Comparativo de la imagen-reputación en el río Sonora y Cananea

The initial costs of the electronic order system are divided between the cost of developing a PKI system, which relatively few registrants are expected to do, and all other initial compliance costs, which include the cost of the initial application, installing the system, learning how to use a digital signature, and generating public and private keys. Software installation is on a per firm basis, but the analysis assumes that the chain pharmacies that do not develop software will install the software centrally and download it to their stores.

The 28 chain pharmacies and distributors as well as the manufacturers assumed to

develop software do not incur additional installation costs for their facilities. Completing applications and generating keys occur on a per certificate holder basis. As discussed in Chapter 4, the cost of learning to use the system is incorporated in the implementation costs where implementation occurs at each registered location. Where implementation occurs at the firm level (manufacturers, distributors, chain pharmacies, hospitals), the cost of learning to use the digital signature is additional and estimated on a per certificate basis.

The estimate for the cost of applying and learning the system is conservative. DEA anticipates that many chain pharmacies will adopt centralized processing systems similar to those already used by four chains. These centralized systems would reduce the

number of certificate holders substantially (from two per registrant to perhaps six per chain or from about 51,000 for chain pharmacies to about 2,200 for chains). The lower number of affected certificate holders would reduce all total costs associated with

applying for and learning to use a digital certificate. DEA is developing a software utility

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that will allow chain POAs to generate location-specific certificates automatically, without having to enter codes and generate keys for each location. This process will also reduce the costs of generating keys and obtaining certificates.

As explained in Chapter 4, there are no capital costs associated with compliance. The only O&M cost is the cost of having the application for a digital certificate notarized and mailed, which is estimated to cost $254,000. Small manufacturers may purchase rather than develop the needed software, but those costs are assumed to be the same as the costs of developing software and are included in the labor costs.

If chain pharmacies and other registrants with multiple locations move to centralized ordering, the cost for mailing and notarization will also fall because it is likely that the entire set of applications for a firm would be mailed together and notarized once. The total initial compliance cost of the electronic order system is about $71 million. Table 5-4 presents labor costs for initial compliance.

Table 5-4: Total Initial Labor Costs for the Electronic Order System Activity Entity Unit Cost Number of

Entities Total Cost Supplier $54/$93* 4,518 Complete

certificate

application Purchaser $45/$78* 155,607

$11.5 million

Supplier $3,066 243

Purchaser $330 43,500

Implement software

Purchaser – Practitioner $21 15,860

$15 million

Supplier $6.30 4,518

Generate

keys Purchaser $7.51 155,607 $1.2 million Learn system Supplier

Purchaser

$26.26

$31.32

4,518

78,824 $2.6 million Develop

software Software developers $153,000 256 $39 million

* Higher figure is for the CSOS coordinator.

Table 5-5 presents the total initial compliance costs, if those costs were incurred in a single year.

Table 5-5: Total Initial Compliance Hours and Costs for the Electronic Order System

Total Hours Total Labor Cost

Total Capital and

O&M Cost

Total Cost

Supplier

Complete Application 3,649 $224,000 $2,400 $226,000 Implement software 304 $758,000 $758,000 Generate keys 452 $28,000 $28,000 Learn to use system 1,884 $119,000 $119,000 Purchaser

Complete Application 150,424 $11,312,000 $252,000 $11,564,000 Implement software 400,307 $15,113,000 $15,113,000 Generate keys 15,561 $1,169,000 $1,169,000 Learn to use system 32,870 $2,469,000 $2,469,000 Software Developers 512,000 $39,250,000 $39,250,000

Total 1,127,000 $70,440,000 $254,000 $70,694,000

5.3.2 Annual Costs

The ongoing costs of the electronic order system are costs that are incurred on an annual basis, including the year in which the system is implemented. One exception is software upgrades, which are assumed to occur only after initial compliance. The estimate for application renewal assumes that one third of the hospitals, clinics, pharmacies, teaching institutions, and individual practitioners, who have three-year certificates, renew each year; other certificate holders renew annually. Unit costs are multiplied by the

appropriate units - the number of firms, number of certificate holders, or number of orders - to obtain total annual costs for each task associated with an electronic order system. For the transmission of orders to DEA, the analysis assumes that distributors and manufacturers do this 152 times a year and importers 125 times a year; neither transmit on holidays. Table 5-6 presents the annual labor costs.

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Table 5-6: Total Annual Ongoing Labor Costs of the Electronic Order System

Activity Entity Unit Cost Number Total Cost Transmit orders to

DEA Supplier $3.15 119,206 $375,000

Use digital

signature Purchaser $0.42 5,338,592 $2.2 million Validate orders Supplier $0.26 5,338,592 $1.4 million

Purchaser $1.88 5,338,592

Developer $7,666 106 $813,000 System

Maintenance Software

Developer $20,655 106 $2.2 million The only O&M cost associated with the ongoing compliance is the cost of the third party audit, which is estimated to cost $353,000 a year (assuming one third occur in each year).

Small manufacturers who purchase rather than develop software are also likely to incur some costs from their vendors in the form of fees for support contracts. Because the PKI-capability will probably be added to an existing system, it is not possible to estimate what those costs will be. Table 5-7 presents the total ongoing hours and costs of the electronic system.

Table 5-7: Total Annual Compliance Hours and Costs for the Electronic Order System

Sign orders 29,659 $2,227,000 $2,227,000 Supplier

Validate orders 22,244 $1,401,000 $1,401,000 Collect and send to DEA 5,960 $375,000 $375,000

Total Hours Total Labor Cost

Total Capital and

O&M Cost

Total Cost

Annotate 222,411 $14,007,131 $14,007,131 Renew certificate 377 $24,000 $24,000 Purchaser

Annotate 133,465 $10,023,000 $10,023,000 Renew certificate 4,833 $363,000 $363,000

Software Developer 157,012 $3,060,000 $353,000 $3,414,000

Total 575,992 $31,481,000 $353,000 $31,834,000

The electronic order system requires 576,00 hours per year. The total annual ongoing cost of the electronic order system is about $32 million.