Legislators, drug manufacturers take steps to ease drug shortages

In addition to tracking drug shortages, the Drug Information Service at the University of Utah Healthcare in Salt Lake City, UT, has also attempted to figure out why the shortages are occurring. The underlying causes aren't all well-understood, but some of the problems are clear. (See Figure 2, below.)

Figure 2

"Most of the drugs that are in short supply are generic injectible drugs, and there aren't many generic injectible drug manufacturers in the country," explains Erin Fox, PharmD, manager of the Drug Information Service. "Over the years, we have seen consolidations ... so we have overall just a few manufacturers."

In addition, quality concerns have prompted some of these manufacturers to voluntarily shut down all or part of their operations for significant periods of time, leaving little time for the remaining manufacturers to pick up the slack, says Fox. "There is no communication required to even let someone know that [a manufacturer is going to shut down], so that other companies might have a chance to make up the difference," she says. "And it takes a long time to solve this kind of problem."

What hospitals are sometimes left with in these situations is having to pay exorbitant prices to secondary suppliers that they may know very little about. "We don't [deal with these companies] without giving it a lot of consideration," explains Michael O'Neal, DPh, the manager of pharmaceutical procurement at Vanderbilt University Medical Center, a campus that includes an adult hospital, a children's hospital, and a psychiatric facility, in Nashville, TN. "We require that they provide a drug pedigree every time we have to make that decision and, in doing so, we can at least have a shot of seeing the transport of that drug from owner to owner to know if it has a legitimate supplier source."

On average, O'Neal says there is a 400% to 500% markup on drugs coming from secondary suppliers. "This is a group of companies that thrives on the shortage, and they have sources that are unknown to most," he says.

Some steps are being taken to resolve these difficulties, says Fox. For example, she points out that at a recent workshop on the drug shortages that was held by the FDA in Silver Spring, MD, pharmaceutical industry representatives indicated that they were working to increase capacity so that there will be more flexibility in the manufacturing supply chain when a manufacturer shuts down. "It can take up to seven years to get a factory ready, so this is not a short-term solution," says Fox.

However, legislation under consideration in the U.S. House and the U.S. Senate would offer some short-term relief by requiring drug manufacturers that are anticipating a shortage to notify the FDA, so that it could then attempt to find capacity to manufacture the drug elsewhere. "No one can turn on a dime and switch out their lines overnight, but if there is time then other companies can ramp up production," says Fox. "What is exiting about these bills is that we know this is based on successful strategy. The FDA has prevented 99 shortages this year because some of the [drug manufacturers] are voluntarily communicating with the agency."

Management Tip

To stay on top of drug shortages, lean on your primary drug distributor

To get the best and most up-to-date information about upcoming drug shortages, consider working more closely with your primary drug vendor, advises Michael O'Neal, DPh, the manager of pharmaceutical procurement at Vanderbilt University Medical Center, a campus that includes an adult hospital, a children's hospital, and a psychiatric facility, in Nashville, TN. "Really lean on your distributor," says O'Neal. "The company will have buyers who deal directly with manufacturers on a daily basis."

In addition, hospital administrators should take steps to further develop their relationships with pharmaceutical representatives, says O'Neal. Vanderbilt has brought the top brass of these companies on campus — not only to get first-hand information about the drug shortages, but also to let them see how the drug shortages are impacting patient care. "We're not talking about automobiles," says O'Neal. "These are medications that are either curing or saving peoples' lives."