Purchasing Considerations for Generics
In the second quarter of 2013, PP&P polled a random nationwide sampling of health system pharmacy directors on the factors impacting their generic drug purchasing decisions. We asked about factors that motivate their off-contract purchasing, impacts from shortages, adding biosimilars to formulary, current spending, and future budget projections. We received a total of 480 responses, yielding a confidence interval of 4.28 (95% +/- 4.28).
The results demonstrate pharmacy’s emphasis on ensuring a reliable supply of generic products. Price is no longer the sole determinant in choosing a generic manufacturer, given the current challenges within the supply chain, including availability, contract status, and unit dose packaging. Pharmacies are looking to simplify their purchasing in light of these current pressures, with many facilities choosing to purchase from a smaller number of manufacturers. While the number of products on shortage decreased this year, managing shortages remains a significant challenge in pharmacy. In addition to driving up drug expenditures and decreasing staff satisfaction, shortages have also resulted in compromised patient care in almost half of all hospitals in the US (43%).
In response to these challenges, most hospital pharmacies are considering the manufacturer’s reliability as part of the purchasing equation. Likewise, generic spending reflects this reality, as budget increases were commonplace this year. This upward trend in strong generic spending is projected to continue for most facilities moving forward.
Looking ahead, indecision marks most facilities’ approach to considering the addition of biosimilars to formulary. More guidance is needed in this area, as hospital pharmacies are unsure of the steps they will take to evaluate biosimilars as they become available.
GPOs vs Wholesalers
Failure-to-supply programs are commonplace, and generally managed by the facility’s GPO. These programs deliver mixed results, however, as 47% are unsatisfied with the amounts recovered from their program, and just 10% of pharmacy directors are very satisfied with their recovered amounts.
Recalls, like product shortages, remain a challenge in the pharmacy. Because of their frequency, they negatively impact staff efficiency and job satisfaction, as well as patient safety. Improved methods for recall management are needed as few pharmacy directors are highly satisfied with their current system.
Click here to download the Recalls Survey Results.
In addition to negatively impacting drug expenditures and staff productivity, drug shortages also continue to compromise patient safety and in some cases increased sentinel events this year. While shortages remain widespread, the number of products requiring replacement eased this year, allowing pharmacy to dedicate fewer resources to shortage management.
Gray Market Purchasing
Despite decreases in the number of shortages, gray market purchasing has yet to be eradicated. This year saw a 10% drop in the number of facilities utilizing the gray market, as just 23% did so this year. While those facilities with a written policy in place addressing gray market purchases remain in the minority, there was a 16% increase in facilities adopting these policies, the majority of which forbid gray market purchasing. Overall, 44% of facilities currently have a written policy in place.
Drug budget increases were common this year and this trend is projected to continue over the next few years. The increases in generic drug spending support the current confidence in the budgeting process as most facilities deem their current generic budget to be at least adequate.
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