Pharmaceutical Reverse Distribution is the industry’s method of choice for handling expired or unsaleable product. It is an essential service, outsourcing what is otherwise a time consuming and labor intensive task for the pharmacist to do themselves, whether in a small pharmacy, a huge healthcare corporation or every size facility in between. It can also be a rather confusing and often opaque process for the pharmacy as a consumer of these services. Here is how it actually works…
Pharmaceutical Returns Eligibility Assessment
The assessment process begins when the pharmacy’s product arrives at the Reverse Distributor’s facility. Incoming pharmaceutical returns are inventoried, and assigned an estimated value, usually based upon current Wholesaler Acquisition Cost (WAC) or customer provided pricing. Product is then evaluated against the Manufacturer’s return goods policy. These policy terms normally center on product dating, based on the published return eligibility window (the number of months before and after expiration that an item can be returned), and product condition, primarily whether it is full (and sealed) or opened (partially dispensed). Manufacturers’ policies may also include other terms, including the exclusion of a specific product or product line, or disallowing product that has been damaged or defaced.
WHAT HAPPENS NEXT TO YOUR PHARMACEUTICAL RETURNS
Each product is sorted into one of three categories by the Reverse Distributor:
Currently Eligible for Return – Product meets ALL published manufacturer requirements. This product is returned to the manufacturer or their designated agent for credit consideration.
Not Currently Eligible for Return – Product has not yet reached the eligibility window but meets ALL other manufacturers’ requirements for return. This indated product is sorted by future expiration date and held until it reaches eligibility, when it will be reprocessed and returned to the manufacturer or their agent for credit consideration.
Ineligible for Return – Product fails to meet one or more of the manufacturer’s requirements for return. This product is processed for safe disposal in strict accordance with local, state, and federal requirements.
Credit Eligibility Assessment
Once Return Eligible product has been shipped back to the manufacturer or their agent, it is subject to the manufacturer’s assessment of credit eligibility, which may further exclude specially priced or discounted lots, product which has been donated, product which was sold as non-returnable, secondary market purchases or purchases from unauthorized distributors. Provided the product meets ALL the manufacturer’s requirements, credit will be issued for the return.
The amount of credit issued will depend on the manufacturers assessed value, often determined by current WAC price, (or WAC less a restock fee), lowest contract price for 12-24 months prior to return, or the actual purchase price paid for the product. These and other factors may influence the final credit value issued, and all manufacturers reserve the right to assess, reduce or deny credit for any product for any reason.
At GRx, our ReverseLink One pharmaceutical returns programs are conducted in partnership with the pharmacy’s primary wholesaler. Manufacturer credits are issued to the program wholesaler and reported to GRx as available for inclusion in periodic distributions of credit. These distributed funds, less any fees due to GRx, are then either deposited directly into the customer’s wholesaler account or funded to GRx and conveyed to the customer in the form of a check. And the comprehensive reporting on our customer portal provides the customer a detailed accounting of the entire process!