent connectivity
with headquarters is not essential, or even a combination of the two. The model to be followed can be selected based on a
pharmacy chain‟s specific requirements.

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The technology features essential in a pharmacy management system include:
1. Scalability to add stores on the network on the same foundation / platform
2. No performance variations due to additional stores or increased transaction volumes. Ability to manage peak loads
considering a mix of 24 hour, extended hour and normal hour operations
3. Quick response to user query/user inputs
4. Restricted access based on functionality and role
5. Real time synchronization between Corporate and stores for fast and convenient data transfer
6. Robust downtime architecture. Ability to continue prescription processing with minimal impact on productivity in
connectivity breakdown scenarios
7. Flexibility to address specific requirements by setting rules and test/modify specific code areas
8. Reliable disaster recovery and back-ups with data storage at stores as well as at Corporate
9. Ease of maintenance
10. Ease of integration and data transfer with other systems such as IVR, Robotics, PoS, website, etc.
11. Ability to ensure quick roll-outs of enhancements / upgrades

Options for Retail Pharmacies

Pharmacy chains can choose between ready-to-deploy products, custom built products or buying out source code and
customizing it for their requirements.
The right choice will depend on factors like size, geographical spread and complexities of each organization. Their current state
with respect to system sophistication and process standardization are also important considerations.
Some critical factors that must be considered from the economic and implementation perspectives include:
• Effort and cost involved in developing/purchasing the base version
• Effort required to deploy the base version across a number of stores
• Development of user training modules and ease of transition
• Estimated long term maintenance effort and costs
• Effort and documentation for support team to stay abreast of developments
• Flexibility and ease of enhancements for future business needs
• Ability to run different versions in production, test and development for different environments and different
applications

The product route

Although most existing products cover the base requirements, the overall picture of ready-built pharmacy systems is not
encouraging. This is partly due to the lack of product choices in the field. Product vendors are yet to gain credibility with retail
pharmacy chains due to:
• Unfulfilled promises in terms of product launches
• Rigid enhancement regimes
• Generic products that have failed to address specific pharmacy needs
In addition, a string of mergers and acquisitions has given rise to concerns over the viability and sustainability of vendors in this
space.

Custom-built systems
Often for want of a better option, pharmacies have tried the custom build route. However, this option has had its own
share of failures. The exception to this is a custom built system at one of the largest pharmacy chains that has become the gold
standard in pharmacy systems. In fact, for over a decade, this system has helped provide the pharmacy a competitive advantage
by offering significantly advanced capabilities over all other systems

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Buying the source code
Another option for retail pharmacies is to buy out the source code from product vendors and customize it for their specific
requirements. With this option, retail pharmacies benefit from starting with an existing, working base version that can be
beta-deployed to quickly ascertain changes or enhancements to be made. However there are significant challenges even in
this mode:
• The source code version is often generic. If the beta deployment is not carefully planned and executed, it could trigger
a strong negative sentiment and scuttle any further deployments (or even enhancements)
• Since the pharmacy would own the source code, it needs to figure out the mechanism and impact of changes.
Frequently, the product vendor‟s commitment plummets after the sale is completed. Although some vendors may
continue to provide support, it could come at a steep price which could alter the economics and make the option
unviable
• There is a strong need for organizational and governance processes to manage the product without which success can
prove elusive. This is necessary as the pharmacy now needs to make arrangements to “manage the product” in the
future.

Key Decision Factors

Infosys believes that retail pharmacies need to consider the economics and their commitment to any option prior to
undertaking a pharmacy management system initiative. Equally important is conducting a thorough due diligence exercise to identify
challenges and strategies for their mitigation.
Economics - A custom-built pharmacy application for a mid-large pharmacy chain can start with an upfront cost upwards of $20
million. While the cost would rule out this option for smaller and regional chains, they could consider products offered on an ASP
platform. Although the ASP model in pharmacy systems is still in its infancy, the entry of a large vendor could help jump start and
stabilize it in the future.
Long-term commitment - On the custom-build route, it is not just the upfront investments that count. Any pharmacy
embarking on this journey must think like a software product vendor. Unless it can commit to nurturing its product for a
span of 5-10 years, this option could quickly succumb to the same issues surrounding other products and head for failure.
Due diligence - Above all, it is detailed due diligence of not merely evaluating the options but also in developing the road map
that will make the difference. Specifically:
1. If a pharmacy has invested in a product or the source code but is not very pleased with the outcome, it should
• Analyze if the problem lies with the foundation, the peripherals or the execution. Foundational problems are bad
news, but otherwise there is typically enough good to move forward although success may not be guaranteed. The
big problems usually pertain to:
i. Scalability / Architecture / Performance - While this could mean a problem is “foundational” in nature, it
can also be traced to „Big Bang‟ implementations. In such cases, taking a step back and evaluating a phased
approach can help.
ii. Functionality and change management - Although this problem is not foundational from a system perspective,
business can find that rolling out a system that is “radically different” from the existing one to be an
insurmountable hurdle. A few factors to consider in this case:
• If technicians could master an old character-based system to record productivity levels, what could
be the worst case intermittent productivity drop with an intuitive GUI-based system which is better
navigable, and possibly smoother? Instead of gut feel an actual usability test and hard numbers would
provide reliable pointers.
• If the pain involved in transition is too high, creating a façade (a layer of screens) mirroring the existing
UIs (but with a better and more robust platform) could be an interim option. This additional effort
could also be phased.
• Futuristic functionality can be a key dissent factor and some of these features could be pulled out to be
plugged in at a later date when they are truly required.
* Infosys has put together a check list of critical functionalities, technology features and process parameters that can assist in selecting the Right Pharmacy Management System for
your needs. This list is available as Appendix 1.1 at the end of this document.

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 iii. Inability to support the system in the future - This is often due to a burn-out in achieving the first release or
lack of planning to take it further. Considering that these decisions involve millions of dollars, it is logical to
plan for at least a few years ahead with a strong organizational and governance model to sustain the initiative
2. On the other hand, If the pharmacy is weighing its options, it should:
a. Undertake a detailed due diligence exercise - Involve internal stakeholders as well as vendors in the exercise. If an
option appears attractive, follow up with a detailed conference room pilot by testing more of exception scenarios
than smooth flow cases
b. Build a robust roadmap for all options generated for a minimum of 5 years
c. Include necessary legal clauses around SLAs and possibilities of the vendor rendering control of the product in the
event of missing the SLAs or undergoing merger / acquisitions / delinquency

Conclusion
Choosing the right pharmacy system has been one of the tougher questions faced by pharmacies. However, successes in this
area show that it is a critical decision that needs to be evaluated and planned for carefully with a 5-10 year roadmap in view.
Given the multitude of considerations and individual operational nuances, the choice often is specific to each pharmacy
chain.
Retailers will need to evaluate their specific environment for opportunities, constraints and their long term vision before
deciding whether an approach is aligned with their specific objectives.

About the Authors

Kunal Puri (kunal_puri@infosys.com) is a Senior Consultant with the Retail and Consumer Goods Consulting Practice of
Infosys and focuses on the retail pharmacy domain. Kunal has extensive experience in defining and executing a range of
Business and IT initiatives for leading pharmacy retailers.
Parag Damle (parag_damle@infosys.com) is a Principal Consultant and Solution Manager with the Retail and
Consumer Goods Consulting Practice of Infosys. Parag leads the Retail Pharmacy and Store Operations practice and
has extensive experience in defining and executing large complex projects for retail pharmacy chains and PBMs.

Appendix 1.1

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 FACTORS INFLUENCING THE SELECTION OF A PHARMACY MANAGEMENT SYSTEM
Functional Description
Typical Workflow
Consultation Tracking Capability
Wait Time Calculation
Base Functional Feature Sets
Centralized Patient File
Inventory Check prior to Fill
Grouping of Rx‟s
IVR
Robotics
Out-of-the-box Integration Capabilities PoS
Website
E-Prescribing
Signature Capture
Refill Alerts
Workload Balancing Capability
Additional Desired functionality
Vicinity Store Inventory View
Single Click Rx Transfers within the Chain
Central Fill Facility Integration Capability

Technical Description
Architecture - Distributed, Centralized, Stand Alone RxWorkflow Systems can be Central (completely Host driven
with a dumb terminal at the store), Central + Store or Standalone
(Completely Store driven - regular connectivity to Host not
required)
Scalability # of Claims processed, 24 hour Operational Capability, Workload
Balancing
Performance Avg Application response Time to user query / user input
Communication Procedures Real Time Synchronization Capabilities between Corp (Host) and
Store Application
Data Security & Access Authentication Restricted Access to functionality based on role
Disaster Recovery Data Backup and Recovery
Data Storage and Transfer Data Storage at Store as well as Host. Frequency of Data Transfer
between Store and Host
Downtime Operation Ability for Store application to operate if connectivity to Host is
lost
Application Configurability Ability to handle for plan / state specific requirements by setting
rules
Modularity - for ease of maintenance/enhancements Ability to modify and test specific code areas
Reliability Frequency and Duration of Downtime
Ease of Interfaces / Integration Easy Integration and Data Transfer with other systems (IVR,
Robotics, PoS, Website, etc.)

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 Process Description
Development Effort Effort to develop base version
Deployment Effort Effort to deploy base version across a significant # of stores
End User Training (Availability of CBT and Training User Training Modules Development and Ease of Transition
Effort)
Production Support / Maintenance Effort Estimated ongoing Maintenance Effort
Maintenance Team Training Effort & Documentation to bring Support team up to speed on an
ongoing basis
Enhancements Plan and Effort Ongoing effort to enhance application for business needs
Version Control and Change Management Effort Planning for multiple environments and multiple applications
version existing concurrently (different versions in production, test and
development)

Notes:
1. The factors listed above are indicative of the considerations to determine the capability of a Rx Workflow System and should not be construed as a comprehensive set.
2. There is no one-size-fits-all approach that can be used across retailers to evaluate the applicability of a Rx workflow system since the impact of each of the above listed factors is
dependent on the size and operational capability of an individual Pharmacy Retailer