McKesson Leads in Contract Price Accuracy for Hospital Pharmacies; Customers Realize Significant Cost Savings from McKesson
SAN FRANCISCO — (BUSINESS WIRE) — June 22, 2006 —
McKesson today announced that it continues to lead the pharmaceutical wholesale industry in contract price accuracy, a key factor in efficient pharmacy operations, according to a comparative study of third-party pricing data. The study, validated by S/T Health Group Consulting, Inc., an independent healthcare consulting firm, concludes that McKesson customers continue to experience the lowest percentage of price errors in the industry, helping them to deliver a high performance pharmacy through significant dollar savings and improved financial performance.
S/T Health Group determined an aggregate industry-wide error rate by reviewing over $1.89 billion of invoices from a variety of U.S. hospital pharmacies. The review assessed contract price accuracy -- the accuracy of invoices as a percentage of total sales -- by reviewing contract price errors; market share and tiered pricing; letters of participation (LOP); manufacturer rebates; and distributor cost of goods. While overall industry contract price accuracy has improved since S/T Health Group's first review was completed in August 2004, customers of other pharmaceutical distributors continue to experience price errors over three times more often than customers of McKesson. According to McKesson's latest study, its price discrepancy, as validated by S/T Health Group, is a low 0.14 percent, compared to a 0.44 percent average for other pharmaceutical distributors. As a result, McKesson's customers benefit from significant time and cost savings, and put less of their drug budget at risk of being tied up in the claims process.
"We continue to outperform the competition on contract price accuracy, which helps us empower customers to improve their financial performance and more effectively create and maintain a high performance pharmacy," said David Evangelista, Director, Pharmaceutical Contracts Administration, McKesson Pharmaceutical. "Controlling drug spending is a big issue for pharmacies and McKesson is committed to using the best systems and adhering to Six Sigma standards to ensure that our customers' time and money is invested in continually enhancing their pharmacy operations, not wasted on pricing errors."
Pharmaceutical distributors, such as McKesson, play a central role in contract pricing for hospital pharmacies. They must manage the complex task of reconciling pricing data from multiple sources, including health systems, group purchasing organizations (GPOs), drug manufacturers, and pharmaceutical distributors. In order to maintain industry-leading price accuracy, McKesson applies its Six Sigma resources and other key process improvements to ensure customers achieve the greatest time and cost-savings advantage in the industry. McKesson's recent findings, using S/T Health Group's aggregate industry-wide error rate, demonstrate that McKesson's investments in these initiatives are delivering real value to its customers.
Empowering High Performance Pharmacy
McKesson is committed to empowering its hospital pharmacy customers to achieve the highest level of performance and increase their contributions to their organization's overall success. McKesson's price accuracy leadership underscores this commitment by helping customers improve their financial outcomes.
Under the guidance of the Health Systems Pharmacy Executive Alliance -- a collaboration of well-known leaders dedicated to the improvement of hospital pharmacy -- McKesson launched the High Performance Pharmacy initiative to empower hospital pharmacies to enhance patient care, increase operational efficiencies, and improve clinical quality. In a high performance pharmacy, a hospital pharmacy is so efficient, financially viable, and clinically advanced that it becomes a significant contributor to the health system's overall quality of care and financial success.
McKesson has established industry-leading guidelines for hospital pharmacies to assess their performance across eight key dimensions, including: leadership; medication preparation and delivery systems; patient care services; medication safety; medication use policy; financial performance; human resource management; and education. Each dimension contains a number of clearly-defined elements that enable hospital pharmacies to determine the anticipated level of effort required to improve their performance in that area, as well as the estimated financial return they can expect.
For more information on how McKesson is empowering high performance pharmacy, please visit www.mckesson.com/thoughtleadership.
About S/T Health Group
S/T Health Group Consulting, Inc., is a leading provider of pharmaceutical cost containment consulting services, providing clients with valuable, objective data resulting in healthcare dollar savings. More information can be found at www.sthealthgroup.com.
About McKesson
McKesson Corporation, currently ranked 16th on the FORTUNE 500, is a healthcare services and information technology company dedicated to helping its customers deliver high-quality healthcare by reducing costs, streamlining processes, and improving the quality and safety of patient care. Over the course of its 173-year history, McKesson has grown by providing pharmaceutical and medical-surgical supply management across the spectrum of care; healthcare information technology for hospitals, physicians, homecare, and payors; hospital and retail pharmacy automation; and services for manufacturers and payors designed to improve outcomes for patients. For more information: www.mckesson.com.
McKesson Pharmaceutical Solutions, a major business unit of McKesson, is the leader in pharmaceutical distribution and supply chain management. Its supply, technology, and care management solutions empower more than 25,000 retail pharmacies nationwide, counting national chains and community drugstores, including the Health Mart® network of independent pharmacies.
