The Supply Side Drug Problem

The Supply Side Drug Problem

By Melissa Pandika



Because a nationwide shortage of essential hospital drugs could lead doctors to ration care or rely on substitutes, compromising the efficacy — and even the safety — of treatment.  

By Melissa Pandika

Imagine checking into a hospital with severe flu symptoms, including non-stop vomiting that makes it impossible to hold down even water.

Now imagine said hospital scrambling amid a shortage of IV saline solutions — crucial for preventing dehydration in patients too sick to eat or drink. 

In short supply: mainstays of hospitals and outpatient facilities, such as antibiotics, anesthesia, nutrient solutions…

Such a shortage has left some providers doing just that. Increased demand from a particularly nasty flu season is largely to blame — but so is a lack of resiliency in the drug supply chain, experts say. 

Indeed, IV saline solutions are just a handful of drugs currently in short supply. Although reports of drug shortages have fallen since 2012, the total number of shortages has more than doubled since 2007 , according to an analysis released by the U.S. Government Accountability Office (GAO) last month. There were a whopping 361 drug shortages reported through mid-2013, up from 154 in 2007. The drugs in shortest supply? Generic versions of sterile injectable drugs — the mainstays of hospitals and outpatient facilities, such as antibiotics, anesthesia, nutrient solutions, chemotherapy drugs and cardiovascular drugs. As a result, doctors have resorted to rationing care or relying on substitutes, which can compromise the efficacy and even the safety of treatment. 

What drives shortages isn’t entirely understood. The GAO points to manufacturers halting or slowing production due to quality problems, such as bacterial contamination. Meanwhile, low profit margins make manufacturers hesitant to address these problems — and lead some to exit the market altogether.   

The report was mandated by a 2012 law that granted the Food and Drug Administration more authority to manage shortages, allowing it to require manufacturers to give advance notice of their plans to cease production, for example. The GAO also recommended that the FDA use its drug databases to identify patterns to help predict shortages.

The analysis found that the FDA was preventing many more shortages than it had in the past – 154 in 2012 compared with just 35 in 2010. It also found that more hospitals are dealing with shortages of five or fewer drugs now, while those struggling with six or more have decreased. But since shortages often persist for years, the total continues to climb.

If they drive profits down to pennies a vial, the vials might be no longer worth making.

“[These efforts] in and of themselves aren’t going to do anything to solve shortages,” said Marcia Crosse, director of the GAO Health Care Team. “It’s going to take efforts on the part of industry and the healthcare system as a whole. If they drive profits down to pennies a vial, the vials might be no longer worth making.”

The public health threats of a nationwide shortage loom large. For example, it might lead doctors to ration care. At Massachusetts General Hospital, for example, a drug called labetalol that’s used to treat high blood pressure was running so low that physicians at one point decided to reserve it only for patients with a brain hemorrhage.

At worst, a drug shortage can lead to otherwise preventable deaths. In 2009, achemotherapy drug shortage forced Stanford University Medical Center oncologists to rely on a less effective alternative , which led to lower survival among children with non-Hodgkin’s lymphoma. Shortages of anticancer drugs are especially alarming, since they rarely have an easy substitute. 

And if doctors aren’t familiar with a drug’s alternative, they might accidentally administer the wrong dosage. In 2011, the Associated Press documented at least 15 patient deaths over the prior year due to such errors.

Everything runs on lean, just-in-time production… but if there is a glitch, the manufacturers don’t suffer — patients do.

Although the U.S. has always experienced some level of drug shortages, “what’s concerning is the large increase we’ve seen over the last five or six years,” Crosse said. Unraveling the causes can be difficult; drug companies rarely disclose the reasons for a shortage, citing the need to safeguard trade information.

The GAO report traces the immediate causes to aging factories, which lead to drug quality problems, such as bacterial contamination and metal shavings floating in glass vials. When a company halts factory operations to address these problems, it can remain out of commission for months. Only a few companies make sterile, injectable generic drugs, so when one factory closes down a few lines or shuts down altogether, there aren’t many others with the capacity to compensate for the shortfall.

Person receiving chemotherapy

Source Getty

What’s more, “many of these drugs sell for very low prices, so there’s not much profit,” Crosse said. In the end, a manufacturer may decide that repairing an old factory isn’t worth the narrow margins, and allow the drug to go into shortage or pull it out of the market altogether — even if patients need it.

“Everything runs on lean, just-in-time production,” said Erin Fox, director of the University of Utah Drug Information Service. “This sounds like a great business model, but if there is a glitch, the manufacturers don’t suffer — patients do.”

Some experts propose adjusting drug prices to widen the profit margin, while others suggest building a reserve of drugs. The GAO also suggests offering tax credits to manufacturers to invest in production facilities. But Crosse points out that “there might not be widespread support to give money to drug manufacturers,” especially in today’s budget climate.

Besides rationing and substituting drugs, hospitals are adding backup inventories and planning treatment regimens early on, for example. “The pharmacy department’s collaboration with the nursing and physician staff has been key,” said John Clark, director of pharmacy services at the University of Michigan. Often there’s a workaround — but it might come at a cost to the health system. Physicians who spend most of their time managing drug shortage emergencies have little time for other aspects of care. 

At the same time, patients are their own best advocates. “[The drug shortage] is something you could mention to your physician if you have a serious medical condition that requires certain drugs,” Crosse said. For now, it might be our best defense while policymakers search for a systematic solution.