Drug shortages and the supply chain

The following is an excerpt from JHC November Digital’s cover story. To read the full article, Domino Effect, visit www.jhconline.com

There’s gotta be a better way. That — and other thoughts — were running through Gene Alley’s mind recently when he had to go to a customer to get a list of discontinued injectables from a major generics manufacturer this spring. The irony is that the manufacturer is one from whom Alley’s company, STAT Pharmaceuticals in Santee, Calif., buys direct.

“We don’t get a heads-up” when shortages occur or are about to occur, says Alley. “We don’t have time to prepare our customers.”

He’s not alone. Shortages of drugs are cropping up unannounced more than ever. “Literally every day I’m managing my backorder report,” says one sales rep. “It’s a constant battle.”

The issue has become serious enough to capture the attention of federal lawmakers, who have proposed legislation that would give the market a heads-up when shortages occur or are anticipated.

“Everybody has been affected by [shortages] one way or another,” says Chris Rogers, director of pharmaceutical programs, McKesson Medical-Surgical. “It’s something we’ve had to manage.”

Impact on providers

Hospitals are feeling the pinch. A Premier healthcare alliance survey of 311 pharmacy experts representing 228 hospitals and other healthcare sites from July to December 2010 showed that:

• 89 percent experienced shortages that may have caused a medication safety issue or error in patient care.
• 80 percent experienced shortages that resulted in a delay or cancellation of a patient care intervention.
• 98 percent experienced shortages that resulted in an increase in costs.

 

“Providers are paying an average of 11 percent more for shortage products, although the total economic impact is likely much higher, since research excludes drugs purchased on the ‘gray market,’ or those with therapeutic alternatives,” said the Premier report, which was published in March. “The research also does not include indirect costs, such as added labor needed to manage shortages and secure alternative supplies, as data on these areas does not exist.”

In September 2010, the Institute for Safe Medication Practices, Horsham, Pa., released the results of a survey of more than 1,800 healthcare practitioners, 68 percent of whom were pharmacists. During the prior 12-month period, more than half of the respondents reported “frequently” or “always” encountering the following difficulties associated with drug shortages:

• Little or no information available about the duration of a drug shortage (85 percent).
• Lack of advanced warning from manufacturers or FDA to alert practitioners to an impending drug shortage and suggested alternatives (84 percent).
• Little or no information about the cause of the drug shortage (83 percent).
• Substantial resources spent investigating the shortage and developing a plan of action (82 percent).
• Difficulty obtaining a suitable alternative product (80 percent).
• Experience a significant financial impact (78 percent).
• Lack of a suitable alternative product (70 percent).
• Substantial resources spent preparing and/or administering the alternative products (69 percent).
• Risk of adverse patient outcomes (64 percent).
• Internal hoarding of medications associated with impending shortages (58 percent).
• Physician anger towards pharmacists/nurses/hospital in response to a drug shortage (55 percent).

 

Nothing new

Critical drug shortages have affected healthcare providers for years, says Erin Fox, manager, Drug Information Service, University of Utah Hospitals & Clinics. In fact, 10 years ago, the University of Utah entered a partnership with the American Society of Health-System Pharmacists (ASHP) and the group purchasing organization Novation to provide drug shortage information for their websites.

The market saw quite a bit of consolidation 10 years ago, notes Fox. “You might have had eight or 10 companies making a drug, then it went down to two or three. And that trend has continued.”

At the time, the Food and Drug Administration website was the only place the industry could get up-to-date information on shortages, says Fox. “That website was OK, but limited in what they could put up there.” Essentially, the FDA was only publishing information the drug companies provided them. And companies weren’t required to provide anything at all, not even information on why the shortage had occurred or when it would be resolved.

 “Since we’re pharmacists, we can provide information about therapeutic alternatives and how to manage a shortage,” including discussions about which patients might be most severely affected and how the provider should compensate for that, says Fox.

Crosses multiple categories

A shortage of chemotherapy drugs highlighted the issue for the general public, points out Fox. In April 2010, for example, the FDA ordered Teva Pharmaceutical Industries Ltd. to close its Irvine, Calif., plant, due to concerns about its manufacturing processes. In May of this year, the company started shipping vincristine sulfate injection, and announced plans to ship streptozocin powder for solution shortly after. (Although FDA did not list vincristine and streptozocin among the drugs in short supply, the University of Utah’s Drug Information Service reported shortages of both antineoplastics.)

In May 2011, generics manufacturer Bedford Laboratories discontinued production of its cancer drug bleomycin to concentrate on the manufacturing of other products. That in turn put a squeeze on Hospira, Teva and APP to take up the slack.

But the issues aren’t related to chemotherapy drugs. In April 2010, for example, the FDA sent an enforcement letter to Lake Forest, Ill.-based Hospira listing a variety of manufacturing problems at its Rocky Mount and Clayton facilities in North Carolina. The agency cited Hospira for failing to assure adequate process design and control of its propofol (used to induce anesthesia), cleviprex (calcium channel blocker) and liposyn (fat emulsion) products; and for failure to have adequate written procedures for production and process controls for its amidate (used for the induction of general anesthesia), amikacin (antibiotic) and droperidol (tranquilizer).

The propofol situation demonstrates the domino effect of the current injectables shortage. In May 2010 Teva announced it would cease making propofol – one of the most commonly used anesthetics — because of manufacturing issues and a host of lawsuits. The forced Hospira and APP to try to meet the demand, not always successfully.

Another case in point is the injectable corticosteroid dexamethasone. In March 2011, American Regent recalled its product indefinitely due to the presence of particulate matter in it. That in turn caused APP’s dexamethasone product to go on intermittent back order, with releases scheduled throughout the summer.

“There aren’t many manufacturers of generic injectable products,” which are often more difficult to manufacture than, say, oral products, says Fox. “When there’s a glitch – manufacturing issues, raw materials issues, the need to make a new label – there’s no resiliency in the supply chain for other companies to take up the slack. So it almost always results in a national shortage.”

Profitability is a key issue for manufacturers. Despite their popularity, some of these injectables are 20, 30, even 40 years old. “They’re not brand new blockbusters,” says Fox. “It’s hard to get to exactly what is the price point where something is no longer financially viable to make. And that will be different for each company and each time period.”