Drug Shortages

The Issue:

From 2005 to 2010 the number of reported drug shortages almost tripled. These shortag­es were especially acute with regard to generic sterile injectable drugs that can be critical and life-saving to patients fighting cancer, com­bating an infectious disease, or undergoing surgery.

Drug shortages not only have the direct consequence of reducing the quality of patient care, but they also contribute to indirect costs on the system by requiring time and money to be spent hunting down alternatives, resched­uling procedures, or modifying drug usage protocols. Some drug shortages have dire consequences for patients because there are no substitutes, while others may be less im­portant. For example, certain vial sizes may be in shortage, but other measurements of the drug are available and can be substituted.

Recognizing these circumstances, health care officials and elected leaders have taken steps to mitigate drug shortages over the past few years. But recent news coverage of short­ages of saline, chemotherapy drugs, and drugs used in death penalty executions has once again brought attention to the issue.

One of the most cited reasons for generic sterile injectable drug shortages is low reim­bursement rates from Medicare Part B that were initiated by a change in law in 2003. It is theorized that these lower payments incen­tivized both physicians and manufacturers to switch to higher-cost drugs, thereby reducing investment in cheaper generic drugs, leading to “growing market concentration” and even­tual drug shortages.

To reverse this policy, some have advocated increasing Medicare Part B rates, although there is limited evidence showing how much of a factor low reimbursement is in contribut­ing to drug resources relative to other hard-to-measure factors. Legislation has been introduced to change Medicare Part B reim­bursement policy, but it is unlikely that Con­gress will consider it.

Recent efforts by Congress and the Food and Drug Administration (FDA) to mitigate short­ages have focused on regulatory matters, such as encouraging increased communication be­tween stakeholders, expediting consideration of new drugs, and allowing drugs sourced from abroad.

Future action by Congress, the adminis­tration, and industry stakeholders remain ambiguous.