Drug Shortages Cost U.S. Care Providers at Least $200 Million Annually, Pose Patient Safety Risks, Research Suggests

Nearly 90 percent of survey respondents recently experienced a drug shortage that may have caused a medication safety issue; majority of drugs expected to remain in short supply in 2011

CHARLOTTE, N.C.--()--Prescription drug shortages are increasing healthcare costs while challenging providers in properly caring for patients, according to an analysis released today. These drug shortages increase the risk to patients due to the introduction and use of unfamiliar drugs to work around the shortages.

The Premier healthcare alliance analysis found the shortage cost U.S. hospitals at least $200 million annually through the purchase of more expensive generic or therapeutic substitutes. Providers are paying an average of 11 percent more for shortage products, although the total economic impact is likely much higher, since research excludes drugs purchased on the “gray market,” or those with therapeutic alternatives. The research also does not include indirect costs such as added labor needed to manage shortages and secure alternative supplies, as data on these areas does not exist.

A Premier survey of 311 hospital pharmacy experts representing 228 hospitals, as well as infusion, oncology and surgery centers, outpatient and retail pharmacies, and long-term care facilities, revealed that nearly 90 percent experienced a drug shortage over a six-month period in 2010 (July-December), which may have caused a medication safety issue that could have affected patient care. More than half stated they experienced six or more shortages.

Respondents also suggested that during this time, a shortage:

  • Resulted in a delay or cancellation of a patient care intervention (80 percent), with 34 percent suggesting an occurrence more than six times.
  • Required the purchase of a more expensive product from a "gray market" vendor (42 percent). These vendors collect and resell drugs in short supply at inflated pricing. Gray market vendors are known to charge as much as 335 percent more for a shortage drug.
  • Required a pharmacist to compound a drug that should be commercially available but is either in short supply or experienced huge price inflation (60 percent).

Over the course of a six-month period in 2010 (July-December), more than 240 drugs were either in short supply or completely unavailable, and more than 400 generic varieties were backordered for five or more days, the research shows. Many of the shortage drugs identified in 2010 have remained unavailable or in short supply in 2011, and data suggests that the number of drug shortages are increasing. The majority of drugs that are in short supply are needed for sedation, emergency care and chemotherapy.

Premier found that reasons for the ongoing shortage include consolidation of prescription drug manufacturers; unpredictable problems in manufacturing, including safety issues that temporarily or permanently shut down manufacturing facilities; interruptions of supply in the ingredients used to produce the drug; and, for generics, a growing number of manufacturers that have ceased production for drugs that generate little or no profit.

Drug shortages may be exacerbated by current regulation, which today does not require manufacturers to communicate drug shortages to hospitals, pharmacists or even the Food and Drug Administration (FDA). Though the FDA may work with manufacturers to encourage additional sources of supply when they are aware of shortage situations, provide assistance with good manufacturing practices or expedite drug approvals, the agency cannot require drug companies to report shortages to the FDA or produce more product.

“Physicians, pharmacists and patients are currently among the last to know when an essential drug will no longer be available – that’s not right,” said U.S. Senator Amy Klobuchar. “This common-sense solution will help set up an early warning system so pharmacists and physicians can prepare in advance and ensure that patients continue to receive the best care possible. As we move forward, it is important that we have better coordination between the pharmaceutical industry, the FDA and healthcare providers so patients don’t lose access to the medications they depend on.”

Senator Klobuchar introduced a bill requiring prescription drug manufacturers to give early notification to the FDA of any incident that would likely result in a drug shortage. If a manufacturer is forced to alter or suspend production due to an FDA initiated review, the bill also requires the FDA to perform a re-inspection of the site within 90 days from when the manufacturer certifies to the FDA that they have corrected the problem.

Premier and its alliance members are working to support a safe, efficient and appropriately regulated drug supply system.

“We are working closely with our member health systems, providing them with ongoing information to help ward off shortages before they occur,” said Mike Alkire, president of Premier Purchasing Partners. “And in the case of shortages, we are advising them on reputable sources from which they should seek supplies. We are also working with suppliers and manufacturers to provide information based on our member’s drug needs. With two to three months of products in the supply chain, additional warning time could mitigate some of the damage.”

According to Martin Caponi, RPh, pharmacy director at the Eugene, Ore.-based Sacred Heart Medical Center, part of PeaceHealth, “The public expects hospitals to have the necessary supplies and medications ready when needed, but at times we aren’t able to meet that expectation. Stepped up efforts and new measures are needed to address this issue.”

“Though some measures can be employed by health systems, private sector initiatives can only go so far in addressing the drug shortage problem,” continued Caponi, who also serves as chair of Premier’s National Pharmacy Committee. “We need new public policies that will further encourage access to medications and increase efforts to improve drug safety.”

About the Premier healthcare alliance, Malcolm Baldrige National Quality Award recipient

Premier is a performance improvement alliance of more than 2,500 U.S. hospitals and 73,000-plus other healthcare sites using the power of collaboration to lead the transformation to high quality, cost-effective care. Owned by hospitals, health systems and other providers, Premier maintains the nation's most comprehensive repository of clinical, financial and outcomes information and operates a leading healthcare purchasing network. A world leader in helping deliver measurable improvements in care, Premier has worked with the Centers for Medicare & Medicaid Services and the United Kingdom's National Health Service North West to improve hospital performance. Headquartered in Charlotte, N.C., Premier also has an office in Washington. http://www.premierinc.com. Stay connected with Premier on Facebook, Twitter and YouTube.


Premier healthcare alliance
Alven Weil, 704-816-5797

Release Summary

Drug shortages cost U.S. care providers at least $200 million annually, pose patient safety risks, research suggests


Premier healthcare alliance
Alven Weil, 704-816-5797