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.
But these costs are only the tip of the iceberg. Along with price increases, there are also indirect costs associated with shortages. Responding to shortages can divert resources away from patient care. The cost in time and money can be especially high when providers face shortages in drugs needed to respond to new treatment guidelines or provide care to victims of natural and other catastrophes where disease outbreaks may threaten large numbers of people.
No one cause explains drug shortages. Rather, the problem is rooted in a complex set of factors such as consolidation of prescription drug manufacturers; unpredictable problems in manufacturing, including safety issues that temporarily or permanently shut down manufacturing; and interruptions of supply in the ingredients used to produce the drug. In fact, an estimated 80 percent of the raw materials used in pharmaceuticals come from foreign nations such as China or India, both of which have less than ideal safety records that have resulted in product contamination and disruptions of supply. Another significant factor is the economics of pharmaceuticals. Especially for generics, manufacturers may decide to cease production if they find that they are making little or no profit.
No easy solution exists to address drug shortages. Although the FDA can address some of the problem through the regulatory process, it cannot order the production of more drugs, nor can it order public reporting of shortages. In some cases, the FDA may engage in discussions with manufacturers to encourage additional sources of supply, provide assistance on manufacturing practices to manufacturers experiencing manufacturing difficulties or expedited drug approvals. In rare cases, the FDA has approved use of nonlicensed drugs from overseas that are similar to the shortage drugs.
Clearly, new measures are needed to address drug shortages. Premier is working with our member health systems to provide them with ongoing information to help ward off shortages before they occur. In the event that hospitals experience a shortage, we advise them on reputable sources from which they should seek supplies. We are also working with manufacturers to provide information based on some of our members' drug needs.
But private sector initiatives can only go so far. More governmental action is needed to require advance notice and public reporting of drug shortages to the FDA, the reasons for the limited supply and the expected timetable for resumed production. FDA, in turn, should make this information available on its website and work with manufacturers to speed product reviews and safety inspections, easing some of the regulatory burden in an emergency. With just two to three months of products in the supply chain, speedy action and additional warning time could mitigate some of the risk and help avert shortages.
Such an approach is supported by Sen. Amy Klobuchar (D-MN), who has introduced legislation in this Congress that would require such notifications, and give the FDA latitude to expedite approval for alternative treatments.
Drug shortages are a major safety issue, and one that deserves prompt attention from both the pharmaceutical industry and the government agencies that oversee them. With patient lives on the line, we can't afford a shortage of concern.
Mike Alkire is president of Premier Purchasing Partners, part of the Premier healthcare alliance. He may be reached at Mike_Alkire@PremierInc.com