Pharmaceutical inventory management using ABC-VED matrix

Background Effective pharmaceutical inventory management is critical for ensuring drug availability while controlling costs in hospital settings. ABC and VED analyses are widely used inventory control techniques, yet their combined application remains limited in Egyptian hospitals. Objectives This study aimed to: (1) classify pharmaceutical inventory using cost-based ABC analysis, (2) categorize medicines using criticality-based VED (Vital-Essential-Desirable) analysis, and (3) integrate both methods through ABC-VED matrix analysis to optimize inventory management in two tertiary care hospitals. Methods A retrospective cross-sectional study was conducted at the Cardiology and Surgery hospitals of Ain Shams University, Egypt, covering the period from July 2023 to July 2024. All pharmaceutical items were analyzed using ABC analysis based on annual consumption value, VED analysis based on clinical criticality determined by a multidisciplinary committee, and ABC-VED matrix analysis combining both approaches. Data were extracted from the Hospital Information System and analyzed using Microsoft Excel 2013. Results The Cardiology hospital procured 198 pharmaceutical items totaling 20,184,198.56 LE, while the Surgery hospital procured 196 items totaling 77,532,708.26 LE. ABC analysis revealed that Class A items comprised 9.6% (Cardiology) and 12.76% (Surgery) of total items but consumed 69.33% and 69.27% of expenditure, respectively. VED analysis identified 26.76% (Cardiology) and 38.8% (Surgery) items as vital. ABC-VED matrix analysis showed that Category I (highest priority) items represented 34.34% (Cardiology) and 46.94% (Surgery) of items, accounting for 82.31% and 82.81% of total expenditure, respectively. Conclusions The combined ABC-VED matrix analysis provides a more comprehensive approach to pharmaceutical inventory management than either method alone. Category I items, representing high-cost and/or vital medicines, require strict inventory control and continuous monitoring. Implementation of these findings can optimize inventory management, prevent stock-outs of critical medicines, and improve cost-efficiency in hospital pharmaceutical services.