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Drug Shortages Raise Costs, Put Patients at Risk

Mike Alkire, for HealthLeaders Media, April 15, 2011

In today's consumer-driven marketplace, we know when products are in short supply. When iPads sold out in stores shortly after their introduction, it made front-page news in most newspapers. Such coverage also detailed plans from Apple to address the problem and timelines for when consumers could expect to see them back on the shelves.

But in healthcare, shortages are rarely reported, even when they put patient health at risk. For more than a year, our healthcare system has experienced a 10-year high in drug shortages for a range of products vital to treatment. This crisis has gotten scant coverage even though 240 products, including drugs needed for sedation, emergency care and chemotherapy, simply aren't available.

Drug shortages present a danger to public health. In hospitals, a shortage may delay necessary medical procedures. Substitution of similar medications, if available, may lead to errors and adverse events, especially if prescribers are unfamiliar with the alternative products' dosing and potential interactions with other drugs.

The problem of drug shortages is also costly. According to a recent analysis of pricing trends for shortage drugs conducted by the Premier healthcare alliance, providers are paying an average of 11% more for shortage products, and in some cases, the price tag has risen 335%. The problem is further compounded by “gray market” vendors, who take advantage of provider desperation by hoarding products in order to price gouge during shortages.

These price spikes have a dramatic affect on the hospitals' bottom line, ultimately costing more than $200 million a year in additional expense through the purchase of more expensive substitutes.

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