Drug Shortages

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DRUG SHORTAGES A PUBLIC HEALTH CRISIS

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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 Anesthesiologists - PowerPoint PPT Presentation

Transcript of Drug Shortages

Page 1: Drug Shortages

DRUG SHORTAGESA PUBLIC HEALTH CRISIS

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BACKGROUNDU.S Healthcare System is experiencing an

alarming increase in number of drug shortages causing a major public health threat

Increased > 200% between 2006 and 2010ASA DRUG Shortage Survey—2011

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

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

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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

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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

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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

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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

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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

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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

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GRAY MARKET: PRICE GOUGINGOf 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%)

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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

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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

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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

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“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

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REASONS TO AVOID THE GRAY MARKET

ETHICAL concerns

Concerns with authenticity

Cost

Concerns about storage conditions

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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

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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

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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

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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?

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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

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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

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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

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

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REFERENCESFields, 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.htmlHaninger, 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

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REFERENCESMalina, D. P. (2011, December, 23) [Commentary]. Retrieved from http://www.aana.com/resources2/professionalpractice/Documents/20111223%20FDA%20Drug%20Shortage%20Comments.pdfSenate 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=17102Stone, 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=votesU. 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