Managing Drug Shortages: A Buyer/Vendor Perspective Allen Sutherland St. Joseph’s Hospital Phoenix, AZ

Drug Shortage Defined “A supply issue that affects how the pharmacy prepares or dispenses a drug product or influences patient care when prescribers must use an alternative agent.” –American Journal of Health-System Pharmacists. 2009; 66:

Factors Contributing to Disruptions in the Supply Chain Supply Chain defined: ▫Sources of raw material, manufacturers, regulators, prime vendors, group purchasing organizations, end-user health care systems

Raw Material Climatic and environmental conditions ▫Political upheaval ▫Animal diseases contaminating tissue from which raw materials are extracted ▫Plant growth retarded ▫Degradation or contamination of raw materials during transportation, harvesting, or storage

Manufacturing FDA (Food and Drug Administration) enforcement actions concerning noncompliance with current good manufacturing procedures (cGMPs). ▫Shift of resources from maintenance of equipment and facilities to research and development. ▫Loss of manufacturer personnel experienced in production and compliance issues as a result of company mergers. ▫cGMP-related problems with sub-contractors who supply products to multiple pharmaceutical manufacturers. ▫Limited FDA resources for timely inspections of sites.

Voluntary Recalls Generally temporary and occur as a result of a minor lapse in manufacturing procedures that would not be subject to FDA legal action. Usually affect specific lots. Conducted because of lack of assurance that the product is safe or for reasons not related to safety (technical issues).

Change in Product Formulation or Manufacturer Transitioning from one product to another -Example: Albuterol MDIs containing chlorofluorocarbons to MDSs containing hydrofluoroalkanes. Montreal Protocol-Global Warming The interim replacements for CFCs are hydrochlorofluorocarbons (HCFCs), which deplete stratospheric ozone, but to a much lesser extent than CFCs. On September 21, 2007, approximately 200 countries agreed to accelerate the elimination of hydrochlorofluorocarbons entirely by 2020 in a United Nations-sponsored Montreal summit. Developing nations were given until Many nations agreed with the accelerated phase out schedule.

Restricted Drug Product Distribution and Allocation Manufacturer places restrictions on available limited supplies. This may require direct purchases from the manufacturer or a specialty distributor. Manufacturer limits the availability of a specific drug product. Only selected suppliers and end- users can obtain product.

Product Decisions and Economics Based on availability of generic products, market size, patent expiration, drug-approval status, regulatory compliance requirements, manufacturers temporarily or permanently reduce quantities of a certain drug product (insufficient financial return). Manufacturers are not required by the FDA of a drug continuation unless it is sole source or medically necessary.

Manufacturing Mergers Often result in decisions to narrow the focus of product lines or move a production line to a new facility, resulting in delayed availability or discontinuation.

Inventory Practices “Just-in-time” inventory management (used in manufacturing, distributing, and health systems) reduces the cost of inventory on hand and optimizes cash flow. Some use inventory management strategies that minimize end-of- quarter or end-of-year product inventories or limit shipments based on yearly quotas.

Demand New indication is approved for an existing drug product Usage patterns change in response to new therapeutic guidelines Disease outbreak

Manufacturer backorder Temp out

Nontraditional Distributors Obtain product in short supply for the purpose of reselling them to end users who are unable to obtain them through normal supply channels (Grey Market).

Natural Disasters Fires, hurricanes, tornadoes, floods may compromise drug product supplies ▫Damage to manufacturing facilities in Puerto Rico in 1998 ▫Hurricanes Katrina and Rita (2005)—Areas affected by both an increased need of medication and the inability to obtain them

ACTIONS: Buyers Is the product “Temp-Out” ▫Call wholesaler to see when product will be available for ordering ▫Transfers can be done between wholesalers Determine how long shortage/backorder will last ▫Short-Term ▫Long-Term Borrowing from other facilities (begin with IHN-sister facilities) Is the product allocated by manufacturer or wholesaler ▫Purchase from both manufacturer (if possible) and wholesaler Non-stocked items ▫Item not on contract or rarely used ▫Call rep to see if drug is available Drug discontinuation ▫Convey message to clinical pharmacist for alternatives

Buyers: When to involve clinical pharmacist/director Product on Long-Term backorder ▫Clinical coordinator will substitute product according to pharmacy practice guidelines Product Discontinuation ▫Clinical coordinator will notify physicians and departments affected Product Shortages/spotty inventory ▫Clinical coordinator will have a substitution ready in the event a facility is unable to obtain enough product for day by day usage (allocation, unavailable from wholesaler)

Five Dimensions of the Buyer-Supplier Relationship Trust ▫Personal and organizational Communication ▫Effective communication can enhance level of coordination, satisfaction, commitment levels and performance Interpersonal Relationship ▫Personal relationships play a significant role and critical for effective business Cooperation ▫Achieve mutual and individual goals jointly (based upon personal trust) Power-dependence ▫Significant impact on buyer-supplier relationships and performance

ACTIONS: Vendors COMMUNICATION IS THE KEY!! *Vendors should be communicating with buyers on a bi-monthly basis with regard to product availability. ▫Notify Buyer of any backorders right away  Buyer can stock up or order direct ▫If drug is on allocation, some may be able to over- allocate on an “as needed” basis, depending on usage ▫Notify Buyer if clinical pharmacist should be involved

Overall Communicaiton Buyer/Vendor ▫Make yourself known to one another ▫Your drug rep is here for you so you may continue to provide quality patient care Buyer/Clinical Pharmacist, Director ▫Substitution of product if needed Buyer/Buyer ▫Monthly meetings should be set up as a form of communications to discuss shortages and other buying issues

Resolving Problems Manufacturer does not accept direct orders Storage Over-budget (WAC pricing) Manufacturer will not over-allocate Cannot get in touch with the sales rep

Conclusion Drug shortages have always occurred. Recent increases in the frequency and duration have a bigger impact on healthcare. Buyers need to establish a proactive process of preventing, identifying, assessing, and enduring shortages without compromising patient care. This necessitates a strong relationship with vendors/manufacturers in obtaining the product needed.

Recommended Buyer Websites FDA.gov ASHP.org PharmacyPurchasing.com