Home' The Source : Third Quarter 2012 Contents [ SourceBook ]
equipment and personnel," Coulter says. "In certain significant
cases, whole production lines have been taken down and rebuilt.
Product manufacturing schedules had to be reevaluated and
To make matters worse, the majority of these drugs are decades
old and have such low profit margins that some manufacturers
could not justify the expense to upgrade their processes and exited
Hoarding of scarce pharmaceuticals and gray market opportun-
ism helped prolong some shortages or spark rumors of shortages
that were in reality temporary hiccups in production or supply,
However, some shortages have little or nothing to do with regu-
lation or market manipulation, notes Bob Fink, PharmD, senior
director, chief pharmacy executive, at Franklin, Tenn.-based
Community Health Systems. For example, the shortage of furo-
semide, which is used in the treatment of heart patients, arose
when a fire knocked out the production facilities of the sole global
manufacturer of its API.
Politics interrupted the supply of pentobarbital sodium, which
is used as a sedative and also in lethal injections. Most of the U.S.
supply of this drug is made in Italy, which bans capital punishment.
Threats of violence against the plant and its workers by anti-death
penalty groups forced the manufacturer to suspend production.
Falling reimbursement rates for medications also contribute to
shortages, Fink says. "In e ect, the government is putting price
controls on the free market, which has led some manufacturers to
decide to exit the market," he says.
In recent months, with new production lines and new quality
control processes in place, the industry has made great strides in
meeting FDA requirements. Delays continue, however, because the
FDA is understa ed and swamped by the number of needed inspec-
tions and abbreviated new drug approvals, Coulter says.
"The FDA is doing a much better job now of communicating
about potential shutdowns and the expected impact on the mar-
ket," he adds.
The onus does not rest entirely on the FDA and the generic
injectable manufacturing industry, Coulter says. Even some GPO
contracting practices continue to contribute to the overall drug
shortage problem. While no GPO should ever apologize for remov-
ing costs out of the health-care system by negotiating lower prices,
an argument can be made that increased dual- and multi-source
awards versus sole-source awards over the last few years have
"Some GPOs think that they are benefiting their members by
hedging and spreading the risk of a shortage among multiple manu-
facturers, but the truth is this poorly considered practice is only
exacerbating the problem," Coulter explains.
Manufacturers depend heavily on predictable demand in order
to adequately manage their production schedules and resources.
Non-sole-source awards and poor GPO contract compliance work
against predictability and, in many cases, they lead to unanticipated
demand fluctuations, resulting in inadequate production needed
to meet new demand.
"This is another reason why HealthTrust's business practice of
awarding sole-source pharmacy contract positions drives better pric-
ing for drugs compared to other GPOs," Coulter says. "HealthTrust
has a very compliant membership. That, coupled with sole-source
awards, leads to predictability, which is extremely valuable to manu-
facturers. As a general rule, manufacturers will also seek to satisfy
their sole-source award obligations first if for no other reason than
to avoid failure to supply penalties."
Recognizing that misinformation and a lack of communication
about shortages and alternative medications had exacerbated
the original problem, in February 2011 HealthTrust launched its
Emergency Room drug shortage information program to provide
members with clear, reliable and up-to-date intelligence on current
and potential drug shortages.
Through constant contact with vendors, HealthTrust is able to
provide reasonable predictions on when the standard drugs will be
back on hospital pharmacy shelves, Thompson says. The reports
advise members on clinical alternatives to scarce medications,
including possible side e ects and ways to deal with those.
"We help them determine how much of 'drug Y' they'll need to
buy so they don't overstock the alternative to 'drug X,' " she says.
The communication is provided in PDF format through
HealthTrust's SCRUBS website. "Our members wanted a format
that was user-friendly, portable and easily transferable," she says.
HealthTrust's relationship with its vendors makes this valu-
able resource possible, "Most of our vendors who have significant
shortages communicate with us every two weeks on the status
of the shortage and reasonable expectations for its resolution,"
"We rely on our close partnership with vendors to provide ac-
curate information to us so members can develop more realistic
strategies for providing patient care," she adds.
"CHS WORKS WITH ITS
PHYSICIANS TO HELP
THE NATURE OF
SHORTAGE ISSUES AND
FIND ALTERNATIVES TO
---Bob Fink, PharmD
continued from page 22
continued on page 26
24 The Source | Third Quarter 2012
Links Archive Fourth Quarter 2012 Second Quarter 2012 Navigation Previous Page Next Page