With drug prices soaring, shortages intensifying, and government-mandated cost-sharing in question, hospital-system pharmacy procurement is becoming an increasingly fraught enterprise. Pharmacy leaders are routinely expected to deliver on critical outcomes, including financial performance, operational resilience, and regulatory readiness.
Health systems – with margins currently hovering around 2% and cash reserves plummeting – are pressuring pharmacies to shore up institutional viability. Unfortunately, too many pharmacy organizations lack the resources to deliver.
They tackle their challenges in silos with ad hoc spreadsheets and reflexive practices such as simply “reordering what we bought last time.” The fragmentation and inefficiency set hidden traps that can trigger overspending, drug-supply emergencies, and unintended regulatory violations. Even a minor spike in drug costs can erase a year’s worth of margin.
Pharmacies’ multifaceted duties
The challenges of pharmacy procurement are multifaceted. Let’s focus on three core functions: managing drug costs, avoiding catastrophic shortages, and securing federally regulated 340B group purchasing discounts to improve patient care. These functions are more intertwined than they appear on the surface.
Each drug purchase must balance acquisition costs, payor reimbursement, 340B savings potential, and supply chain stability, variables that traditional procurement systems cannot address.
Imagine you’re reviewing an NDC change that could save hundreds of thousands of dollars each year. It looks like a win until you’re suddenly hit with an upcoming supply disruption. Similarly, a lower 340B price can jeopardize projected margins if reimbursement fails to keep pace.
Unfortunately, the most endangered institutions tend to be the least equipped to handle these thorny decisions, whether it be resource limitations or lack of solutions to support success
No system, however, can afford to continue making isolated purchasing decisions in an interconnected financial matrix. Instead, procurement must evolve into a strategic organizational capability that considers the operational, regulatory, and financial implications of every decision. It must enable unified decision-making.
Prevailing forces
A perfect storm of forces has significantly complicated pharmacy procurement.
- Drug prices are on the rise and are projected to rise by 3.35% to 4% this year, driven largely by explosive demand for a growing pipeline of expensive therapies and the increasing complexity of specialty drugs. For pharmacies, the focus has shifted from simple price negotiation to a survival-level need for total spend management.
- Drug shortages are the norm rather than the exception. We’ve entered an era of persistent scarcity, with the total number of active drug shortages reaching a new record high of over 270 medications at any given time and nearly 60% of current shortages persisting for two years or longer. Shortages act as a hidden spend driver, forcing systems to procure expensive off-contract alternatives or costly outsourcing facilities to fill the void. From 2019 to 2024, both labor hours and labor costs dedicated to shortage management more than doubled, significantly increasing operational strain.
- Regulatory scrutiny is intensifying. The 340B drug program has long served as a financial cornerstone of safety-net providers, enabling them to stretch scarce federal resources and expand care for underserved populations. As the market value of 340B purchases exceeds $80 billion, a proposal to shift up-front discounts to back-end reimbursements introduces the potential for unprecedented cash flow volatility. Health systems may be required to front the full cost of medication, sometimes seeing temporary drug spend spikes of 500% to 5,000% while waiting for manufacturers’ rebates.
Every procurement decision comes with a tradeoff. Compartmentalization creates “decision whiplash” – a cycle of reactive firefighting that drains labor hours and compromises institutional resilience.
Managing all these functions – drug spend, shortages, and 340B holistically as an integrated whole – will benefit operational and financial performance. Health care systems need to buy, build, or create a roadmap for acquiring unified decision-making capability.
Enter pharmacy intelligence
New pharmacy intelligence platforms are helping transform procurement from a transactional purchasing function to a data-driven strategy. By integrating supply chain visibility, contract analytics, and predictive shortage insights, pharmacy leaders are improving purchasing decisions, controlling acquisition costs, and building greater resilience into the medication supply chain.
Drug-spend management programs for the first time are providing 100% visibility into contracts and invoices, identifying optimal pricing options across primary and secondary wholesalers while managing complex 340B rebate comparisons and providing insights into shortage risk. The intent is to never leave savings on the table.
Drug-shortage technology acts as an early-warning system, forecasting supply
disruptions. It also offers visibility to site-by-site “days-on-hand” counts that automatically update, giving institutions time to prepare for substitutes if necessary. By integrating these predictive signals directly into the procurement workflow, procurement can prevent switching to “low-cost” drugs that are about to disappear from the market, anticipate manufacturer price increases on sole-source medications before they take effect, and plan ahead for predicted shortages.
340B compliance technology provides 100% transaction auditing, moving compliance from a retrospective “snapshot” to a continuous, real-time process, ensuring every claim is auditable and defensible. It offers continuous compliance monitoring and total rebate defense.
Some companies use their 340B compliance technology to enable consultants to conduct “mock audits” resembling those ordered by the Health Resources and Services Administration (HRSA), the 340B regulatory body, giving them a singular snapshot in time of overall compliance. As an alternative, a solution specifically designed for a 340B compliance team instead allows for continuous compliance monitoring across the entirety of their 340B program.
Unified decision-making empowers pharmacy teams to act with confidence. They no longer have to choose between the cheapest drug and the most reliable one. Instead, they gain a single source of truth that balances price, availability, and audit-readiness in every transaction.
In an era of thin margins and persistent volatility, this connected approach is the only way to ensure that your pharmacy remains both clinically prepared and a financial lifeline to the health system in which it operates.
About Lauren Forni, PharmD
Lauren Forni, PharmD, MBA, is Senior Director of Clinical Strategy at Bluesight, where she works with health system leaders to modernize medication management, strengthen diversion oversight, and translate complex regulatory and operational challenges into scalable, data-driven solutions. As a former Assistant Director of Pharmacy at Brigham and Women’s Faulkner Hospital, she brings frontline operational insight spanning pharmaceutical supply chain optimization and 340B program management to industry-wide strategy. She is also the co-founder of the Diversion Collective, a multidisciplinary collaborative designed to elevate how healthcare organizations measure, manage, and mitigate diversion risk through shared expertise and practical application.
