Drug Shortages Impose Risks and Increase Costs, Especially Among IV Solutions

An updated survey of 124 pharmacy experts by Premier, Inc., conducted over a five-week period in December 2013 to January 2014, indicates that drug shortages continue to challenge patient care and increase health care costs. Premier, Inc. is a leading group purchasing organization (GPO), uniting an alliance of more than 2,900 U.S. hospitals and nearly 100,000 other providers.

According to Premier’s study: (1) approximately 90 percent of those experts surveyed experienced at least one drug shortage in the last six months that may have caused a medication safety issue or error; (2) U.S. hospitals that were forced to purchase more expensive generic substitutes for shortage drugs incurred approximately $229.7 million in additional annual costs from 2011 to 2013; and (3) the prevalence of shortages affecting patient care appears to be decreasing, as compared to 2010 survey results.

Most Common Shortage Drugs

The survey lists the following as the most often cited shortage drugs: (1) electrolytes, intravenous fluids and parenteral nutrition solutions; (2) cardiovascular agents used to treat heart disease and other cardiac conditions; and (3) surgical agents used for surgery preparation/anesthesia and sedation.

According to Michael J. Alkire, Premier’s chief operating officer, to remedy drug shortage “spikes,” such as the one currently affecting the supply of intravenous solutions, “we need a ‘swat team’ mentality by all, including the FDA, the manufacturers, the distribution channel, the GPOs and the hospitals. FDA in particular plays a critical role given their role in approving the availability of additional drug supplies.” In fact, the FDA has issued its first annual report to Congress summarizing the major actions it has taken during the first three quarters of 2013 to prevent or mitigate drug shortages in the United States.

GPO Help

The survey indicates that GPOs are helpful to providers in managing shortages, with: (1) 53 percent citing “failure to supply” clauses in contracts as helping hospitals capture funds when shortages occur and the provider has to purchase a more expensive alternative; (2) 42 percent citing advocating for legislative changes and providing early notice regarding manufacturing issues; and (3) 34 percent citing adding additional manufacturers to contract portfolios and providing information about therapeutic alternatives.

Preparing for Shortages

The survey also shows that since the 2010 drug shortage crisis, a high percentage of providers have implemented programs to handle shortages: (1) 90 percent have added back-up inventory or adjusted par levels for critical drug categories; (2) 87 percent have increased communications about shortages to internal stakeholders; and (3) 83 percent have implemented restrictions and rationing for short supply drugs.

In addition to help from GPOs and preparing for shortages, Premier suggests contracting only with generic manufacturers with a good FDA record, thereby reducing the risk of shortages. One example of this effort by Premier includes bringing new manufacturers, like Heritage Pharmaceuticals Inc., into the generic injectable market. Jeffrey A. Glazer, RPh, JD, Heritage president & CEO, notes that “Heritage Pharmaceuticals Inc. is committed to robust research and development of newly genericized products, and legacy and drug shortage products…With their knowledge of industry issues and access to a national network of health systems, GPOs such as Premier are important to bridging the gap between the FDA and providers as we partner to prevent drug shortages.”

Comments

  1. GPO help? You’ve got to be kidding. Anticompetitive GPO contracting practices, self-dealing, and kickbacks CAUSED the drug shortages! If you want to understand how this happened, read our 9/3/13 New York Times op-ed, “How a Cabal Keeps Generics Scarce”:http://www.nytimes.com/2013/09/03/opinion/how-a-cabal-keeps-generics-scarce.html.

    • Harold Bishop says:

      You make an excellent point Mr. Zweik. I respect your work in this area. Thank you for referencing your NY Times article.