How a Dual-Matrix Framework Improves Inventory Management

A new decision-support framework is offering community pharmacies a practical road map for managing inventory more effectively at a time when financial pressures are leaving little room for error, according to a study in Exploratory Research in Clinical and Social Pharmacy.¹

“Mastering inventory logistics makes medication more reliable and ordering processes more efficient. This allows staff, both technicians and pharmacists, to spend more time focused on the patient, rather than the operational hurdles in ordering the patient’s product,” Austin Hilverding, PharmD, the pharmacist in charge at Shrivers Pharmacy, told Drug Topics. “Patient care in pharmacy depends not only on medical expertise but also on operational success, including appropriate inventory. Financial discipline in inventory management promotes the responsible use of health care resources, minimizing waste while ensuring access to care.”

The current climate for community pharmacy is tumultuous, characterized by chain closures, pharmacist walkouts, and the daunting financial “DIR cliff,” the result of CMS mandating retroactive direct and indirect remuneration fees be collected at the point of sale. For many independent owners, the business feels like a high-wire act, balancing the ethics of patient care against the unforgiving reality of declining reimbursements and rising operational costs.^2,3

This dual-matrix model addresses financial tension by splitting inventory into 2 distinct subsystems: medical products managed for public health needs and nonmedical items managed for economic contribution.¹

Under this framework, medical products are analyzed through an ABC-FSN matrix, which cross-references purchase value with dispensing frequency to ensure that high-demand medications are always available. Conversely, nonmedical items, which can comprise up to 76% of a pharmacy’s total assortment, are filtered through an ABC-HML-P matrix that prioritizes products based on their actual gross profit.

This approach is vital because, despite pharmacists having little control over regulated drug prices, they can optimize their mix of nonmedical goods to subsidize their clinical mission.¹

The necessity of such precision is underscored by data showing that nearly 97% of items in some pharmacies are “nonmoving” on a daily basis, effectively locking up precious capital in stagnant stock. By assigning items to 3 specific control categories—strict, moderate, or minimal—pharmacies can automate their oversight.

For instance, Category I items receive weekly reviews and stock-out alerts, and slow-moving Category III items are audited quarterly for potential delisting. This level of discipline is crucial for financial sustainability, as it prevents funds from being depleted on low-turnover inventory when they are needed for growth opportunities or essential operations.^1,3

Modern pharmacies are already adapting by using technologies such as medication synchronization and pharmacy management system reports to anticipate seasonality and reset reorder points. Many are also comparison shopping across multiple wholesalers to secure the lowest acquisition costs for generics.^4,5

However, the dual-matrix framework goes further by linking inventory efficiency directly with patient safety and quality. When inventory is streamlined, pharmacists can transition from volume-based dispensing to high-value services such as immunizations, compounding, and medication therapy management.^1,2,4,5

This strategic shift not only protects the pharmacy’s bottom line but also ensures that communities do not become pharmacy deserts, where patients lose access to their most trusted and readily available health care providers.³

“Accurate and appropriate management of stock levels is critical for the entire health care ecosystem. It can help prevent medication shortages, enhance emergency preparedness, reduce pressure on health care facilities, and strengthen the overall supply chain,” concluded Hilverding in his discussion with Drug Topics. “Pharmacies can only fulfill their patient care mission by remaining financially secure. Financial success in inventory management is achieved through fair purchasing agreements, utilizing multiple suppliers to compare costs, keeping waste and loss at a minimum, keeping inventory turns high, and using data-driven inventory management procedures.”

REFERENCES

1. Jelić AG, Vučenović VT, Vučenović S, et al. Balancing public health needs and economic sustainability: a dual-matrix model for community pharmacy inventory management. Explor Res Clin Soc Pharm. 2026;22:100727. doi:10.1016/j.rcsop.2026.100727

2. Galdo JA, Logan RN Jr, Logan RN III, McDonough R. All pharmacies are not the same: community pharmacy quality. Pharmacy Times. February 22, 2024. Accessed June 30, 2026. https://www.pharmacytimes.com/view/all-pharmacies-are-not-the-same-community-pharmacy-quality

3. Bollinger M. Financial challenges for independent pharmacies and the cost to patient care. NC Med J. 2025;86(2). doi:10.18043/001c.142355

4. The crucial role of inventory control in pharmacy management. Outcomes. February 21, 2025. Accessed June 30, 2026. https://www.outcomes.com/blog/pharmacy/the-crucial-role-of-inventory-control-in-pharmacy-management

5. Letourneau N, Scott M, Sitkowski A, Frieder M. Independent pharmacy challenges and adaptive strategies. Avalere Health Advisory. September 3, 2025. Accessed June 30, 2026. https://advisory.avalerehealth.com/insights/independent-pharmacy-challenges-and-adaptive-strategies