The ABC and VED (vital, essential, desirable) analysis of the pharmacy store of Post Graduate Institute of Medical Education and Research (PGIMER), Chandigarh, India, was conducted to identify the categories of items needing stringent management control. The annual consumption and expenditure incurred on each item of pharmacy for the year 2007-08 was analyzed and inventory control techniques, i.e. ABC, VED and ABC-VED matrix analysis, were applied. The drug formulary of the pharmacy consisted of 421 items. The total annual drug expenditure (ADE) on items issued in 2007-08 was Rs. 40,012,612. ABC analysis revealed 13.78%, 21.85% and 64.37% items as A, B and C category items, respectively, accounting for 69.97%, 19.95% and 10.08% of ADE of the pharmacy. VED analysis showed 12.11%, 59.38% and 28.51% items as V, E, and D category items, respectively, accounting for 17.14%, 72.38% and 10.48% of ADE of the pharmacy. On ABC-VED matrix analysis, 22.09%, 54.63% and 23.28% items were found to be category I, II and III items, respectively, accounting for 74.21%, 22.23% and 3.56% of ADE of the pharmacy. The ABC and VED techniques need to be adopted as a routine practice for optimal use of resources and elimination of out-of-stock situations in the hospital pharmacy.
Keywords: ABC analysis; ABC-VED matrix; VED analysis; inventory management; pharmacy.