Pharmacy IT helps Vanderbilt save $35 million annually on inpatient drugs

Vanderbilt University Medical Center knew that transitioning biosimilars – a biologic medical product highly similar to another already approved biological medicine – into the various workflows of a health system was a critical yet complex challenge that had to be tackled quickly. It needed to find a behind-the-scenes technology that prioritized efficacy, safety and cost savings, because the health system found that just adding the biosimilar into the formulary did not mean that people would order or use it.


“That realization spurred us to think critically and collaboratively as the pharmacy and therapeutics committee and the health IT team about what kind of elegant, high-tech solution could increase the use of biosimilars, which when first released carry the opportunity for cost savings and incented reimbursement,” said Bob Lobo, PharmD, director, clinical programs, and secretary, PT&D committee, at Vanderbilt University Medical Center.

“But the first biosimilar added to the formulary and added to the ordering system just sat there. There were no orders, even though the evidence and safety were there,” he added.

There was a natural time element. There is a relatively brief window in which staff can take advantage of CMS’ incentive to use biosimilars.

“If the process breaks down anywhere along the line, we may be giving a very expensive drug, even a biosimilar, without reimbursement. That can easily happen in hospitals right now unless you have a high-tech process in place.”

Bob Lobo, PharmD, Vanderbilt University Medical Center

“This was not a problem that could gather dust if we were going to help the health system be nimble in a situation that required a sophisticated, elegant roll-out,” Lobo explained. “A roll-out that ideally did not require providers and pharmacists to change their workflows, because if changes to their workflows were required, then the likelihood of success would be diminished.”

The clinical side has complexities and the administrative side has complexities, but the technical side also has complexities, said Scott Nelson, PharmD, assistant professor, biomedical informatics, and assistant clinical director, health IT, at Vanderbilt University Medical Center. Thinking about this in a way that moved all the departments forward required a close connection between pharmacy, the pharmacy and therapeutics committee, and pharmacy informatics, he added.


So Vanderbilt used its Epic EHR as the basis of a new technology it created that it calls eStar. Vanderbilt knew the technology had to fit into the workflow of clinicians, pharmacists, and the teams that work with payers and their formularies.

Additionally, the technology had to be scalable to include new biosimilars in the future. All of this had to seamlessly adjust as prices change and formularies get updated and connect with the ordering provider’s request.

“Based on high levels of evidence, the pharmacy and therapeutics committee evaluates each new biosimilar to add to ensure they won’t impact the level of care or our business metrics,” Nelson said. “Then, we work closely with pharmacy informatics and the pharmacy and therapeutics committee to push guidance about the biosimilar to providers at the point of care.”


The health IT team at Vanderbilt came up with a clever solution. When an order is placed, the system funnels requests to the people who get prior authorization. Then, when the approval comes back from the payer, the system defaults to the correct dispensable – reference or biosimilar – for the pharmacy to dispense.

The system has to coordinate between all the clinical, dispensing and administrative components that work in tandem to order, get authorization and dispense the correct medication while balancing the process against the expertise of the clinical team about what the patient needs and what the payer will cover.

“We have formal weekly meetings and catch-ups in-between, so there is intermittent transparency and frequent communication. That fosters accountability and trust between the teams.”

Scott Nelson, PharmD, Vanderbilt University Medical Center

“Under a system that isn’t electronic, then individual people would be relaying the information – and the patient would not be getting the medication until everyone finished, successfully, their task,” Lobo said. “When accounting for the additional administrative burden of biosimilars, which is fluid because of how fast the market changes, extra time is potentially hazardous for the patient, and costly for the health system.”

Vanderbilt really likes how the new technology was designed. When the clinician is placing an order, they are placing the order for whichever one – reference (brand name) or biosimilar – is covered by that patient’s payer formulary. This ensures that the patient does not receive a medication that is not covered by their payer, which would result in additional costs to the patient or a loss of payment to the hospital.

This also improves efficiency by having the pharmacy call the provider back less often in order to change the order to what is covered.

“If the process breaks down anywhere along the line, we may be giving a very expensive drug, even a biosimilar, without reimbursement,” Lobo explained. “That can easily happen in hospitals right now unless you have a high-tech process in place.”


The first biosimilar adopted, Zarxio, had a nearly 100% transition overnight. It’s a biosimilar for a drug that is used at Vanderbilt University Medical Center every day in patients who either have transplants or receive chemotherapy. It is used to increase white-blood-cell counts in order to help reduce infection. It allows for hundreds of thousands in savings alone and hundreds of thousands more with extra reimbursement, which adds up, Lobo reported.

“We estimate that Vanderbilt University Medical Center saves about $35 million annually on costs associated with inpatient drugs,” Lobo stated. “In order to achieve these results, we are constantly updating and improving our medication-ordering process. Our process has placed us in the top five of academic medical centers nationally for inpatient drug spend.”

If the hospital was at the median for academic medical centers, the annual drug expenditures would be about $35 million more than it currently spends, he explained. Not only is Vanderbilt able to see significant cost savings, but the pharmacy and therapeutics committee also identifies important safety improvements and recommendations that enhance the level of care for patients, he added.

“Almost all of the decisions by the pharmacy and therapeutics committee require resources to implement, and there is a tremendous amount of work for the health IT team,” he said. “The collaboration, mutual respect and throughput from committee to system is why we have achieved such significant success with our inpatient drug spend.”


“It is hard to imagine a hospital having a functional throughput from committee into the system without a weekly workgroup with various leaders and pharmacy managers,” Lobo advised. “There have to be people with clinical and pharmacy expertise in health IT.”

A sense of collaboration and commitment to it takes a team, not one person, and is critical to the success of moving anything from idea into the system, he added. Putting walls between the committee and the health IT team will make everything a struggle and easily extend projects out to a year. This teamwork has to be hardwired into the system, he said.

“I can’t emphasize enough the importance of having a weekly meeting,” he insisted. “There is no one person who can make complex solutions happen. The pharmacy and therapeutics committee and health IT really are interdependent; I don’t think either of us would be successful without the other.”

Vanderbilt takes a flexible and agile approach to providing solutions, rather than a rigid waterfall approach, Nelson added.

“This way we can provide quick prototypes back to the business lines for valuable feedback,” he said. “We encourage a fail early and small process, rather than having a bigger fail later on down the line. This means we have formal weekly meetings and catch-ups in-between, so there is intermittent transparency and frequent communication. That fosters accountability and trust between the teams – which, of course, have other projects – but keeps the end product as the focal point.”

It is great, Lobo concluded, when the pharmacy and therapeutics committee gets recognized for its inpatient results, but everything it does happens because it has the health IT partner to actually implement the ideas.

“I think lots of places have good ideas,” he said, “but we actually are able to act on them. The talent on the IT side is vital to thinking through the potential solutions.”

Twitter: @SiwickiHealthIT
Email the writer: [email protected]
Healthcare IT News is a HIMSS Media publication.

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