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Hospital Drug Shortages Reach 10-Year High, Cost Hospitals $200M Annually

Cheryl Clark, for HealthLeaders Media, March 30, 2011

A near crisis shortage of drugs, especially chemotherapy, sedation, and pain relief medications, is endangering patient safety and costs hospitals more than $200 million annually for higher priced substitutes, according to Premier Inc., a hospital purchasing alliance.

"For months, our healthcare system has experienced a 10-year high in the drug shortage arena, with 240 drugs in short supply or completely unavailable in 2010, and many remain in short supply or unavailable in 2011," says Mike Alkire, president of Premier Purchasing Partners.

That was the finding from Premier's survey of 311 pharmacy experts representing 220 hospitals or centers specializing in infusion, oncology, surgery, outpatient care, and retail pharmacies during the last six months of 2010.

Some of the cost increase and shortages have been deliberately caused, Alkire said. "During times of shortages, grey market distributors take advantage of the needs of providers. They buy up available supplies and offer to send them to end producers at significantly higher prices, creating huge profits for themselves."

In one case, the drug furosemide, which reduces swelling and fluid retention, previously contracted for $1.21 per vial, could only be purchased for $195, or 160 times the cost, he said. The same dosage of hydroxyprogesterone, used to prevent pre-term births in high-risk pregnancies, went from $15 to $1500.

The report by Premier, which represents 2,500 hospitals, says the frequency and impact of these shortages has more than tripled between 2005 and 2010; 77% involved sterile injectable products used in acute care settings, and many of those were the result of product discontinuations.

Alkire says that the shortages also occur when prescription drug manufacturers consolidate, thus reducing the number of suppliers. Safety issues may permanently or temporarily shut down manufacturing facilities. And in the case of some generic drugs, he said, "a number of manufacturers ceased production of products that generated little or no profit." A shortage of raw materials can slow the supply chain as well.

In a briefing to announce the survey results, Premier was joined by Sen. Amy Klobuchar, (D-MN), who last month introduced a bill that would require drug manufacturers to notify the FDA when supplies of a drug might be curtailed, for any reason. 

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