America has a major drug problem, but it’s not the one that probably comes immediately to mind. It is a continual and rotating shortage of important drugs needed to treat a variety of legitimate medical conditions impacting patients and the healthcare supply chain.
The drug shortage issue has been an ongoing problem in recent years, even with a concerted effort to reduce shortages through earlier manufacturer notifications and better government enforcement. In October, the numbers of drugs in short supply ran between 100 and 250, depending on which organization is referenced.
There are a lot of different factors for the continued shortages, said Curtis Rooney, president of the Healthcare Supply Chain Association. “There are issues with production, with oversight and enforcement by the FDA, and with reimbursements. Right now it is creating a perfect storm.”
The Pharmaceutical Research and Manufacturers of America (PhRMA) agrees. “The factors that contribute to drug shortages are complex and multidimensional,” the organization says. Among the reasons it cites for the shortages are:
shifts in clinical practices
wholesaler and pharmacy inventory practices
raw material shortages
changes in hospital and pharmacy contractual relationships with suppliers and wholesalers
adherence to distribution protocols mandated by the FDA
individual company decisions to discontinue specific medicines
Rooney said drug shortages in recent years have been aided by the insufficient oversight by the Food and Drug Administration, but much of that was due to lack of authority on that agency’s part. Rooney expects new enforcement powers given to the FDA will soon pay off.
In the meantime, however, drug shortages continue to impact the healthcare supply chain, contribute to a “gray market” of alternative drugs, in some cases encourage price gouging, and in all cases, impact patient care.
The consequences of drug shortages are felt quickly in the supply chain, said Brent Petty, system vice president of supply chain at the Wellmont Health System in Kingsport, Tenn.
“When we have shortages it forces us to do a number of things,” Petty said. For one, “it forces us to reach out to non-contracted distributors. This may create a little bit of risk, because we may not know who is really behind that drug.”
Supply chain managers may have to execute a lot of electronic work-arounds as well, since these distributors are not a part of the hospital’s normal supply chain and distribution systems would otherwise reject the orders.
And having to work outside the normal supply chain means that a hospital may not get the pricing it desires, Petty noted.
According to PhRMA, when gray markets spring up, the potential for price gouging is high and the safety of products is not assured because there is no oversight to ensure that the products have been properly handled.
Another consequence of shortages that impacts the supply chain is panic. When drug distributors or healthcare clients learn of a pending shortage on one drug, said Roslyn Schulman, director of policy at the American Hospital Association, they create unanticipated demand for alternative drugs, which in turn leads to a shortage of those.