Pharmacy Inventory Management in Tanzania — Batch & Expiry

Why pharmacy stock control is a different discipline

A hardware shop that miscounts a box of nails loses a few thousand shillings. A pharmacy that miscounts a batch loses the ability to answer the only question that matters during a recall: who did we dispense this to, and when? Batch and expiry are not optional fields on a pharmacy stock card — they are the spine of the record. Everything below is written around that constraint, and around the way medicines actually move through a Tanzanian retail pharmacy: bought on short credit from a Dar es Salaam or Kariakoo distributor, delivered by boda with a hand-written delivery note, stacked behind the counter by whoever is on duty.

Pharmacies also sit inside a regulatory frame most retailers do not. Premises and dispensing staff fall under the Pharmacy Council of Tanzania; the products fall under TMDA, the Tanzania Medicines and Medical Devices Authority that took over medicines regulation from the former TFDA. On tax, pharmacies are one of the sectors that require a fiscal device regardless of turnover — you do not get to wait until you cross the VAT threshold. Our EFD/VFD eligibility checker sets it out: designated sectors including pharmacies, hotels, bars, fuel stations, hardware and private schools must fiscalise irrespective of size, with 30 days to register a device once you qualify, and a penalty of TZS 200,000 per month or 1% of turnover — whichever is higher — for trading without one.

Capture batch and expiry at goods-receiving, not later

The highest-leverage change most Tanzanian pharmacies can make is to stop treating the delivery note as a receiving document. A delivery note records what the supplier says they sent. A goods received note records what you actually counted, in what batch, expiring when. If batch and expiry are not captured when the carton is opened, they will never be captured accurately — nobody reconstructs a batch number from a blister strip three months later.

1. Do not sign the delivery note before counting. Signing first is how a short delivery becomes your loss instead of the distributor's.
2. Count by pack, then open one pack per line to confirm pack size matches the invoice unit. Distributors switch between 10×10 and 3×10 presentations of the same molecule constantly.
3. Record batch and expiry per line. Two batches of one product in a single delivery is two lines, not one. Merging them destroys traceability.
4. Quarantine short-dated stock on arrival. Put a written rule in your purchase order terms — for example, nothing under six months of shelf life unless deliberately ordered as a discounted line — so the argument happens before delivery, not after.
5. Check cold-chain items first and record their condition. Insulins, vaccines and some suspensions that travelled in a hot vehicle are worthless whatever the printed expiry says.
6. Post the receipt against the purchase order so the gap between ordered, delivered and invoiced is visible. That gap is where supplier credit notes come from.

On paper, the minimum viable version is a bound receiving book with columns for date, supplier, product, pack size, quantity, batch, expiry and the receiver's initials. In Tawala's inventory module the same fields are enforced at entry, so a line cannot post without a batch and an expiry date.

FEFO beats FIFO — and shelf layout is what enforces it

General retail runs FIFO: first in, first out. Pharmacy runs FEFO: first expiry, first out. The two diverge constantly, because deliveries do not arrive in expiry order. A carton received in March can carry a shorter expiry than one received in January, and a FIFO habit will push the January stock out first and leave you holding the March stock until it dies.

The failure is almost never ignorance of the rule — it is that the shelf does not enforce it:

• Front-load the shortest expiry physically. New stock goes to the back, always, and someone other than the person who shelved it checks.
• Mark short-dated packs visibly with a coloured dot or a written month, so the dispenser is not squinting at small print during a queue.
• Run a monthly short-date list — everything expiring inside 90 to 180 days — and decide per line: push it, discount it, move it to a busier branch, or negotiate a return.
• Segregate expired stock into a locked bin, not "the shelf at the back". Expired stock that stays reachable will eventually be dispensed by a locum on a Saturday.
• Keep a disposal register — product, batch, quantity, expiry, date, two witnesses. It protects you in an inspection and it tells you across a year exactly how much your ordering habits are burning.

Controlled substances and the dispensing register

Narcotics and psychotropic products carry recordkeeping duties ordinary stock does not. The operational point for an owner is that the controlled register must reconcile independently of the sales system: opening balance, receipts, issues, closing balance, every issue tied to a prescription and a named dispenser. If your only record of a controlled issue is a POS line, you have a sales record, not a dispensing record.

Three habits keep this clean: a lockable cabinet with a named keyholder per shift; balancing the register every shift rather than every month, because a discrepancy found the same day is investigable and one found in four weeks is not; and never correcting an entry with correction fluid — strike through and initial, so an inspector sees history rather than a suspicious blank.

Buying: lead time, credit and the reorder point

Pharmacy purchasing here is dominated by supplier credit and lead-time variability. The temptation is to buy to the credit limit rather than to demand — which is how a pharmacy ends up with eleven months of one antihypertensive and no amoxicillin suspension.

Set the trigger level per product rather than by feel. Our reorder point calculator derives it from three things you already know: how many units a day you dispense, how long that distributor actually takes to deliver, and how much cushion the line deserves. The pharmacy-specific adjustment is to weight that cushion by clinical consequence rather than by value — running out of a cheap chronic medicine hurts a patient far more than running out of an expensive vitamin.

Two pharmacy-specific adjustments. First, cap order quantity at your shelf-life window — an optimal order size is worthless if it exceeds what you can sell before expiry. The EOQ calculator makes the same point for perishables, and notes that holding cost for a Tanzanian retailer typically runs 15–25% of unit value per year before you count expiry write-offs at all. Second, split fast movers across at least two distributors; single-supplier dependence on a chronic-medication line is a clinical problem as much as a commercial one.

Tax codes, the till and the power cut

Some medicines and medical supplies are treated differently from general goods, so your product master must carry the correct tax code per item rather than a shop-wide default — get that wrong and every fiscal receipt you issue is wrong. For standard-rated lines, VAT is 18%; the VAT calculator converts between VAT-inclusive shelf prices and net figures. Price by category rather than one blanket markup, and keep the distinction straight: a 50% markup is a 33.3% margin, as the markup vs margin calculator shows.

Every dispensing transaction should produce a fiscal receipt at the counter, not a manual receipt reconciled later. The end-of-day Z report is then your reconciliation instrument — fiscal total against cash in the drawer against mobile-money receipts. And because a pharmacy cannot stop dispensing when TANESCO goes out, test offline behaviour before go-live: drop the connection mid-shift, complete three sales, restore it, and confirm all three appear in the day's fiscal totals exactly once. A system that duplicates or drops offline sales corrupts your stock ledger and your tax position at once.

What to review every month

• Expiry write-off value as a share of purchases — the honest scorecard for ordering discipline.
• Stock-out incidents on chronic lines. A patient who cannot fill a repeat prescription goes elsewhere permanently.
• Counted-versus-system variance by category. Persistent negative variance on high-value small items is a shrinkage signal, not a counting signal.
• Supplier fill rate — what share of each order arrived complete and on time. That number should decide who gets next month's business.

For the underlying stock discipline — cycle counting, ABC classification, landed cost — see inventory management best practices. If you run more than one branch, transfer and variance mechanics are covered in multi-location inventory management. For how these workflows are configured for a dispensing business, see Tawala for pharmacies.