Economic and manufacturing factors aside, better communication among all supply chain members can help healthcare providers continue to meet their patients’ Rx needs
There’s some good news about drug shortages in the United States. The U.S. Food and Drug Administration reported in October 2013 that the number of new shortages in 2012 was 117, down from 251 in 2011.
But there’s some not-so-good news too. “It’s still a big problem,” says Wayne Russell, senior director, pharmacy, Premier. “FDA data shows that the number of new drug shortages – and I have to emphasize ‘new’ – has declined this past year. But when you look at the total number of drugs still on the shortage list that have carried over, we’re still looking at over 300 drugs.” Many are generic injectables, including oncology agents and nutritional agents used primarily in the hospital setting, ambulatory clinic or infusion center.
“A number of market forces drive medication shortages,” says Andy Keller, vice president of inventory development, Cardinal Health. Some of the most common drivers are product quality issues, raw material shortages and quality issues, and manufacturing capacity constraints, he says. Some shortages are also caused when manufacturers cease production of a given product. “Although many manufacturers are working diligently to remediate product shortages and associated root causes, we expect product shortages to be a market reality for the foreseeable future.”
Providers are seeing the same thing.
“There are many reasons why we ended up in the situation we are in regarding drug shortages,” says Mary Beth Lang, vice president, healthcare pharmacy and supply chain management commercial operations, UPMC, Pittsburgh, Pa. “But part of what we’re finding is, this whole situation has really forced us to get better at communication as an industry.”
Even in the recent past, information about current or impending shortages wasn’t readily available, she says. “But it is now.” Shortages also forced the FDA to re-evaluate the way vendors notify the agency about impending interruptions of supply, as well as the process by which the agency approves alternatives. “It has forced us to look at items that only one vendor makes, and begin to seek alternatives. Things are getting better, but only because of how bad it was.”
“Shortages are complex and multi-faceted, and different therapies face different circumstances,” says David Gaugh, RPh, senior vice president of sciences and regulatory affairs, Generic Pharmaceutical Association. “Some therapies in shortage are only made by one or two manufacturers. Others cope with unplanned disruptions in manufacturing for any variety of reasons. There is no single cause, and no single solution.”
What’s going on?
“[Drug shortages] are still a very significant problem,” says Ron Hartmann, PharmD, senior vice president, pharmacy, MedAssets. “It really is affecting all healthcare providers, but in particular, those in the acute care market. It’s the No. 1 problem hospital pharmacies face today.” There are occasional problems with branded products, he adds, but those are relatively uncommon. “Primarily it’s an issue with generic products.
“I believe the underlying cause for most shortages are manufacturing-related,” he says. “The FDA has, in many cases, found fault with something they are doing to adhere to quality standards. Manufacturers have responded that they have been making changes as needed to bring themselves up to that level of standard and be seen as compliant. But that has required a complete changeover of the culture at some manufacturing sites, all the way down to the workers on the line, who perhaps hadn’t seen themselves as part of the entire quality process. I think that’s changed now. They really are engaged and do understand there is a patient who is ultimately going to be receiving sterile products, and they can’t lose sight of that.”
Another issue, particularly in the generic injectables market, is that there are relatively few suppliers, continues Hartmann. “Whether it’s because of industry consolidation or the global nature of that market, probably seven or eight manufacturers produce the majority of generic injectable products for use in the United States.” Several have experienced manufacturing-related problems.
“Some new manufacturers are cropping up, but bringing up a new manufacturing plant takes an extended amount of time. The whole process – building the plant, getting it inspected, and ultimately making product – takes a number of years.”
On top of that, the economic incentives aren’t always there. “Part of this has been affected by the drive by consumers – in particular, in the U.S. market – to purchase quality product at the lowest price possible,” continues Hartmann. “This is a highly competitive market, and some companies are willing and able to sell their product at more competitive prices than others. That has been a factor in whether some companies continue to produce these products at prices that are market-competitive. But we have seen pricing go through cycles as well. More recently, the trend for generic injectables has been for pricing to increase, so some of their profitability is being maintained.”
Cause for optimism
Product quality issues have been a problem among some manufacturers, says Russell. But because of insufficient capacity in the system, bringing down a product line for routine maintenance can affect supply.
What’s more, insufficient capacity extends back up the supply chain, he says. “The ability to obtain raw materials [to make pharmaceuticals] is becoming more and more important, because there are a limited number of manufacturers making them. And they have to be inspected and approved by the FDA, just like the manufacturers making finished products.”
Have product-quality issues grown more severe in recent years? “That’s hard for me to answer,” says Russell. “I think we’ve seen, over the last 10 years, more transparency in making information available. So it may seem like there’s more quality issues today than 10 years ago, but I’m not sure that’s the case.”
There is cause for optimism, he adds. “There’s been a lot of attention brought to bear on this issue.” That being the case, “I think we are going to see a lot of these products come to market over the next few years by new manufacturers. We’re starting to work with some companies that a few years ago didn’t manufacture generic injectables, but now are going to. So I think there will be a decline in the shortage problem, but it will still take a couple of years.”
UPMC’s situation is unique in a couple of ways. First, Lang is a registered pharmacist with responsibility for HC Pharmacy Central Inc., a for-profit membership corporation and group purchasing organization that annually distributes $550 million in pharmaceuticals on behalf of its members. She also leads Prodigo Solutions Inc., a supply chain management services company designed to leverage UPMC contracts along with management, consultant and technology expertise, particularly in the area of e-procurement. Prior to joining UPMC, she was the senior vice president of business intelligence for Amerinet, and president of Amerinet subsidiary Diagnostix.
Second, HC Pharmacy – which works with a national wholesaler (McKesson) and GPO (MedAssets) – self-distributes. Products are brought into UPMC’s distribution center, then picked, packed and shipped to customers in acute-care facilities, clinics, physician offices and other sites.
HC Pharmacy has direct contracts with many pharmaceutical companies, including generics manufacturers. “When I have a direct relationship with the generic company, and I purchase directly from that company, my allocated portion [when shortages arise] comes right to me,” says Lang.
When shortages occur, Lang and her team quickly alert the pharmacy staff and work with the medical staff to move patients to alternative therapies. They look at the most vulnerable patient populations, and allocate pharmaceuticals appropriately. For example, when potassium phosphate injection – used primarily in the neonatal population – was in short supply, Lang made sure supplies went to the neonatal units, instead of the adult units.
The fact that HC Pharmacy self-distributes gives UPMC another advantage – inventory. “We have a warehouse,” Lang explains. “But when you’re a small hospital with limited physical space, you can’t really stock anticipatory supply.”
As the industry works to improve quality-related issues, so too are efforts being made to improve communication among all healthcare players, so all have a heads-up when shortages might occur.
The Food and Drug Administration Safety and Innovation Act, signed into law in July 2012, requires manufacturers of certain drug products to notify the FDA at least six months prior to the date of the permanent discontinuance in the manufacture of the drug or an interruption in the manufacturing of the drug that is likely to lead to a meaningful disruption in supply. In October 2013, the agency sent a strategic plan to Congress that includes, among other things, plans to launch a mobile app so that individuals can instantaneously access drug shortage information via their smartphones.
By and large, the industry supports the FDA’s actions.
“Addressing anticipated occurrences of a drug shortage early in the process helps both healthcare providers and manufacturers identify treatment alternatives more efficiently, and we will continue to work with FDA and other stakeholders to improve upon existing reporting requirements,” said Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO John J. Castellani in a statement.
“The only way to mitigate current shortages and prevent future shortages from occurring is a collaborative effort,” says Gaugh. “This means more communication between regulators and manufacturers, enhancing the ANDA review and approval process, and making sure that generic manufacturers continue to be part of the solution to this complex issue.”
(An Abbreviated New Drug Application, or ANDA, contains data which, when submitted to the FDA’s Center for Drug Evaluation and Research, Office of Generic Drugs, provides for the review and ultimate approval of a generic drug product. Once approved, an applicant may manufacture and market the product to the American public.)
“We are pleased with what’s happened,” says Russell. “Communication has been one of the issues of the past. If the FDA has more information to better gauge the severity of the problem, they can look for alternative manufacturers.” Or the agency can try to shorten the time it takes to get products from new manufacturers into production.
Some steps only go so far
“These have certainly been positive steps,” says Hartmann, referring to the FDA’s recent actions. “But they only go so far.” The FDA, for example, may be responsible for setting standards, inspecting manufacturing facilities, and ensuring the safety and efficacy of drugs being produced, he points out. “But they can’t require a manufacturer to make any product.”
What’s more, while requiring manufacturers to notify the agency of anticipated disruptions is a positive step, “the problems we’ve had primarily are from unplanned shortages and events,” he says. Those unplanned events include a shortage of raw materials, even of vials and stoppers.
“Through their efforts at early notification from manufacturers, the FDA has averted a large number of shortages by contacting other manufacturers of a particular product to see if they can ramp up production,” says Hartmann. “They have managed to avoid large numbers of what would have been additional shortages. So that’s been a positive. But manufacturers have to ultimately choose to make these products and in sufficient quantities to meet the demands of the U.S. and, in some cases, global market.” Manufacturers also have to make an effort to secure backup suppliers of raw materials, in case their primary source is disrupted.
Inside the IDN
Dealing with potential shortages also calls for better communication within the hospital or IDN.
“Our members tell us that planning is key,” says Bona Benjamin, director, medication-use quality improvement, and coordinator of the Drug Shortages Resource Center for the American Society of Health-System Pharmacists. “A standardized process for identifying and managing shortages developed by the pharmacy leader and other hospital stakeholders is critical.”
That standardized process should begin with a hospitalwide or IDN-wide inventory and identification of those pharmaceuticals that the provider absolutely cannot do without, advises Benjamin. “Then brainstorm with ‘what-if’ scenarios. ‘What if I couldn’t get my full supply?’ ‘What conservation or rationing protocols should we put in place?’ ‘What alternatives are out there?’”
Decisions about how best to allocate scarce drugs shouldn’t be made by pharmacy directors alone, though they may coordinate such discussions, continues Benjamin. “These decisions have to be made with other stakeholders in the hospital,” including the medical staff, nursing, P&T committee, and sometimes the ethics committee.
UPMC has developed an internal communication strategy, explains Lang. “We look at the FDA website every week,” she says. “For each drug class, we look at what items are on hand, and the alternatives on hand. Then we add information from the industry and our wholesaler, including all of the production projections as to when it might be available.” The IDN’s clinical pharmacists review the reports weekly.
“At each institution, we have been able to have an open dialogue with our physicians in a very different way,” she continues. “Because of the potential for rapid interruptions to patient care, they are very open to talking about alternatives and acting quickly.”
It’s important to keep nurses in the loop as well, adds Lang. “If we need to change an item, or its strength has changed, nursing needs to know, or there could be medication errors. When you have to replace one medication for a therapeutic equivalent, sometimes it must be handled or infused differently.” UPMC issues a clinical alert as well as operation plan to make sure everyone understands the change. Notifications are posted on the hospital’s internal information system, as well as on screensavers. Substitutions can also be clearly spelled out in the IDN’s computerized pharmacy order entry system.
“As we look at drug shortages, I think the hardship has taught us lessons we have been able to turn into opportunities,” says Lang. “It has helped us create the infrastructure to ensure that drugs are readily available for our patients, to lessen the impact [of shortages] on patient care.”
Says Russell, “The key is enhanced communication across all aspects of the supply chain. That means manufacturers increasing communication with the FDA; and GPOs working closely with manufacturers, distributors and members. All aspects of the supply chain need to be communicating about what they think is the problem and how they’re managing it.”