011: The Pharmacy Enterprise

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The term pharmacy enterprise encompasses the concept that pharmacy was much bigger and more important to the success of our health systems than the term pharmacy department implies.
Does your health system look at the pharmacy department as merely a cost center?  This has historically been the case, but should definitely be expanded.
History of the Pharmacy Enterprise
While there is increasing use of the term pharmacy enterprise, it is a more recent addition to the pharmacy lexicon beginning in 2006.
The term pharmacy enterprise encompassed the concept that pharmacy was much bigger and more important to the success of our health systems than the term pharmacy department implied. The pharmacy enterprise has increasing importance today.
Several great health system pharmacy leaders coined this term and began to describe the scope.  Those leaders include Marianne Ivey, Bill Zellmer, Rita Shane, Scott Knoer, Mark Woods, and Mike Powell. 
While there are many ways to describe the Pharmacy Enterprise, this is most succinct definition I have found.
“An integrated system of business units with accountability for clinical and financial outcomes related to medication use across the continuum of care in a health system.”
  • Knoer, S. Stewardship of the pharmacy enterprise. Am J Health-Syst Pharm. 2014; 71:1204-9
Pharmacy Enterprise - ASHP Policy:
To advocate a high level of coordination of all components of the pharmacy enterprise in hospitals and health systems for the purpose of optimizing
(1) the value of drug therapy and
(2) medication-use safety; further,
To encourage pharmacy department leaders to develop and maintain patient-centered practice models that integrate into a team all components of the pharmacy enterprise, including general and specialized clinical practice, drug-use policy, product acquisition and inventory control, product preparation and distribution, and medication-use safety and other quality initiatives.
           Am J Health-Syst Pharm . 2006; 63:661–5
Benefits of the Pharmacy Enterprise
There are many benefits to the broader pharmacy enterprise.
“If medications are managed appropriately, we will control costs, improve outcomes, and not only eliminate readmissions but prevent many admissions in the first place.”
..”without managing the entire medication continuum, we cannot achieve the operational, quality, and safety efficiencies required for success in the world of accountable care.”
                 Am J Health-Syst Pharm. 2014; 71:1204-9
Research shows that well run and optimized pharmacy enterprises can deliver 2.8% overall margin to the health system. This can be the entire margin of many organizations. Given the current healthcare environment, organizations cannot ignore the role of pharmacy and medication use.
From a clinical perspective, a health system minimized unwarranted clinical variation through antibiotics stewardship and resulting in quality improvement and savings of nearly $20M over 7 years.   Another example is a centralized supply chain center to find new approaches to reduce expenses.
Scope of the Pharmacy Enterprise
 The scope of the pharmacy enterprise is vast and growing. The "business units" of this pharmacy enterprise can generally be grouped into:
  1. Acute Care Operations
  2. Acute Care Clinical Services
  3. Ambulatory Care Services
  4. Outpatient & Specialty Pharmacy
  5. Business & Managed Pharmacy Solutions
Some organizations will include a separate unit of medication safety, but this can also be seen as an underpinning of all the units.
I hope this has helped provide perspective on the Pharmacy Enterprise and the value it brings to patients and our organizations.
In this week's blog post at, you will also be able to access the free blog download - The Pharmacy Enterprise Assessment Tool.  This tool will allow you to Assess and reflect of your organization status as a Pharmacy Enterprise as part of your strategic plan situational analysis.
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Now it's your turn:
Identify the areas of the pharmacy enterprise that are known opportunities for you and which you want to explore more! Share your insights and what action you will take in the comments section at
Be bold, be a connector and pharmovator, and excel your life and advance pharmacy practice.   
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