The Whys of Drug Shortages

There is an event going on the pharmaceutical sector which could put lives at risk...but it's not what you may first think.

It's not drugs being recalled for causing dangerous side effects. What is happening is an actual record shortage of much-needed medicines.


Pharmacists Are Worried


The American Society of Health-System Pharmacists said last year its members could not obtain an unprecedented 211 prescription drugs through the usual channels. The Society also reported more than 89 shortages of products in the first three months of this year alone.

The organization convened a national conference on the issue last November and has devoted a special section of its website – www.ashp.org – to drug shortages.

Cynthia Reilly, director of its practice development division, reflects widespread concern among pharmacists. She said, “The clinical impact is significant, with the potential for morbidity and mortality.”

She says pharmacists are spending many hours managing drug shortages and conducting inventory work rather than looking after patients. She also warns that even when alternative treatments are available, they are not always the most appropriate and could lead to dosing and other errors.

Separately, figures from the Food and Drug Administration show a surge in “stock-outs” with 178 drugs in short supply in 2010. This compares to only 65 drugs in 2005.

The growing number of “stock-outs” has sparked rising concern in the healthcare sector for good reason.


Shortages of Critical Drugs


Most of the medicines experiencing shortages are are for generic, off-patent medicines. But they do include some of the most important life-saving therapies, such as drugs to treat acute leukemia and bone marrow cancer.

Dr. Richard Schilsky, chief of oncology at the University of Chicago Medical Center, was the former head of the American Society of Clinical Oncology. He said, “For some of these drugs there is no substitute.”

Yet a growing number of patients in the United States are indeed experiencing problems, sometimes with life-threatening consequences.

One such example occurred due to production problems at Genzyme's Boston plant for its patented 'orphan drug' Fabrazyme. This drug is used treat the rare genetic disorder Fabry's disease. Genzyme was recently bought out by Sanofi-Aventis ADR (NYSE: SNY).

What is behind these shortages of needed drugs? It is being partly driven by intensifying industry consolidation, with a lot of merger and acquisition activity in the sector. This has reduced the number of suppliers and spurred cost control efforts.

These newly-merged companies are simply disengaging because of a lack of profit in producing these drugs.

Coupled with pricing pressure on medicines, some manufacturers have preferred to cease production of those drugs with low margins produced in low volumes.

Another factor is the globalization of the pharmaceutical supply chain. The rise of producers in places like India and China has added further to pricing pressures, as well as a shift to “just in time” production. Ms. Reilly of ASHP commented on this situation, “There is no buffer stock any more, so [pharmacies] don't even have a week's supply of drugs.”

Of course, there is regulation. Mike Benedict, pharmacy director at the Denver Health Medical Center, pointed to drug regulatory shutdowns of manufacturing centers. This, he says, leaves hospitals to stockpile drugs for injections and turning to secondary wholesalers who charge more for medicines they know are in short supply.


Calls for Reform


These shortages of medicine have sparked calls for wide-ranging reform. These reforms include calls for tougher powers given to be given to the FDA and intensified voluntary efforts by generic drug manufacturers to tackle the drug shortfalls.

There have also been calls for fresh financial incentives to ensure adequate provision of older medicines that are in short supply. Others have called for the lowering the regulatory costs of approving some medicines.

However, right now no one really seems to have the right answer.

Perhaps the best solution may be to give pharmaceutical companies incentives to again produce enough of these types of older drugs that are such a necessary part of many people's lives.