DRUG SHORTAGES

A PUBLIC HEALTH CRISIS

BACKGROUND

U.S Healthcare System is experiencing an alarming increase in number of drug shortages causing a major public health threat

Increased > 200% between 2006 and 2010

ASA DRUG Shortage Survey—2011

1,373 Anesthesiologists90% reported a shortage of one or more

anesthetics 10% postponed or cancelled cases48% reported longer recovery times

IMPACT Interruptions in pt’s daily regimen can lead to dangerous

effects/withdrawal symptoms (ex. Rebound HTN)

Decreased pt satisfaction, prolonged awakening, delayed discharge, nausea

Longer procedure times and recovery times drive up healthcare costs

When shortages occur, drugs can be obtained through a non-contracted supplier aka. “gray market” resulting in significantly increased prices and compromised safety

Ethical issues

BACKGROUND AANA Drug Shortage Survey

94.7% indicated they experienced a drug shortage affecting their practice in the last year.

6.1% have had to cancel cases due to shortages Top recommendation for stakeholders regarding

shortages: Increase regulations of drug manufacturers/provide more incentives for or “force” companies to produce drugs in shortage

HOW DO I KNOW WHAT DRUGS ARE ON SHORTAGE?

American Society of Health System Pharmacists (ashp.org)

each manufacturer gives reason for shortage estimated resupply dates alternate agents usually lists more drugs

CDER Drug Shortage website—thru FDA site

encourage manufacturers to report shortages but not mandatory

REASONS FOR SHORTAGES Drug companies decrease the supply which increases the

demand and cost

Many drug companies will stop producing a drug if the profitability is less than 6% above cost.

Medicare reimburses sterile injectables at 6% above average sales price under Part B

Only 7 Pharm manufacturers produce a majority of sterile injectables

Any given sterile injectable is produced by 3 or less manufacturers

Distributors tend to provide the best prices and most stable supply to high volume purchasers

REASONS FOR SHORTAGES In 2009, 2 out of 3 U.S. Manufacturers of Propofol stopped

production which led to increases in use of other induction drugs which led to a shortage of those as well

Several manufacturers are expanding capacity but won’t be ready for several years

QUALITY PROBLEMS or Scarcity of an active pharmaceutical ingredient can lead to cascading and persistent shortages

54% of shortage attributed to quality problems—leading to temporary closure or renovations of facilities

Asymmetry of incentives: little cost of producing too little of a drug but a potentially high cost of producing too much of that drug

ANESTHESIA RELATED SHORTAGES

Alfentanil Injection

Acetylcysteine Inhalation Solution

Alcohol Dehydrated (Ethanol > 98 Percent)

Atracurium Besylate

Atropine Sulfate Injection

Bupivacaine Hydrochloride Injection

Buprenorphine Injection

Butorphanol Injection

Calcium Chloride Injection

Cocaine Topical Solution

ANESTHESIA RELATED SHORTAGESDesmopressin Injection

Dexamethasone Injection

Diazepam Injection

Diltiazem Injection

Diphenhydramine Hydrochloride Injection 

Etomidate Injection

Fentanyl Citrate Injection

Fosphenytoin Sodium Injection

Furosemide Injection

Hydromorphone Hydrochloride Injection (New)

Indigo Carmine Injection 

Ketorolac Injection 

ANESTHESIA RELATED SHORTAGESOpana ER (oxymorphone hydrochloride)

Pancuronium Bromide Injection

Phentolamine Mesylate for Injection

Potassium Phosphate

Procainamide HCl Injection

Prochlorperazine Injection

Promethazine Injection

Sodium Acetate Injection

Sodium Chloride 23.4 Percent

Sodium Phosphate Injection

Sufentanil Injection 

Vasopressin Injection

Vecuronium Injection

ANESTHESIA RELATED SHORTAGESLabetalol Hydrochloride Injection

Lidocaine Hydrochloride Injection

Lorazepam Injection

Magnesium Sulfate Injection

Metoclopramide Injection

Midazolam Injection

Morphine Sulfate Injection

Nalbuphine Injection

Naloxone 

Ondansetron Injection 2mg/mL 

Ondansetron Injection 32 mg/50 mL premixed bags   

THE GRAY MARKET: PUTTING PROFITS BEFORE PATIENTS

What is the Gray Market???

A supply channel that is unofficial, unauthorized or unintended by the original manufacturer

In markets where the products are scarce or in short supply gray markets evolve to sell the item at any price the market will bear

Price gouging

Average of 650% markup of drugs needed to treat critically ill pts Highest single markup was 4,533% Normally priced at $25.90 offered price was $1200!!!

Not just a cost concern. Myriad of SAFETY issues

Pose risks to your patients and the facility—drugs can be counterfeit, stolen, mishandled, diverted

Not regulated, no standards for storage and handling

GRAY MARKET: PRICE GOUGING

Of the markups…

96% were at least double normal price (100%)

45% were at least 10 X normal price (1000%)

27% were at least 20 x normal price (2000%)

WHAT DRUGS ARE BEING AFFECTED BY THE GRAY MARKET???

The highest markups…

3980% for chemotherapy drugs to treat leukemia and non-Hodgkin's lymphoma

3170% for drugs for cancer patients receiving bone marrow transplants

3161% for sedatives/anesthetics

A supply of Propofol that usually cost $1500 now being sold for $25,000!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

2979% for certain blood pressure medications

2692% for meds to prevent damage during a heart attack

WHERE DOES MY HOSPITAL GET THE DRUGS I USE???

Drugs moving thru the gray market can be bought and sold across state lines multiple times, moved in whole or partial lots, repackaged or relabeled

Complex web of transactions making it impossible to determine the product’s origin, the supply source, or authenticity

Temperature and climate conditions required for maintaining efficacy cannot be ensured—may cause drugs to be inadequate or harmful

STUCK BETWEEN A ROCK AND A HARD PLACE! Record number of drug shortages

Drug scarcity forcing pharmacists to search for new sources of supply

Puts the pharmacist/buyer between a rock and a hard place

Results of a recent survey of purchasing agents and pharmacists at 549 hospitals…

Stockpiling and hoarding “You are hesitant to tell gray market vendors what you need

because they will buy it all up if they find it, and then harass you to buy it for months afterwards.”

More than half of all respondents were solicited daily from up to 10 different gray market vendors by phone, email, or fax

Contain language such as “we only have 20% left” and “quantities are going fast”

Most frequent solicitations at university hospitals

“I would like to know why hospitals can’t get these products but the scalpers can. It is unreal to have to deal with scalpers in healthcare.”

They watch the wholesaler’s supply and if they sense an impending shortage they buy the entire supply

“Our physicians DO NOT want to hear that a drug is unavailable.”

52% reported purchasing one or more drugs from gray market during past 2 years

Feeling pressured by physicians and hospital administrators to purchase from gray market vendors

REASONS TO AVOID THE GRAY MARKET

ETHICAL concerns

Concerns with authenticity

Cost

Concerns about storage conditions

WHAT NEEDS TO BE DONE TO STOP GRAY MARKET VENDORS???

Legislative action is needed to give the FDA the authority to better manage drug shortages

Requiring manufacturers to stop deliveries to wholesalers/distributors when the company knows their products are soon to be in short supply

This way only direct accounts with hospitals, clinics, pharmacies, and other direct patient care to have access to the products at the contracted rate

With better control of drug shortages the gray market can’t thrive! Stronger regulations needed for distribution of pharmaceutical

products

National pedigree law—limits distribution to authorized dealers and appropriately licensed distributors

Pricing of products should be standardized in a way that prohibits unfair price gouging

WHAT NEEDS TO BE DONE TO STOP THE GRAY MARKET VENDORS

Healthcare provider organizations need to take steps to minimize the need for purchasing products from gray market vendors

Local affiliations forming that identify shortages and determine appropriate limitations on use, and cooperatively borrow from each other to avoid using gray market vendors

Pharmacy and committees seeking out alternatives for drugs in short supply and implemented safety strategies to avoid errors with these alternative drugs

Regulatory and law enforcement action against counterfeiting and theft

WHAT IS CURRENTLY BEING DONE? Obama—Oct. 2011 executive order for FDA to investigate

price gouging

Government is now requiring drug manufacturers to report production interruptions in drugs that have no generic equivalent or those that are critical to maintaining life to the FDA

In 2009, the ASA worked with the FDA to allow importation of Propofol from European drug companies

Several leading manufacturers of generic sterile injectables are upgrading facilities or building new facilities—will take time

Producing a new drug will often require manufacturers to reduce or stop production of another drug

PROFITABILITY OF GENERIC DRUGS: AN ETHICAL ISSUE

Many drug companies will stop producing a drug if it brings in less than 6% profit above cost.

Medicare reimburses sterile injectables at 6% above average sales price under Part B

Many of the current drug shortages are sterile injectable GENERIC drugs.

This is an ethical issue:

Should drug companies continue to make drugs that they profit little from out of an ethical obligation?

Should we create an incentive to keep them making these drugs to prevent shortages?

WHAT CAN WE DO? The FDA does not have the authority to “force” drug

companies to continue making a drug or to increase production of a drug

We can write letters to drug companies pleading with them to continue to make drugs that may not profit them and include specific pt stories.

Drug companies are businesses whose goal is to be profitable

Updating Medicare’s generic drug reimbursement methods frequently, especially for shortage drugs

Providing tax incentives to encourage makers of generic drugs to upgrade their facilities and continue or begin producing shortage drugs

TAX INCENTIVES: THE BOTTOM LINE It is unfortunate that drug companies are for-profit

businesses who will probably show a weak response to our pleads for them to make drugs out of an ethical obligation

Tax incentives for drug companies to continue making lower profit drugs has been suggested by many respondents to a recent questionnaire sent to members of the AANA

Unfortunately, “money talks” and tax incentives may be a logical way to stimulate them

CONCLUSION The solution to the drug shortage problem must be multi-

faceted due to the vast number of causative issues

Many of the solutions thus far have focused on reporting shortages which may encourage rationing and slow the shortage, but this does not “fix” the problem

This advocacy project focuses on two main solutions:

Regulate the gray market Find ways to get drug companies to manufacture the less

profitable generic sterile injectable drugs that are on shortage

REFERENCES

American Association of Nurse Anesthetists website. (2012). http://www.aana.com/resources2/professionalpractice/Pages/Drug-Shortages.aspx

Drug shortages in the U.S.-An industry prospective [Newsgroup comment]. (2011, October, 11). Retrieved from http://bournepartners.wordpress.com/2011/10/11/drug-shortages-in-the-u-s-%E2%80%93-an-industry-perspective/

Drug shortages leading to price gouging, possible safety issues, according to research [Newsgroup comment]. (2011, August 16). Retrieved from https://www.premierinc.com/about/news/11-aug/drugshortages081611.jsp

REFERENCES

Fields, R. (2012, February 9). 7 serious effects of anesthesia drug shortages on surgery centers [ Newsgroup comment]. Retrieved from http://www.beckersasc.com/anesthesia/7-serious-effects-of-anesthesia-drug-shortages-on-surgery-centers.html

Haninger, K., Jessup, A., & Koehler, K. (2011, October). Economic analysis of the causes of drug shortages (Issue Brief ASPE). Washington, DC: Department of Health and Human Resources.

Harris, G. (2011, August 19). U. S. scrambling to ease shortage of vital medicine. New York Times. Retrieved from http://www.nytimes.com/2011/08/20/health/policy/20drug.html?_r=1&pagewanted=all

REFERENCESMalina, D. P. (2011, December, 23) [Commentary]. Retrieved from http://www.aana.com/resources2/professionalpractice/Documents/20111223%20FDA%20Drug%20Shortage%20Comments.pdf

Senate bill addresses drug shortages. (2011, May). Anesthesiology News. Retrieved from http://www.anesthesiologynews.com/ViewArticle.aspx?d=In+Brief&d_id=220&i=May+2011&i_id=729&a_id=17102

Stone, K. F. (2012, January, 14). Where has all the Propofol gone? [Newsgroup comment]. Retrieved from http://www.opednews.com/articles/Where-Has-All-the-Propofol-by-Kurt-Stone-120114-156.html?show=votes

U. S. Food and Drug Administration. (2011, October, 31). A review of FDA’s approach to medical product shortages (Executive Summary). Retrieved from FDA Website: http://www.fda.gov/DrugShortageReport