Supply Chain and Inventory Management

Question 1

Prescription Drug

Answer 1

Rx or legend drug; need a presription

Question 2

Over the Counter

Answer 2

May be purchased w/o a prescription

Question 3

Compounding

Answer 3

Mixing, combining, altering of ingredients to make specific product dosage form or strength nor commercially available

Question 4

Dispense

Answer 4

Supply drug to patient pursuant to a RX or drug order from a practitioner or prescriber

Question 5

Distribute

Answer 5

Supply a drug to entity for sale, resale, dispensing, or administration

Question 6

Supply Chain

Answer 6

Path drug takes from manufacturer to patient. Includes: Manufacturer, wholesale distributer, 3PL, 503B Outsourcing Facility, Reverse Distributor, etc..

Question 7

Pharmacy

Answer 7

Obtains RX product and dispenses to patients pursuant to patient-specific RX or order. Hospital, Community, outpatient, mail order, nuclear, specialty, LTC, other

Question 8

Wholesaler

Answer 8

Obtains product from manufacturer to distribute (sell) to other wholesalers, pharmacies, practitioners, health systems, and others appropriately registered.

Question 9

Manufacturer

Answer 9

Makes drug from active ingredients, excipients and other components. May have own facility or virtual manufacturer.

may offer health care providers product education, patient support programs, and support with navigating insurance reimbursement

Question 10

Third Party logistics Provider

Answer 10

3PL. Possesses but not owns. Act as warehouse, recieves product sent by manufacturer distributing orders directed by manufacturer

Question 11

Product

Answer 11

Per “DSCSA” human Rx product in finished dosage form.. Some exceptions to definition

Question 12

Transaction

Answer 12

Product transfer between persons in which a change of ownership occurs

Question 13

Inventory

Answer 13

What is on hand to dispense

Question 14

Group Purchasing Organization

Answer 14

Organization joins together several facilities to purchase products at a larger volume than each could on their own generating cost savings

Question 15

Virtual Manufacturer

Answer 15

Owns drug but not possess drug. Outsources manufacturing to a contract manufacturing organization (CMO) utilized a 3PL for distribution. Includes repackager and relabeler

Question 16

FDA

Answer 16

ensures the safety, efficacy, and security of food, drugs, biologics (e.g., therapeutic proteins, monoclonal antibodies, vaccines), radioactive products (e.g., sodium iodide, radium), medical devices, and cosmetics. Regulating the manufacturing, marketing, and distribution of tobacco products also falls under FDA’s purview. Also plays a role in the nation’s counterterrorism capability by ensuring food supply security and fostering medical product development to respond to public health threats

Question 17

1906 Food and Drugs Act

Answer 17

passed to protect the consumer against dangerous and mislabeled drugs) allowed for the establishment of FDA.

Question 18

DEA

Answer 18

regulates Controlled Substances, who sells and prescribes as well
Established 1973 to enforce CSA

Question 19

Controlled Substance Registration Certificate

Answer 19

Form 223. Renew Q 3 years. Makes so you can handle Controls

Question 20

CI

Answer 20

No medical approved use. High abuse potential.

Question 21

CII

Answer 21

High abuse potential. May lead to severe psych or physical dependence.

Question 22

CIII

Answer 22

potential for abuse less than CII. may lead to moderate or low physical dependence or high psych dependence

Question 23

CIV

Answer 23

low abuse potential compared to CIII

Question 24

CV

Answer 24

low abuse potential compared to CIV.

Question 25

Combat Meth Epidemic Act 2005

Answer 25

CMEA put restriction on daily and monthly purchase of certain OTCs. Required to self certify.

Question 26

State Board of Pharmacy

Answer 26

License or register those working in pharmacy, dispensing to patients, may posess RX drugs, supply chain entities, responds to complaints

Question 27

FD&C Act 1938

Answer 27

authorized FDA to demand safety evidence for new drugs, issue standards for food, and conduct factory inspections

Question 28

Kefauver-Harris Amendments of 1962

Answer 28

mandated efficacy and safety data before a drug could be marketed; established stricter FDA control over drug trials; allowed FDA to regulate prescription drug advertising; established good manufacturing practices by the drug industry; granted FDA greater power to access manufacturer’s records to verify those practices

Question 29

Clinical Trial Phase 1

Answer 29

20-100 healthy volunteers or people with the disease/condition, Several months, Safety and dosage

Question 30

PDMA 1987

Answer 30

Ensure drugs safe and effective, avoid unacceptable risk to consumers from
counterfeit misbranded adulterated subpotent or expired drugs. added restrictions on sale of RX and samples. Required wholesalers be registered in the state meet uniform standards

Question 31

DCSCA

Answer 31

Title II of Drug Quality and Security Act 2013 Further protects patients from counterfit, stolen, contaminated or otherwise harmful drugs. Requires interoperable package level tracing. required FDA to establish national licensure standards for wholesalers and 3PL reporting requirements

Question 32

Track and Trace Exemption

Answer 32

Veterinary drug products; Blood or blood components intended for transfusion; Radioactive drugs or radioactive biological products; Imaging drugs; Intravenous products intended for the replenishment of fluids and electrolytes (such as sodium, chloride, and potassium) or calories (such as dextrose and amino acids); Intravenous products used to maintain the equilibrium of water and minerals in the body, such as dialysis solutions; Products intended for irrigation, or sterile water, whether intended for such purposes or for injection; Any medical gas; Homeopathic drugs; Active pharmaceutical ingredients (APIs) used in compounding; Preparations compounded by a 503A Compounding Pharmacy or a 503B Outsourcing Facility

Question 33

Active Pharmacutical Ingredient Repaker

Answer 33

API Repacker takes bulk powder APIs from the original manufacturer and packages it into smaller containers to distribute to drug manufacturers, outsourcing facilities, and compounding pharmacies.

Question 34

Reverse Distributor

Answer 34

unsaleable products from dispensers such as damaged products or expired products.

A reverse distributor does not sell or distribute products to wholesale drug distributors or dispensers. The reverse distributor may obtain credit for unsaleable products from the manufacturer and destroy the unsaleable products or send unsaleable products for destruction.

Question 35

503A Compounder

Answer 35

preparations for patient-specific prescriptions and is not allowed to compound commercially available products unless there is a clinically significant difference required.

Question 36

503B Outsourcing Facility

Answer 36

compounds preparations for office use. An outsourcing facility may NOT compound any commercially available product unless the product is documented as being in short supply. This is to alleviate shortages. An outsourcing facility must compound at least one sterile product but is allowed to compound both sterile and nonsterile products. The outsourcing facility must comply with CGMP

Question 37

Compounding Quality Act

Answer 37

CQA Title I of the Drug Quality and Security Act (DQSA) of 2013. The CQA separates out compounding for patient-specific prescriptions from compounding for office use or administration.

Question 38

current Good Manufacturing Practices

Answer 38

a standard required of manufacturers and much more stringent than USP sterile and nonsterile compounding standards.

Question 39

Transaction Data

Answer 39

T3 Transaction Information, History, Statements

Question 40

Transaction Information

Answer 40

Product name, strength, dosage form, NDC number, container size, number of containers, lot number, transaction date, shipment date (if >24 hours after the transaction date), business name and address of the original and new owner

Question 41

Transaction History

Answer 41

Statement including the transaction information for each prior transaction which can be traced back to the manufacturer

Question 42

Transaction Statement

Answer 42

States that the entity transferring ownership received the product, received transaction information and a transaction statement from the product’s prior owner, did not knowingly ship a suspect or illegitimate product, had systems and processes in place to comply with verification requirements, and did not knowingly provide false transaction information or alter transaction history

Question 43

Exemptions from Transaction Data

Answer 43

Intracompany distribution of products; Distribution of products among healthcare entities under common control; Distribution of products for emergency medical reasons or public health emergencies (does not include drug shortages); eDispensing a product to a patient; Distribution of product samples; Distribution of minimal quantities of product from a pharmacy to a practitioner for office use. “Minimal” is interpreted as less than or equal to 5% and may not be allowed by a state board of pharmacy. Pharmacies distributing larger quantities may also require licensure as a wholesaler and then transaction data requirements will apply.; Certain charitable organizations; Sale or merger of trading partners for the actual transfer of product ownership (transaction data received for those products originally must still be kept); Certain kits or devices that may include products

Question 44

Clinical Trial Phase 2

Answer 44

Up to several hundred people with the disease/condition, Several months to 2 years, Efficacy and adverse effects

Question 45

Clinical Trial Phse 3

Answer 45

300-3,000 volunteers with the disease/condition, 1-4 years, Efficacy and monitoring of adverse effects

Question 46

Clinical Trial Phase 4

Answer 46

Several thousand volunteers with the disease/condition, Post Marketing, Safety and efficacy

Question 47

New Drug Application

Answer 47

If early tests and preclinical and clinical research indicate that a drug is safe and effective for its intended use, This is filed with results from pre-clinical and Phase 1-3 clinical trials, Mist include: proposed labeling, safety updates, drug abuse information, patent information, any data from studies conducted outside the U.S., Institutional Review Board, compliance information, directions for use

Question 48

abbreviated new drug application

Answer 48

ANDA contains data which is submitted to FDA for the review and potential approval of a generic drug product. generally not required to include preclinical (animal) and clinical (human) data to establish safety and effectiveness. Instead, generic applicants must scientifically demonstrate that their product performs in the same manner as the innovator drug . To be approved, must demonstrate bioequivalence.

Question 49

Medical Product Safety Network

Answer 49

(MedSun) monitors medical device safety and effectiveness. requires hospitals, nursing homes, and outpatient treatment and diagnostic centers to report medical device problems that result in serious illness, injury, or death. Once an individual reports a problem, MedSun researchers work with each facility’s representatives to clarify and understand the problem. Each month, FDA publishes the MedSun newsletter to share information about medical device safety so clinicians can take preventive actions

Question 50

FDA Adverse Event Reporting System

Answer 50

(FAERS) is a database that contains adverse event reports, medication error reports, and product quality complaints resulting in adverse events that were submitted to the FDA. The database is designed to support the FDA’s post-marketing safety surveillance program for drug products. Based on an evaluation of the potential safety concern, the FDA may take regulatory action(s) to improve product safety (e.g., updating labeling information, restricting the use of a drug, communicating new safety information to the public, removing a product from the market). Health care professionals and consumers can submit electronic reports on a voluntarily basis, while manufacturers are required to report to FAERS

Question 51

Sentinel Initiative

Answer 51

launched in 2008, FDA is developing a new national system to identify possible safety issues more quickly. The system uses large existing electronic health databases (e.g., electronic health records, insurance claims databases) to monitor the safety of approved medical products in real time. will add to, not replace, FDA’s existing post-market safety assessment tools.

Question 52

MedWatch

Answer 52

medical product safety and adverse event reporting program to promote public safety.

publishes safety alerts for FDA-regulated products including OTC and prescription medications, biologics, combination products, medical devices, nutritional products, cosmetics, and food. website allows reports for serious adverse events, product quality problems, product use/medication errors, or therapeutic inequivalence/failures. Manufacturers are mandated to report adverse events through MedWatch; reporting by consumers, patients, and health care professionals is voluntary but strongly encouraged by FDA. Individuals can file reports online or by mail

Question 53

Controlled Substances Act of 1970

Answer 53

CSA bring those involved in the illegal growing, manufacturing, or distribution of controlled substances to the criminal and civil justice systems. DEA also recommends and supports programs aimed at reducing the availability of illicit controlled substances on the domestic and international markets

Question 54

Form 224

Answer 54

To register with DEA

Question 55

Form 223

Answer 55

Certificate of Registration

Question 56

Form 224A

Answer 56

Used to renew reg with DEA q 3 years
renewal notifications via email to registrants approximately 60 calendar days prior to their registration expiration date.

Question 57

Form 224b

Answer 57

Same as 224a but for chains

Question 58

Resource Conservation and Recovery Act in 1976

Answer 58

address increasing problems the nation faced from the growing volume of municipal and industrial waste

Question 59

EPA

Answer 59

authority to control the generation, transportation, treatment, storage, and disposal of hazardous waste by imposing strict standards through tracking and permitting. EPA authorizes states to operate their own hazardous waste programs when those programs are at least equal to and consistent with federal standards.

Question 60

Procedures for Non-Creditable Hazardous Waste

Answer 60

waste that is sent to a facility for incineration instead of a reverse distributor

place its hazardous waste pharmaceuticals in containers that are structurally sound, compatible with the contents, and prevent any leaks or spills.

If incompatible hazardous waste pharmaceuticals are commingled in a container, must manage the container so it doesn’t: have the potential to generate dangerous heat and/or pressure; emit any toxic or flammable substances; damage the container’s structural integrity; otherwise endanger human health and/or the environment

must be protected from unauthorized access and marked with the phrase “Hazardous Waste Pharmaceuticals.”

must ship hazardous waste to a designated facility via a hazardous waste transporter. EPA and DOT require all shipments accompanied by a manifest form.

Question 61

Hazardous Waste Manifest form

Answer 61

form is designed to track hazardous waste from the time it leaves the health care facility until it reaches the off-site waste management facility where it will be disposed of.

If signed copy of the shipping document from the owner of the facility within 60 days, must notify EPA. must provide a copy of the manifest along with an explanation of efforts taken to locate the hazardous waste and the results of those efforts.

must keep a copy of the signed shipping document for 3 years when hazardous waste is removed from the premises.

Question 62

Procedures for Creditable Hazardous Waste

Answer 62

waste that is unopened, undispensed, and unexpired or within 1 year of expiration and has a reasonable expectation of receiving manufacturer credit

EPA does not impose specific standards for how containers of creditable waste must be managed or labeled because they are in the original manufacturer packaging which is already labeled.

EPA believes that the risk of environmental release of creditable hazardous waste pharmaceuticals during transport is relatively low because of the form and packaging

Question 63

Country of Manufacture

Answer 63

FDA, the country where the final formulation of a drug occurs, including where it is packaged, is the drug’s country of manufacture

Question 64

Country of Origin

Answer 64

CBP, the country in which the active pharmaceutical ingredient is made is the country of origin

Question 65

FDCA

Answer 65

Requires only that a manufacturer’s drug label bear the name of the manufacturer and any address associated with the company
The address does not have to be where the drug was made (eg, the address can be a manufacturer’s corporate headquarters instead of the country of the factory where the drug was made)

Question 66

Tariff Act

Answer 66

Requires imported products to be labeled with the country of manufacture
A drug manufacturer cannot list a US address alone without including the country of manufacture for a drug with a foreign made active pharmaceutical ingredient
A drug labeled solely with a US address would be considered, by the FDA and the CBP, to be manufactured domestically

Question 67

FTC Act

Answer 67

Stipulated it was illegal to market a product with the phrase “Made in the USA,” unless “all or virtually all” the contents of the product are domestically manufactured
A drug with a domestically manufactured active pharmaceutical ingredient, labeled only with a US address, cannot make the claim “Made in the USA’’ if any of its inactive ingredients are imported

Question 68

Trade Agreement Act

Answer 68

TAA limits the US Government procurement to domestic products or products made in designated countries. Such products are called TAA compliant. Examples of designated countries that are not TAA approved are China, India, Indonesia, Iran, Iraq, Malaysia, Pakistan, and Russia

Question 69

Red Flags

Answer 69

Purchasing from a source new to the trading partner
Receiving unsolicited sales offers from an unknown source (eg, receiving emails, telephone calls, or in-person sales calls from an unsolicited source)
An internet purchase from an unknown source that offers a product their usual source cannot provide or a better price
Purchasing from a source that a trading partner knows or has reason to believe has engaged in questionable business practices that could increase the risk of suspect product entering the supply chain, such as:
Previous business transactions where the trading partner sold or delivered illegitimate product
A trading partner with a history of problematic or potentially false transaction histories (eg, contains misspelled words or is incomplete)
A trading partner that is reluctant to provide a transaction history or does not do so in a timely manner
A trading partner that provides transaction information, a transaction statement, and/or transaction history that appears to be incomplete or questionable
Product that is generally in high demand in the US market
Product that is in higher demand because of its potential or perceived relationship to a public health or other emergency (eg, antiviral drugs)
Product that has a high sales volume or price
Product offered at a price that is “too good to be true”
Product that has been previously or is currently being counterfeited or diverted (eg, HIV, antipsychotic, or cancer drugs)
Product that has been previously or is currently the subject of a drug shortage (current and resolved drug shortages can be accessed at https://www.accessdata.fda.gov/scripts/drugshortages/default.cfm)
Product that has been or is the subject of a public alert or announcement related to drug quality
Product that has been or is the subject of an FDA counterfeit or cargo theft

Question 70

Drug Diversion

Answer 70

act of changing the intended course of a drug: at some point in the supply chain, it is passed along into the wrong hands.

Question 71

Authenticating Trading Partners

Answer 71

check directly with the state licensing agency in the state in which the wholesaler is located, AND the pharmacy’s state (the state they are shipping into),

Check if license is current.

Specialty or biologic check manufacturer for authorized distributor

Question 72

Drug Counterfeiting

Answer 72

act of selling a product that has packaging for one drug but contains a different drug, OTC product, or placebo.

Question 73

Transaction Data

Answer 73

suspicious entries in transaction data may include duplicate serial numbers, unfamiliar names of manufacturers or wholesalers, or pharmacies who sold the drug to other trading partners. For some specialty or high-priced drugs, manufacturers will note which wholesalers they will sell to on their website. When these products show a different wholesaler in the transaction history, it is a sign that the drug may have been diverted or counterfeited.

Errors or evidence or suspicious produce contact supplier. Further investigation may be needed. If illegitimate FDA reporting.

Question 74

Receive Product

Answer 74

Examine Outer Case, Examine Produce, Compare to Invoice,

Question 75

Examine outer Case

Answer 75

Does the appearance of the package or container seem questionable? Does it have a label that contains misspellings or appears different from the standard label for color, font, images, or shrink wrap that has unexpected markings, etc.

Are there signs that it has been compromised or opened such as a broken seal, damage, appears to have been repaired, or otherwise altered?

Has the package or the transport container changed since the last shipment?

Are there shipping addresses, postmarks, or other materials indicating that the product came from an unexpected foreign entity or source?

Question 76

Compare to Invoice

Answer 76

checking off each item received in the shipment. When C-II controlled substances are received, the amounts of each drug should be checked off on the purchaser’s copy of DEA Form 222. 222 then signed, dated, retained for at least 2 years. C-III through C-V substances also need to be detail checked off on the invoice or packing slip which is then signed and dated. Invoices and documentation for C-II must be separated from C-III through C-V, and both of these separated from non-controlled substance invoices and documentation.

Discrepancies immediately reported

Question 77

Product Examinaton

Answer 77

Any missing information, such as the lot number or other lot identification, NDC, or strength of the drug

Package that contains foreign identification features (such as a different drug identification number where a National Drug Code (NDC) number would be expected)

Lot numbers and expiration dates on product that do not match the lot numbers and expiration dates of the outer container

Any altered product information, such as smudged print or print that is very difficult to read

A product name that is the product name for a foreign version of the drug

Misspelled words

Bubbling in the surface of a label

Lack of an “Rx only” symbol

Foreign language with little or no English provided

Foreign language that is used to describe the lot number

A product name that differs from the name that appears on the FDA-approved drug label or labeling

Missing security or anti-counterfeiting technologies normally featured on the FDA-approved product that are easily visible, such as holograms, color shifting inks, neckbands, or watermarks.

A finished dosage form that seems questionable (e.g., it has a different shape or color from the FDA-approved product, a different or unusual imprint, an unusual odor, or there are signs of poor quality like chips or cracks in tablet coatings or smeared or unclear ink imprints).

Question 78

Suspect Product

Answer 78

(A) is potentially counterfeit, diverted, or stolen;

(B) is potentially intentionally adulterated such that the product would result in serious adverse health consequences or death to humans;

(C) is potentially the subject of a fraudulent transaction; or

(D) appears otherwise unfit for distribution such that the product would result in serious adverse health consequences or death to humans.

Question 79

Storage ranges

Answer 79

Fridge - 36-46 Room 68-77 Freezer -13-14 Humidity 35-60% Remember first in first out

Question 80

Illegitimate Product

Answer 80

(A) counterfeit, diverted, or stolen;

(B) intentionally adulterated such that the product would result in serious adverse health consequences or death to humans;

(C) is the subject of a fraudulent transaction; or

(D) appears otherwise unfit for distribution such that the product would be reasonably likely to result in serious adverse health consequences or death to humans.

Question 81

If Suspect

Answer 81

Quarantine the product: Do not put products into active stock or dispense if there are any discrepancies that are not resolved. Do not destroy the product as FDA may want to obtain a sample for testing.

Perform an investigation: Contact the trading partner from which the product was purchased. You may also want to contact the manufacturer of the product to assist in verifying if the product is illegitimate.

Question 82

If Illegitimate

Answer 82

Notify the appropriate agencies and trading partners: If the product is still suspect or illegitimate, notify the FDA. The FDA must be notified within 24 hours. If it is determined later that the product is legitimate, also notify the FDA. If the product is a controlled substance, also contact the DEA. The state board of pharmacy may also have requirements for notification.

Appropriately receive and act upon notifications from agencies or trading partners.: The FDA or other trading partners may contact the pharmacy or send a notification of suspicious or illegitimate products. If that specific product is on hand, quarantine the product and follow instructions for responding to the notification. If a product is eventually found to be legitimate, and notification to this effect is received, the product may be put back into active stock.

Document: Documentation of investigations and notifications of illegitimate products must be kept for at least 6 years after the conclusion of the investigation and final disposition of the product.

Question 83

340B Drug Pricing

Answer 83

enables patients who are low-income, lack insurance, or live in a rural community to obtain medications at reduced prices. Hospitals that serve rural areas, children’s hospitals, or free-standing cancer hospitals can purchase drugs for their patients at significantly reduced rates. Manufacturers who participate in Medicaid are required to provide the needed medications at reduced rates to 340B-eligible institutions. The 340B covered entities must recertify their eligibility annually to remain in the 340B Drug Pricing Program.

A pharmacy that is a part of a 340B contract must meet specific regulations to maintain eligibility. Pharmacies must prove they meet the criteria to participate in 340B and must continually document that the discounted drugs are being dispensed or administered to the intended patients. Participants in the 340B program will be subject to audits that will review the procedures in place to ensure 340B is being managed appropriately.

Question 84

Formularies

Answer 84

pre-determined lists of drugs available to be prescribed and dispensed within a hospital or healthcare system.

Question 85

Consignment

Answer 85

specialty drugs that are high in price and infrequently used. The purchaser pays a fee as part of the consignment contract, but only pays the full price of the drug if it is dispensed to a patient.

Question 86

State and Federal Vaccine Program

Answer 86

may be an ongoing contract in response to a high need in a geographical area or in a population the pharmacy serves, or it may be a part of a broad-scale public health initiative. Vaccines For Children A Medicaid-eligible child, who is not insured, who is administered a qualified pediatric vaccine by a FQHC or a rural health clinic, not insured with respect to the vaccine, A child who is Native American (per the Indian Health Care Improvement Act)

Question 87

Hospital Formulary

Answer 87

created and maintained by the P&T committee. Creates list of what hospital will stock.

Question 88

Pharmacy & Therapeutics Committee

Answer 88

evaluates potential changes to formularies, including adding medications that have been recently approved, adding medications that are requested by hospital staff, or removing medications that are no longer deemed valuable to the hospital or safe for patients.

Question 89

General Inventory

Answer 89

inventory of all prescription products annually

Question 90

Perpetual Inventory

Answer 90

process of documenting the addition or subtraction of each drug as it is occurring. The result is a continuously accurate real-time count of the drug in the pharmacy’s possession.

CII done this way

Question 91

CS Inventory

Answer 91

Must be done upon Initial DEA Reg. And Q2 years some states require Q year.

non-controlled is moved into a controlled substance schedule, or a controlled is moved to a new schedule, an inventory of that specific drug must be performed the day the classification change.

CII by manual count. CIII-CV by estimated unless bottle is over 1,000 then manual.

ALL on premises.

Retained for 2 years

Question 92

CS Inventory Requirement

Answer 92

The date the inventory was taken

An indication if the inventory is taken at the beginning of the day (before any prescriptions are filled) or the end of the day (after the pharmacy is closed)

The name of each controlled substance inventoried

The strength and dosage form (10 milligram tablet, 10mg/mL oral solution)

The number of dosage units or volume in the commercial container (e.g., 100 tablet bottle)

The number of commercial containers (e.g., four 100 tablet bottles)

The total count of the substance

Discrepancy accounted for

Question 93

Form 41

Answer 93

reports breakage or spillage of CS

Signed by 2

Question 94

CS Theft

Answer 94

Report to DEA Field office, state regulatory agency, and local law enforcement

Significant or recurring reported on form 106

Question 95

Cycle stock

Answer 95

is the regular inventory that is needed to fulfill orders

Question 96

Anticipatory stock

Answer 96

is inventory that is kept on hand because of expected future demand or expected price increases (eg, flu vaccine in the fall and winter months).1

Question 97

Buffer stock

Answer 97

(also called safety stock) is additional inventory that is needed in case of a supply or demand fluctuation

Question 98

Inventory Days Supply

Answer 98

How many Days of inventory on hand?

amount of inventory have on hand and the amount that is sold or dispensed on average per day

7,300 tablets dispensed per year/365 days = 20 tablets dispensed per day. There are 300 tablets on hand, 300 tablets/20 tablets per day = 15 days

Question 99

Acquisition Cost

Answer 99

Price the pharmacy pays for the product

Question 100

Carrying cost

Answer 100

This is the cost over an entire year for maintaining the inventory and is expressed as a percentage. Carrying costs typically range from 20%-30% (or about 2%/month on average).

(total annual costs of maintaining inventory/total annual inventory cost) x 100 = % carrying cost

Question 101

Expiration Cost

Answer 101

Difference between Acquisition cost and credit received.

Question 102

Procurement or Replenishment cost

Answer 102

This is the cost (typically labor) to order or reorder products, receive and pay for inventory.

Question 103

Stock-Out or Shortage Cost

Answer 103

Cost for OOS. Time spent of PFL, billing said PFL, Completion fill, loss if transferred

Question 104

Primary Wholesaler

Answer 104

contract with a primary wholesaler, most prescription products (90-95%) will be purchased from them. The contract may give better pricing as long as purchases outside of the primary wholesaler do not exceed the agreed-upon percentage. Primary wholesalers typically deliver every weekday (and some on Saturdays), have easy automatic ordering systems that integrate with pharmacy prescription processing systems, and may also have emergency delivery available. With daily delivery, the amount of inventory on hand may be able to be reduced.

Question 105

Manufacturer Consideration

Answer 105

minimum quantity to purchase, and the purchase will be infrequent. This means more stock will be kept on hand and it will turn more slowly, but the product may cost less.

Question 106

Secondary and Specialty Wholesaler

Answer 106

products that are not carried by the primary wholesaler or have been backordered or are in short supply. Examples include compounding active ingredients and components, specialty drugs, and biologic products. These may be only ordered once or twice a week, or only when products are needed from these wholesalers.

Question 107

Chain Warehouse

Answer 107

Chain stores may have their own warehouse as the primary source of prescription drugs. Delivery may only be once or twice weekly, so a slight increase in the amount of prescription products may need to be ordered to prevent running out between deliveries.

Question 108

Buying Groups

Answer 108

Pricing is negotiated for a guaranteed minimum of purchases from members of the group. As such, to get the discounts, there may be minimum quantities to purchase of certain items. The buying group may have its own warehouses or be administered through a primary wholesaler. If administered through a primary wholesaler, only the specific products that are discounted in the group should be ordered. For example, ordering may be restricted to only one or two generic manufacturers’ products.

Question 109

Seasonal Purchasing

Answer 109

Inventory levels on some prescription products fluctuates with the seasons. For example, antihistamines and allergy nasal sprays peak in spring and fall and antibiotics peak in the winter.

Question 110

New Provider

Answer 110

May change type of meds and amounts needed

Question 111

Significant Events

Answer 111

may require inventory adjustment. Such as natural disaster or pandemic

Question 112

Competitors

Answer 112

nearby pharmacy closes, that may mean an increase in prescription volume. Also if a third-party contract is no longer accepted by a competitor and you have a contract with that third-party payor, you may experience an increase in prescription volume as those patients transfer to your pharmacy.

Question 113

Inital CS Inventory

Answer 113

an actual physical count of all controlled substances in their possession).19 If there is no stock of controlled substances on hand, the registrant should make a record showing a zero inventory. The inventory record shall include18:

Date; Substance name; Finished form (e.g., 10 mg tablet); Number of dosage units or volume of each finished form in the container (e.g., 100 tablet bottle); Number of commercial containers of each finished form (e.g., 4-100 tablet bottles); Total count of the substance; Whether the inventory was taken at the beginning or close of business.

Question 114

Recordkeeping requirements

Answer 114

Required for all pharmacies and kept for at least 2 years: Executed DEA Forms 222 or the electronic equivalent; Power of Attorney authorization to sign DEA Form 222
Receipts and/or invoices for Schedules III-V controlled substances; All inventory records of controlled substances, including initial and biennial inventories; Records of controlled substances distributed (e.g., sales to other registrants, returns to vendors, distributions to reverse distributors for disposal); Records of controlled substances dispensed, including prescriptions or a logbook of controlled substances which may be lawfully dispensed without a prescription (e.g., some Schedule V controlled substances); Reports of theft or significant loss (DEA Form 106); Registrant Record of Controlled Substances Destroyed (DEA Form 41); DEA registration certificate; Self-certification certificate and logbook/electronic equivalent as required under the Combat Methamphetamine Epidemic Act of 2005; logbook must include information entered by the purchaser (name, address, signature, date, and time of sale) and the quantity and form of the product sold

Question 115

BeSafeRx

Answer 115

designed to educate consumers about the health risks of purchasing prescription medicine through rogue online pharmacies. The FDA issues warning letters to these pharmacies and alerts consumers not to purchase medicines from these sites

Question 116

Know Your Source: Protecting Patients from Unsafe Drugs

Answer 116

This program is designed to educate health care professionals so they can help prevent unsafe or ineffective drugs from reaching their patients by buying medications from licensed sources

Question 117

Disposition

Answer 117

Product removal from the distribution supply chain including disposal or return of the product or other actions (eg, retaining a sample for further additional physical examination or laboratory analysis)

Question 118

Distribution

Answer 118

Sale, purchase, trade, delivery, handling, storage, or receipt of a product; does not include dispensing pursuant to a prescription

Question 119

Homogeneous case

Answer 119

Sealed case containing only product that has a single NDC number belonging to a single lot

Question 120

Illegitimate product

Answer 120

Product which is counterfeit, diverted, or stolen; is intentionally adulterated; is the subject of a fraudulent transaction; or appears otherwise unfit for distribution

Question 121

Product identifier

Answer 121

Graphic that includes the SNI, lot number, and expiration date of a product represented as a linear or 2-dimensional data matrix barcode that can be verified through human or machine-readable methods

Question 122

Repackager

Answer 122

Person who owns or operates an establishment that repacks and relabels a product for sale or distribution without a further transaction

Question 123

Reverse logistics provider

Answer 123

Entity who owns or operates an establishment that dispositions or processes saleable or nonsalable product received from an authorized trading partner so the product may be processed for credit or disposed of for no further distribution

Question 124

SNI

Answer 124

Set of numbers or characters used to uniquely identify each package or homogenous case; comprises the NDC number combined with a unique alphanumeric serial number of up to 20 characters

Question 125

Suspect product

Answer 125

Product for which there is reason to believe is potentially illegitimate

Question 126

Trading partner

Answer 126

Manufacturer, repackager, wholesale distributor, dispenser, or third-party logistics provider from whom a manufacturer, repackager, wholesale distributor, or dispenser accepts or transfers direct ownership of a product

Question 127

Verification

Answer 127

Determining whether the product identifier corresponds to the SNI or lot number and expiration date assigned to the product by the manufacturer or repackager

Question 128

EPCIS System

Answer 128

captures information about status, location, movement, and chain of custody of products enabling supply chain visibility by sharing data using a common language between the trading entities. EPCIS provides the following information7:

Whereabouts of products produced at or shipped from a given facility
Aggregation of individual items packed into cases, cases loaded onto pallets, and pallets into containers
Timestamped series of business-relevant sensor data (eg, critical mechanical components, temperature-controlled transports)
Details on measured concentrations of chemicals and microorganisms for food safety applications
Overview of product inventory or equipment availability across networks of distributed locations
Expiration of perishable products (eg, vaccines) to ensure timely use and first-in/first-out distribution
Certification details associated with harvest, production, shipments, and locations (eg, reduction of carbon emissions, efficient use of water and land).7

Question 129

Counterfeit

Answer 129

A drug (or its container or labeling) that bears the trademark, trade name, or other identifying mark, imprint, or device of a drug manufacturer, processor, packer, or distributor other than the party who manufactured, processed, packed, or distributed it

Question 130

Diverted

Answer 130

A product that left the US pharmaceutical supply chain and is reintroduced in the US in a transaction with a trading partner (eg, a product that is dispensed to a patient and then reintroduced into the pharmaceutical supply chain to a trading partner); a product that is labeled for sale in a non-US market and is introduced into the US pharmaceutical supply chain through a transaction with a trading partner

Question 131

Stolen

Answer 131

Any product that has been taken or removed without permission of the owner of the product (this includes the drug and/or its packaging)

Question 132

Intentionally Adulterated

Answer 132

A product that would result in serious adverse health consequences or death to humans due to questionable safety, identity, strength, quality, or purity issue

Question 133

Unfit for distribution

Answer 133

A prescription drug whose sale would violate the FDCA and shows a reason to believe or credible evidence that the product would be reasonably likely to result in serious adverse health consequences or death to humans; this includes drugs identified as suspect, illegitimate, adulterated, or misbranded

Question 134

Reorder Point Formula

Answer 134

Reorder point = [(review time + lead time) × average demand] + safety stock

Question 135

Quantity discounts

Answer 135

offered as an incentive for purchasing large quantities of single products or a special grouping of specific products offered by a manufacturer (eg, a specified quantity of generic drugs).

referred to as noncumulative quantity discounts because they are based on a quantity of the same product being purchased on the same order

Question 136

Cash discounts

Answer 136

are offered for the prompt payment of invoices. A common discount is “2/10, net 30,” which means a 2% discount is granted if the invoice is paid within 10 days of the date of the invoice, otherwise, the net amount is due in 30 days.

beneficial because the pharmacy is not required to purchase extra inventory; however, some pharmacies may have difficulty finding enough cash on hand to pay the invoice early

Question 137

Serial discounts

Answer 137

occur when multiple discounts are applied at the same time.

might be eligible for a cash discount and a quantity discount on the same order.

Question 138

Order when you dispensed a unit or empty a bottle

Answer 138

MANUAL Method! When a product is dispensed or a bottle is emptied, another one is ordered. Ensures that exhausted stock is replenished and that the pharmacy does not have too much of a product. Does not consider seasonal variations and can perpetuate an overstock situation if a high-volume drug is suddenly not needed, or cause delays in filling orders if there is a sudden rise in demand. Also, if an item is missed, it will not be known until a patient needs a prescription filled and the product is not in stock.

Question 139

Visual Method

Answer 139

MANUAL Method! The number of units in inventory is compared with a list of how many should be carried. When the number falls below the desired amount, an order is placed. A handheld electronic device into which item numbers and quantities are entered or a handheld scanning device that scans the bar codes on the product packaging or shelf labels is usually used to conduct inventory inspection. These devices then can be used to submit an order electronically.

Question 140

Periodic Method

Answer 140

MANUAL Method! This method follows the same process as the visual method, except inventory inspection is carried out at timed intervals (eg, weekly, monthly, annually).

Question 141

Inventory Turnover Ratio

Answer 141

ITOR number of times a pharmacy turns over its inventory in a given year.

reasonable ITOR ranges between 5 to 10.8 This means the business is selling and replenishing inventory every 1 to 2 months. The national average ITOR for independent pharmacy is 11.

Question 142

Inventory Turnover Ratio Formula

Answer 142

ITOR = COGS/Average Inventory

ITOR = $3,000,000/$300,000

ITOR = 10

Question 143

Cost of Goods Sold

Answer 143

COGS represents all costs associated with the sale of a product both direct (eg, cost of the product, inventory, or packaging) and indirect (eg, labor, equipment) and is usually found on the pharmacy’s income statement

Question 144

Days on Hand

Answer 144

which is the number of days it takes to turn the pharmacy’s inventory. This can be calculated by the following formula

DOH should be less than 37 days.

Question 145

Days on Hand Formula

Answer 145

DOH = 365/ITOR

DOH = 365/10

DOH = 36.5

Question 146

Days of Supply

Answer 146

measure the average time (in days) it takes for the pharmacy to sell its entire inventory.11 The following formula can be used to calculate DOS

Question 147

Want Book

Answer 147

MANUAL Method! When a medication is dispensed or used up, it is written in a “want book” or the wholesaler sticker from the bottle is placed in the want book. The items are reviewed before entered into an order – this is a manual process that takes time to review, but it gives purchasers more control over the items ordered and allows for critical review of how much product should be ordered.

Question 148

Periodic Automatic Replenishment Levels

Answer 148

PAR Levels levels are set in the pharmacy’s computer system and alert pharmacy staff when product on-hand goes below a pre-determined amount or automatically adds the item to the order. The level is the amount set by pharmacy staff based on how much product is typically dispensed in a given period. PAR levels may be consistent throughout the year, or they may change if the demand is expected to change, such as an expected increase in allergy medication during the fall and spring.

Question 149

Electronic Data Interchange

Answer 149

EDI secure way to exchange electronic information between two trading partners. Allows the pharmacy computer system to talk directly with the wholesaler’s system.
Replenishment order is accumulated using on-hand quantities and set PAR levels, then the order is sent automatically.

Allows seamless, accurate, and efficient communication with the wholesaler, can confirm the purchase, and can update on-hand quantities in the computer when the order is received by the pharmacy.

This saves a lot of time! You are not calling in orders, manually punching in orders, entering orders into the wholesaler’s website ordering portal, or scanning barcodes to build an order that then must be transmitted to the wholesaler.

Question 150

Just-in-Time

Answer 150

products are ordered as needed. This method focuses on keeping a minimal amount of inventory on hand instead of keeping a certain amount of stock available in case a product runs out.

Question 151

Open-To-Buy

Answer 151

monthly buying budget is created based on the pharmacy’s planned sales.
Calculates how much inventory is needed each month to meet planned sales. This makes it a proactive rather than a reactive approach. The following formula can be used to calculate how much money can be spent on inventory

Question 152

ABC Approach

Answer 152

A category contains products that should always be on hand (ie, the top-selling, highest-turnover products). Category A products make up about 10% of inventory but 70% of sales
B category contains lower-demand products with slower turnover rates. B products make up 20% of inventory and 20% of sales
C category contains even lower-demand products with slower turnover rates as compared to B products. C products make up 70% of inventory and only 10% of sales

Question 153

Open-To-Buy Formula

Answer 153

(Planned Sales + Planned Markdowns + Planned End of Month Inventory) –
Planned Beginning of Month Inventory

Question 154

Min/Max

Answer 154

In this method, a pharmacy determines a minimum and maximum number of products desired to have in inventory at any given time. The inventory is designed to never drop below the minimum or go above the maximum. This method focuses on keeping inventory at consistent, economic levels.

Question 155

Economic Order Quantity Formula

Answer 155

EOQ = Square Root of:
[(2 × Annual Product Quantity × Ordering Costs per Order)/Holding Costs]

Question 156

Power of Attorney

Answer 156

POA Grants another person permission to obtain DEA Form 222s, and to sign a DEA Form 222 to order Schedule II controlled substances.

Does not have to be a pharmacist.

Must be signed by registrant and the person receiving the POA.

May be revoked by grantor and 2 witnesses

Question 157

Form 222

Answer 157

Used for ordering CII when doing so manually. was triplicate, but now DEA has and requires the single sheet format.

Keep for 2 years

Orders with errors or omissions will NOT be filled and still keep copy

Use a typewriter, computer printer, pen, or indelible pencil;
Enter 1 ordered item per line; Note the number of lines completed on the form; List the name and address from whom the controlled substances are being ordered on the form; Make a copy of the original form and submit the original form to the supplier; An authorized person or granted power of attorney must sign and date the form; When the items are received, document the date and number of containers received on the copied form; Do not correct a defective DEA Form 222; it must be replaced by a new form for the order to be filled

Question 158

Brown Bagging

Answer 158

This is when a patient has their prescription filled at their regular pharmacy and brings the medication with them to the facility or office to be administered.

These medications are typically injected or administered by IV infusion and may also include products specifically compounded for that patient.

This carries some risk because the patient must take care to properly store and handle the medication to avoid compromising its integrity.

Question 159

Controlled Substance Ordering System

Answer 159

CSOS Form 222 alternative. Must have digital certificate issued by DEA Certification Authority.

Electronic transmission must be secure and done through CSOS EDI. Must only use approved EDI.

Kept for 2 years.

Orders with errors or omissions will NOT be filled and still keep copy

Question 160

CSOS Digital Certificate

Answer 160

Valid until DEA registration under which it was issued expires. Certificates will be revoked if the certificate holder is no longer authorized to sign schedule II orders, if information on which the certificate is based changes, or if the digital certificate has been compromised, stolen, or lost.

Question 161

Ordering CIII-CIV

Answer 161

Invoices must be verified as accurate and retained by the purchaser for two years. State boards of pharmacy may require a longer retention time. These documents must be stored in a manner that makes them readily available for review.

Question 162

White Bagging

Answer 162

This is when a pharmacy outside the health-system facility or provider’s office (typically a specialty pharmacy) fills a prescription for a specific patient and sends it directly to the facility or office for administration to the patient.

Question 163

503A Compounding

Answer 163

Pharmacy may compound prescription products, but only for a specific patient on a prescription or order from a provider. Pharmacies may NOT compound any commercially available product unless there is a significant clinical reason to do so. Some examples include compounding a liquid medication for an infant when the commercially available medication is only available as a tablet and compounding a medication without dye when a patient is allergic to the dye in the available product.

If a commercial product is not available in the marketplace (there is an FDA-documented shortage), then a pharmacy may compound that product for the specific patient but only during the time the product is in shortage.

Question 164

503B Outsourcing Facility

Answer 164

compounds preparations for office use. An outsourcing facility may NOT compound any commercially available products unless the product is documented as being in short supply. This is to alleviate shortages.

Health systems and providers may obtain both sterile and nonsterile compounded products from an outsourcing facility for use and administration in the facility or office. There have been widespread shortages, for example, of IV fluids and many injectable medications.

An outsourcing facility can be authenticated if it is registered with the FDA. Authentication should also include checking with the state licensing agency or board of pharmacy in the state in which the outsourcing facility is located, and in the receiving state (if different) to ensure the facility is licensed and in good standing.

Question 165

Clear Bagging

Answer 165

This is when the health-system’s own specialty pharmacy prepares and delivers the patient’s medication to the facility or office for administration. Better control over the product is achieved and includes appropriate handling.

Question 166

Foreign Sourcing

Answer 166

may look to other sources for purchase of drugs that are unavailable or in low supply.

When looking at foreign source must evaluate is: source is registered with FDA, drug manufactured FDA-approved for use in the United States, is it eligible to be imported for resale.

Drugs imported for resale subject to tax and customs regulations. Foreign-sourced products that are FDA-approved and from an FDA registered facility are usually as safe and effective as domestic products, but the regulations relating to resale of a foreign-sourced product may be complex and heavily enforced.

Researching and adhering to these regulations may be worthwhile to supply chain entities that purchase large quantities of an item but are typically found to be overly onerous for pharmacies who are trying to fill a prescription.

Question 167

Austria, Croatia, France, Italy, Malta, Spain, Sweden, and the United Kingdom.

Answer 167

European drug regulatory authorities as capable of conducting inspections of manufacturing facilities that meet FDA requirements

Question 168

Gold Bagging

Answer 168

This is like clear bagging except the health system’s specialty pharmacy controls the chain of custody of the product, shares medical records documentation, and notes, and coordinates delivery times to specific destinations to coincide with the patient’s appointment for administration.

Question 169

Drug Transfer Between Pharmacy

Answer 169

Unless state regulations prohibit it, pharmacies within the same health-system network or chain are permitted to transfer drugs from one site to another, being sure to document the gain or loss of inventory.

not in the same network or chain are permitted to transfer drugs in an emergency situation, and in an annual amount not to exceed 5% of the transferring pharmacy’s annual dispensed amount of that drug.

An emergency situation means that the pharmacy needing the medication has a prescription for a specific patient needing to be filled immediately..

Question 170

Class I Recall

Answer 170

reasonable probability that the use of or exposure to a violative product will cause serious adverse health consequences or death.

Question 171

Class II Recall

Answer 171

situation in which the use of or exposure to a violative product may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote.

Question 172

Class III Recall

Answer 172

situation in which the use of or exposure to a violative product is not likely to cause adverse health consequences.

Question 173

Market Withdrawal

Answer 173

product has a minor violation that would not be subject to FDA legal action. The firm removes the product from the market or corrects the violation. For example, a product removed from the market due to tampering, without evidence of manufacturing or distribution problems, would be a market withdrawal.

Question 174

Drug Wastage

Answer 174

CS wasted/spilled must be properly disposed of and documented on a DEA Form 41 and signed by two people who witnessed the wastage or spill. Wasted controlled substances may be destroyed onsite if approved by the DEA as part of an approved destruction method, or they may be sent to a DEA-registered reverse distributor for destruction.

Either method must be done promptly, so drug intended for waste is not taking up space in a safe or waiting outside of a safe and subject to theft or diversion. Both methods must be documented, and the documentation must be stored and readily available for at least two years.

Drug that is intentionally wasted, such as excess drug from compounding, should also be accounted for in a pharmacy’s compounding documentation.

Question 175

Medical Device Safety Alert

Answer 175

A medical device safety alert is issued in situations where a medical device may present an unreasonable risk of substantial harm. In some cases, these situations also are considered recalls.

Question 176

Returned Product

Answer 176

Salvage. must be filed with the invoices to account for the drugs.
For controlled substances, these documents must be filed in the appropriate C-II or C-III-V invoice files.

Additionally, for C-II medications, there must be a DEA-222 or CSOS document generated and filed.

Question 177

Hazardous Waste

Answer 177

documented by the pharmacy. Typically contractor comes for it.

Question 178

Security requirements

Answer 178

safe/cabinet weighing less than 750 pounds must be bolted to the floor so it is not easily removed. Safe/cabinets should be equipped with 30 man-minutes against surreptitious entry, 10 man-minutes against forced entry, 20 man-hours against lock manipulation, and 20 man-hours against radiological techniques. If necessary, depending upon the quantities and types of controlled substances stored, a safe/cabinet should also be equipped with an alarm system. If inventory will not fit in a safe or cabinet, a vault is required for storage purposes

Question 179

Recordkeeping requirements

Answer 179

Required for all pharmacies and kept for at least 2 years: Executed DEA Forms 222 or the electronic equivalent; Power of Attorney authorization to sign DEA Form 222
Receipts and/or invoices for Schedules III-V controlled substances; All inventory records of controlled substances, including initial and biennial inventories; Records of controlled substances distributed (e.g., sales to other registrants, returns to vendors, distributions to reverse distributors for disposal); Records of controlled substances dispensed, including prescriptions or a logbook of controlled substances which may be lawfully dispensed without a prescription (e.g., some Schedule V controlled substances); Reports of theft or significant loss (DEA Form 106); Registrant Record of Controlled Substances Destroyed (DEA Form 41); DEA registration certificate; Self-certification certificate and logbook/electronic equivalent as required under the Combat Methamphetamine Epidemic Act of 2005; logbook must include information entered by the purchaser (name, address, signature, date, and time of sale) and the quantity and form of the product sold

Question 180

CS theft or significant loss

Answer 180

experiences theft or significant loss of any controlled substance, they must notify the local DEA Diversion Field Office in writing by using DEA Form 106 within 1 business day of discovery.19 DEA recommends notifying local law enforcement and state regulatory agencies, but this is not required by federal law.