Managing pharmaceutical procurement is one of the most complex and error-prone areas within the health system supply chain. With hundreds of manufacturers and distributors, health systems often manage 100+ pharmaceutical accounts-each with variable pricing, frequent backorders, and inconsistent substitutions. TAG’s Pharmaceutical Procurement Optimization service is designed to simplify this process, reduce pricing discrepancies, and recover lost savings through precise validation and reporting.
Health systems regularly pay multiple prices for the same drug across different accounts, locations, or distributors. For example, one system reported nine separate prices for a single product in a single year. Without the proper controls, these discrepancies can go unnoticed, leading to hundreds of thousands-or even millions-of dollars in annual overpayments.
Procurement teams often lack the visibility and tools to manage pharmaceutical pricing efficiently. Back orders, item substitutions, and variable purchase orders compound the problem. On top of that, internal resource limitations make it nearly impossible to manually track every transaction and confirm eligibility under programs like 340B.
TAG’s expertise extends to managing the nuances of 340B and DSH (Disproportionate Share Hospital) programs. We ensure covered entities receive the correct discounted pricing under all eligible contracts. Our monitoring process identifies instances where list pricing was incorrectly applied instead of 340B pricing, helping prevent potential six-figure overcharges.
We also assist hospitals in evaluating alternate 340B designations such as Rural Referral Centers, Sole Community Hospitals, and Critical Access Hospitals. This ensures every possible designation and savings opportunity is explored.
Pharmaceutical purchasing volume fluctuates heavily. Even small misalignments can cause dramatic pricing variances. TAG’s process compares purchase volumes and invoice prices to contract terms, identifying where eligible 340B or GPO pricing was missed. In some cases, list prices were billed instead of contract prices, creating variances of over 1,000%. Our audits frequently recover over $1M in pricing corrections per year for large systems.
Most manufacturers have strict windows-often as short as 30 days-to identify and report pricing errors. TAG manages this process proactively, ensuring discrepancies are documented, submitted, and credited before these windows close. We coordinate directly with distributors and manufacturers to secure corrections and prevent future errors.
Our reporting suite provides ongoing visibility into pharmaceutical pricing accuracy. We deliver regular reviews of price changes by account and item, highlight major pricing shifts, and validate alignment with contracts and Class of Trade. Our team conducts quarterly and bi-weekly reviews to ensure that pricing errors are identified and corrected promptly.
This managed service reduces the manual burden on pharmacy and procurement teams, ensuring ongoing accuracy, compliance, and realized savings.
