Hospitals are routinely forced to purchase substitute drugs, which is a costly proposition. Not all of those costs are direct, nor are they easy to tally.
Hospitals and health systems continue to struggle to manage the record number of drug shortages that have plagued the nation's healthcare system since the late 2000s.
While the FDA reported in February that the number of new drug shortages dropped significantly in the first three quarters of 2013 as compared to 2012, there are still more than 300 drugs that are chronically in short supply due to a laundry list of reasons, including the quality of active pharmaceutical ingredients, drug recalls, industry consolidation, quality control issues at manufacturing plants, and the lack of manufacturing line capacity.
See Also: Drug Shortages Exacerbated by Supply Chain Woes
Hospitals are routinely forced to purchase substitute drugs, which is a costly proposition. A recent survey from group purchasing and performance improvement organization Premier found that U.S. hospitals spent nearly $700 million between 2011 and 2013 to cover the additional costs associated with buying more expensive generic substitutes for shortage drugs—and that doesn't include the indirect expense of the staff time required to hunt down alternative supplies.
To call the drug shortage situation "widespread" would be an understatement. According to the survey, in the second half of 2013:
- More than 99 percent of respondents said a shortage led to the purchase of a more expensive generic alternative.
- 96.4 percent of respondents had to purchase a more expensive therapeutic alternative due to a shortage.
- 93.7 percent of respondents said a shortage required the purchase of a more expensive product from a direct manufacturer source.
Drug shortages first became a noticeable and steady issue in 2009, says David Jaspan, RPh, director, pharmacy and materials management at Union Hospital of Cecil County, a 122-licensed-bed institution in Elkton, MD.
"That is when things really started to become a problem, and we started managing it using some tricks of the trade. We weren't able to get a particular strength of some drugs so we would make substitutions and start converting things behind the scenes," he says.
Direct and Indirect Costs
As the number of drug shortages grew over subsequent years, quietly making substitutions for hard-to-get drugs became increasingly difficult and eventually impossible to do, Jaspan says. At that point, Union Hospital's pharmacy and therapeutics committee had to begin making some tough choices around conserving and substituting drugs.
"For example, propofol is a drug used to sedate patients. For that particular [shortage] situation we had to identify which patient population needed this drug the most," Jaspan says. "We had been using it in the intensive care unit, but we started using alternatives there and focused on just providing propofol to a subset of patients for which there weren't any alternatives. We had to limit its use."
Jaspan says there are significant direct and indirect costs associated with managing the drug shortages, including the higher prices his organization pays to buy some drugs from the manufacturer instead of wholesalers and the additional staff time required to manage the new process purchasing alternatives and communicating with staff about shortages.
"There are the direct, immediate costs of having to purchase something directly from the manufacturer because we have to pay freight charges and we also can't get the credits we can take when working with the wholesalers," he says. "Then there is our pharmacy buyer, who also has other responsibilities but has spent a lot more time focusing on finding drugs."
"Also, we now produce a weekly newsletter to keep staff informed of new shortages, and that takes a lot of time. Also, there are costs to train staff to use new products instead of something they are used to," he adds. "I have never sat down to figure out the full cost to the organization because that would be very difficult to do, but obviously, we are spending a lot more money."
Matt Moss, PharmaD, director of pharmacy at Methodist Richardson Medical Center, a 209-bed hospital in Richardson, TX, agrees it is difficult to put an exact dollar amount on the cost of dealing with drug shortages because there are so many factors to take into account. He estimates, however, that the additional cost is between 2% and 7% per year.
"And that is on a $43 million annual spend," he says. "Each shortage we have touches so many things. We have to update order sets in the computerized physician order entry system, find alternatives and get them added to the system, physically touch every [automated dispensing] cabinet, [and] send out communications to physicians and the medical staff. We may have to call physicians, which takes a lot of time and takes them away from patient care."
While MRMC has not had to add staff to handle the shortages as many hospitals around the country have done, Moss says managing the situation takes a considerable amount of time and effort.
The 'New Norm'
"It does require more time and more emphasis," he says. "We have weekly meetings now with buyers to discuss what shortages we should anticipate in the next few weeks and how we can tackle that situation… Our exempt employees are putting in more hours, but that isn't necessarily reflected in overtime."
The extra staff time is essential, however, especially when it comes to communicating with the medical team in order to prevent patient care problems.
"I can't say we've had any direct errors that have occurred because of shortages, but it takes so much more time to communicate with the medical staff and nurses at the bedside. And not all patients will respond the same way to the alternative drug so there is always that potential that it will cause medication issues. On the front end, we are trying to do so much with education to keep it from becoming a patient safety issue," Moss says.
Both Moss and Jaspan believe dealing with this level of drug shortages will be an ongoing challenge for hospitals.
"This is definitely the new norm," Moss says, adding that MRMC will work closely with its group purchasing organization and will continue to improve communication between the pharmacy and the medical staff in order to ease the strain as much as possible.
"I don't see an end in sight for this problem," Jaspan agrees. "It does wear you down. Trying to mitigate the impact to patient care is difficult, but like anything else, you get a little war weary, and you get used to it. We know pretty much every day there is going to be another product we won't be able to get."