Drug spend is rising faster than health system margins — which currently sit at around just 2%. At the same time, drug shortages have shifted from episodic disruptions to a constant operational burden, more than doubling the time and cost required to manage them since 2019. For pharmacy teams already stretched thin, the pressure isn’t coming from just one direction.
In a recent Becker’s Healthcare webinar, Melissa Stiles, Director of Pharmacy Services at Vernon Health, and Lauren Forni, Senior Director of Clinical Strategy at Bluesight, explored why managing cost, supply, and 340B compliance as separate problems actually makes each one harder to solve — and what it looks like to connect them.
The Fragmented Data Problem
The core challenge facing pharmacy teams isn’t a lack of data or tools, but that cost, supply, and compliance are managed in isolation, despite the fact that every procurement decision touches all three. “The data and information needed to make decisions is scattered across multiple systems, multiple portals, and spreadsheets,” explained Forni. “This leads to fragmented workflows and unavoidable inefficiencies.”
This fragmentation creates unavoidable trade-offs:
- A lower 340B price can compress margins if reimbursement doesn’t keep pace
- A cheaper purchase option can reduce 340B capture and increase total cost
- Securing supply during a shortage may eliminate expected savings altogether
These trade-offs happen constantly, but most organizations don’t have the infrastructure to see them coming and evaluate them in real time.
The Real-World Constraints and Doing More with Less
Vernon Health is a critical access hospital in rural Wisconsin. As Stiles put it, one of their primary goals is to remain independent so they can keep providing care to their community — and that independence is directly tied to how well the pharmacy manages its finances.
With limited staffing, procurement responsibility falls almost entirely on Stiles, alongside her broader operational duties. She recently added oversight of three retail pharmacies to her scope, where the current procurement model is even more basic: staff reorder what they used, with no time to evaluate whether a better-priced alternative exists.
At the same time, Vernon Memorial has been actively building out its 340B program — hiring a compliance coordinator, tightening documentation, and investing in 340B compliance software. The investment reflects what the program means to the organization. “Maintaining compliance with the 340B program really allows us to keep open our retail pharmacies, and to be able to pass along that savings to our patients,” Melissa said. “It allows us to maintain delivery service, mail out service to our patients at no cost.”
For a rural critical access hospital, the 340B program can often be the driver of keeping certain services financially viable.
Making the Case for Investing in Technology
As an existing 340BCheck customer, the logical next step for Vernon Health’s pharmacy procurement strategy was adding CostCheck and ShortageCheck to connect drug spend optimization and shortage management to the compliance foundation already in place. But in a tight-margin environment, new technology investments must be justified clearly. “If we don’t have this piece of software, how does the cost of software compare to hiring, say, another tech or a pharmacy buyer?” she said. “To find a qualified applicant in our area, it’s possibly 3 to 6 months. And to actually train them up, it’s a long process.”
She also demonstrated the operational savings directly, walking through specific NDC-level purchasing decisions where switching sources could save thousands of dollars on a single line item. At the same time, the technology reduces the labor-intensive, manual process currently required to evaluate purchasing decisions and manage shortages. With better visibility and foresight, the team can prepare for shortages in advance, purchase within contract when possible, and still maintain a consistent and reliable medication supply.
By investing in additional procurement technology, their initial goals are practical: fewer emergency product changes – at least two fewer annually – and enough drug spend reduction to earn a reaction from leadership.
Q&A Highlights: What Connecting Cost, Supply, and Compliance Actually Looks Like
How do drug shortages specifically affect 340B program integrity?
Forni called this one of the most underappreciated challenges in pharmacy operations. When a shortage forces a substitution, the compliance implications downstream are significant. In areas like the OR, where barcode scanning doesn’t occur, running multiple NDCs simultaneously creates accumulation errors — the system can’t reliably track which NDC is being dispensed against 340B. If a team has to buy outside their wholesaler to secure supply, manual invoice uploads are required to maintain accurate accumulation records. “The more lead time you can get, and the more collaborative your tools are, the more workflow-driven they are to loop in all of the key people — the better off teams will be,” Forni said.
Melissa added the patient safety layer: “Pharmacy has gotten so complex. A simple drug shortage impacts so many things. Is it going to lead to nursing staff to override it out of your automated dispensing cabinets more? And then that leads you to compliance issues.” The argument for 52-day advance notice on shortages isn’t just financial, but rather the difference between a planned substitution and a scramble.
Where should organizations without a dedicated buyer focus first?
“Managing those shortages,” Melissa said, “because they’re just so much part of your daily life now.” Her reasoning was specific: if tools can help a team purchase within contracts and 340B pricing before a shortage hits, fewer items end up purchased outside contracts at spot prices. “That allows you to save money there so that it impacts your margin less when you’re having to maybe purchase something on a shortage.”
How has 340BCheck changed your audit readiness?
Vernon Health uses 340BCheck for its annual mock audit with an external auditor. This year, Melissa’s team gave the auditor direct platform access. “Instead of you having to submit all of your policy, all of your contract agreements, all of your compliance documents — they were able to access that platform and see all of those documents seamlessly.”
That matters because the stakes of an HRSA audit have grown considerably. OPAIS-related record-keeping errors accounted for 64% of HRSA audit findings published for FY2024. “The platform also compares what your OPAIS registration is,” Melissa said. “It reminds you that you have a recertification. If you happen to miss emails, it reminds you to double check your policy and upload your yearly review. Same thing with your Medicare cost reports.” Automating that monitoring doesn’t add workload and it removes the single largest category of audit exposure.
What does good procurement data actually look like?
“You don’t want your data to just be informational, you want your data to be actionable,” Forni said. “Data that tells you what to do with it, not just what happened. You don’t want to have to export from a bunch of different places, collate all of the information into one, do fancy VLOOKUPs — you want that in the forefront for you so that your time is better spent taking the action rather than gathering the data.”
Melissa’s illustration of the alternative was pointed: one of her retail pharmacy managers built a spreadsheet to manage purchasing. He used it for a couple of months, then stopped, noting that it was much too labor intensive and took up time that he didn’t have.
The Future of Pharmacy Procurement
The core insight from Vernon Health’s experience is one that applies across hospital sizes and staffing levels: when cost, supply, and compliance are managed together, the trade-offs between them become visible and manageable before they create problems. To learn more, watch the full webinar or check out Bluesight’s whitepaper: Connected Procurement Decisions.