It is Friday evening, and the pharmacy buyer reports that the hospital’s supply of a critical drug will run out over the weekend. It is impossible to get more. How will this shortage impact hospital operations and patient care?
The pharmacy department will scramble to ration remaining supplies, develop contingency plans, communicate next steps, and explain the challenge of obtaining additional medication. Patients will either be transitioned to alternative therapies or denied treatment. Physicians, pharmacists, nurses, and other health care providers may be forced to treat patients with unfamiliar therapies. Providers will also need to develop rationing plans and determine how new patients will be treated with limited or alternative resources.
Unfortunately, this scenario has become a regular occurrence over the past decade at health care institutions across the country. In the past five years, the number of documented drug shortages has nearly quadrupled. In 2010 alone, a record 211 incidents were documented by the University of Utah Drug Information Service (UUDIS) and the American Society of Health-System Pharmacists (ASHP). The causes are often tied to increased demand, lack of raw materials, product discontinuation, a limited number of suppliers, manufacturing issues, or regulatory rulings that affect the overall supply of drugs in the United States.1
While advocacy groups are working to address drug shortages and minimize their occurrence, health care organizations need to transition from a reactive approach and work toward instituting proactive strategies to manage shortages. The first step in developing such a proactive plan is to accept that shortages are part of daily operations rather than unusual events. With this mind-set, institutions can take steps to assign the necessary personnel to identify and manage drug shortages, establish protocols for analyzing and reporting the financial effects on the institution, and implement strategies to minimize impact of shortages.
Managing Personnel Requirements
As the frequency of drug shortages increases, so does the need for human resources to properly respond to them. Most often, institutions have existing personnel reallocate their time and commitments rather than add staff. At the University of Utah Hospitals & Clinics (UUHC)—which consists of four hospitals, 10 freestanding clinics, 15 retail pharmacies, three infusion centers, and a number of specialty clinics in the Salt Lake City, Utah, metro area—some personnel provide an ongoing commitment to managing drug shortages while others contribute in an ad hoc fashion (see Table 1).
At UUHC, five dedicated pharmacy buyers are responsible for purchasing nearly $80 million worth of drugs annually; occasionally pharmacy technicians may assist with drug procurement. We have had the same number of pharmacy buyers for about six years, and the increase in drug shortages has required them to adjust their priorities. In times of shortages, buyers generally need to redirect some of their time to response efforts, and tasks such as contract compliance checks, rotation of stock, and price verification take a back seat. On average, 25% of buyers’ time is dedicated to managing drug shortages, specifically with tasks related to inventory management, regular follow-up with manufacturers about allocations, and placing direct orders. If a buyer suspects a shortage, in addition to calling UUDIS, they will contact the wholesaler and manufacturer to inquire about supply. The buyer will then report back to UUDIS and pharmacy management to determine the next steps, which may include switching products and implementing rationing strategies.
One dedicated automation technician is responsible for automated dispensing cabinet, packager, and carousel implementation, maintenance, and optimization. This technician’s commitment to shortages is variable, depending on the shortage and where the product is stored. In an average week, about 10% of this technician’s time is dedicated to drug shortage responsibilities, including product distribution, sequestering and centralizing, and database modification. During various emergency syringe shortages (eg, epinephrine, lidocaine, dextrose), our automation technician identified numerous areas where the product sat idle and assisted in the redistribution of product to areas of higher need.
UUHC has two full-time informatics pharmacists who maintain and update the fully implemented electronic health record and computerized provider order entry (CPOE) system. As shortages occur, these pharmacists are tasked with database modification and alert messaging for these systems. Like the automation technician, the informatics pharmacists’ time commitment to drug shortages is variable and situation-dependent; in an average week, about four hours is committed to product changes and messaging associated with drug shortages.
UUHC’s department of pharmacy includes UUDIS. On top of helping to manage drug shortages nationally (see UUDIS’s Role in Managing Drug Shortages Nationally sidebar on page 12), UUDIS also plays a key role in managing drug shortages at UUHC. The service has 2.5 full-time pharmacists dedicated to drug shortage work; collectively, they spend about six hours a week working on shortages related to UUHC. Since a team approach is key, UUDIS works closely with our pharmacy buyers, pharmacy managers, clinical pharmacists, information technology staff, and others who may be affected. The service is particularly proactive with the medical staff; when a shortage is impending, UUDIS provides medical staff with information on drug supply status and discusses therapeutic alternatives with them. This ensures that medical staff are not caught off guard by a transition in drug therapy and allows them a chance to provide input on alternative care. UUDIS also works closely with the pharmacy and therapeutics (P&T) committee and clinical leaders to establish use criteria or other formulary restrictions appropriate for managing a particular drug shortage.
Depending on the magnitude of a shortage, clinical pharmacists and the pharmacy management team engage clinical leaders, P&T committee members, and hospital administration. The overall goal is to engage the appropriate groups as soon as a drug shortage is identified in order to minimize surprises and manage the shortage as proactively as possible. At UUHC, engagement of the various groups occurs in both informal and formal settings (see Table 2).
The size and complexity of UUHC requires a large personnel commitment to drug shortages. As occurrences have increased, so has the personnel commitment; however, additional staff has not yet been hired. Current staff have shifted priorities and left behind other responsibilities. Without the addition of staff, the pharmacy and the organization are at risk for lost opportunities and delayed timelines for other tasks. In planning for the upcoming fiscal year, an additional buyer will be requested to assist with the current workload and address needs that are not being met.
Evaluating Financial Impact
Being able to demonstrate the actual financial impact of a drug shortage can be a powerful tool when trying to justify employing strategies and resources to manage drug shortages. An effective investigation of the financial impact of a shortage involves identifying variability in pricing, purchasing patterns, suppliers, and methods of procurement.
Shortages generally result in fluctuations in drug prices, regardless of the volume of medication purchased. In addition, shortages may change purchasing patterns because of variability in drug supply or significant change in practice. Working with the institution’s or wholesaler’s purchasing software, reports can be generated that identify or highlight price and utilization variances over specified time frames. An investigation of these variances often ties them to drug shortages.
Another way to identify the financial impact of a shortage is to review the institution’s purchasing history, particularly those purchases made outside normal channels. Most institutions buy much of their medication from drug wholesalers. However, manufacturers often limit the amount of product they send to wholesalers during shortages in an effort to manage limited resources. They accept only direct purchases to assist with rationing, which may subject an institution to allotments. The institution is then forced to purchase the difference between allotments and the needed amount of product off-contract, which also adds shipping and freight charges. The result is an increase in overall drug spending. Further, direct purchasing may cancel out the benefits of agreements an institution has with GPOs and wholesalers, such as contract compliance clauses and cost-minus benefits. Gray-market purchases have many of the same financial implications as direct purchases, in addition to exorbitant price mark-ups for certain products. All in all, a review of direct purchases, purchases from alternative suppliers, and purchases from the gray market can reveal increases in costs that were most likely caused by drug shortages.
UUHC regularly runs drug acquisition and expense reports to identify variances and abnormalities in drug spending, which we then investigate. To ensure that we are equally proactive, as soon as a shortage is identified, we track the drug and the medications being used to compensate for the shortage by supply and cost. Variances related to the shortage are highlighted and shared with senior leadership, clinical staff, and others to promote awareness of ongoing issues. This information is also helpful in producing budget variance statements if necessary and providing historical data when attempting to forecast future drug spend. At UUHC, drug shortages have been attributed to a 1% to 2% variation in the department drug budget in the past fiscal year.
Keep in mind, the impact of drug shortages on personnel also affects finances. Assigning a dollar value to an institution’s day-to-day staff commitment would have to reflect wages and benefits, and should be tracked if possible.
Assessing the financial impact of drug shortages has enabled us to identify opportunities to justify adding staff and engage providers on selecting more cost-effective therapies when appropriate. It also helped jump start the implementation of aggressive inventory management tactics to increase overall inventory turns.
Effective Management Strategies
Effective drug shortage management strategies begin and end with communication plans that account for all involved parties. Without solid communication strategies in place, institutions are more likely to be blindsided by drug shortages.
Hospitals should dedicate staff to addressing drug shortages on a daily basis. At minimum, staff should regularly check the ASHP Drug Shortage Resource Center (www.ashp.org/shortage) and enroll in automatic messaging. Staff should be trained to communicate immediately when they receive notice of a potential shortage. ASHP should be notified to trigger an investigation of the shortage, and drug wholesalers and manufacturers need to be contacted to initiate ordering and allocations if necessary.
At the institutional level, setting up direct contracts and purchase orders in advance of a shortage can minimize delays when ordering drugs during the shortage. The department of pharmacy should identify how much product the institution is carrying and how long it should last at the current usage rate. Meanwhile, clinical and frontline staff need to address patient needs, and informatics personnel need to address database, technology, and automation needs. Senior leadership must be notified of changes in practice that may lead to provider or patient complaints, as well as have budget implications. At our institution, the chief medical officer and medical directors are constantly updated about the status of shortages. We rely on the physician leaders to disseminate the message about shortages to the frontline medical staff. This is in addition to the constant stream of emails, Web postings, and paper flyers that are used to promote awareness about a specific shortage.
Drug shortages have evolved from an occasional inconvenience to a harsh daily reality, and the impact these occurrences can have on patient care as well as personnel and financial resources can be quite substantial. However, taking the time to implement proactive strategies, instead of just reacting, can help to substantially curtail the impact that shortages can have on an institution. n
Kavish Choudhary, PharmD, MS, is the manager of pharmacy support services at the University of Utah Hospitals and Clinics (UUHC) in Salt Lake City, Utah. He received his PharmD from Ohio Northern University in Ada, Ohio, and completed a two-year specialty residency and masters in health-system pharmacy administration from the University of Wisconsin Hospitals and Clinics in Madison, Wisconsin. Kavish’s professional interests are supply chain management, drug forecasting, and operations benchmarking.
Erin R. Fox, PharmD, is the manager of the drug information service at UUHC. She has previously served as a clinical pharmacist. Erin received her PharmD at the University of Utah and completed a specialized residency in drug information at UUHC. Her areas of professional interest include drug information, drug shortage management, evidence-based medicine, and internal medicine.
Michelle Wheeler, PharmD, is a drug information specialist at the drug information service at UUHC. She has previously served as a clinical pharmacist, and during that time helped to create the inpatient thrombosis service at UUHC. Michelle received her PharmD at the University of California, San Francisco, and she also completed a PGY1 residency and a specialized residency in pharmacokinetics there. Her areas of professional interest include drug information, drug shortage management, and anticoagulation.
UUDIS’s Role in Managing Drug Shortages Nationally
The University of Utah Drug Information Service (UUDIS) is a comprehensive, national service of the University of Utah Hospitals & Clinics (UUHC). UUDIS provides drug shortage information and content to the American Society of Health-System Pharmacists (ASHP) and Novation, a GPO. UUDIS has collaborated with ASHP and Novation since 2001 and also works closely with the FDA.
On a weekly basis, UUDIS receives between 40 and 60 reports of drug shortages from the ASHP Drug Shortage Resource Center. It verifies each reported shortage by contacting all manufacturers of the product. UUDIS then shares its findings with ASHP, Novation, and the FDA. UUDIS also updates shortage content on ASHP and Novation Web sites. Web postings identify drug shortages that are clearly affecting patient care. They list the affected products, the reasons for the shortage, and estimated resupply dates. When applicable, Web postings also include information for patient care, potential alternative agents, and safety recommendations. UUDIS continues to track the shortage until it is resolved.
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