This new service helps you recover lost supply chain dollars


Novation is offering a new service to help member hospitals recover their supply chain dollars.

Such invoicing errors happen all the time and could cost pharmacies a bundle. But recovering these costs takes manpower that many pharmacies don't have. Now a new service from Novation can save pharmacies the hassle of recovering such costs on their own.

Since 2004 the group purchasing organization has been providing member hospitals with a report of their pricing discrepancies for multisource drug contracts so they can recoup lost dollars on their own. Now going one step further, Novation is centralizing the recovery of failure-to-supply funds on behalf of its members. According to Novation's VP of pharmacy Mick Hunt, this will simplify the collection of these lost funds and remove this administrative burden from members. In return for its service, Novation will keep 10% of the dollars recovered and return 90% to participating members in the form of a quarterly wholesaler credit or check.

Romig estimates that up to three-quarters of 1% of a pharmacy's drug purchases could be recovered. For Moses Cone, which approaches $50 million in its drug budget every year, the savings can really add up. Romig believes that most hospitals don't want to take it upon themselves to collect these funds. They prefer someone else to do it for them. Here's where Novation comes in handy.

Hunt told Drug Topics that Novation conducted a pilot of its recovery program last July. The program was then rolled out to 130 hospitals of the University HealthSystem Consortium, which uses Novation as its contracting-services company. Expansion is continuing this year with VHA and Provista as well as the rest of Novation's 1,600 acute-care hospitals. Hunt added that while other buying groups may also offer hospitals help with recovering lost supply chain dollars, not all of them do it on a central basis or they may charge more than what Novation is charging. To date, 825 members have joined Novation's program.

To sign up for Novation's service, members should submit the enrollment agreement located in Form Manager on the Marketplace Web site. To access Form Manager, click on the E-Commerce Services menu. For more information, you can send an e-mail to
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