Wednesday, August 21, 2013

How Modern Healthcare Grinds to a Halt: Drug Shortages

Surprisingly, one of the biggest challenges in healthcare over the past five years has been a shortage of pharmaceuticals.  From 2006 to 2011 drug shortages grew by 400%.[1]   It is now a common practice for hospital pharmacies to maintain lists of which pharmaceuticals are available for physicians to prescribe.  
Source: FDA Analysis of Drug Shortages

In the U.S, the FDA has been tasked with tackling the problem of drug shortages.  They provide updates through their website listing of new, current and resolved drugs shortages.  In 2012, the FDA even undertook the unusual action of bypassing patent protection for the oncology medication, Doxil, by allowing the importation of a generic equivalent to resolve a critical shortage.  While these efforts have improved the situation over the past two years, drug shortages remain stubbornly high, and the FDA is not able to require firms to provide the reason for drug shortages or how long the shortage will take to be resolved.

A recent report from the Tufts University Center for the Study of Drug Development provides insights into how our modern healthcare supply chain is so severely impacted by simple shortages of important drugs.  The top two reasons for shortages are manufacturing problems such as not meeting FDA quality requirements and increase in demand for a particular drug as in a sudden need for a drug substitution.[2]   Both of these reasons draw attention to how delicate our healthcare supply chain has become.  The healthcare industry, similar to other industries, follows lean inventory policies.  While an average pharmacy turns its inventory just under 12 times each year – the average drug shortage lasts 19 months.[3]    Implementing improved supply chain technology and transportation can help speed the delivery of inventory to providers and patients.  But only when the products are available for distribution.  

  Do you think the FDA should be allowed to require firms to report the reason for shortages and an estimated duration to resolution?

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