AMERICA S COMBAT LOGISTICS SUPPORT · PDF fileamerica’s combat logistics support agency warfighter first - people & culture - strategic engagement -financial stewardship ... all

DEFENSE LOGISTICS AGENCYAMERICA’S COMBAT LOGISTICS SUPPORT AGENCY

WARFIGHTER FIRST - PEOPLE & CULTURE - STRATEGIC ENGAGEMENT - FINANCIAL STEWARDSHIP - PROCESS EXCELLENCE

AMSUS-SM Meeting03 March 2016

Customer Pharmacy Operations Center

(CPOC)MAJ Randall Sweeney, USA

DLA Chief Pharmacist

Presenter

Presentation Notes

Good morning, My name is MAJ Randall Sweeney, and I am here with Ms. Geneva Polini, Deputy Director of DLA-Troop Support Medical Director, and Mr. David Johns, Chief of the Supplier Operations Directorate, the Lead Acquisition personality, at DLA-Troop Support Medical [PAUSE FOR GENEVA COMMENTS]

Deliver the right solution on time, every time

WARFIGHTER FIRST - PEOPLE & CULTURE - STRATEGIC ENGAGEMENT - FINANCIAL STEWARDSHIP - PROCESS EXCELLENCE 2

• Customers• Organization• Strategic Mission• Partnerships• Financial Indicators• Programs• Becoming a Supplier / Business Expansion• Customer Pharmacy Operations Center• Challenges & Opportunities

Agenda

Presenter

Presentation Notes

We constructed this agenda assuming our audience knows very little about the Medical Supply chain, which is not always the case. Therefore, if we have listed an area that includes information you already know, please tell me and we’ll move to other areas that are more informative. Conversely, if you would like more detail on any aspect of the briefing, let me know also and I’ll cover it in more depth. If you have a question during the briefing, please ask it and I’ll do my best to answer it or obtain the answer before you leave.



DLA Troop Support Medical Supply Chain

Presenter

Presentation Notes

A short video (1:58) about DLA- Troop Support Medical….



Presenter

Presentation Notes

These are DLA Customers….



DLA…Combat Support Agency

Foreign Policy AdvisorMs. Dolores

BrownFE-MC

Chief of StaffDr. Renee

Roman

DLA Joint Reserve

Force

DLA Logistics Information

ServiceGS-15

DLA Document Services

GS-15

DLA Transaction

ServicesGS-15

DLA General Counsel

DLA Strategic Materials

GS-15

DLAAcquisition

DLA Finance

DLA Human

Resources

DLA DispositionServices

Vice DirectorMr. Ted

Case

DirectorLieutenant General

Andrew E. BuschUnited States Air Force

DLA Land and Maritime

DLA Distribution

DLA Information Operations

DLA Energy

DLA Logistics

Operations

DLA Aviation

Joint Contingency Acquisition Support Office

DLA Contracting

Services OfficeGS-15

DLA Installation

SupportGS-15

Senior Enlisted LeaderCommand Sergeant Major

Charles TobinUnited States Army

DLA Troop Support

DLA Inspector General

Fred Pribble

Brad Bunn

Rear Adm. Griffith

Kathy Culter

Matthew

Beebe

Tony Poleo

Rear Adm. M

acLaren

Marcus Bow

ers

Denise Miller

BG Hamilton

???Brig Gen Day

Mr. Cannon

BG Dix

Rear Admiral King

Brig Gen McLeod

DLA Strategic Plans and

PolicyGS-15

Command

Presenter

Presentation Notes

Defense Logistics Agency Structure and Leadership. [CLICK] Air Force Lieutenant General Andrew Busch is the DLA Commander with an office at Ft. Belvoir, VA. [CLICK] Army Brigadier General Charles Hamilton is the DLA-Troop Support Commander with an office in Philadelphia, PA.

https://today.dla.mil/DESC/LEADERSHIP%20IMAGE%20LIBRARY/DULIN2.JPG






SMSG Division

Customer Operations Directorate

Donald Buchwald, Director

EA ProgramOffice

Forward Cell(Fort Detrick, MD)

OperationalDivision

Supplier Operations Directorate

David Johns, Director

Supply Support Division

DMLSSOffice

Supply Chain IntegratorCOL Alex Zotomayor, MS, USA, Director

Geneva Polini, Deputy Director

Institutional Division

CollectiveDivision

Pharmaceutical Prime Vendor Division

Medical/Surgical Prime Vendor Division

Electronic CatalogDivision

Capital EquipmentDivision

Hospital Supply Division

Pharmaceutical Manufacturer/Distributor

DivisionMedical/Surgical

Manufacturer/Distributor Division

Medical Supply Chain Organization

National Contracts IST

Customer Pharmacy

Operations Center (CPOC)

Presenter

Presentation Notes

DLA Troop Support Medical is the OSD Executive Agent (program management authority for Class VIII), and is organized similarly to the commercial sector with both Customer and Supplier operations. The Customer Pharmacy Operations Center is an asset of, and falls under the Customer Operations Directorate. ------------------------------ We have our Deputy Director of DLA-Troop Support Medical, Ms. Geneva Polini, and Our Chief of the Supplier Operations Directorate, Mr. David Johns, the Lead Acquisition personality at DLA-Troop Support Medical her with us today. ------------------------------



Every Day Every Crisis

Vision: To provide an integrated and responsive system of choice for delivering consistent, quality medical materiel support for health care providers to perform their patient care mission

Our Dual Focus

• Ready on day one• Varied missions & requirements• Resupply & sustainment• Control commercial/industrial

materiel• Situational awareness

• Health care economics• The business of health care• The cost of medical materiel• Reliable “next day” support• Business intelligence

Institutional Operational

Presenter

Presentation Notes

The mission of the DoD Medical Supply Chain has a dual focus, as depicted here. The theme – “Every day, every crisis” – reflects our mission requirements, and you will see this theme repeated throughout the briefing. During peacetime, we need to be fast, reliable, responsive, affordable and easy to use. Simultaneously, we must be ready to respond “around the clock, around the world” on a moment’s to the full continuum of contingency missions from natural disasters to war on multiple fronts. Fortunately, our dual focus is complementary in some very important aspects. Our peacetime commercial business supports, exercises, and funds our readiness support infrastructure . It maintains and trains our core cadre, while providing us the commercial footprint required to attract and partner with commercial vendors that support our contingency plans. Without our peace time sales, we would be hard pressed to attract and retain our commercial partners that must maintain steady, reliable sales, in both peacetime and during contingencies, to remain in business.



Mission: To provide the most effective, best value medical logistics support to America’s Armed Forces… Every Day and in Every Crisis

• We exist to meet DoD medical wartime requirements…

• We integrate our logistical information systems to handle them

• We prepare for them by leveraging our peacetime business programs

• We optimize costs so our customers can afford more capabilities

• We partner with federal/commercial counterparts when it furthers DoD goals

• We practice our response capability continuously and realistically

• We prove our capabilities to respond every day and in every crisis

Strategic Mission

Presenter

Presentation Notes

Our strategic mission is to maintain a Readiness posture that empowers us to immediately and effectively transition from peacetime to wartime support. All our peacetime activities are designed to do just that. All our Prime Vendor contracts, for example, have contingency provisions that enable us to leverage the enormous supply and distribution capabilities of our peacetime trading partners to meet our wartime needs. Similarly, we combine both commercial and DoD transportation and distribution assets to increase and maintain the velocity of medical logistics support to meet any known contingency. As we execute our “every day” peacetime mission, we never lose sight of the fact that wartime support is why we exist.



• ASD (Health Affairs) and Defense Health Agency– Home Delivery Pharmacy…largest single customer

• Defense Medical Logistics Standard Support (DMLSS)• Program Management Office

– Joint end-to-end Medical Supply Chain Management Application

• Army (Army Medical Materiel Agreement)– Enduring partnership

• Department of Veterans Affairs (VA)– Joint contracts– Proposal to combine PV programs is being worked at OSD/DVA

level

• Industry Partners– Manufacturers, suppliers, and wholesalers

Partnerships

Presenter

Presentation Notes

This is a summary of our most important strategic relationships. We have a Performance Based Agreement with the TRICARE Management Activity to support its $2B/year home delivery pharmacy operations, as well as its fixed facility operations. We partner with the Joint Medical Logistic Functional Development Center at Fort Detrick MD to maintain the DMLSS integrated logistics ordering and management system. We partner with the Army under our joint AMMA construct to maintain medical power projection and sustainment sites throughout the world. We partner with the VA to combine our buying power and extract the lowest prices possible for all federal customers. And we partner with our newest federal customer, the CDC, to extend our buying power and Readiness processes to assist in protecting the health of the entire US population.



Army $1.6B

DHAHome

Delivery $2.4B

Air Force $968.6M

Navy $863M

Marine Corps $49M

Other $420M

Pharm PV $4.688

Med/Surg PV $594M

Capital Equipment

$356MTraditional Med/Surg

$147MTraditional

Pharm $234MECAT $186M

Hospital $110M

Medical Business FY 2015

FY15actual$6.3B

FY16 Forecast$5.9B

Presenter

Presentation Notes

Medical sales reached $6.3B in FY 2015 and are projected to exceed that figure in FY 2016 and beyond. Our sales are increasing so rapidly they are exceeding our official FY 16 forecast, which will be updated at midyear. Defense Health Agency Home Delivery (mail-order) Pharmacy Operation is DLA’s largest medical customer, followed by the Army, Air Force and Navy. About $5.73B (over 91%) of DLA Medical business is handled exclusively through Ecommerce. The remainder ranges from a blend of Ecommerce and MILSTRIP to strictly MILSTRIP orders. Even with most MILSTRIP orders, medical relies on Direct Vendor Delivery to satisfy customer requirements. The only items provided from depot stocks are military unique items such as camouflage bandages, Nerve Agent Antidote Auto-injectors, etc.



• Ecommerce– Pharmaceutical Prime Vendor – Global– National Prime Vendor – DHA Home Delivery Program– Medical-Surgical Prime Vendor – Generation V– Electronic Catalog (ECAT)…niche medical markets

• Traditional– Depot– Seasonal influenza– Direct Vendor Delivery– Capital Equipment

• Contingency – Corporate exigency contracts– Vendor managed inventory

Our Programs

Presenter

Presentation Notes

DLA has three types of programs designed to support our mission. Ecommerce encompasses DLA’s prime vendor programs, the Pharmaceutical Prime Vendor - Global, National Prime Vendor Program (supporting the DHA Home Delivery Program), the Medical-Surgical Prime Vendor – Generation V, and the Electronic Catalog or ECAT (supporting niche medical markets like Laboratory and Dental items); giving DLA the ability to support our customer’s every day mission using a commercial footprint. Traditional – programs allow access to products that are military unique, seasonal, or are not routine acquisitions. Contingency – allows DLA ACCESS to materiel to support contingency missions from natural disasters to war on multiple fronts. We will discuss more of the contingency section later in the presentation.



Pharmaceutical Prime Vendors

National Prime Vendorwww.freeworldmaps.net

Presenter

Presentation Notes

This slide illustrates our five (5) main pharmaceutical prime vendors. AmerisourceBergen Corporation is the primary pharmaceutical prime vendor globally, backed by DMS Pharmaceutical as the secondary prime vendor, supporting more than 270 military treatment facilities worldwide. McKesson is the National Prime Vendor supporting the DHA Pharmacy Home Delivery Program. Dakota Drug is the pharmaceutical prime vendor for military treatment facilities located in North and South Dakota and Minnesota. Cardinal Health is the Fleet Prime Vendor, supporting our Navy customers at home and deployed around the world. In total, there are more than 600 PV ordering sites.



Medical/Surgical Prime Vendors

Presenter

Presentation Notes

This slide illustrates the Regional Military Commands, and the logistical coverage of the DLA Medical-Surgical Prime vendors: Cardinal Health and Owens & Minor.



WARFIGHTER FOCUSED, GLOBALLY RESPONSIVE SUPPLY CHAIN LEADERSHIP

14WARFIGHTER SUPPORT ENHANCEMENT STEWARDSHIP EXCELLENCE WORKFORCE DEVELOPMENT 14

• Features – Multiple Catalog Ordering, Online comparison shopping,

Customer product and vendor selection, Direct customer delivery

• Benefits– Customer

• Stable pricing, B2B Interface, Ecommerce solution, Robust Search Engines

– Supplier • One focal point for contract administration, 15-day payment

post receipt/invoice, paperless, electronic published catalog pricing, available to all Federal Agencies, No vendor fee

Electronic Catalog (ECAT) Program

Presenter

Presentation Notes

The Electronic Catalog or ECAT supports niche medical markets like Laboratory and Dental items, and offers multiple catalog ordering, online comparison shopping, customer product and vendor selection, and direct customer delivery. The customer can benefit from stable pricing and a robust search engine in an Ecommerce solution. The supplier benefits from no vendor fees, one focal point for contract administration, accessibility to all government agencies, and a paperless, prompt payment process.



• What we need– Access to FDA approved products– Participation in Readiness Contracts

• CEC, VMI

• How we need it– Product availability through Ecommerce programs

• Prime vendor, ECAT– Government pricing vehicle

• DAPA, FSS– Auditable process

Becoming a Supplier/ Business Expansion

Presenter

Presentation Notes

How can we help you establish or increase your business with the government? DLA customers have requirements for FDA approved products, and, with a wartime focus, industry participation in our Readiness Program through corporate exigency contracts and vendor managed inventory where DLA pays for access to materiel. How can you help us to meet our requirements? The industrial base can seize the opportunity to make products available through DLA’s Ecommerce programs, at a fair price, using a transparent, audit-ready process.



• Mission: Customer Service. Facilitate & enable access to industry

• Roles• Identify sources• Clarify needs and alternatives• Determine availability of TAA compliant sources and

recommending Non-availability Determination when compliant sources are not available.

• Find hard to find drugs.• Promote sources that provide the best value...National

Contracts, generics, etc.

Customer Pharmacy Operations Center (CPOC)

Presenter

Presentation Notes

Identifying sources – by building partnerships with our industrial base, we can assess the global market, and gain access to sources of medical products. Clarifying needs and alternatives – by interacting with our customers, we can assess their requirements to better enable us to meet their needs from our industry partnerships Determining availability of TAA compliant sources and recommending Non-availability Determination when compliant sources are not available. Our market research matches available products to meet our customer’s requirements. In cases where products are not available in sufficient quantities to meet our customer’s needs, the market research data gathered by the CPOC can be used to enable contracting officer decisions to seek sources of TAA non-compliant products after establishment of a Non-Availability determination (NAD) or TAA waiver. Finding hard to find drugs. Specialty pharmacy and limited distribution products. Through coordination with industry partners, determining how products are positioned in the marketplace and what the product’s regulatory requirements are. Then leverage DLA & partner programs and capabilities (Medical Air Bridge, E-Commerce Solutions) to gain access to products, maximize buying power, meet regulatory requirements, and supply our customers at the lowest cost possible. Promoting sources that provide the best value: Joint National Contracts, Brand to Generic Initiative….



Customer Pharmacy Operations CenterCPOC: Small Team…Global Impact

• Established in 2011– DLA’s response and pharmacists’ vision to improve customer

support for all DLA customers; internal and external– Team: 5 military pharmacists, 2 civ pharmacists, 1 civ analyst

• Goals and Objectives– Put the customer first– Facilitate Pharmaceutical and Med/Surg Prime Vendor support – Enable sourcing optimization efficiencies – Modify procurement behavior– Mitigate impact of drug and vaccine shortages– Leverage business Intelligence tools and purchase data/analysis– Support Medical Readiness and contingency response– Build partnerships with other federal agencies and industry

Presenter

Presentation Notes

The CPOC was established in 2011 as a DLA response/vision to improve customer support. We put the customer first, and use our experience (All our military pharmacists have both military treatment facility and deployment experience), and our unique position at DLA to support both internal and external customers by translating requirements and building partnerships. We analyze sales data, monitor the market, communicate ways to optimize product sourcing, and help to influence procurement behavior, resulting in $4.8M in procurement costs avoided this FY through our Brand to Generic initiative alone.



Challenges and Opportunities

• Pharmaceutical Shortages– Specialty Pharmacy /

Limited Distribution– Manufacturer Backorders

• Trade Agreements Act

• Veterinary Items

• Joint National Contracts

• Contingency Contracts– Corporate exigency

contracts (CEC)– Vendor managed

inventory (VMI)

• e-Commerce

Presenter

Presentation Notes

Here are some of our challenges and opportunities. First, we will discuss Specialty Pharmacy….



Specialty Pharmacy• High Cost, Complexity, & Touch products

• DLA review of ~1,130 NDCs ID’ed as Specialty Rx Products– Analysis of Product Coverage, Fill Rates, and Spending Data

• Findings– Coverage: 90%; 700 of 1,130 with usage in FY15– Fill Rate: 94% for DHA Home Delivery & PPV-G– Spend:

• $811 million in FY15• PPV-G: 98% or $795 million

– 80 non-covered NDCs with spend of $13.5 million• Charge Card: 0.04% or $316K

Presenter

Presentation Notes

We Defined specialty pharmacy items as: High, Cost, High Complexity, and High Touch items, and we able to identify ~1,130 items that fit the definition. We reviewed these products, and Analyzed Product Coverage, Fill Rates, and Spending Data. Our findings were: Product Coverage: Only 700 of 1,130 NDCs have spending data in FY ’15, and 90% of these NDCs covered by PPV-Global Program. Fill Rate: 94% Fill Rate for all transactions across TMOP and PPV-Global. 160,419 transactions identified for Specialty RX. 145,588 transactions accepted. 13,831 transactions rejected, and 9,143 were factored into Fill Rate Analysis. The OCONUS Fill Rate was 93%. Spending Data: NDCs reviewed had approximately $811 million in spending for FY ’15. the PPV-G’s product catalog covered 98% of the spending or $795 million. For NDCs not covered, only 80 NDCs had spending data totaling $13.5 million. $316K was identified as going through Charge Card purchases or 0.04%.



Specialty Pharmacy• Areas of Opportunity

– Review NDCs with deficient fill-rates & conduct RCA • Byetta Pen

– Review NDCs with no coverage and no spending• Manufacturer relationships with PVs; Access

• Specialty marketplace is dynamic

• Way Ahead– Forge strong relationships with PVs & Specialty Divisions – Engage Manufacturers with limited distribution channels not

inclusive of Prime Vendor program

Presenter

Presentation Notes

Areas of Opportunity Review NDCs with deficient fill-rates and perform root-cause analysis (MFG backordered, new NDC, etc.). E.g., Byetta Pen had Fill Rate Issues in FY ‘15; Identified replacement NDC and fill rate was 90%+ in FY ’15 for replacement NDC. Review NDCs with no coverage and no spending. Are these manufacturers that our PVs have relationships with and could access if needed? DLA Medical and Industry Partners recognize that the Specialty marketplace is dynamic and not static. Program is performing well today but could have issues down the road if Specialty marketplace is not closely monitored. Way Ahead Forge strong relationships with Prime Vendors and their Specialty Divisions to ensure all parties are lock-step on any industry changes. Engage with Manufacturers with limited distribution channels not inclusive of Prime Vendor program to discuss path forward.



Pharmaceutical TAA Compliance Views

As of 02/17/2016

18,027

6,073

12,488

395

DLA Pharmaceutical Universe36,983 Items

Compliant Suspect Non Compliant NAD

-518

+1239

+1382

-133

18,027

59,458

12,488

395

Commercial Universe90,368 Items

Compliant Suspect Non Compliant NAD

Compliant - Includes all government contracted items plus any Regional DAPA items certified by a PVas TAA compliant

• Suspect - Items still waiting certification by a PV and review by DLA Troop Support

• Non-Compliant - Items certified by a PV as TAA non-compliant and reviewed by DLA Troop Support

• NAD - Items reviewed by DLA Troop Support and issued Non Availability Determinations (NAD)

-518

+1239

+1382

-133

Presenter

Presentation Notes

PPV reported. Emphasize: Wholesaler reaches out – respond timely and be transparent. e.g. unknown TAA status and no sales – blocked item



Cost Optimization…National Contracts• Supports all Federal Customers

‒ Project 10 year sales…$6.3B; Initiated 3/1/13‒ 37 contracts awarded; DoD target 120 contracts‒ Saves DoD additional $1.25B/10years; ‒ $155.9M realized to date; 73% ahead of plan

Dave Johns

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

Plan Savings Realized Savings

Presenter

Presentation Notes

National Contracts This is an opportunity for generic manufacturers to participate Highlight: Projected 10 year sales – $6.3B. DLA National Contracts Team formed in March 2013. 37 DLA Awarded National Contracts to date, with a DoD target of 120 National contracts. Savings: projected to save DoD and additional $1.25B over 10 years. Over $150M in savings realized, (73% ahead of projection).



Desert Storm Experience Today

8% DepotStock

92% New Acquisition

69% Contingency Contracts

24% New Acquisition

7% DepotStock

Peace Time Surge Sustainment

• Prime vendor • Depot• Direct Vendor

Delivery• Electronic Data

Interface

• Service stock• Vendor managed

inventory (Service owned)

• PV surge

• Contingency contracts– Corporate exigency contracts– Vendor managed inventory (DLA owned)– PV war reserve materiel– Industrial base maintenance ctrs

• New acquisition

Warstopper Funded

OpportunityFor

Improvement

Warstopper fundingkey enabler

Purchase Access not

Stock

Medical Supply Optimization Strategies

Presenter

Presentation Notes

Opportunity Since 1991 DLA Troop Support Medical has purchased access to stock and minimized its static depot assets. To expedite and prime its transition from peacetime to wartime, Medical uses DLA “Warstopper” funds to purchase this time-phased guaranteed access or production capability. Medical invests ~$27M/year and obtains access to ~$780M in stock or a 28:1 return on investment. These Warstopper-funded stocks are used for initial sustainment of the Warfighter during a contingency until the US industrial base can gear up to meet demand. The reason for DLA Troop Support Medical’s transition to purchasing access was its experience during Operation Desert Storm. Although we maintained ~$680M of depots stocks at the beginning of the Operations, we had to purchase 92% of the stocks we needed to meet wartime demands. Relying on guaranteed access provided by contingency contracts, DLA Troop Support Medical has reduced the need for new acquisition to ~24%. Basically, the new approach allows Medical to adjust its contingency stocks more rapidly to accommodate new medical procedures, products and processes, thereby, avoiding large stagnant aging stockpiles and the costs inherent in them.



Presenter

Presentation Notes

Another short (0:30) video about DLA – Troop Support Medical.



Customer Pharmacy Operations CenterDLA-Troop Support

Philadelphia, PA

[email protected]

Presenter

Presentation Notes

Please contact DLA-Troop Support Medical, and thank you for your attendance. Are there any questions? [CLICK]

mailto:[email protected]

DEFENSE LOGISTICS AGENCYAMERICA’S COMBAT LOGISTICS SUPPORT AGENCY


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AMERICA S COMBAT LOGISTICS SUPPORT · PDF fileamerica’s combat logistics support agency warfighter first - people & culture - strategic engagement -financial stewardship ... all