Sunday, February 23, 2014

Drug Shortages Exacerbated by Supply Chain Woes

Assigning responsibility for the costs linked to maintaining adequate supplies of medications is at the heart of the medication shortage issue, says one pharmaceutical economist.

New rules and greater cooperation between major players appear to be leveling off a spike in medication shortages that began nearly a decade ago. But with at least 38 new drug shortfalls last year, providers are continuing to scramble to make sure the best treatments are available to their patients.

"We, on a routine basis, have to deal with shortages of medication that require mitigation," said Dan Johnson, director of pharmacy services at St. Anthony's Medical Center in St. Louis. When shortages occur, the hospital's pharmacists coordinate with the medical staff, wholesalers, and manufacturers to find alternate therapies or new sources for scarce medications.

In some cases, Johnson says the only option is to "restrict the drug to the patients who really need it."
Erin Fox, director of the Drug Information Service at the University of Utah in Salt Lake City, says a recent shortage of oncology drugs demonstrates the potentially severe consequences for patients.
"When you have a limited supply, you have to decide which patients will get a medication and which might not," Fox said, noting "there is no other effective alternative" for several cancer medication regimens.

"That's a really hard position for providers to be in," she said.

FDA Drug Shortage Report

 In July 2012, the Food and Drug Administration Safety and Innovation Act became law. In addition to requiring drug manufacturers to provide timely notice of impending or unexpected medication shortages, FDASIA required the FDA to issue annual reports on pharmaceutical shortfalls.

The federal agency released its first "Annual Report on Drug Shortages" this month, with the research focusing on the first three months of 2013. The report notes a slowing in the rate of new medication shortages.

"While the number of new shortages… quadrupled from approximately 61 shortages in 2005 to more than 250 in 2011, after actions by the FDA working with stakeholders, that number significantly decreased in 2012 to 117 shortages. However, shortages continue to pose a real challenge to public health," the report states.

The FDA report indicates reforms in recent years such as FDASIA are having an impact.

"As a result of recent actions by the President, Congress, and FDA, manufacturers are notifying FDA about potential shortages earlier than in the past. Early notification of potential shortages gives FDA additional time to work with sponsors and other groups to identify ways to maintain treatment options and prevent a shortage," the report states.

"Using a range of available tools, including regulatory flexibility when appropriate, FDA's Center for Drug Evaluation and Research (CDER) worked with manufacturers to successfully prevent 140 shortages from January 1 to September 30, 2013. In addition, the number of new shortages tracked by CDER for this same time period is 38, compared to the 117 new shortages during calendar year 2012."

The federal agency can choose from a suite of responses when a drug shortage is reported, including:
  • Determining whether other manufacturers are willing and able to increase production.
  • Expediting FDA inspections of manufacturers attempting to restore production.
  • Working with affected manufacturers to investigate the root cause of a shortage.
Bearing the Cost

 "It's a very complex problem. If we could fix it tomorrow, it would be great, but that's unlikely," said Cynthia Reilly, director of the medication safety and quality division at the American Society of Health-System Pharmacists.

"We really can't hold one party responsible for drug supply," she said. "Realistically, part of the reason we have great drugs to treat patients is we have a free market."

Enrique Seoane-Vazquez, PhD, an associate professor at the Massachusetts College of Pharmacy and Health Sciences University in Boston, said assigning responsibility for the costs linked to maintaining adequate supplies of medications is at the heart of the drug shortage issue.

"If a hospital doesn't have a medication, nobody is responsible even if you die," said Seoane-Vazquez, who serves as director of MCPHSU's International Center for Pharmaceutical Economics. "This is the main problem… the lack of responsibility."

He said the players at the opposite extremes of the supply chain—manufacturers and healthcare providers—would face significant costs if they were compelled to bear the burden of avoiding drug shortages alone.

"They don't produce an extra amount in case there is a shortage," Seoane-Vazquez said of pharmaceutical companies. "They produce enough to satisfy the needs of their clients."

For hospitals, stockpiling supplies of medications presents a financial drain, he said. "Hospitals could be required to have the medications to meet the needs of their patients, but it will cost you more," Seoane-Vazquez said.

Transparency Needed

 In addition to sorting out the economic imperatives of operating a robust medication supply chain, Fox said boosting transparency in the pharmaceutical industry is needed to ensure a steady supply of quality medications. The University of Utah College of Pharmacy faculty member said the common practice of drug companies contracting out medication lines is problematic.

"Just like our food, we need to know where our drugs are coming from," Fox said. "Some companies are forthcoming with that information and some companies are not… I want to know: is that product quality, or is it going to be recalled? I want to know those medicines are safe."

Fox said the shortage of medications is particularly acute for injectable drugs, noting there are fewer than 10 manufacturers worldwide.

In a prepared statement earlier this month, Ralph Neas, president and CEO of the Generic Pharmaceutical Association, said his group's members are playing a key role in providing a supply of affordable medications to patients around the world.

"Generic pharmaceuticals play a critical role in any strategy to hold down health costs," Neas said. "We will continue to work with policymakers to ensure any proposed laws and regulations do not undo the framework responsible for decades of more affordable generics and trillions of dollars in savings."

Neas describes 2013 as "a year of milestone achievements" for the generic drugs industry. "Generic utilization hit an all-time high as 84 percent of prescriptions dispensed are now generic," he said.
"Congress passed the Drug Quality and Security Act to establish a nationwide, reliable system for tracking prescription medicine that further safeguards our nation's prescription drug supply and protects patients. The law also enhances the ability of regulators to limit risks posed by counterfeit or adulterated products and reassures patients that the generic medicines they receive are secure from the manufacturer all the way to the pharmacy."

Embracing Shared Responsibility

 St. Anthony's pharmacy director says the best way to achieve a permanent solution to the nation's drug shortage problem is through teamwork among the players in the supply chain. "We're all part of the problem," Johnson said. "We all need to work together."

The new FDA shortage reporting rules are seen as a significant step toward greater cooperation. "That gives us a chance to allocate drugs before we run out," he said.

"It really is a situation that we are all in it together," Johnson said. "If we don't work together… sometimes we make these situations worse."

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