On-line bidding allows for control of generic purchases

April 3, 2006

Marlin Weekley, R.Ph., owner of four community pharmacies in central Illinois, had a problem. While his stores yielded an annual sales volume of better than $9 million, managing his generic buying program had become a headache that was leaking profits.

Marlin Weekley, R.Ph., owner of four community pharmacies in central Illinois, had a problem. While his stores yielded an annual sales volume of better than $9 million, managing his generic buying program had become a headache that was leaking profits.

First he created a centrally managed database to help coordinate these purchases. But he quickly discovered this was not a true solution to a problem that needed to be dealt with in "real time."

"It didn't work," recalled Weekley. "By the time the information was received, processed, and returned to the pharmacist, it was already 'dated' and virtually worthless. Also, the process was inefficient in a busy pharmacy environment."

Enter the Internet. If the database could be placed on-line, Weekley figured, then his pharmacists could view the information as soon as it was entered. However, they would still need to make the time available to call each of the suppliers in a timely fashion in order to take advantage of advertised specials and gain the best price. "I knew there had to be a better way still," he said.

That better way proved to be an on-line bidding process, developed by Weekley and similar to consumer on-line auctions such as eBay. Pharmacists simply place an order once a week and allow registered suppliers to bid on the order. The Web site, located at http://www.BidGenerics.com/, was an instant hit and has saved Weekley thousands of dollars since its launch in August of last year.

With the new system, each pharmacy places a single generic order once a week at the site. All orders are gathered and compiled into a single "master bid" for the suppliers to bid on each week. Suppliers have 24 hours to bid on any or all drugs listed, and when the bid time has expired, the Web site automatically e-mails each supplier and pharmacy notifying them of which suppliers won.

"The results have been amazing," said Weekley. "My four stores are now all getting the same lowest price possible."

Weekley estimates that as larger orders have been placed more consistently at the site, he is saving well over $500 per store per week on generic purchases. With all buying efficiencies factored in, he expects to enjoy an annual saving of at least $30,000 per store in pharmacies filling approximately 175 scripts per day. And as word of his venture has spread, other pharmacists have begun using the site as well, making the master bids even larger and garnering even greater savings.