Pharmacies typically engage with a single pharmaceutical distributor to purchase all the drugs they need. This type of arrangement is governed by a contract called a Prime Vendor Agreement (PVA), which the pharmacy enters into with the distributor for a specific number of years defined in the agreement itself. The PVA also stipulates what percentage of its drugs a pharmacy must buy from the distributor in order to be compliant with the agreement. A pharmacy may choose to purchase drugs from a distributor other than the one it has a PVA with; this is referred to as “leakage,” and it can sometimes be significant.
Your challenge is to determine which drugs are being bought outside the PVA from other distributors, hypothesize why this is happening, and recommend where AmerisourceBergen should concentrate efforts to reduce this leakage and regain lost revenue and profit.
Your analysis needs to answer question #1 as well as address one or more of questions #2 through #4.
- Which drug families appear to be purchased outside the PVA most often?
- Is leakage based on quantity? Based on $? Based on Therapeutic Class or disease state?
- Is price always the cause of leakage? Or are there other reasons for it?
- Where should AmerisourceBergen focus its efforts to reduce leakage to regain revenue and profit?
Click here for AmerisourceBergen Data
- Be certain to view the PDF file named AmerisourceBergen 2018_analytics_challenge for detailed information about the datasets and other reference materials.