Edefo et al. Inventory analysis in a tertiary hospital in Benin City 303 Original Research Article Inventory analysis in a tertiary hospital in Benin City, Nigeria Wednesday J Edefo 1 *, Stella F Usifoh 2 , Anthony W Udezi 2 , Ikponwonsa C Ediae 1 1 Department of Pharmacy, Federal Neuropsychiatric Hospital, Benin City. 2 Departments of Clinical Pharmacy and Pharmacy Practice, Faculty of Pharmacy, University of Benin, PMB 1154, Benin City, 300001, Nigeria * For correspondence: Email: edefojoshua2000@yahoo.com, Tel: 2347035800341 Abstract Purpose: In resource limited countries like Nigeria with ever increasing drug needs, it is necessary to apply scientific tools for effective and efficient management of pharmaceuticals in the hospital. This study aims to identify the categories of drugs in Federal Neuro-Psychiatric Hospital (FNPH), Benin City that are available and make recommendation for strict managerial control. Methods: The annual consumption and expenditure incurred for pharmaceuticals from 2014-2018 was analyzed. The ABC, VED and a matrix based on ABC and VED analysis was developed to narrow down the group of items for effective managerial monitoring. Results: The ABC-VED matrix analysis of drugs for 2014, 2015, 2016,2017 and 2018 revealed that category I items which were 21 (20.19%), 26 (21.14%), 27 (19.02%), 27 (18.12%), and 27 (18.49%) respectively consumed NGN18,991,634 (72.21%), NGN28,817,113 (74.22%), NGN37,955,459 (73.76%), 42,562,300, (70.79%), NGN44,430,522 (74.03%) for each year Annual Drug Expenditure respectively. This category which include olanzapine, amitriptyline, carbamazepine, nifedipine, consumables, risperidone, sodium valporate, diazepam, 10% dextrose water, 4.3 % dextrose saline, 5% dextrose saline, biperidine 5mg should have maximum attention and meticulous inventory control. Conclusion: Scientific inventory management tools need to be applied strictly and routinely for category I of the ABC-VED matrix in order to save money for the establishment and reduce out of stock syndrome. Keywords: ABC analysis, VED analysis, ABC-VED matrix, Category I, Inventory Analysis, Pharmacoeconomics Indexing: Index Copernicus, African Index Medicus Introduction Pharmaceutical services are indispensable to any hospital especially with the global increase in population [1], as the hospital grows in size and number the need for pharmacy services also increase. Researches have revealed that, money spent on pharmaceuticals accounted for 17% -33% of all health expenditure [2,3]. The activities at pharmacy departments constitute part of the overall hospital clientele satisfaction thus out of stock of medicines in the department may lead to poor healthcare delivery and bad reputation for the healthcare organization [4]. Effective managerial controls of availability of pharmaceuticals are found to be very crucial for optimal and rational pharmacotherapy [5]. Attainment of this could need a mix of proper selection, quantification, procurement, distribution and use of drugs based on consumption and morbidity pattern of the catchment area [6]. The stocking of hospital pharmacy items can be capital intensive and majority of hospital capital is held up in these items and it can be reduced by one- third of a hospital’s budget by bringing efficiencies to important cost drivers [7,8]. It is almost impossible for hospital managers to monitor each and every drug used in hospitals hence the need to apply the Pareto principle which has metamorphosed into the Always Better Control (ABC) analysis “separating the vital few from the trivial many” because, for any group of things that contribute to a common cost, a relatively few contributors account for a majority of the cost [9]. In Pareto’s analysis, about 10% of items consume about 70% of the budget (Group A). The next 10% inventory items consume 10% of the financial Journal of Science and Practice of Pharmacy December 2019; 6 (1): 303-308 Available at http://www.jsppharm.org doi: https://doi.org/10.47227/jsppharm/v6i1.4 ISSN: 2449-0458 (print); 2449-0466 (electronic) © Official Journal of the Nigerian Association of Pharmacists in Academia, University of Benin Branch, Benin City, Nigeria. All rights reserved.