[BLOG]: Effective collaboration can help to mitigate drug shortages

June 2, 2014

Patients across the country continue to feel the impact of critical prescription drug shortages. As formulary managers understand, an integrated approach to solving shortages, involving all supply chain stakeholders, can have a profound effect on mitigating the impact of shortages on patients.

RooneyPatients across the country continue to feel the impact of critical prescription drug shortages. As formulary managers understand, an integrated approach to solving shortages, involving all supply chain stakeholders, can have a profound effect on mitigating the impact of shortages on patients. A recent report from the Healthcare Supply Chain Association (HSCA) and Avalere Health found that healthcare group purchasing organizations (GPOs) are playing a significant role in helping hospitals, purchasing partners, and suppliers alleviate the impact of prescription drug shortages in the United States.

Employing a strategic approach

Proper communication is critical for combating shortages, and as the sourcing and purchasing partners to US hospitals, GPOs are well positioned to help anticipate and respond to drug shortages. The HSCA/Avalere Health report detailed a number of steps being taken by GPOs that are having a positive effect, including tracking data on drug shortages, strategizing with members when the potential for a supply disruption arises, communicating with manufacturers and distributors when they anticipate a supply problem, and creating incentives for drug manufacturers to produce agreed-upon quantities of certain critical drugs and drugs in short supply.

The HSCA/Avalere Health report included a number of case studies to demonstrate the various methods that GPOs are employing to address shortages. In one example, a GPO provided financial and technical support for alerting the public about drug shortages. In another, a GPO encouraged production of critical drugs through innovative agreements that provided certainty to the manufacturer. Still another example found a GPO working with key generic manufacturers and wholesalers/distributors to ensure availability and access to key generic injectable products for its members by coordinated distribution of these urgently needed products through one distribution channel to control their availability.

The goal of GPOs is to bring flexibility, stability, and predictability to the supply chain through a number of approaches, such as voluntary contracting practices, reliable price adjustments, and helping hospitals and healthcare providers to ensure prompt and safe migration to alternative products when shortages arise. Together, these methods can make a significant difference in ensuring patient access to critical medications.

 

Effective collaboration

A critical part of GPOs’ efforts to mitigate drug shortages involves collaboration with industry, hospitals, and other supply chain stakeholders. This collaboration can manifest itself in a number of ways. For example, a case study showed a GPO offering healthcare providers critical information and best practices to avoid the purchase of unsafe products from the gray market, which helped to enable them to maintain patient access and provide appropriate treatments during times of shortage.

GPOs are also working with government agencies. In one of the report’s case studies, a GPO communicated with the US FDA about manufacturer decisions to stop production of key generic injectable drugs, and supplied FDA with utilization data of certain injectable drugs. This allowed FDA to determine the major suppliers in the market and to assist in the determination of alternative suppliers. On a broad level, the efforts of GPOs show that effective collaboration can help the industry expand production capacity for drugs in short supply and ensure the timely reporting of shortages, both of which are critical for addressing this crisis.

The path forward

Although understanding the positive effects of past efforts is certainly valuable, the HSCA/Avalere Health report identified several policy recommendations for a multi-stakeholder approach to help mitigate shortages, including improving FDA approval processes, refining early notification systems and public communication, and implementing market and operational efficiencies.

Drug shortages are a complex problem with no overnight fix. GPOs are committed to continuing to take innovative actions and strategic steps to help hospitals identify potential shortages, maintain a safe and reliable supply of productions, and ensure that patients and their families have access to the critical medicines they need. We’re all in this together, and effective collaboration is key to overcoming this challenge.

To read the complete HSCA/Avalere Health report, The Vital Role of Group Purchasing Organizations in Alleviating Drug Shortages in the United States, please click here or visit the HSCA website at www.supplychainassociation.org.

Check out the HSCA press release on the report here.

For more information about how GPOs are helping to mitigate the impact of drug shortages, please visit www.drugshortage.org.

 

Curtis Rooney is president of the Healthcare Supply Chain Association.