As Shortages Continue, Suppliers, Hospitals, and Health Systems Look for New Solutions

Article

Hospitals, health systems, and the supply chain are all negatively impacted by drug shortages and are each affected by the decisions of the others.

Drug shortages have plagued the health care system over recent decades and continue to impact patient care, safety, health care costs, and the medical workforce. Shortages affect not only hospitals and health systems and their ability to treat patients, but also the manufacturers, distributors, and wholesalers of the supply chain, which provide the medications and materials necessary for patient care. Hospitals, health systems, and the supply chain are all negatively impacted by drug shortages and are each affected by the decisions of the others.

Although new reported annual drug shortages peaked in 2011 and have been steadily decreasing since, total shortages are on the rise, and the severity of these shortages can be persistently disruptive.1-2 Vizient completed an impact analysis in 2019 and found US hospitals were spending a combined estimate of $360 million in annual labor costs due to drug shortages.3

As shortages continue to affect day-to-day patient care, hospitals and health systems are turning to standardized processes to manage and mitigate these disruptions in order to deliver safe and reliable patient care. As important as it is for hospitals and health systems to provide the best and safest care for their patients, it is just as important for manufacturers and suppliers to understand the standardized processes being employed. In doing so, they can be better collaborators in tackling this decades-long issue of shortages together.

Although specifics vary by institution, hospitals and health systems employ various standardized processes and mechanisms to identify, assess, and act on shortages. Some of these processes are outlined below, and without these, the most effective drug shortage management or mitigation strategy is to attempt to purchase more product.

Multidisciplinary Committee

One of these processes includes setting up a multidisciplinary committee which may include a pharmacy buyer, inventory manager, compounding manager, pharmacy information technology professional, medication safety pharmacist, drug information pharmacist, clinical pharmacists, physician representatives, supply professionals, and other experts. Multidisciplinary representation is crucial to ensure accurate and appropriate communication between departments, as well as to allow subject matter experts to validate the clinical and operational recommendations proposed to mitigate a shortage

Acute Implementation of Mitigation Strategies

Strategies such as switching from parenteral to enteral products, limiting use to certain indications or populations, and decreasing inherent waste, among other operational changes to conserve inventory, also help providers prepare for and adapt to shortages and disruptions. Leveraging the electronic health record (EHR) helps guide prescribing, direct appropriate medication use, and facilitate some of these strategies.

Internal Organizational Drug Shortage List

These lists help mitigate challenges when a drug or product is unavailable by reviewing essential medications and identifying which national shortages currently affect the institution. The lists are utilized to track days-on-hand inventory and communicate agreed upon mitigation strategies to front line staff.

Leverage Regional Networks

Experience demonstrates that by leveraging regional networks, hospitals and health systems located near one another can plan, partner, and communicate about shortages affecting their institution(s). Should a need for a particular medication arise, partnered institutions will share and borrow inventory and reimburse each other accordingly.

Avoid the Gray Market

The gray market creates an environment in which providers overpay for medications, leading to additional strain on health care providers. Anecdotally, where possible, hospitals and health systems are avoiding the gray market. In a recent Vizient survey of 34 members, 15 (47%) reported purchasing pharmaceuticals from the gray market in the last 12 months due to a shortage, and 1 (3%) reported they may do so in the future, if required to obtain product. The majority of those who reported purchasing from the gray market only did so to be able to maintain patient care.

What Is the Impact for Manufacturers and Suppliers?

Hospitals and health systems without robust drug shortage management practices are more prone to experience the negative impacts of drug shortages. Without a robust plan, they aren’t as agile and adaptable to implement changes required to manage drug shortages effectively. As such, their most effective drug shortage management or mitigation strategy is to attempt to purchase more product. Increases in demand during times of shortage may increase the severity and duration of a shortage, as well as negatively impact manufacturers and suppliers in a variety of ways, including:

  1. Excessive communication, such as calls or emails, to relay inventory information
  2. Disruption of manufacturing lines due to vast fluctuations in demand
  3. Loss of future manufacturing and additional inventory of a non-shortage product due to switching manufacturing lines to produce more of a shortage product
  4. Delay in manufacturing other products due to line requirements that lead to shortage of other products in subsequent months or years
  5. Unreliability of estimated release dates of and resolution of shortage
  6. Potential loss of reliable ordering patterns or customers as institutions shift to other manufacturers for inventory
  7. Diversion of an already limited staff to other needs within facilities to respond to an unexpected demand surge
  8. Potential for increased reliance on the gray market for just-in-time inventory, removing product outside of the appropriate manufacturer channels

How Can Manufacturers and Suppliers Help?

Transparency is crucial. Hospitals and health systems can only mitigate and manage shortages appropriately when they have accurate, timely information. When information regarding shortages is limited or unavailable, it may surge demand. Rapid, simple, and straightforward information allows hospitals and health systems to appropriately assess and act on the shortage to mitigate the effects within their institution. This information should include:

  1. Which products are on shortage
  2. How long the shortage is expected to last
  3. The reason behind the shortage
  4. Whether the product on allocation, available as a direct shipment, or not available currently

Forward-Thinking Initiatives to Address Shortages

A novel concept is being cultivated called drug shortage stewardship (DSS). DSS is a coordinated program to implement strategies, including inventory and mitigation practices, to limit the severity of a national shortage by reducing the utilization of the affected drug locally. The thought is that no matter how stable or how much supply is on the market when shortages trigger extraordinary demand, the supply chain cannot function or fit the needs of the hospitals and health systems. DSS aims to limit the severity and duration of shortages by managing demand at the local level to allow for supply to recover nationally. DSS also promotes evaluating the use of essential medications, even those for which acquisition cost is not a significant concern, as well as improving medication use and broad access.

Patience is running out to end the plague that is drug shortages. In 2021, industry stakeholders formed the End Drug Shortages Alliance (EDSA). EDSA brings together providers, group purchasing organizations, manufacturers, distributors and other industry thought leaders to focus on improving access to medications through greater transparency across market participants, leading to improved quality manufacturing of medications and production of additional supply.

Greater transparency is the key ingredient in the cure to end drug shortages. Without it we may continue to see an increased incidence of shortages, with increasing duration and severity. For providers and the patients they care for, the cure can’t come soon enough.

About the Authors

Kyle Hoelting, PharmD, BCPS, is Senior Clinical Manager, Pharmacy, at Vizient.

Gretchen Brummel, PharmD, BCPS is Pharmacy Executive Director, Pharmacy, at Vizient.

References:

1. ASHP. Drug shortages statistics. Accessed online: 4/29/2022 at: https://www.ashp.org/drug-shortages/shortage-resources/drug-shortages-statistics

2. ASHP. Drug shortages worsening, pharmacists say. Published: 3/16/2022. Accessed online 4/29/2022 at: https://www.ashp.org/news/2022/03/16/drug-shortages-worsening-pharmacists-say

3. Vizient. Drug shortages and labor costs report. Published: 6/2019, accessed online 4/29/2022 at: https://newsroom.vizientinc.com/doc_library/file/Drug_Shortages_Labor_Cost_Report_Vizient.pdf.

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