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June 03, 2021

What Is Medication Waste Costing You?

Joy Somogyi
Sr. Director Product Marketing & Development, Omnicell

With drug costs skyrocketing and the ever-present challenge of drug shortages, throwing away medications can be agonizing. And costly. Expired medication waste has been estimated to cost the healthcare system $800 million a year. For example, one 240-bed facility valued its annual expired medication waste at $200K.

Poor inventory visibility and manual processes make it difficult to dispense medications before they expire. But expired medications are not the only culprits of waste. Other causes include:

  • Excess inventory and low inventory turns
  • Short shelf life for high cost medications
  • Medication shrink due to drug diversion
  • Misplaced or lost medications in units

Data intelligence can support pharmacy medication waste reduction

The more visibility you have into your inventory – where every dose is located, when it’s expiring, where the demands for each medication are highest by site – the better equipped you are to eliminate medication waste and ensure clinicians have access to the medications patients need. This kind of optimization isn’t possible with spreadsheets, forms or manual processes. Today’s data intelligence tools are easy-to-use and many include Artificial Intelligence (AI) and Machine Learning (ML) to provide predictive and prescriptive analytics.

Baptist Health, the largest healthcare system serving central Alabama, experienced the benefits firsthand of the power pharmacy data intelligence systems can deliver. With the onset of the COVID-19 pandemic, Baptist Health discovered systemic issues with their medication inventory management, including: 

  • Overstocked cabinet inventory 
  • Critical drug shortages 
  • Low inventory turns  
  • Risk of expired medications 

These challenges were further exacerbated by manual and disconnected processes, where each facility was managing inventory separately. Reordering decisions were based on visual inspection and anecdotal evidence rather than hard data. 

To confront these challenges, Baptist Health pharmacy leaders sought a holistic, systematic approach to inventory management. Implementing Omnicell Intelligence Solutions has helped Baptist Health to gain full visibility across locations and optimize inventory, increase turns, and reduce unnecessary drug spend.

In less than three months, Baptist Health experienced a 39% reduction in days on hand and an $800,000 reduction in on-hand inventory. They also saw a 59% improvement in inventory turns and realized medication inventory savings of nearly $425,000 within the same time period.

“The buyers are seeing the financial, clinical, and operational impact of using data to make inventory management decisions,” said Katie Tahir, Pharmacy Compliance Analyst. “They’ve become passionate about it in ways that I don’t think we would have been able to achieve otherwise.”

Other ways technology helps reduce medication waste

In addition to data intelligence systems that provide pharmacy performance dashboards, medication automation systems also include functionality that can help curb costly medication waste.

Central pharmacy automation that incorporates expiration date tracking plays a key role in reducing waste. For example, the Omnicell XR2 Automated Central Pharmacy System has advanced algorithms that ensure earliest expiring medications are dispensed first.

IV compounding automation and robust services that include access to low cost cGMP stability studies to support extended beyond use dating.

Systems that automate the process for managing patient-specific medications within the automated dispensing cabinet reduce waste caused by misplaced or lost medications.

Medication waste is a large issue to tackle, but fortunately there are many strategies to ensure that more medications are administered to patients and fewer are wasted. With sophisticated data intelligence tools and pharmacy automation systems, health systems can gain better control of their pharmacy supply chain.

Learn how to gain visibility and optimize your pharmacy supply chain.


The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of any other agency, organization, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author(s). These views are always subject to change, revision, and rethinking at any time and may not be held in perpetuity.

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