Drug Shortages Increase Costs, Put Patients at Risk

Prescription drug shortages are increasing healthcare costs and putting patients at risk, according to a new study released last week by Premier healthcare.

The majority of drugs that are in short supply are needed for sedation, emergency care and chemotherapy, and the Premier healthcare alliance analysis concluded that the shortage cost US hospitals at least $200 million annually through the purchase of more expensive generic or therapeutic substitutes. The total economic impact is likely much higher, since the research excluded drugs purchased on the "gray market" or those with therapeutic alternatives. It also did not include indirect costs, such as added labor needed to manage shortages and secure alternative supplies.

Premier surveyed experts from 228 hospitals and found that over a six-month period in 2010 (July-December):

Nearly 90 percent experienced a drug shortage, which may have caused a medication safety issue that could have affected patient care. More than half stated they experienced six or more shortages.

More than 240 drugs were either in short supply or completely unavailable, and more than 400 generic varieties were back-ordered for five or more days.

80 percent said a shortage resulted in a delay or cancellation of a patient care intervention. More than one-third (34 percent) reported this type of occurrence happened more than six times.

42 percent have had to purchase a more expensive product from a "gray market" vendor. These vendors collect and resell drugs in short supply at inflated pricing, and are known to charge as much as 335 percent more for a shortage drug.

60 percent said they had to compound a drug that should be commercially available but is either in short supply or experienced huge price inflation.

In addition, Premier's research revealed that many of the shortage drugs identified in 2010 have remained unavailable or in short supply in 2011, and the data suggests that the number of drug shortages are increasing.

What are the reasons behind the scarce supplies? Premier points to:

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

for generics, a growing number of manufacturers that have ceased production for drugs that generate little or no profit.

Keep in mind that the FDA cannot require drug companies to report shortages or produce more product and to many, that's an added source of frustration.

Sen. Amy Klobuchar (D-Minn.) has introduced legislation that would require drugmakers to give the FDA early notification of any incident that could result in a drug shortage.

TAGS: Finance
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