Pittsburgh-based Allegheny Health Network has saved $4.2 million and significantly reduced medication stockouts after shifting from managing pharmacy inventory at individual hospitals to an enterprisewide strategy, according to Laura Mark, PharmD, vice president of pharmacy.
Speaking on Becker’s “Pharmacy Leadership Podcast,” Dr. Mark said the health system’s previous inventory management process relied heavily on manual work at individual sites, making it increasingly difficult to navigate staffing shortages, supply chain disruptions and the growing complexity of pharmacy operations.
“There is so much complexity in pharmacy operations,” Dr. Mark said. “It was just really an unsustainable way of managing inventory.”
AHN, which includes 12 hospitals, sought to create a single, coordinated view of medication inventory across its hospitals and infusion centers rather than relying on each location to manage inventory independently. The approach gave pharmacy teams greater visibility into where medications were available, allowing leaders to identify trends sooner and respond proactively instead of reacting to inventory issues after they occurred.
To accomplish that, the health system standardized inventory management practices and connected its pharmacy technologies using Omnicell’s Inventory Optimization Service. Dr. Mark said the platform allowed AHN to standardize stocking, replenishment and inventory management across the enterprise while also supporting IV workflow optimization.
However, technology alone was not enough, she said.
“Technology doesn’t create standardization on its own,” Dr. Mark said. “Leadership alignment was really something that we focused on, and a shared governance process that was consistent. Processes were just as important as the technology itself.”
Before implementing the technology, AHN established governance structures, standardized processes and centralized change management to ensure consistent adoption across all sites. Dr. Mark also described Omnicell as a strategic partner that became an extension of the pharmacy team rather than simply a technology vendor.
The initiative has delivered measurable operational and financial improvements. AHN has generated $4.2 million in savings through National Drug Code optimization, inventory reduction and dead stock reduction. The health system also reduced its medication stockout rate to 0.46%, improved restock ratios and eliminated time-consuming manual inventory tracking that previously relied on spreadsheets and phone calls between sites.
Beyond the financial gains, Dr. Mark said the initiative has improved medication access for clinicians while reducing administrative burden for pharmacy buyers.
“We’ve transitioned from spreadsheets-based tracking to structured system-wide days on hand visibility,” she said. “Technology can help accelerate the work, but it’s really best when it’s supporting a well-designed process and governance model.”
Looking ahead, Dr. Mark expects pharmacy inventory management to become increasingly data-driven, enabling leaders to make proactive decisions while continuing to standardize workflows and improve medication management across health systems.
“I think by leveraging the technology and moving forward in the future, it’s really where pharmacy leaders have much more greater visibility and can make decisions proactively instead of just reactively,” she said.
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