Chapter 7
Pharmaceuticals stock
status and
consumption analysis
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Learning objectives:
By the end of this session, students/Trainees will be
able to:
Conduct VEN classification for pharmaceuticals
Categorize pharmaceuticals into ABC classes
Analyze ABC/VEN reconciliation
Perform Stock Status Analysis (SSA)
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Introduction to
pharmaceuticals stock and
consumption analysis
Health facilities shall analyses their pharmaceuticals
stock and consumption regularly to avoid overstock
or under stock, to use budgets efficiently, and to
minimize wastage.
Among the widely used methods to assess medicine
use pattern at health facility, VEN and ABC analysis
were the pioneers.
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VEN analysis
is a method to classify medicines into Vital (V), essential (E) or
nonessential/less essential (N) per their clinical importance.
Medicines can be categorized into VEN according the
catchment areas or disease morbidity.
ABC analysis
is a method for determining and comparing pharmaceutical
costs within a health facility in terms of their budget
consumption.
To identify if there is relatively high expenditure on low
priority medicines (N category items in Class-A) ABC-VEN
reconciliation will be performed.
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Stock status analysis
is a method used to analyses the consumption
pattern of a product in the past and predict
utilization of available stock
It identifies whether products are fast moving, slow
moving, or non-moving
It will help to avoid stock out and wastage
to identify if there is relatively high expenditure on
low priority medicines (N category items in Class-A)
ABC-VEN reconciliation will be performed.
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Classification of pharmaceuticals
into VEN
Pharmaceuticals list of the health facility should be
classified into vital (V), essential (E) and non/less essential
(N)
VEN analysis is a method that is used to classify
pharmaceuticals into Vital (V), essential (E) or
nonessential/less essential (N) per their clinical importance
This categorization should guide the forecasting,
procurement, and inventory management decisions of the
health facility
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The criteria for prioritization of pharmaceuticals into
VEN are as follows:
Vital (V)
Vital pharmaceuticals are very essential
pharmaceuticals that fulfil one or more of the
following criteria:
Potentially life-saving
Patient may die or may be harmed or disabled due
to lack of these pharmaceuticals
It is mandatory for these pharmaceuticals to be
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Crucial to provide basic health services, without which it is
impossible to deliver the basic services in the specific
catchment area (in its absence service may be
discontinued)
Essential (E)
Essential pharmaceuticals are those that fulfil one or more
of the following criteria:
Effective against less severe but significant illnesses (it is
between vital and is essential)
Important to provide basic health services without which
patients can face difficulty
May be somehow substituted
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Essential to the service without which it is difficult to provide health
service
Nonessential (N):
Non-essential pharmaceuticals are less essential
pharmaceuticals that are:
Effective for minor illnesses and have low therapeutic
advantage
Necessary to give the health service; however, health
service delivery will not be discontinued in the absence of
these pharmaceuticals
Assignment to the non-essential/less essential category
does not mean that the pharmaceutical is no longer on the
health facility’s pharmaceutical list
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Criteria to classify Pharmaceuticals
into VEN
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Steps in VEN Analysis
For the VEN analysis to takes place, facility specific
pharmaceuticals list should be available.
Each pharmaceutical, medical supplies, laboratory chemicals
and reagents included in the list should then be categorized
as V, E or N.
Steps to conduct VEN Analysis
1. Establish committee of experts comprising deferent
disciplines
2. Reach on consensus on the criteria for VEN categorization
3. Classify each pharmaceuticals in the health facility‘s
pharmaceutical list into VEN
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4. Identify pharmaceuticals which are classified in more
one category and give more important category.
Example if pharmaceutical-A is categorized both in
E and V, the pharmaceutical should be classified
as V category pharmaceutical for the facility
5. Conduct workshop to get feedback
6. Endorse in drug and Therapeutics Committee( DTC)
7. Review annually, can be modified whenever
necessary
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Example: Assuming a general hospital, categorize
the following pharmaceuticals into V, E or N and
indicate the criteria why you put that specific
Drugs
pharmaceutical VE category
in that Remark
N
Normal Saline V life-saving & crucial to give
the service
Vitamin E capsule N Not life-saving and Not be
crucial
Amoxicillin 500mg E
cap life-saving & may not be
crucial to deliver the service
Diazepam injection V
life-saving
TTC Capsule N
less essential
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Amlodipine Tablet E life-saving & may not be
Categorization of
pharmaceuticals into ABC
classes
ABC analysis is a method for determining and
comparing pharmaceutical costs within a health
facility.
ABC Analysis can be explained in terms of budget
consumed and number of pharmaceuticals in the
budget list as follows:
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Steps for Conducting ABC
Analysis
There are steps to conduct ABC analysis
The following points before conducting ABC analysis.
ABC analysis can be conducted separately for
donated pharmaceuticals, if necessary
If ABC analysis is to be conducted separately,
include donation items which are not continuously
supplied that have impact on budget
pharmaceuticals with ABC analysis for budget
pharmaceuticals
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Data sources for ABC analysis is electronic/paper
based bin card. In the case of paper based bin cards,
costs can be obtained from model 19/22.
Similar pharmaceuticals/supplies should be written in
the same name and unit of measurement
National base code should be used during recording
to avoid duplications of naming.
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Analysis of ABC/VEN reconciliation
and interpretation of findings
ABC/VEN reconciliation involves categorizing the class
of pharmaceuticals generated from ABC analysis by
VEN to identify if there is relatively high expenditure
on less priority pharmaceuticals. Conducting ABC/VEN
analysis by itself may not have importance.
The findings should be interpreted and used for
decision making.
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Example from Nejo General Hospital the
following ABC-VEN reconciliation results
obtained
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Example from Nejo General Hospital the following ABC-
VEN reconciliation results obtained
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From the above reconciliation using AV, AE, AN, BV, BE,
BN, CV, CE, CN categories Answer the following
questions.
1. Which category of pharmaceuticals is given highest
priority for procurement?
2. Which category of pharmaceuticals is given less
priority during procurement?
3. Which category of pharmaceuticals need careful
evaluation before undertaking procurement?
4. Which category of pharmaceuticals is candidate for
stock status analysis?
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Stock Status Analysis (SSA)
Pharmaceutical stocks at the facility should be
analyzed periodically after physical inventory is
conducted every quarter, to see whether the stock is
being sold or consumed at the expected levels
Stock status analysis is used to take actions before
pharmaceuticals are expired or stocked out
This process enables the health facility to minimize
wastages and ensure effective and efficient utilization
of budget and continuous availability of essential
pharmaceuticals
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Steps to conduct SSA
Step 1: Identify pharmaceuticals that are candidates for
the stock status analysis (SSA).
Which pharmaceuticals are candidate?
Those that fall in A category in the ABC analysis
Those that fall in N-A category in ABC/VEN
reconciliation
Pharmaceuticals with near expiry regardless of its
category
Items recommended by experts (store managers, bin
managers, others)
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Step 2: Calculate average monthly consumption (AMC)
of all pharmaceuticals subjected to SSA.
For pharmaceuticals used for seasonal diseases (e.g
malaria), it is advisable to take consumption data of the
season in preceding years.
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pharmaceuticals.
MoS- is the number of months that can be covered by
the stock at hand and add stock on order provided that
the consumption pattern remains constant
In situations where the monthly consumption is
increasing with time, use last month‘s consumption
instead of average monthly consumption.
This calculation is valid only when the remaining shelf
life of the product is greater than the months of stock.
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Step 4: Decide if the product is overstock, under stock
Over stock: if the months of stock are more than 4
months, it is overstock
If the product is overstock, make sure that it can be
consumed before expiry.
If a pharmaceutical has short expiry date, the amount
of stock that cannot be consumed until expiry is
overstock
Under stock: If the months of stock are less than 2
months, it is said under stocked
This may lead to stock out, so needs especial attention.
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Actions to be taken after SSA
If over stock:
Present to the management for decision making
Discuss with prescribers to identify any opportunity
to use the pharmaceuticals
Reverse to the suppliers if possible
Transfer donate to other health facilities
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If under stock:
Immediately refill the product
Determine additional stock needed to reach to the
maximum (4 Months stock)
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THANK
YOU
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