ABC and VED Analyses of Drug Management in a Government Tertiary Care Hospital in Kerala

Abstract

Rationale Approximately 35.0% of annual hospital budget is spent on buying materials and supplies, including medicines. This necessitates effective and efficient management of the medical stores. Efficient priority setting, decision making in purchase and distribution of specific drugs, close supervision on drugs belonging to important categories, and prevention of pilferage depend on the drug and inventory management Provision of care in tertiary care hospitals is sensitive to the timely availability of facilities including drugs. Huge budget and key element in the provision of care make drugs as an important component of hospital care. Objective This paper evaluates the drug usage and its management in a government tertiary care hospital in Kerala.

Methodology The chosen tertiary care hospital has an annual budget of US $18.0 million and spends 6.0% on drugs. Details of consumption pattern and unit costs of 399 drugs used were collected and an ABC analysis was performed. In ABC analysis, annual drug expenditure and unit costs along with names of individual drugs were arranged in ascending order of cost. The list was divided into A, B and C - three groups based on cumulative costs sequentially. Drugs consuming 70.0% of annual drug expenditure were included in group A, those consuming 20.0% were in group B, and others in group C.

VED analysis is a system of setting priorities, in which drugs are classified according to their health impact. A panel of clinicians classified the drugs as Vital (V), Essential (E) and Desirable (D). These were compiled in a table to obtain drugs in the following categories - AV, AE, AD, BV, BE, BD, CV, CE and CD. These were then classified into three categories - X.Y and Z based on the level of manager required to monitor and supervise the drugs.

Results About 70.0% of annual expenditure was on 35 drugs, 20.0% on 56 drugs and 10.0% on 308 drugs. Drugs belonging to group A should be controlled carefully and ordered frequently so as to keep low quantities of, or almost zero stocks. The VED analysis showed that 13.0% (54 drugs) are vital for patients' life, 51.0% (203 drugs) are essential, and 36.0% (142 drugs) are desirable.

Category X consists of expensive and vital drugs accounting for 20.6% of drugs. Category Y consists of less expensive and essential drugs accounting for 50.9% and Category Z consists of cheap and non-essential drugs accounting for 28.6%. Category I is considered to be most important from management point of view and accounted for 19.0% and Category II is the low priority list. Here the advantage of prioritization is that we have to supervise lesser number of drugs closely (Category 1 = 76 out of 399). On the other hand close supervision is not required for the category II drugs as they are less expensive.

Conclusion: This combined ABC and VED analysis will help in improved drug availability and lesser emergency purchase and adequate inventory control.

Keywords: ABC analysis, VED analysis, drugs management