FDA Tackles Drug Shortages
October 30, 2011
Posted by chcablogadmin in : Cost Reduction, Group Purchasing, Industry Trends, Quality
by John VanEeckhout, Pharm.D., Vice President, Clinical Services, CHCA
On Sept. 26, I participated as part of a panel discussion for the Drug Shortage Workshop presented by the FDA Center for Drug Evaluation and Research. The objectives of the workshop were to update the status of drug shortages in the U.S. including trends over time and a discussion of the impact on patients and the health care system; describe the FDA’s role in and regulatory authority related to drug shortages; hear perspectives from the health care sector, patient representatives and the industry, and seek perspectives on solutions to alleviate or prevent drug shortages.
As part of the professional group panel offering recommendations, I shared the particular vulnerability of our children’s hospital patients — pediatric dose substitutions and different strengths; severity of medication errors on vulnerable patient population, and higher use of injectables to name a few. In addition, I outlined our specific drug shortages — hematology and oncology, electrolytes and trace elements used in TPNs for neonates and nutritionally at risk patients; specialized agents for diagnostic procedures such as intravenous Arginine, and controlled substances such as Morphine and Fentanyl in small dose forms to avoid overdoses. I shared our efforts to date to diminish the effects of the shortages such as close contact among pharmacy personnel, vendors, buyer groups and directors. We’ve also worked with Premier on education about the risks and costs associated with gray marketers.
Among our CHCA recommendations:
- Improve communications to end users and distributors of pending and existing drug shortages;
- Allocate remaining supplies by drug wholesalers or directly by the manufacturer;
- Create CDC-like, federally controlled repositories of critically needed drugs similar to pandemic and disaster supplies now in place;
- Review the effects of Regulatory Action by FDA with drug manufacturers; and
- Provide an incentive/stimulus to drug manufacturers by federal, state or local entities to maintain and improve or build new factories for manufacturing critical drugs in the U.S.
The FDA stated they would take more accountability and vowed to be much more effective in the future. They cited 100 drug shortages prevented by FDA intervention. For several of the drugs in limited supply, five vendors are expanding their plants in the next three to four years. Three tactics outlined are as follows:
- Better communication among vendors, distributors, hospitals and the FDA about shortages;
- Asking vendors to know who they are selling to, to avoid gray marketers or problems with drug pedigree; and
- Protecting the supply chain particularly for the most vulnerable patients, e.g. oncology, small unit production, low volume and high expense drugs.
Children’s hospitals were also represented as part of a ASHP Drug Shortages Summit Regulatory-Legislative Work Group by Michael P. Link, M.D., President-elect of the American Society of Clinical Oncology and a pediatric oncologist at Lucile Packard Children’s Hospital at Stanford.
The CHCA Pharmacy Team is working on multiple fronts to counter drug shortage issues including legislative efforts, advance warnings and connecting available supplies to Owner Hospitals with an acute shortage of a drug product or unusually high demand. Specifically, we are working with partners on the following efforts:
- Premier Pharmacy Drug Shortage group for latest updates on their activities on supply availability and failure to supply refunds;
- Contracted Pharma vendors who can supply small quantities of short supply drugs for critical needs of patients e.g. chemotherapy treatments or other treatment regimens;
- CHCA Pharmacy Buyers and CHCA Pharmacy Directors who through networking and utilization of various legitimate drug wholesalers, expedite supplies of drug to their colleagues location in need of the drug in short supply; and
- Advocacy efforts through Healthcare Supply Chain Association (HSCA), HSCA Pharmacy Committee and Premier, and by talking directly to key decision makers on Capitol Hill.
Recently, I discussed drug shortages and their impact on children’s hospitals with Sen. Herb Kohl’s (D-WI) legislative aides and the Chief Investigator of the Special Committee on Aging. They are very interested in the gray market issues that have become a source of concern in our industry. I am supplying them information on gray market sources and examples of solicitation of our Owner Hospitals.
We are also in discussions with our current vendors to determine if we have any looming shortage issues we may not be aware of at this time. This is especially vital concerning drugs for special needs that are truly small market products.
Please contact me with any questions. (john.vaneeckhout@chca.com).
add a commentGPO Due Diligence Update
October 30, 2011
Posted by chcablogadmin in : Group Purchasing
The GPO Due Diligence Task Force, chaired by Ben Melson, CFO, Texas Children’s Hospital, has evaluated RFP responses from major national GPOs. The solicited GPOs were Amerinet, HealthTrust Purchasing Group (HPG), MedAssets, Novation and Premier. With the assistance of Dan May of CSC, the Task Force is analyzing the proposals on the basis of their respective financial models, pediatric portfolio and strategic focus, ancillary value-add services, and other key attributes. The Task Force is focusing analytics on a traditional GPO partnership model, with an at-risk savings option for those Owners that desire a high-compliance model. The Task Force met with the GPOs in Dallas, Oct. 24-25, to discuss their proposals and continue the due diligence process.
Ben Melson and Dan May will present an update via a webcast scheduled for Fri., Nov. 4. They will share information on the GPO presentations to the Task Force with key observations, a summary of proposed deal models with associated financial projections, and Advisory Committee and Board input and feedback. There will be time for discussion and audience participation. (See below for time and links to participate.)
The Task Force will visit GPO corporate offices between mid-November and early December, and begin final deliberations to select a recommended partner for the CHCA Board to consider at their February meeting.
Note that, although the current agreement with Premier runs through the end of 2012, CHCA may exit that agreement and implement the new agreement (assumed to provide greater value) earlier in 2012, based on the final decisions of the Task Force, Advisory Committee and Board.
Please direct any questions that you may have to Dan May, CSC (678-576-0408, dmay20@csc.com) or Jeff Primovic, CHCA (913-981-4130, jeff.primovic@chca.com).
Webcast: GPO Due Diligence 11.04.11
Date: Friday, November 4, 2011
Time: 11:00am PT|12:00pm MT|1:00pm CT|2:00pm ET (60 minutes)
Audio: 800-289-5126 call-in | 616343 participant passcode
Web Link
Please RSVP by 11/02
Gray Marketers Taking Advantage of Drug Shortages
August 28, 2011
Posted by chcablogadmin in : Group Purchasing, Industry Trends
by John VanEeckhout, Pharm.D., Vice President, Clinical Services, CHCA
Editor’s Note: See the previous blog entry on drug shortages.
The current drug shortage situation — the highest in a decade — is a case study of supply and demand principles. Costs are rising exponentially as the drugs become harder to attain. There is also a growing trend of price gouging by “gray market” vendors. Also known as parallel market, “gray market” refers to the trade of a commodity through distribution channels which, while legal, are unofficial, unauthorized, or unintended by the original manufacturer.
A few weeks ago, Premier publicly released recommendations as a part of analysis which shows the average markup on many drugs in short supply is 650 percent. Even higher markups were seen in certain critical care areas including cardiology and oncology; so the sickest patients are most at risk.
In addition to the astronomical costs, the quality of the drugs cannot be assured since you don’t know how the “gray market” vendor gained access to the product. The drugs could be counterfeit and since pedigrees aren’t officially documented and tracked, you assume a huge liability risk when dealing with these distributors.
CHCA and Premier both recommend using recognized distributors who have a documented chain of custody, and we’ve been in close contact with your pharmacy directors.
We are working on multiple fronts to counter drug shortage issues including legislative efforts, advance warnings and connecting available supplies to organizations in high demand. I’ve been asked to participate as a panel member at an upcoming Drug Shortage Workshop presented by the FDA Center for Drug Evaluation and Research on Sept. 26. The workshop will focus on the causes and impact of drug shortages and strategies for addressing shortage issues. I will report back to you the outcomes of the workshop.
We are working in close partnership with your pharmacy directors to address drug shortages in all Owner Hospitals. In addition to your pharmacy team, you may contact me (johnvaneeckhout@chca.com) or Ben Lizak (ben.lizak@chca.com) with an urgent drug shortage issue, and we will do our very best to help you attain the necessary drugs without disruption of care.
Nitric Oxide Agreement Signed
July 24, 2011
Posted by chcablogadmin in : CHCA News, Cost Reduction, Group Purchasing
Over the last several months, CHCA has been working with Owner Hospitals to reduce your spend on nitric oxide, a patent protected drug which costs CHCA Owners nearly $70 million per year. Guided by the work of an Owner Hospital Task Force, a Nitric Oxide Services Agreement has been signed with Ikaria (INOtherapy) to provide platinum-tier pricing (unlimited utilization) for a period of five years. The potential savings for Owner Hospitals is $3.6 million annually.
Letters of Commitment were sent to each Owner Hospital supply chain management director. Owners will have 90 days (from contract effective date of June 30, 2011) to return the LOC. If you have questions about your hospital’s opportunity specifics, please contact your supply chain leader or Sean Jeffries (sean.jeffries@chca.com).
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